BlackBuck Limited (BLACKBUCK) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q1 FY '26 Earnings Conference Call of Zinka Logistics Solutions Limited. [Operator Instructions] Please note that this conference is being recorded. Please note that a copy of disclosure is available on the Investor Relations section of the website as well as on the stock exchanges. Anything said on this call, which reflects the outlook towards the future or which will be construed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. Please note that the audio of the earnings call is the corporate material of Zinka Logistics Solutions Limited and cannot be copied, rebroadcasted or attributed in the PR media without specific and written consent of the company. I now hand the conference over to Mr. Rishi Jhunjhunwala from IIFL Capital. Thank you, and over to you.

Yes. Thank you. Good morning, everyone. On behalf of IIFL Capital, I welcome you all to the Q1 FY '26 Earnings Call of BLACKBUCK or Zinka Logistics Solutions Limited. To give you an in-depth understanding of the company and answer all your queries, we have from the management side today, Mr. Rajesh Kumar Naidu Yabaji, CMD and CEO; and Mr. Satyakam Naik, CFO. With this, I would hand over the call to Rajesh. Over to you. Thank you.

Yes. Thanks, Rishi. Am I audible?

Yes, please go ahead.

Good evening, everybody. Welcome to the first earnings call of FY '26. We met a quarter back, a few months back. We had a very good end to the last financial year and a very good beginning as well to the next financial year. This is our fourth earnings call. I think a number of 4 from an earnings call perspective probably in public markets would also make it a year broadly old. So we've decided, as you've seen in the circulated material, you would have seen that we have really evolved our metrics to represent strengthening of the metrics because last year, first year into the IPO, there were a lot of one-offs, which would keep coming every quarter. I think now we are sort of behind that. So our ability to stick to like only reporting and talking about largely like the hardcore metrics, which I think are the holy grail, I think is starting to happen from this quarter. So you would see we have evolved a few metrics, and we will -- wherever there are some changes, we will be rating some of those. And yes, and here we go. So this is a snapshot of our first quarter. So on the overall income of the company, we made close to about INR 160 crores in total revenues, which was a growth of about roughly [62% to 63%] over the last year same quarter. On an EBITDA basis, this is -- the real EBITDA number includes all the cost above, ESOP cost above because our adjusted EBITDA number was only adjusting for ESOP. On that number, we have done close to about INR 40 crores in the last quarter, which is close to 4x growth over the last year -- in the same quarter last year. On the PAT, we have done close to INR 34 crores. There is no comparable number last year because it had a lot of one-offs, so we are not comparing it with last year. So that's the broad on the financial metrics performance. So it was a good quarter for us. And more importantly, because this is a true EBITDA number, important to note that in our business, we generated an operating cash flow of approximately INR 63 crores in the last quarter because most of our revenues are -- is what we collect upfront in terms of subscription revenues from our customers, and they get generally spread out over the year. So we collected like 63 -- we generated operating cash flow of INR 63 crores. And then obviously, when you account for revenue and then the EBITDA, it becomes a INR 40 crore number, which you're seeing. Continuing our growth trajectory in terms of our operating metrics, we continue to deepen our market share in various different markets. So we have close to about now 783,000 transacting customers, monthly transacting customers on the platform, which is roughly a growth of about 14% on a year-on-year basis. Because majority of our revenues and majority of our work of focus is largely in the intercity and bigger trucks dimension, there, we are able to like garner higher and higher market share and that growth continues. On the metric where we demonstrate power users and power users are the users who really love us and we hardly see any churn from those users typically. We have roughly close to about 386,000 of these users who use more than equal to services, which is on that number, we've grown about 20%. GDP of payments, which determines largely the revenue from payments, right, grew about close to 28% on a year-on-year basis, and we did close to INR 6,800 crores in payments flow through on the platform. So summarizing, as you can see, broadly, in the last 4 quarters of reporting, you've seen that we have consistently grown in strength to strength on the profitability numbers. So we've delivered continuously like continuously increasing profitability. And at the same time, what's important to note is that most of this profits delivered incorporates the cost of our newer experiments, cost of our newer investments we are making in our new businesses. So there, I think after coming into the public markets and understanding really how sort of what it takes to really run the company on this side. Having said that, like we are much more aggressive on our scale-up of newer business areas over the last few quarters, and we will continue to do so as we keep moving forward. That's a snapshot of Q1 '26. Before deep diving into further details, like many of you would be attending to our earnings call for the first time, we'll take a minute and sort of revisit what we really are as a company building, right? As you understand, we are -- like we are a company with a dream in the long term to really disrupt and really organize the space of Indian trucking, right? Today, any one of us, if you walk into a Transport Nagar in the country, they will only come back with a realization that this industry would change, right? The only question is really about when would this change, but not really whether will this change, right? So we believe that the systemic inefficiencies in terms of the idle days of a truck, in terms of the number of kilometers which a truck does in a month, like when you compare all of this to the developed world, India is like far behind. In terms of the number of billable days, which a truck does, which is broadly in the range of like 17 to 18 days, the remaining 12 days is like nearly going empty to really find the next load or getting unloaded or getting loaded. All these inefficiencies are something which can really be addressed leveraging technology? And to be able to build this, I think the first like lever to solve for is really trying to solve for the truck operator. And that is what we've dedicated like BLACKBUCK's, our time over the last 5 to 8 years really solving for that. And from there is where we've been able to build really what BLACKBUCK today exemplifies a platform, which really enables and empowers a truck operator, helping him manage his business and really expand this business. What today, our business model and our strategy looks like, is basically these 3 vectors. We continuously create offerings for our customers, which are essentially the innovations for our customers. We have a platform on which our customers transact. This is nothing but our mobile app, which our customers use continuously day in and day out. And a very unique low-cost distribution and servicing engine, which is like spread across almost every significant trucking village, right? What is really important to note is that the part of platform and distribution are something which basically took us a lot of time to build, right? It took us like the last 7, 8 years to really invest in these and build these platforms. And a lot of investments in these areas are largely like completed maybe about 18 months to 24 months back. And most of the investments today are in the area of innovating newer offerings, right? And the reason I'm explaining this is because it becomes very easier to understand our financials, if you understand the fact that the platform investments, our platform and distribution investments are really enabling us today to be able to launch a newer offering on the platform at a very incrementally zero cost. And newer offerings are able to achieve critical scale because of these 2 sort of capabilities of ours where we are not really spending any incremental costs, right? So yes, so articulating our strategy very clearly, offerings, as I always explain, we keep iterating, keep building newer value prop services, newer innovations for our customers with which their lives can improve. These are always launched on the platform, our mobile app, which is really like continuously being used more and more deeper by our customers, right? And our ever-scaling distribution workforce where largely it's a variabilized workforce. So basically, if at all sales don't really happen in a seasonal months or quarters, you would see the costs also essentially shrinking automatically because these are really not fixed costs. They are really variable costs like which are in the nature of sales, right? So that's the whole, I would say, revenue delivery cycle or a growth cycle for the whole company. Now taking you straight into really what the financials are for us. So this is the P&L overview for the company. First line item, which is the total income. Total income of the company in the last quarter, we have done close to about INR 160 crores, which is a growth of roughly about 62% on a year-on-year basis and on a rolling quarter basis, roughly 17%. If you remove largely the interest income, we get the number on revenue from operations, which is roughly about close to INR 144 crores. INR 144 crores is a growth of roughly 56% on a year-on-year basis, growing from INR 92 crores in the last year same quarter to INR 144 crores. Now if we split this into 2 segments, core businesses are largely -- we've defined as all the new -- all the existing capabilities. Typically, let's say, in earlier reporting under telematics, when we used to typically do GPS, we would report into core, and we would report the fuel sensor vertical in the growth businesses, right? But then for these businesses, the costs are shared, the capabilities are shared. So we've decided to reclassify that and put that as payments and telematics as our core business where we have done close to INR 120 crores in the recent quarter. Over the last year, we've done close to INR 86 crores. That's a 41% growth. Even if we would have used the previous definition, the growth number would have come close to 39%. So largely, this reclassification is done more to enhance the quality of reporting, but not to really look at numbers differently. Next is the growth business, which is interesting because Super Loads business, which is basically the evolution of a classifieds business into a transaction marketplace is kicked in, right? And that's where we are seeing a good level of growth. So we've started reporting that -- those revenues from this quarter onwards because of the unlock we have had in that particular business where we've done close to about INR 23 crores in revenues, which is a growth of roughly about in the overall growth business, Super Loads plus multiple other businesses, we've done close to INR 23 crores, which is roughly a growth of about 3 to 4x over the last year, where roughly we did INR 6.5 crores in the previous year. Now we have done close to INR 24 crores. That's growth business. Important point to note is that Super Loads business in an accounting terms happens to be at a gross level, right? So that's why we've introduced a newer metric, which is called as net revenues where we add to the revenue the operating -- the operational revenues of the other businesses, plus we add the gross margin of the Super Loads business is where we come to net revenues, right? So we take off the gross impact of that business and start reporting so that it's easier for you to understand the revenue reporting. So on the net revenues, we've again had a very healthy growth rate. We've grown at about 43% on a year-on-year basis from INR 92 crores in the same quarter last year to INR 132 crores. On a sequential quarter basis, we've grown at roughly about 8%, right? And coming to the cost line items, direct cost largely has grown in line with the growth in revenues, growing at about close to 45%, 46%. And that's why the whole contribution margin for the business largely is stable at about roughly 93%. If you see last year, the contribution margin was 92.8%. This year, the contribution is 92.6%, right? On the overall -- on the total expenses, roughly, there is a small shrinkage of about 6%, but don't expect the shrinkage to continue. We would be investing in growth as we move into the next quarters and for propelling growth and growing into new businesses. So removing all of this, we've generated roughly about close to INR 47 crores in the adjusted EBITDA -- on the adjusted EBITDA basis compared to INR 12 crores the same quarter last year, which is roughly a growth of about close to 4x on a year-on-year basis. Accounting for the ESOP expenses, coming to the pure EBITDA line item, that's roughly about INR 40 crores for this quarter compared to the previous year same quarter of about INR 8 crores, which is roughly about a 5x growth from the previous year. Coming to the line item of PBT, where there is basically a growth of roughly about 41%. Last year, the same quarter, we had an adjustment in the one-off adjustment in the PBT numbers, which was a reversal of the RTS charges, right to subscription, we had instruments on right to subscription in the capital. Those were reversed. So you would see a INR 32 crores, which is because of a one-off item, which is really not the real PBT of that particular quarter. And this quarter, we've delivered close to about INR 46 crores in the PBT. On the PAT basis, which is basically the true metric, we have done close to about INR 34 crores in the current quarter, right? So this is broadly -- you can summarize most of these changes as really moving into the spirit of like really accounting line numbers so that the needing to explain some of these would not be there as we keep moving forward. Coming to some of the operational metrics, the key KPIs, which we reported during going public, largely growth as expected across most of these metrics. And we have covered most of the financial metrics in the previous slide already. Revenue from operations, we have covered, net revenues we have covered, adjusted EBITDA, we have covered in the previous metric. So largely in line with, as we discussed in the previous slides, right? Going forward, summarizing the 3 broad key areas. On the overall revenue growth, as a company, we've done close to 62% on a year-on-year basis. Core businesses compounding at close to 41%, largely leveraging the core operating model because the core operating model is built to leverage the tailwinds of the industry and a very strong execution excellence rhythm, which we have, as a company, maintained over the many years. The growth businesses continue to lead the growth trajectory where we've grown by about roughly 4x -- 3.5x to 4x the last year, largely led by the launch of Super Loads business, where the transition from classifieds to transactions is happening, and that's a very high value prop for our customers, and we would be able to really dramatically influence their deadheads, their running days. And it's a very powerful product and a powerful value prop for our customers. Commenting on to the dimension on profitability. As you can see, the strong operating leverage continues to be demonstrated in the core business. And while we continue to invest in new businesses, we continue to build on profitability. As we spoke, adjusted EBITDA grew roughly 4x from INR 12 crores in the previous year same quarter to INR 47 crores to this quarter, which is roughly on a percentage point basis, it's 13% growth, 13% to a 36% on a net revenue basis -- on a year-on-year basis. And all the core platform metrics continue to compound. As you can see, there is a growth of trucking operators roughly about 14% to close to 800,000. The time spent of the users is growing -- has grown to about 43 minutes. The GTV in payments, which is one of the largest used services, also has continued to compound. Now explaining, again, reiterating again on the operating leverage story. As we've always maintained, most of the revenues are platform-led, like subscription-led revenues, commission-led revenues, so hence, if you see on the right-hand side, the revenues are largely recurring in nature. So we don't have to really go every quarter and win these revenues, like 90% of these revenues probably would be coming in from what we have already done in the past quarters. Most of the revenue has high gross margin profile. So as you can see on a net revenue basis, if you see our contribution margin profile continues to be steady at 93% gross margin, which talks about the quality of revenues. And we always have had very strong user retention. And to create these revenues, there is no real strong asset creation or money invested in deploying into an asset, right? And that is the reason why continuously, we have delivered in any quarter you pick up anywhere in the range of 70%, 75% to like as close to 90%, 95% operating leverage we delivered. Talking about this quarter, if you see on a year-on-year basis, there's a change in revenue of close to INR 40 crores and there's a change in adjusted EBITDA of close to INR 35 crores. That's a delivery of 88% of operating leverage. On a sequential quarter basis, there's a growth in revenue of INR 10 crores. There's a growth in adjusted EBITDA of INR 8 crores, that's a delivery of 84% of operating leverage, right? So we probably -- with a reasonable confidence, probably believe that this operating leverage will continue to play out as we keep building the growth trajectory of the company. Moving forward, just giving you a snapshot of profitability. This is the adjusted EBITDA metric because the past numbers on pure EBITDA would move around a bit for right comparison, it's adjusted EBITDA. As you can see, Q1 '24, 2 years back, we did negative INR 10 crores, negative INR 11 crores of adjusted EBITDA. Change from the last reporting is that we've removed the other income bit from all of these numbers. So you would see the negative being a little bit more higher. So it's a negative 18% on Q1 '24 2 years back. And as we report today, that number has grown to INR 47 crores, which is close to about 36% in the recent quarter of Q1 '26. And as you can see, there is probably no quarter in which our profitability has not consistently grown in line with delivering operating leverage. And this is what I typically talk about when people ask me to share my experience on the journey of going public that if the business model really delivers your results, really the whole rhythm of doing quarter-on-quarter results really is not really burdensome because your operating model delivers a results. You don't really work on this quarter for this quarter. You typically work in this quarter for probably your next 5 years kind of a growth trajectory and solving really the hard problems, which you really have to still solve, right? And that keeps really -- that keeps us as a company really focused on right objectives for the long term, which are also -- which is really important even for the shareholders. Just putting here together because there is some change in numbers so that all of you can refer to this particular chart. The way we started reporting numbers this quarter, you can find the reporting of these numbers for the last 8 quarters so that you can compare and contrast if you have any doubts in terms of how some of these numbers have trended in the past relevant to this definition. So you can find sort of the glossary over here. Summarizing the broad takeaways of those 2-year numbers is that there is a 2.5x growth -- revenue growth over the last 8 quarters from the time broadly many of you would have started interacting with us and knowing us, like it was Q1 of '24 numbers, Q1 to Q4 of '24 numbers is what we were taking with you and talking. So from that, the first number, you've seen like there's broadly a 2.5x growth. There's a massive turnaround in profitability, roughly a 53 percentage points turnaround in profitability from a negative of minus 18% in Q1 '24 to a positive of 35%, which we talked about in this particular quarter. As I mentioned, like almost every quarter, you would find numbers of quarter-on-quarter, if you look at -- every quarter, if you look at year-on-year operating leverage, the numbers would vary between 95%, 98%, 85%, like lowest to 70%. So I think 70% plus is something which I think we have delivered very, very, very, very consistently in the last 2 years. And as you would have seen in this particular quarter, we are moving into this financial year with a very strong momentum in like creating newer and very high-quality revenue streams, which are not only high quality from a P&L perspective, but also the value proposition of those business verticals is very, very, very high and solves very critical pain points of our customers and helps us more become a part of their revenue generation like and because today, we really help him optimize his costs, help him run his business well, have control, which basically is very good, and they really love us. But I think the really shift into really partnering with them and really expanding their revenues and make more, I think is a very, very stronger and integrated partnership level with our customers than where we are today. So yes, with that, we'll open the floor to questions. Thank you so much for listening to us.

[Operator Instructions] We take a first question from the line of Sachin Dixit from JM Financial.

I just hope well and quarterly results obviously were brilliant. So building on to some of the things that you mentioned, there are 3 questions that I had. The first one was on the Super Load side. So this is the first quarter where you have come up with some of the numbers on that piece. And if we do some math around that, it looks like we did roughly a GTV of close to INR 12 crores, INR 13 crores there, which effectively is implying, and let me know if my math is wrong, which effectively is giving close to like 20 to 25 freight transactions a day. Is that math right? How do we look to ramp up that number? Do you have any visibility on the plans ahead on this piece?

Yes. So Sachin, I won't be able to comment on your numbers because as a principle, as we have always kept out that we will probably keep the disclosures of new businesses fairly limited, and we will probably till the time they become a little bit more mature or probably 20%, 30% of the overall revenues, we would not be disclosing probably in greater details. The second part of your question was around like the first part was on the numbers. And second part, Sachin, can you repeat your question?

Visibility on how you are looking to ramp this up, where you stand, where you plan to go?

Yes. So basically, as I had maintained before, I think the business is in a very nascent, very creation zone. Obviously, we've started reporting it now, right? So it's still live in 4 hubs across the country, hyperscaling in 2, the other 2 hubs are largely for reversal synergies. The business has taken a very strong shape in this particular quarter. If you're asking me, we are still largely focused on heavily ramping up in only 2 cities from 1 earlier, now only 2 cities, largely to really complete the whole playbook creation. But I think we have what I would like to also add is that I think really -- I think the business is more entering into a phase where we are also trying to more understand how a mature P&L of this business should look like, how would a very -- like, let's say, a playbook of launch of a market from, let's say, scale 0 to a maturity, what would that look like? How would the expansion strategy look like? I think those deliberations have already started. So the broad guidance I would sort of say is that it will probably be another 3 to 4 quarters before a very exponential growth to come into this particular business.

Got it. Just touching on to the thing that you mentioned that a couple of us are doing quite well. So when I think of like you ramping up to newer hubs, like what does it take, right? How much effort, time, capital, whatever -- I mean, I understand capital requirement might be minimal, but otherwise, how much effort does it take for you to ramp up newer hubs?

Yes. So that's a very good question. See, basically, in this business, right, the whole aspect is that this business is already running live off-line business, right? So India does like close to $200 billion of freight, right, freight volumes in a year. In that, if we really remove the specialized execution like the part truckload businesses, the e-com businesses, the cold chains, the customized trucks, et cetera, right? So if you remove all of that, 40% of the market goes away. 60% of the market is $120 billion typically gets executed in the full truckload in an open market load kind of a basis, right? Now this business largely happens through multiple layers of intermediaries, as we've always discussed. There are 2 layers of intermediaries, right? And in the industry, there are like roughly 2.5 lakh brokers who do basically this business. Our business is nothing but a shift of this business from an offline industry to an online industry, right? Now in any marketplace, there are 2 critical factors. There is a demand side and there is a supply side, right? As you would be aware, in our history of the business, we initially had gone into the enterprise business. And one of the biggest reasons that we did not pursue that business later on was our inability to build direct supply. And supply side costs are very high cost in this business, right, which you have also articulated that the cost will be minimal, right? The reason they are minimal is in a sense because we've created our whole go-to-market in this industry by really delivering payment solutions and telematics solutions. And with that, we really gained a very high market share of long-distance traveling truck operators, right? So a large part of our truck operators do intercity, right? Now to switch on a newer market, remember that in every market in the country, any market you pick up, we have of the long-distance truck operators of market share between anywhere near 15%, 20% to as high as 70% market share of these long-range, long distance truck operators, right? So now I have largely supply already incubated, number one. And number two, supply is already activated on the classifieds platform. So truck owners know that there is loads over here, right? Now this classifieds platform, which already has loads, which are posted by the off-line other brokers and transporters, we typically convert them into our own first-party load, where the customer can really see that this is a Super Load. This is executed by BLACKBUCK full stack end-to-end. BLACKBUCK will essentially be paying me the money. So it's a much more stronger payment assured load, right? So essentially to turn on a market, we basically need to get to the market, probably deploy a branch, hire a few people who can essentially conduct fulfillment, conduct price negotiations. So it's a very thin -- wafer thin effort because demand side, always the shippers have unfulfilled demand because fulfillment by local brokers and transporters is very minimal. Now they always are -- always in search of a newer transporter who can enable them, right, a newer company which can enable them. So Super Loads essentially becomes a very easy partner for people on the shipper side because the cost there is minimal. There, again, we do an on-ground activation with the customers to get onboarded. The supply side is largely like 95% plus-plus dependent on the platform to get truckers who can come and take the transaction marketplace-oriented loads. So really activating the market is a lead time of like 15 days to like 20 days to activate a newer market and start like the business.

Understood. My second question is on the insurance license press release that you put out. What's the plan there? Are you planning to like put in proper people dedicated to trying to ramp up insurance or this will just be a product plug on the app?

Yes. So in the history of insurance license, we already had this insurance license before. This was actually the renewal of the insurance license, right? That's point number one. Point number two is that today, already like, let's say, we have a few like attach rates on insurance basis some of the services we sell. We obviously are using third-party players to get those procured and our margins are basically a little lesser. With this, basically, with the same insurance what we are selling, it will go through via our own corporate agency license where our margins essentially will a little bit expand, which will help us deliver better contribution profits, number one. And number two is that in terms of explaining, as you rightly said, it's largely a small plug-in, nothing really material because we are not very directly in the business of only selling insurance to truckers. We basically use this as an attach rate for any of our products and then cross-sell it over that particular product rather than really get into really the insurance business of selling.

Got it. Just one final question, which is on the growth piece, right? So when you release the average monthly transacting truck operator data, there seems to have been a growth downtrend. Obviously, that is also understandable for the size you are at. But is it normal? Is it likely to again pick up? Or do you see like over a period of time, this will start to inch slightly downwards? That's...

In our business, Q1 and Q2, right? I had also narrated this in our first earnings call. Q1 and Q2 typically are always the seasonal months, right? Addition of truck operators and you would not be seeing this reflection in our revenue because our revenue is a compounded revenue, right? Addition of truck operators, the whole movement of trucks, right, all of those typically hit the lowest numbers in Q1 and Q2, right? Most of the growth typically comes in Q3 and Q4, right? So if you typically see even our movement in numbers, let's say, for example, mostly, let's say, the numbers on mostly the profitability, et cetera, as well. Typically, you would see heavy moves in Q3 and Q4 because that's where -- like the whole operating leverage extends not only on to the contribution to EBITDA, but also extends into the sales leverage also, right? So Q1 and Q2, I would say, will be a bit muted. But at the same time, I would not like to guide that those numbers will be like, let's say, really past breaking. There will be maybe -- like probably an optimal correction to that, but not really a seesaw change, a very big lift in that as you move into the next quarters.

We'll take our next question from the line of Rishi Jhunjhunwala from IIFL Capital.

Can you hear me?

Yes, Rishi, we can hear you.

All right. Great. So just a couple of questions. Firstly, again, on the loans business, while the revenue opportunity is quite clear. Just wanted to understand how would you approach it from an acquisition or cost of acquisition perspective? Do you think both on the cost line as well as on the balance sheet, you could use some investments that are being done there because you've, in the past, talked about like 6% to 8% kind of take rate or commission on that. But can your initial bit of revenues actually be lower in order to acquire customers? Just wanted to understand how would you play that economics?

So basically, I would break this in 2 phases, Rishi. One is basically the whole playbook development phase. I think in the playbook development phase, if we really like reduce the bar to really create numbers, what happens is that the ability to differentiate between the real muscle which is being built out versus really the calorie growth because the calorie growth may appear as a strong growth and you really would be able to mistake that with the muscle and then there, the quality of business development essentially goes down, right? So as you rightly said, what we -- what I would like to say that in this business, because on both sides, though the truck operator, like, let's say, is a more -- let's say, the persona is a more retail customer, but at the end of the day, is a very strong businessman. On the shipper side, SMBs and the transportation companies are also like businessmen, right? So we are in like a sort of a B2B kind of an industry, right? So any kind of an interplay on short term like really trying to grab market share. Typically, we've seen that has not really been a very sustainable strategy in terms of growth and development, right? So that's like point number two. Point number three is that as you are aware that ability -- the cost of building supply is the highest, but the cost of building demand is actually smaller. But -- and hence, by leveraging the platform, we have this unique opportunity like compared to anybody else in the market who's even trying to do this to be able to blitzscale in this particular area, right? So what I would say is that like availability of, a, first of all, inorganic opportunities are abysmal, right? Availability of -- ability to really induce capital till the time the playbook doesn't get built out, probably I would not really sort of advise. But what I would like to guide you towards is that in the long term, if at all, you would see from a perspective of investment, only the margin of this business may get fully reinvested, but probably we will not break anything beyond that is how probably we are thinking even in the blitzscale phase of this particular business.

Got it. Secondly, with the PPI license, does any kind of dynamics change for us in any of the businesses, including tolling? How do you intend to leverage on that in the longer term?

Yes. So rightly asked question. Last time we gave you an update that we've got the in-principle approval. That in-principle approval on this July 2, we got a full approval of our PPI license. So that's point number one. Point number two, as we've always maintained, the context of getting a PPI license was to really deliver a stronger customer experience, right? And also at the same time, it enables a little bit of margin expansion as well, right? Number three, our strategy with partners will continue to be largely same. We will continue to work with our partners in partial part of the business and in the remaining part of the business. And at this point in time, really, there is no thought process of really leveraging the PPI license on any part of the other parts of the business. I think largely in the mainstream tolling business, we may end up probably creating some innovative products, like -- but then that's pretty much a few quarters down the line. But at this point in time, you can assume this to be as a customer experience enhancing tool and in a very longer-term margin-enhancing tool and in a very longer-term new product additive tool, but not in the near future.

So this doesn't disintermediate banks or your banking partners in the long run for you?

Not fully. Let's say, I mean, basically, with some of the principal partners we've been working for long, like I think we would be working with them for a long period of time. We would not basically be fully disintermediating.

We'll take our next question from the line of Abhishek Banerjee from ICICI Securities.

Great set of numbers this quarter. The first question I have is on the loads Marketplace business. So you mentioned of a blitz phase, right? So is it right that you alluded to it will be, say, 3, 4 quarters down the line, the blitz phase when we see exponential growth here?

Yes. I mean, let me put it in this way. New businesses are always like, let's say, hard to build. They take time to build. We are in the playbook building phase, but I've always maintained this that 4 to 6 quarters down the line is where you can see significant movement in some of these businesses, not in the immediate future.

Understood. Now coming to this business, while I understand it might not be feasible to give out absolute numbers, but some indicators with regards to things like loads posted on the platform or I mean, at least the growth rates of how many loads are getting posted. Is that possible to share? So that -- see, there are some things which are kind of indicators of future performance, right? So if we get a handle on that, it becomes a little easier to kind of model it.

Yes. So I mean, we have like a few sort of philosophies we have taken is that newer businesses, like till the time they don't add to 20% plus-plus of the overall revenue, we would be limiting the disclosures. And -- but then as you rightly said, I think as we keep moving forward, looking at how these businesses scale up, we will start disclosing a few more things for adding clarity.

Sure. Now one very interesting thing in deliveries presentation this quarter, I don't know if you have seen that, is that they're again talking about building Orion, which is their FTL business, and it is somewhat similar to your loads marketplace. And there is also another competitor out there in the private side of the market. So any thought on competitive intensity in this space? And should one really be worried about competitive intensity at such a recent stage? Or would you really think that it's better for the growth of the overall market?

I mean, basically, like if you have to draw a parallel, like probably it would be like a 2019 or 2020 of quick commerce where there's literally nobody doing anything in this space, right? That's point number one. Point number two is that the biggest competition in this market today is the market itself because it's a hard market to crack. We've been in this space for the last like 10 years and ability to build supply is very hard because of the demography of the customers, and like the places and the regions they need to really go into to build supply and it's very costly, right? Most of the money we've invested is basically into building supply, prior to going public, all our loss-making years were largely about building supply on the platform. Now talking about whatever little like, let's say, we are aware is that like our business largely does not cater to enterprise customers. I think the business which you are mentioning may be the business which they cater to enterprise customers. Our business caters to SMBs and 3PL transporters, right? To basically put in perspective, delivery is basically our customer today in this business. So basically, hence, it's basically a classifieds platform closed looping into transactions and making a take rate, right, and then basically getting the whole marketplace getting woven around it, right? So it's -- so I would say that at this point in time, really a formidable direct competition or really worrying about competition is too nascent at this point in time for this business because the market opportunity is very, very huge.

Understood. Now if we talk on a per transaction basis, what are the key things that you try to improve to improve customer experience with regards to the loads marketplace?

And when you say customer experience, you're talking about the shipper or the trucker?

The shipper?

Yes. So basically, in this business, if you look at it, let's say, a shipper who's typically -- as I mentioned, shippers are 2 types. One are SMBs who are trying to ship goods themselves. They are the owners of the goods. They are basically selling it to somebody. Second type of customers are like 3 peers and transporters who are shipping goods on behalf of their customers, their end customers. And they have contracts with the end parties, right? And then they have a price contracts at the end parties and they try to take a truck on a market higher basis from us, right? There are 2 types of customers. The first biggest need for both of them is a fulfillment index, which means if they are able to come to a platform, right, can they get basically a truck, right? So that's one metric because of availability of large amount of supply on our platform compared to a traditional small broker who in a day is able to process 2 to 4 transactions on a daily basis, our fulfillment rates are fairly high. That's point number one. Point number two, compared to an offline broker, where offline brokers typically specialize on only one lane or a one route, let's say, Delhi to Vijayawada and Andhra region would be one broker, right? So there'll be brokers who will be only operating in those lanes side. So as a customer, I have to go for that load to that particular broker, right? And then basically, then because of that, I need to go to multiple brokers, right? With BLACKBUCK, because of the scale advantage, like in the hubs we are operating, we are operating across mostly most of the regional lanes, right? So we've taken a strategy to do go regional first. We're operating across most of the regional lanes. So we are able to cater to most of the demand what these guys really need to or let's say, for a large chunk of demand, they're able to come to us. Number third, they are able to track the vehicle in transit, right? So they're able to see where the vehicle is, has it left the city, how many kilometers is it done? Like where is it, right? So we give live tracking on the product directly, right? So these are basically 3, I would say, big value props today. And on top of this, most importantly, the existing brokers do not have a very professional method of handling, be it in terms of accounts, in terms of reports, be it in terms of relationship management, et cetera. I think with us, all of that comfort becomes much more higher. Our ability to deliver a very strong quality of a truck. So let's say, our strength on the truck side also represents on the demand side because we know the trucker, we know the village we have onboarded him. We have a KYC verified -- verification of this particular guy. We understand the truck much more deeply, right? So I think all of this translates in a very strong in-transit experience for the customer, right? So basically, put like 4, 5 strong value props, availability of a truck at a lane level of higher availability, multiple lanes at one particular place, like in-transit tracking, ability to know where the truck is and being able to update their own end customer, right, ability to deal with a very professionally created setup so that it's more predictable, a very strong from an experience perspective and in-transit experience perspective in terms of any exigency issues, we are able to handle it much more effectively than an offline partner.

Got it. Does moving to a transaction model open you up to payment risk?

The answer is, basically, this business is largely cash and carry. By that, I mean, roughly close to 90% of the payment is collected upfront from the shippers, right? Let's say, anybody who's trying to ship, they need to pay 90% of the money in advance, right? So that basically removes largest part of the risk. So intrinsically, there is really no working capital in this business. That's point number one. Point number two is that the remaining balance upon the truck reaching the particular place on the receipt of the proof of delivery, the remaining balance gets paid, right? So if you were to argue, the risk probably will be only to the tune of the sort of remaining balance. But then like it's like after having operated this business in the last quarter a bit deeply, I think our ability to really deliver is close to like 0 risk on collections is there.

Super. And just one last bookkeeping question. There's a large tax outgo in this quarter. So how do -- I mean, you would have accumulated losses, right, to write that off? And how should one look at the tax rate going forward?

Yes. Satya, our CFO, will take that.

Yes. So a quick one on taxes. The current tax is the actual outgo. So that's about INR 3.8 crores, which is on other income, right, which is on treasury income essentially. The other -- out of the total INR 12 crores, that's INR 3.8 crores. INR 8 crores is deferred tax. That's on accounting profits. It's not an actual outflow. But in the previous quarter, you would have seen that we have created deferred tax asset because current quarter, we had accounting profits. We have accounted for that deferred tax. So you should think of tax outgo per se only from a treasury income point of view, at least for a few quarters from now.

Got it. So your cash PAT is definitely higher, more in the range of INR 42 -- INR 41 crores, INR 42 crores, right?

Yes. Cash profit will be higher. It should be in the zone of cash from operations, like Rajesh mentioned, should be in the zone of INR 60 crores for the quarter -- for this quarter.

We'll take our next question from the line of Gaurav Malhotra from Axis Securities.

Congrats on a good set of numbers. I just had a few questions. Rajesh, if I see the payment business, the payment, someone alluded that the trucker numbers growth has been a little bit soft, which you alluded to seasonality and the GTV of payments also is roughly around 28%, 29%. But the incumbent business growth is closer to 40%, and the payments is the sort of the larger part of that pie. So is there like -- did the take rate or something increase during this quarter? How should we sort of think about the difference in the growth rates in the payments as well as underlying revenues?

Basically, as you rightly said, the GTV of payments, which is a little bit of a proxy to growth in the revenue of payments, right, corresponds to that. There is obviously higher uptake of value-added services, which has pushed the growth rate above the growth rate of the pure-play payment volume per se. That's point number one. Point number two is that, as we have mentioned, under telematics, today, there are 3 growth vectors, right? First, growth vector is basically the basic GPS device, which basically is used by a trucker to manage the driver location, share the location with the end customer, manage his harsh acceleration, harsh braking, manage to also remotely switch off the ignition if at all, he feels that there's danger to truck and he doesn't want the truck to be in transit at this point in time, right? So the basic GPS device has more -- like, let's say, you can assume that, that particular business is more growing at that 20%, 25% kind of a growth rate from a year-on-year perspective, right? Second biggest thing is that in India, across multiple states, GPS is getting mandated for purposes of basically either getting the passing renewed or for the purposes of entering regulatory areas like mining, et cetera, right? So in multiple states, these mandations are taking off. Now in our understanding, roughly about 7 to 8 states across the country have largely mandated this. If you go back 1.5 to 2 years, this number was only 4 to 5 states. So these mandations are increasing. So we're seeing a very strong growth in the AIS-based kind of a GPS device, which basically is leading to a stronger growth, right? The third part is that by the launch of the fuel sensor product, where basically we are premiumizing the whole offering because of the revenue of the fuel sensor product is at a very higher price point compared to the basic GPS device. And it is in the early phases of growth and has grown very strongly also over the last quarter, right? All of this on a compounded basis, payments and telematics, like, let's say, has been able to reach the growth rate of that close to 40% plus-plus.