BlackBuck Limited ($BLACKBUCK)

Good evening, ladies and gentlemen. Welcome to the Q4 and FY '26 Earnings Conference Call of BlackBuck Limited hosted by Radhi Capital. [Operator Instructions] Please note that this conference is being recorded. Kindly also note that the audio of the earnings call is the corporate material of BlackBuck Limited and cannot be copied, rebroadcasted or attributed in the PR media without specific and written consent of the company. Please note that anything said on this call that reflects the outlook towards the future, which can be construed as a forward-looking statement must be reviewed in conjunction with the risk that the company faces. A copy of the disclosure is available on the Investor Relations section of the website as well as on the stock exchanges. 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, Chairman, Managing Director and CEO; and Mr. Satyakam, Chief Financial Officer. I now hand over the conference to Mr. Rajesh for his opening remarks. Thank you, and over to you.

Thanks, Vinita. Are you able to hear me? Is it clear?

Yes, yes.

Good. Thanks, Vinita. Ladies and gentlemen, good evening. Welcome to our earnings call of the financial year '25-'26 end and for the Q4 of FY '26. as in every earnings call, just rearticulating what we are trying to build at BlackBuck. BlackBuck was founded about 11 years back to solve the trucking problem of the country. Any space you pick up within trucking has massive opportunities, massive inefficiencies because of the fragmented nature of the space. And application and use of technology, there are possibilities to lift it out and pull in an orbit where a new world of trucking for India could be imagined. That is how the whole journey of BlackBuck started. We have toiled around with a lot of experiments in this space. As we speak, like BlackBuck's definition today is nothing but all the experiments, all the successes we have got over the last 11 years, which has taught us a lot, we've learned a lot. And what has become is the largest digital platform for truckers in the country. We have close to about INR 8, 8.5 lakh monthly transacting customers on an average across the whole financial year, which roughly represents at an India level in excess of 25% to 30% close to of Indian truckers using this platform. And they use this platform very deeply because the platform we have built has so many use cases solving for the trucker that he ends up spending 45 minutes on our platform, our mobile app, BlackBuck daily. And because of the nature of the business, nature of the customers we have, -- we've got a very strong offline presence, having over 10,000 touch points on the ground through which we service, through which we acquire and retain our customers. That's the crux of what BlackBuck is and what we have built. Diving into a summary of numbers of last financial year. On a gross income level, we have done close to about INR 715 crores in total income, which is growth of about 55% on a year-on-year basis. On an EBITDA basis, we have done close to INR 167 crores, which is an 80% growth on a year-on-year basis. This is our first full year of profitability at a PAT level. We have done INR 160 crores in PAT in the full year financial FY '25-'26 -- not only the financial numbers, we continue to compound on our operating metrics, which are the top of the funnel metrics for our revenues to grow and compound. We grew in our transacting customers by 13% on a year-on-year basis to close to INR 8.2 lakh monthly transacting customers across the whole year. Users who use more than 2 services are our power users, we've compounded at 22% year-on-year. That's why you find the revenue to be compounding much stronger than the transacting customers because customers use more and more products on the platform. One of the leading metrics on payments vertical is tolling. The GTV of tolling for us in the last full year grew at about 27% on a year-on-year basis in a very mature and penetrated industry, largely driven by a strong product play and a distribution play. Speaking about the core highlights of this growth, more talking about the recent quarter of FY '26, the last quarter, Q4 FY '26. Year-on-year growth on the Q4 '26 basis, we did about close to 52% on a year-on-year basis. And if we split that into core and the newer businesses or the growth businesses, core businesses grew by about close to 30% on a year-on-year basis in the last quarter on a full year 34%. This business, obviously, on the back of the payments business, which is tolling business, grew at 27%, which we spoke about in the GTV growth was 27%, I just spoke about in the last slide as well, which when you compare to the NEPC CV growth, which was about 16%, so still driving 11 percentage points delta over the industry growth, largely because of a strong product and largely because of the strong distribution. Overall business definitely has grown at a higher level, largely because of stronger growth in the telematics business, which continued to deliver strong sales numbers. Under telematics business, we have different product categories where there is a basic GPS -- basic vehicle tracking service, and there is an AIS specialized vehicle tracking service, which is largely driven through mandates. The sales of the AIS vertical doubled during the last quarter, which was largely driven by mandates and largely driven by a strong distribution and our product play. So that's the narrative on the core business. Coming to the growth businesses. On a year-on-year basis, they grew roughly close to about 300% in the Q4 of last year, right? Largely there, the gross revenues are composed of the vehicle finance business and the Super Loads business. Super Loads business, the narrative continues to be the same. Our mature or, let's say, our first hubs of Bangalore and Hyderabad, we continue to scale, continue to double down and these continue to show signs of strength from a unit economics from a scale perspective. We had updated to you a couple of quarters back that we started our business in 10 new cities. Most of those cities or all the cities are growing much faster than the earlier established cities and largely because of the network effects of existing customers, relationships which we have activated in the older cities, they have translated to the business for these cities directly. And the supply base, which was activated on Super Loads in the existing cities continue to get activated -- continue to be leveraged and utilized in the new cities as well. So that narrative continues to be the same, and we're doing everything it takes to grow that faster. In the vehicle finance business, which is under the growth business, a bit older business compared to Super Loads, there, this last 2 quarters were very strong in terms of disbursals for that particular business. The previous quarter, we delivered a growth of 30%. On top of that, the disbursal further grew by 25%. Definitely a seasonally strong quarter for that business. But on top of that, strong execution has led to driving this growth. Good part about the vehicle finance business under the growth business umbrella is that, as you all know, we basically are investing a lot of money in our growth businesses A lot of money which we generate in the core businesses, we are investing in the growth businesses. Vehicle finance business probably by the end of this financial year would no longer be in the investment mode and would start probably churning cash flows, which will also enable us to move that into a core business kind of a trajectory from a narrative perspective. Going forward, commentary on profitability. Broadly following the trends of the last 3 quarters, overall yearly growth in EBITDA has been at 84%, which has moved to INR 190 crores trajectory, which we spoke about. On a recent quarter basis, there is a growth in profitability is 30% on a year-on-year basis, and we delivered a INR 50.2 crores of adjusted EBITDA in the last quarter. Largely, the narrative, if you cut across the momentum and the quality of revenue growth and profitability growth has largely been consistent compared to the last 8 to 12 quarters in the core businesses. Regardless of a bit of unfavorable macro headwinds in the last quarter, we continue to execute and deliver this profitability, right? And even if you look at metrics like operating leverage in terms of translating the revenue growth moving into profits, most of that is holding good in the core businesses as we speak. Moving into the newer businesses. That's where we continue to step up our investments because these are in the rapid expansion phases. We are conducting multiple experiments, be it on the supply side, be it on the demand side, be it for faster scale up, be it for quality customer service, be it for maximizing profitability, be it for blitzscaling in certain customer segments. We are taking up most of these experiments parallelly, which makes it imperative to add teams, add product and technology team members. This is also the area of strong investments in AI for us because Super Loads probably will be one of those businesses, which will be an AI native business for us as we strongly execute this vertical. One area we wanted to give a heads up. I think this is something which is not a hidden topic, but everybody knows about this, probably being in the heavy truck movement, intercity movement, which typically is -- can feel the headwinds maybe quite early on compared to others, right? So we believe that the West Asia conflict, which is a widespread conflict not only for us, but for the whole Indian economy, will have short-term headwinds with anticipated drag on freight movement and which obviously, because most of our revenue comes from flow-throughs, but we continue to climb on our revenues, that will be consistent, but maybe create a drag on our short-term growth. Long-term growth profile, long-term projection of how operating metrics will play around, everything will largely remain the same, long-term retention rates, long-term ARPU rates everything will be consistent. But I think in the short term, there would be some headwind, which we need to be watchful of. We need to be prepared into, and we are actively doing that. One small narrative on that, which is a very direct impact is, as you know that we make -- we have a fuel business, which goes on, which is basically built on top of the loyalty program, which OMCs work on. And they have suspended their loyalty program temporarily -- like that's the bad part. The good part is this has happened -- a bit of hiccups on this business segment has happened in the past as well. And some of this takes a bit of short time then it comes back. But yes, so some of these headwinds -- minor headwinds we'll be facing. Some of this impact has already been absorbed in the last quarter's profitability and some of this impact will show up in the next quarter as well. But again, reiterating, none of these is a structural change or none of these impacts long-term customer acquisition, neither long-term customer retention, neither ARPUs. And yes, so that's the broad narrative of the business, giving you a broad highlight on the P&L as we have narrated already on the top line, 46% on a quarterly year-on-year basis, on a full year basis, 55%. Net revenue growth, 31% on the recent quarter on a year-on-year basis, adjusted EBITDA growth of 30%, right? And full year, as you can see here, adjusted EBITDA is INR 190 crores and PAT is INR 160 crores. And we've always given this narrative that our adjusted EBITDA mimics the free cash flow from operations. So in the full year of financial year, we've delivered close to INR 185 crores, INR 190 crores of free cash flow, which has been a consistent trend of EBITDA to adjusted EBITDA to free cash flow conversion for us. And that's again, on an adjusted EBITDA basis, a growth of -- full year growth of 84% on a year-on-year basis. Broadly, zooming out and giving you a 4-year view, broadly from the time when we went public, so that you guys would be -- it's easier to look at these trends because we articulated that this is sort of the business model, which will be playing out. So if you can see on an adjusted EBITDA basis from FY '23, where we were in a strong, strong user acquisition mode. We continue to be in a strong user acquisition mode, but the annuity revenues had not played out till then. And that converted into roughly close to negative INR 6 crores in FY '24 and then turned around a strong profitability on adjusted EBITDA of INR 103 crores last year. That has moved up to INR 190 crores. So that's a slip of close to INR 400 crores, [INR 364 crores, INR 64 crores] over a 3-year sort of a time period. Same thing on PAT is even more stark to observe -- from a negative of INR 290 crores in FY '23. That's a INR 450 crores turnaround in profitability in 3 financial years. And that will be -- that has been the trend. And as we have accelerated in FY '25-'26 into newer businesses, we are investing -- the core businesses will have a continuing follow-through trend as these -- as you can see here, but the growth businesses will consume money. And in the overall basis, we will have a balanced trade-off of continuing to turn profits from core businesses and continuing to invest in the future so that we probably end up building a massively large company and massively transformative company in this space in the long term. Reiterating the strategy. As I always explain, I personally take a pride in executing the same strategy every year because that also gives a testimony that the strategy articulated a year back largely was profound and sound, and it helps us have a longer run through and our decisions stick with the test of time. So strategy largely remains the same that we have core businesses on tolling, fueling, fuel sensor, vehicle tracking, AI GPS and multiple experiments within the core businesses, the new businesses under core. Here, the key focus will be to continue to compound on profitability, which will be enabled to operating leverage. We'll continue to expand our market share. As the landscape continues to evolve because the space is attractive, continues to -- will continue to attract a few players here and there. So we will keep track of that, and we will not let the long-term picture go out, and we will keep investing in this business as well. And while we've delivered consistent operating leverage in this business in the last 2, 3 quarters also, we've also stepped up investments in core businesses as well. Last time I highlighted that. I thought I will remind that again. In the growth businesses, again, the playbook is same. We are betting on Super Loads and vehicle finance over here and classifieds continues to grow, and we have an armory of new experiments we continue to do. And these are the businesses we believe in with a very long-term potential. And as we execute, the road map continues to get clear, the confidence on execution in the businesses continue to improve. And some of these businesses have got -- kind and we execute well, we will move into the left side of core businesses as we move into the next year. So yes, so simply put, doubling down on execution in the core and turning more and more innovative and stepping our investments on the growth businesses. That's a summary of the strategy for the next year as well. We will pause here, and we can take questions. That's from my side.

[Operator Instructions] The first question is from the line of [Atul Bhosle].

My first question is basically on the Super Load business, while you have mentioned in the PPT that Bangalore and Hyderabad are showing strong unit economics. Do you want to elaborate a bit on this? Like are these hubs operating on breakeven? Any quantifiable metric that you can share or highlight? That's my first question.

Yes. I think largely, it depends on the -- it's a technology business enabled through manpower, right? So the cost -- the direct cost of the business are manpower costs. So, largely, upon tenuring of manpower, people hit breakeven periods -- so more tenured manpower is definitely returns money to the company. Newly hired manpower does not. So from that point of view, it's consistent, right? And upon continuous scalability, the equation continues to hold. So that's the strengthening unit economics part. And when you launch a new business, you first reach an ability to plot a P&L for the business in the future. I think we are able to do that strongly. And yes, I think that's all we can share at this point in time. Yes.

And just on that, are we continuing to invest in our existing cities as well for the manpower like we are increasing manpower in those.

Yes, we are. We continue to scale teams rapidly in the existing cities also. If we stop that, we can [slide] breakeven very fast, but that's not the objective.

Okay. Understood. And in the vehicle financing piece, could you share some color on like what's the book size as of FY '26? How much is on our books or let's say, disbursal growth or ticket size growth? Any metrics you want to highlight?

Yes. So close to INR 600 crores is the assets managed by our partners overall, like partners in our books. About 10%-ish is basically on our books. Their strategy remains constant. Basically, whenever we onboard a new partner for the new partners confidence, we do a co-lending book together. And any new experiments, if you see our book, a large part of the book is new experiments as well. So anything we want to launch or we want to see we first perfected on our book. So our book, we will only use for newer experiments and to probably launch new partnerships. So we continue to build the vehicle finance on an asset-light model as we have always articulated in the last 3 years. The strategy remains the same. And as you always understand, because we get a sourcing fee and then we get a operational fee continuously. So as and when partners make more and more money from the book, the revenue share in revenue -- absolute revenue made by us also increases. So that's the broad nature of this business. And the fixed cost, if they get covered out, this business will enter the breakeven phase.

All right. If I can just squeeze last question. You have seen the improvement in your working capital days mainly because payable has increased. Where is that coming from? Is it like mainly because of the Super Load [season]?

Yes, I'll ask Satyam to take this question.

Yes. Working capital days, Atul always has been pretty robust for us. If you can see no receivables exceed more than 3 months. Everything comes in like more than like some of -- at least 50% of the revenues are received in advance for a year if you look at the telematics business. On the other businesses, it's less than 30 days. On payables, there's nothing much that is there. It's a very small number. Some of the, let's say, purchase of telematics, et cetera, is what would be the AP that would have been built up, but nothing has changed.

The next question is from [Raghav Mittal].

I wanted to touch upon, Rajesh, on the MLFF system that the government is now aggressively trying to target. I mean the couple of pilots as per news articles has gone viral, and they are targeting like 200 corridors in a couple of years and potentially nationwide rollout by 2029, '30. So can you just talk about MLFF being postpaid? Of course, you may also have a prepaid FASTag wallet, but -- how do you think about our relevance to our customers sort of reducing over time? And how do we mitigate that?

Yes. So basically, the whole framework of MLFF is on prepaid collection. That's point number one, right? Because in India, small ticket size is postpaid and enforcement and the cost of collection of that is going to be very high. And even now in the current framework, if you pay later, there's a penalty fee of double, right? So when you use the word postpaid, first of all, it will be prepaid, right? And second is that in the MLFS construct, right, the way to understand is that there are 2 ecosystems. There's an acquirer ecosystem and there is an issuer ecosystem. 100% of our revenues are from the issuer ecosystem, right? The MLFS replaces the existing acquisition ecosystem to MLFF-based acquisition ecosystem, which uses cameras and much better quality RFID readers, right? So that's the construct. And in the full-scale rollout of MLFF as well, the payment ecosystem, the payments methodology is basically FASTag. That is what has been articulated and that will continue. So point number one, the relevance of issuer ecosystem in terms of FASTag being the lead vector of conducting payments on the issuer side is going to be there forever. Now -- so that's like base case, right? Then the next context is MLFS graduating into a satellite-based system is basically the next thing. Even in that change, the change is again on the acquirer ecosystem, not on the issuer ecosystem. That's like even if you pass for MLFF into the satellite GNSS-based tolling era, right? Now answering your question on in MLFF again, right, because MLFF again provides an opportunity on the acquisition side to enter because largely, it's a telematics-led capability with a technology stack led capability and being present in this ecosystem for a long period of time, would we as BlackBuck would be looking at like keen to participate on the acquirer side, right? So that is something we are like, let's say, in talks with various players to discuss and see if we can jointly enter into some of these opportunities as we move forward.

That's very helpful. Just as a follow-up, what percentage of MLFF payments today are prepaid? Is it 100%? Or is it lower? Because I might be wrong. From what I read is like, yes, there's a penalty if you don't complete the fine within stipulated period, but it's a postpaid arrangement.

We -- whatever offline information we've received, we believe 99% plus of the payments are prepaid.

Okay. And what kind of opportunity...

Because if the tag doesn't have a balance, it's considered as an offense as per the way it is defined and there is a penalty for it that you don't have a balance in your tag and you've crossed it. It's a penalization framework and not an encouragement of postpaid framework.

But how do you check the tag because there is no barrier where you're stopping to check your tag?

So the whole gantry system, which is created on top of the like tollgate, the RFID readers, which erstwhile used to be very close to the RFID tag are now on top of these gantry systems, number one. And number two is that they're using cameras to read the number plate. And government with one vehicle, one fast tag has already implemented the unified mechanism where a truck or a car only has one FASTag. So with this whole ecosystem, they are able to achieve this high level accuracy of collections.

Okay. And lastly, what kind of partnerships are you exploring when it comes to the issuer when it comes to the acquirer side of things.

Yes, we are in very early stages of exploring these. Once there is more concrete plan on this, we would be happy to share.

[Operator Instructions] Next question is from [Mr. Ritvik Agarwal.]

My name is Ritvik and I'm from 3P Investment Managers. I just had one question. I wanted to understand more on the telematics business. Any updates on the number of telematic devices that we have now? And how do we see the growth in this business going forward?

Yes. So telematics business growth, I'll give you some color so that you will be able to get a feel of where the devices may be, et cetera, right? So basically, if you split the business of telematics into 3 to 4 parts. One is our core vehicle tracking device, which is regardless of mandates, which is a basic GPS tracking. Second is the AIS device, which is driven by mandates, right? And in terms of your -- third is your fuel sensors and let's say, the new initiatives like DashCam, et cetera, right? The basic GPS device penetration, obviously, coupled by a bit of cannibalization by AIS because AIS is now mandatory across 10 states which drives the growth of AIS. But for the basic vehicle tracking device, that growth rate like, let's say, is on a lower side, right, than the overall core business growth rate in the range of that 15% level. The AIS device, because it's a mandatory device in various different geographies, et cetera, is seeing a very strong growth. As we also gave you a narrative that over the sequential quarter, we doubled the AIS numbers as well. So sales is increasing at a very fast pace and revenue will follow suit in time or the other. Fuel sensor business, again, because it's a newer business in the stack, that continues to compound, right? So overall, as a telematics category, because of a mix of each of these kind of businesses sort of put together, delivers a much higher growth rate, right, than the rest of the core businesses. This is the broad model to understand.

Understood. And the second question on the disruption from the Middle East war. Just wanted to understand, is that the reason why we have shifted to a tolling GTV only metric?

Yes. To be able to better appreciate what's happening beneath, we segregated that metric and started giving tolling GTV to it. That's the largest part of the payments GTV also and also drives a large part of the revenue also. So that gives you a direct indicator.

Any sense on how much percentage would be tolling GTV of the total payments GTV so we can make a...

I think broadly -- I think broadly, you can assume 90%-ish basically, yes.

The next question is from the line of Jeetu Panjabi.

I, Jeetu Panjabi from EM Capital Advisors. So I joined a little late, but a basic mundane question. When I see your growth numbers, they look pretty good and then your margins have come off. Is this a function of you investing in the growth businesses and that those costs adding up and thus the margins headed softer? I can't hear you.

Sorry, Jeetu, we lost you. We only heard part of your question.

Okay. I'll repeat. Can you hear me now?

Yes, we can hear you.

Okay. So my question is -- sorry, I joined a little late, but the headline question was that I saw the growth numbers, your growth numbers look good, but your margins have softened. Is that a function of you all investing more capital or more money into the growth businesses and thus those costs adding up and coming and hitting margins?

Of course. Yes.

Okay. Second linked question is, is there a thought process in terms of the balance between growth and profitability? And how would you manage that as you navigate the next 3, 4 years? And also what is, in your mind, the growth that would be -- you'd be comfortable with over the next year or two to guide?

Yes. So I think a good question. But I think the way we think about growth and the balance of profitability is a little opposite because for us, growth is actually an outcome because we don't like -- we don't manufacture a growth rate. Let's say, for example, core businesses are there. They are basis some of the strong fundamentals of the economy works and how our acquisition engine works, right? And at every point in time, we try to go in to invest till the time it's not profitable to acquire that customer anymore, right? So that's the way we go about driving growth and the growth percentage comes as an outcome, right? That's point number one. Because getting a customer in an unprofitable way doesn't help the company doesn't help anyone in the long term because that's not sustainable, right, point number one. Point number two, on how do we balance growth versus profitability from a long-run perspective. Again, whatever number, compounded profitability number you are seeing, it's again not a calculation that we should have done 100 of core profit and then we should have invested only 20 and 80 which should delivered as profit. Again, that's not a number. We are in a very large industry, right? It's a $200 billion kind of an industry, and we've built a company which is very small till now, and there are so many avenues to grow, right? So the way we look at always is that are there opportunities to pursue? Are there -- like, let's say, I'm in the testing phase, what will it take to really invest into these opportunities? And God being kind, the kind of platform we have built, most of the new opportunities we're able to test it out on a very small base. So that even does not ever affect burn. The burn comes in only when we try to scale up. And that scale up has a very strong bar on being able to define micro markets, being able to define ability to turn profitable whenever we want, right? So the way to look at it is, we define the quality in which we want to build a business. And inside that, if we get an opportunity to invest and an investment makes sense, right, we like typically look at allocating capital regardless of what that quantum is, right? So this is our framework of going about newer initiatives and the existing core businesses because this just keeps it very clear in terms of that we are building a company which always has to be highly innovative. We will invest in every opportunity we get to if that's going to be long-term profitable and that's going to solve the customer's problem and that's going to return immensely to shareholders in the very long term, right? So that's how we look at it. And whatever you are seeing, it is an outcome of such an input process.

That helps clarify a lot of things. But what kind of growth -- headline growth do you think the company will sustain at?

I mean we -- as we generally don't give growth guidance, I think this is -- yes, -- we've typically helped you guys to plot how to look at the business, how it will scale, et cetera. But yes, but we have -- like we've decided not to give guidance on our numbers.

Okay. And one last question, if I may sneak in. There was some of the senior team who left. I did -- can you talk about the reasons and what happened there?

So we've spoken about this topic in the past, like the team at BlackBuck, which reporting to me typically has an average tenure in the company of like 8 years, right? And that was the case even -- and the company is like 11 years old. And that was the case even when we were going public because we are going public when we were 9 years old and the average tenure of people who are reporting to me was 7 years. So they were like the earliest of the employees, built the whole company, did good for themselves, right? So one of them -- 2 people left as you -- 3 people left from an SMB perspective, right? One of them, I think, left within about 2 to 3 years. And other 2 of them were very long with us 7 to 9 years. One of them left to pursue building his own company. One of them left to pursue sort of more balance on health, et cetera. So that's the context.

Our next question is from the line of [Ankush Agarwal].

This is Ankush from [indiscernible] Capital. Just one question. So a few quarters back, the growth business was -- I'm looking at net revenues was around INR 10 crores, INR 11-odd crores. And last few quarters as we have scaled up the Super Loads, we have reached around INR 15-odd crores of run rate. So about INR 5 crores extra. What I'm trying to understand is when do we expect this say, INR 5 crores of Super Loads kind of starting to INR 20 crores, INR 30 crores, INR 40 crores, INR 50 crores kind of number. Because in terms of cost, I think even if we consider that there are some extra incremental investment in the core business, the cost base jump, say, INR 70 crores, INR 75-odd crores to INR 100 crores -- so obviously, the investments look kind of high versus the incremental net revenue that we're generating on the super load, like INR [indiscernible] crores quite basic to be honest, to begin with.

Yes. So I think the answer is absolutely right. I think the question is absolutely right. I think the pace of Super Loads definitely would have been much stronger. The -- in terms of when that will come through, probably when the confidence on really going further all out in terms of strategies across all the newer hubs, et cetera, maybe I think that is the time when such kind of scaling can be expected. And talking about the increase in the overall cost, -- remember that the investments in the core businesses also have been stepped up. So the number which you're looking at it, a good part of that, like, let's say, has also gone into the core businesses. It's not only the cost of Super Loads, right? And a good part of that also has gone into scaling up of vehicle finance, though vehicle finance -- like the revenue growth of vehicle finance continues to get a higher pace than the investments increase in investments, obviously, right? And a part of that has gone into Super Loads. So completely it's not Super Loads, point number one. Point number two, definitely, the growth rate could have been faster, right? And that's also our pursuit to make that happen. But as we have always maintained the playbook building on Super Loads is taking time, and we are also taking an AI native approach to ensure that we build the business in a much faster way and a better way. And so that's the -- some of the narrative on how we are going about it. But yes, we can expect that. We don't know when. Is it like 1 year down the line or 2 years down the line. But then yes, that's the goal.

I mean the reason for asking this was, I think we feel in terms of profitability, say, back in, say, Q1 of FY '26, almost 36% of adjusted EBITDA margin. And now we have sort of stabilized around 31-odd percent. So just trying to understand, is this the kind of profitability that we could expect for, say, next 1, 2 years during which you sort of scale and some of the newer growth businesses because unless those businesses scale up quite rapidly, the profitability might even come down or, say, at this stable level about 30-ish percentage. Is that the right way to assume that's how things play?

I think the way the earlier gentleman was asking the question, right, profit percentage is actually again a much more further outcome. like, let's say, because we generate X in core, we invest Y. Now we see rapid growth, we increase Y, right? X largely follows secular trend, which I was mentioning, follows the operating leverage construct, follows the growth construct. Why is all independent on that quarter need and probably subsequent 2, 3 quarters, right? So I would say that it's hard to put a number to this. But the way to look at it is it's an outcome metric. And it is determined by X plus Y and if X minus Y, in fact, why is a negative sign. And then depending on what Y is your X comes and X divided by overall net revenue as a percentage. So that's why you see -- because the overall revenue growth happens like and then there is increase in burn also and then you have a profit which also increases. So it's a pretty much composite metric, right, X minus Y by total R, right, Rx plus Ry. So that's how you should look at it.

So would it be possible to sort of split like how we are revenues for the core and growth business? Would it be possible to split the profitability as well? Because then it's better for us to appreciate how the core business is playing out and the investment if you're doing in a growth business and even if it does burning cash, I mean, that is understandable as investors. But if we have a combined metric, it's very difficult to judge how the core business is sort of performing.

Fully agree with you, but I think we believe it's still too early. We will evaluate this down the year on when can we improve the visibility. And I definitely understand your pain because modeling is tough for you.

The next question is from the line of [Arun Tirumalai]. The next question is from the line of [Abhishek Banerjee].

This is [Abhishek] from [indiscernible]. I wanted to understand just a couple of things. One is you gave kind of a cautious outlook on the Middle East conflict. Do you -- I mean, how bad do you see your revenues getting impacted? And then if you could give some idea whether it's a growth slowdown or could there be some sort of a decline also? That would be really helpful. And secondly, on the vehicle financing business. And this is a question that I keep getting from investors. So I wanted to just also check with you. Is there any right to win that we have in this business? Is there something of a unique offering that we are doing, which is kind of giving us the confidence to try to build here given that there is already enough number of NBFCs and financial companies who kind of operate in this space?

Yes. I'll answer the question sequentially. So the Middle East crisis, the cautionary context was in terms of -- as I think clearly articulated also, I think there will be a drag on growth, right? I think that's the thought process, point number one, right? And what we are seeing, as I'm mentioning, right, let's say, because intercity trucks typically are sit at the top end of the value chain. And mostly until March, I think there was a lot of inventory stocks, which would definitely move. But I think going into April and May, we're finding some kind of drag on it taking off. So I think that's the broad-broad. I don't think -- because a lot of our revenues are also compounding in nature. So you will see it in the very small subsection, some kind of a number up, down here there. But I think that's the broad narrative on the Middle East crisis. On vehicle finance, I think very good question. See, basically, vehicle finance in like, let's say, the major players who do large competency -- one of the large capabilities or differentiations or right to win there, but all of them is distribution, right? And obviously, the whole aspect of freight engine, building intelligence with the customer, right? Distribution and being very close to the customer is one of the most important right to wins for them. And the whole -- if you look at for a truck operator, digital means BlackBuck, right? So our vehicle finance play is largely predicated on being a digital-first company, being in the -- like our mobile app is in the pocket of like a large number of fleet operators across the country. We generate real-time data about these truck operators. So our vehicle finance play is predicated on this aspect, and that's yielding results. And it's also -- it's more like growing a growing market. It's a very big market. And the whole technology like led approach to vehicle finance in terms of from -- right from meeting a customer to disbursing the loan for a large part of the customers, we're able to do it within like 24 hours to 48 hours, 24 hours is something which we have achieved for a lot of customers. So I think there is a technology play where there are small 1x, 1x, 1x when you add up, it clearly gives the 8x to 10x play. But that's true from a differentiation perspective. But if you look at it from a technology kind of a business where you can architecture a nonlinearity, we believe that at the end of the day, it's a risk business for our partners, right? So partners will take cautious calls continuously. So we believe that it may not be a nonlinear business, and we have to work with the partners with their own approach to cycles, with their own credit writing frameworks and the delinquency management. So we believe that it will be a strong tech-led vehicle finance origination play. which is not nonlinear, but will give sufficient profit generation in the long term if built in the right way with the right partners. I think that's the broad takeaway of that business.

Got it. Just to expand a little bit more. So you are not able to guarantee any sort of [indiscernible] performance of these loans from their transaction on your platform, right? So that is a call which is completely with your lending partner.

Yes. That is completely with the lending partner. And we make an origination fee and a collection fee depending on how well the portfolio behaves for them.

Next question is from [Abhneesh Tiwari].

This is [Abneesh] from [indiscernible]. My question is on this growth business. Is this business -- you said investment mode. So do you sort of have any profits at contribution level or there also because of being in investment mode, it remains a negative number?

Yes. I mean this is the good part and also holds us back from going crazy. So in trucking business, what we've understood over the years is that building a business with negative contribution creates a lot of negative behavior and sentiment amongst the market participants because the nature is at the end of the day, it's a B2B relationship, right? So most or like all our businesses across, regardless they are new or experiments or whatever, we are always contribution margin positive. We make money on every order we do. So if orders scale, our profitability converges.

Great. So it's only at the EBITDA level or below that -- around that line item, which would be a negative number, right?

Yes.

That was the last question for the day. I now hand over the call to Mr. Rajesh for his closing comments. Thank you, and over to you.

I think that's all from our side. And I think we've covered everything which was on top of the mind, at least has given you a flavor so that you guys have a feel of what you're building. And yes, again, as I articulate, we always love to keep it consistent because I think building businesses with consistent strategies over a long period of time with laser-sharp focus on few values and tenets creates, I think, big businesses and enduring businesses. I think that's what we are here to build. And yes, thank you so much for attending our financial year-end earnings call, and see you soon.

Thank you once again for your time and participation. On behalf of BlackBuck Limited, this concludes today's conference. For any questions, please feel free to write to us on the e-mail IDs mentioned on the invite. We appreciate your engagement. You may now disconnect your lines.