CarTrade Tech Limited (CARTRADE) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to CarTrade Tech Limited Q3 FY '23 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. The statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vinay Sanghi, Chairman and Managing Director, CarTrade Tech Limited. Thank you, and over to you, sir.

Thank you, and good morning, everybody, and thank you for taking the time out early this morning for this call. What I'll do is run you through a few key financial highlights, and then we can clarify all your doubts and questions which you might have. I think the first part is really which -- on a presentation, which we've, of course, shared with each one of you, on Slide #2 are the key highlights is we have, on a 9-month period, had a revenue growth of 23%, adjusted EBITDA growth of 30% and adjusted PAT by 43%. As you can see here, the number of vehicles auctioned are most -- more than -- approximately 1.1 million annualized. Traffic is 35 million unique visitors per month for the last quarter. Organic continues, which is unpaid or traffic we don't pay for is 87.6%, which was again healthy in the last quarter. We've also achieved the highest ever revenue at close to INR 116 crores for the quarter. And 9 months, close to INR 311 crores and highest ever adjusted EBITDA in the quarter, which is INR 36.6 crores, which is almost about 85.1% now over a 9-month period. So we had probably our best revenue quarter or adjusted EBITDA quarter. PAT is INR 14 crores for the quarter, adjusted PAT, adjusted for ESOP and tax -- deferred tax, which is deferred tax, sorry, is 9-month, approximately INR 52 crores. The company is obviously debt-free and continues to have strong cash balances, approximately about INR 1,000 crores. I just want to highlight that even though we had a highest ever revenue and EBITDA -- adjusted EBITDA quarter, it has been a challenging quarter for us. I think these results are in spite of some of the challenges we faced in the business. If you go to consolidated financials, which is the next slide for each one of you. As I discussed, revenues gone up by -- for the quarter at about 13%. Adjusted EBITDA also for the quarter, 13%, this is Q-on-Q, year-on-year. Over the 9-month period that I discussed with you, it is 23% revenue growth and 30% adjusted EBITDA or the adjusted EBITDA, as we discussed is INR 36.6 crores for the quarter. Adjusted PAT is INR 24 crores and PAT is at INR 14 crores as we highlighted in the previous slide. If you see the margin, EBITDA margin without other income is about 19%. Of course, with other income is close to 33%. Even our adjusted PAT has grown by 43% for the first 9 months. When it comes to standalone financials, which is the next slide, this has really been a good quarter for our consumer business, CarWale, and our stand-alone financials reflect that. There's a 45% growth in revenue and 128% growth in adjusted EBITDA for the standalone accounts. Even in a 9-month period, we've shown the consistency and growth in the consumer business, which is a 40% growth. And as you can see, the 92% growth in adjusted EBITDA. I think there are some of the things we've been talking about through the last few quarters is that when we see revenue growth, costs don't escalate in relation to the growth of revenue. And you can see cost Q-on-Q almost flat, but big growth in revenues. And that reflects in the 92% growth in adjusted EBITDA. Costs are not growing in relation to the revenue growth. I mean, from these numbers, you can see it. adjusted PAT standalone is up by 9 months of 100%. And even when you look at PAT, those standalone close to INR 11.8 crores or INR 12 crores. And as you can see now, the margin without other income in the standalone entity is almost 22%, which is a double of the last year same period. So 11%, it was 11% in the third quarter last year, and it's now doubled to 20% -- 22%, which shows the leverage in the business itself when the revenue goes up. We got to the next slide, the remarketing of the auction business or Shriram Automall's financial results. as we've had a very, very good quarter in the consumer business, the remarketing business has had a lot of headwinds, and it's been a tough, tough quarter for them. Revenue is actually down 9%, EBITDA is down 44%. Although 9-month revenue growth is 11% and EBITDA there is down by 9%. So it's been a really, really tough quarter. I think this is primarily as we had talked earlier, we've had some fall in our supply from repossessed -- of repossessed assets and then that's caused this revenue degrowth in the quarter. This is also a business which has got leverage. So when revenue degrows, also EBITDA falls. As we've seen when revenue grows, also it grows [indiscernible]. So I think that's part of the leverage in this business as well. But it has been a tough, tough quarter, and that's primarily because we've seen supply or repossess assets come down. This is also the case in the previous quarter. So we are hoping that -- of course, this is market-driven and we're hoping that maybe in the next quarter or the quarter after that, this would correct itself. But at this point, there are headwinds in this small reprocess asset scale. The one thing is that the -- our retail vertical within supply of vehicles from retail channels has gone up and has been growing nicely. So we feel that one is that, that actually helped even maintain this performance because that's been growing at a reasonably fast clip. And we feel that maybe over the next few quarters, the growth in that business, it will help our volumes and performances in the remarketing division, but it has been a tough quarter for this business. If we go to the next slide, these are the monthly UVs. It's up to about 35 million from last year's same quarter was 31 million, which are our average monthly unique visits on our consumer platforms -- all our consumer platforms. If you look at our Google search popularity, that's also maintained a reasonable or sufficient distance from all our competition on the both CarWale and BikeWale side. And if we look at the auction volume, our auction listing volume, both have degrown and that's in reflection by the revenue degrowth as well. This is what I wanted to highlight with the overall financials. I'm happy to go into question and clarification. I just want to give a few more numbers, which we normally give out on the consumer business. One is that our dealer share of this business has been going up over the last year. Now approximately 38% of our consumer business comes from dealers and 62% in the last quarter came from OEMs. Our new vehicle business, approximately 84%, 16% is used. But the used business has had reasonably substantial growth over the previous year. So the percentage is almost 90-10, or 84%,16%, which shows the growth in the used vehicle business. So these are the other couple of highlights I wanted to give out to you. I think the other last point would be the share of the repossessed business itself, as I said, is going down as a percentage of our total business. And the retail business is going up in Shriram AutoMall business. That's the key highlights. I thought we can take Q&A as a clarifications for you.

[Operator Instructions] The first question is from the line of Vijit Jain from Citi Group.

Congratulations. Looks like a good set of numbers on the standalone business. My question is looking forward into the next year. Obviously, this year, in the standalone business, your margins are nicely expanding, but you have kept your marketing spend steady and employee costs steady as well. So looking forward into next year, how should we think about the standalone business in terms of margins and in terms of marketing spend? That's my first question. And the second question is if you can give an update on where we are right now with abSure?

Sure. I think the first thing is that I don't think marketing spends will see any dramatic change over the next year, if that's the question. I think we feel that as you can see a digital brand index is -- relative competition is strong. And we think that it will be similar or in similar proportion to our revenue. In terms of wages, you will have definitely wage escalation based on increments, some additional hires, et cetera, et cetera. So we do see that -- and that's the leverage in the business where even the wages will go up. It is not in relation with the growth in revenue. And that should see -- if there is revenue growth, it should see margin growth as well as we've shown over the last year. The fundamentals of the business remain the same, increase in revenue does not have a proportional increase in cost, just as the nature of the business. So we see that continuing or the dynamics of that continuing. abSure, we continue to roll out and continue to get stronger at -- it's just still a very new business for us. It's really an early-stage business for us. So I think we're on a 73 locations, Aneesha, am I right? Is it 73?

Yes.

And we continue to roll out and continue to work closely with dealers and customers to make sure our experience for them is best-in-class.

Got it. And just 2 housekeeping questions then from my side. You already mentioned the mix of revenue on the consumer side. If you could give the Y-o-Y growth rate for new versus used, OEM versus dealers, that will be great. And on the remarketing side, if you could give a current split of mix between retail and repossessed, that would be great.

Yes. We can give detail. In the last year same quarter, the repo was about 70%. It's down to 53%. Retail was about 19%, 20%, it's up to 34%. So I think that's changing. The mix is changing in that business. The growth on new and used, I mean, Aneesha, do you have that here handy?

Yes, Vinay. On the new side of the business, the growth was about 27%. On the used side of the business, it was about 154%.

Thanks, Aneesha.

Got it. This is for the quarter, right?

This is y-o-y for -- okay, you -- for the quarter would be 19% and 161%.

Got it. And how about between OEM and dealers?

The OEM business, so again, you would want for the quarter, right, not for the 9 months?

Yes, yes, for the quarter. That's right.

Give me a second.

We'll come back and look into it.

Yes, sure, sure.

Sorry, I have the -- OEM is about 24% and dealer is 37%.

The next question is from the line of [ Nisha Sarda ] from Atera Investments.

This is the first time I'm attending the call. So I just want to understand your revenue source in the standalone business. When you say consumer business, so is this advertising revenue? Or is this transaction revenue?

So on the consumer business, we monetize car manufacturers and dealers who list their products for sale -- for new cars and used cars for sale to consumers. And we monetize both of them for advertising in lead revenue. The transaction revenues are insignificant here. On the auction side of the business, where you have sellers and buyers, auctioning vehicles, it is all transaction revenue.

Okay. So that's also in the standalone, right? The transaction.

No. No, the remarketing is the auction, and the standalone is the consumer business.

But remarketing is mostly that auto mall, right?

It is Shriram -- it is -- the company name is Shriram AutoMall. There's an online-offline business. It's a digital business.

The next question is from the line of Siddhartha Bera from Nomura.

Congrats on a good standalone performance from the margin. Sir, I wanted to first take on the group outlook. I mean, obviously, Q3, we have done quite well and reported a very strong double-digit growth. As you said, operating leverage is very important to the business. So just wanted your thoughts on how you are looking at the growth in the coming year across segments going ahead?

We normally don't give any growth guidance. But to be honest, I think we've been through a year of a situation where the auto industry has seen -- as you can see, this year probably grew at about -- the car sales probably grow about 25%, 28% for the year. And it's been a strong year for the growth in the new car industry and also that the used car demand has been quite strong. It's hard for us to tell what the next year in the auto industry would be, but I think that growth would be -- growth rates will be much lower than this 25%, 28% in the industry you're seeing for next year. So also what might happen -- so that's one part. But also on the other hand, supply may be higher than demand. I think we've seen some shortages of cars this year. Next year, you might find that with demand -- or the growth of demand slowing down. You might find the supply higher than demand. And then that becomes a little more favorable for us because then dealers, the car manufacturers tend to spend heavily in advertising. So we see similar market conditions. It's hard for us to give any real growth guidance at this point.

Understood. But just in terms of your mix, which segment do you think can grow at a much faster pace, like right now, dealers is growing at quite...

Yes, I think this trend will continue for some time. The dealer and OEM, retail and reprocessed trend will continue. I think this may be a longer-term trend, I think. I just feel like in advertising -- when you come to advertising, the first part is the OEM, which is far more aggressive in the first year of our business. And then the dealers over time, they advertise in growth. So I feel the dealer growth rate may continue to, if possible, outpace to manufacture growth rate, if possible.

Okay. And all the margins -- again, I mean, we have seen some -- in terms of our unique visitors also slightly coming down quarter-on-quarter, is it a seasonal phenomenon? Or is it because we have to sort of cut back on our marketing spend that it has come down some...

No, no, no. I don't think it's related to that. I think it's just -- if you see last year same period, it was 31 million, it's 35 million now. October tends to be very heavy -- September, October months tend to be very -- those 2, 3 months were very heavy buying seasons, right, just in India. So this marginally was 37 million in the quarter before, 35 million now. It's -- I don't think it's a reflection on what marketing spend is. It's also a reflection of consumer demand.

Okay. So you're saying this level of 12% odd marketing split would be a sustainable number going ahead?

Yes, I don't think the marketing has changed too much, no.

Okay. Okay. And sir, on the abSure, I mean, if you see last quarter, we had about, I think 63 locations. Now we are at 73. So we added only 10, I think, stores in the quarter. We, I think, had estimated to such -- close to 120 by year-end. Is this still on track? Or do you think the ramp-up there is slightly slower?

Yes, I think the rollout is a little less than what we predicted about a year ago. And I think that's also conscious to make sure that we get the right locations, the right franchisees, the right model, the right customer experience, et cetera, et cetera. As again, I said, abSure is one part of our used car business. So it's a very insignificant part of our total business. It's almost -- it's a very early-stage business. So the volatility in that business was very, very early, is greater than the other businesses which are far more stable. So I think it will probably be maybe 20 locations or 25 locations by March. It looks like that from here. Maybe 20 more, maybe 20. Yes.

And can you give some -- any medium-term guidance you can -- you would look to highlight like in the next 2, 3 years, where do you want this to be?

Sorry. I didn't get that. I didn't hear the last question, sorry.

In terms of the ramp-up, any 2-, 3-year out guidance you want to give about how many stores you want to be in abSure.

No, I don't think at this stage, we'll give a future guide -- forward guidance on it. But the idea is to be present and roll out as quickly as we can. But also subject to getting the right location, the right franchise and the right experience in that location.

[Operator Instructions] The next question is from the line of Sachin Dixit from JM Financial.

So quickly on the number side. Obviously, as you mentioned, that standalone numbers are brilliant, remarketing business take through some headwinds. I was just thinking like on remarketing, I think it's so much market-dependent. Do you think there are levers that you can pull within the company to drive growth? You do mention the retail business growing. But do you think retail or any other business that you can put your efforts into can drive decent enough diversification for remarketing business?

No, you're absolutely right. And I think this is something we discuss internally is that how do -- if you put that's a 70% of our business a year ago, it is down to 50-odd percent, right? So I think the view here is that how do we grow other verticals within that business -- within the company, right, within the remarketing company. And retail vehicle, some retail sources is becoming a significant contributor to us and a significant -- and growing at a significant pace. That's clearly one area. We like the commercial vehicle side of auctions. We like multiple verticals there. So we are focusing a lot on other verticals. Maybe one can say that we should have done it earlier and derisk in a way -- of fall in one segment. But now it is happening. I mean I think we're becoming more and more widespread out from supply sources now rather than some part coming from the repossessed.

Good to hear. And quickly on this abSure business, right, I know you mentioned that it's decently small. And -- but meanwhile, is there any headwinds that you are seeing? Like why do we not see any metrics being released on this business anymore?

Why do we see any -- sorry?

Why do we not see any metrics being released for this business?

Yes, it's just very early. I think it's very early. We are still trying to -- as I said, it's been 1.5 years or so, maybe a little more than that from piloting to experimenting to putting up the first rollouts to, again, understanding customer experience, franchise profitability and again rolling out. So these are early-stage businesses. As you know in India, early-stage business like [indiscernible] business, is it still -- there is -- it's more stable now in terms of our own understanding. So we're just still -- and I said it's very, very insignificant in our financials at this point. We also feel in the next 3 to 5 years, it still be in a very small percentage of our total business. Although we're very excited about it, and we've got a very good asset-light model. We're still trying to get full understanding on customer experience, franchise profitability and et cetera, et cetera. When it becomes a little more stable, then we start rolling on metrics, which matter. We are still at [indiscernible] matter.

Got it. Just one final question. The remarketing piece again. We did see very minor revenue growth if we take out the budget of stock and trade portion from the revenue on a sequential basis. Why did other expenses grow? Like what was...

Yes. In fact, I think it's actually degrown by 9%, the remarketing business, not grown. It's degrown by 9%. But the other expenses grew because we've got certain contracts with certain customers. And during the quarter, we normally get confirmation of these contracts and deliveries to these 2 customers on our valuation business. And during the quarter, we had at least about a couple of crores, INR 2 crores of confirmation to customers on our valuation business. Our valuation business is actually the low margin business. And then the corresponding cost got booked, which is the cost of carrying on to the inspection and valuations. And therefore, you see a little jump in variable cost, which is the other income -- which is the other expense, am I right, Aneesha, is that correct?

Yes.

This is probably a one-off. I don't think you'll see that again.

[Operator Instructions] The next question is from the line of Nishit Jalan from Axis Capital.

I have 2 questions on 2 businesses. So new car business, obviously, is doing well for us. So there, I just wanted to understand, you partly alluded to this that where are the dealers spending in terms of marketing, which has come down very substantially, whether as a percentage of revenues, how much they tend to spend, is it back to normal levels? Or is it yet to come to normal levels because this demand versus supply issue is still there. right? So that will be my first question. And is there any room for us to add more dealers on the new car side or our growth will be more dependent on existing dealers spending more? So what will be the drivers of growth in the new car business?

Sure. A year ago, the market conditions were not favorable, where demand was much, much higher than supply. I think you're seeing that only a few products, and there are still a few cars or vehicles where supply is lower than demand. So it's not, I would say, a fully favorable position, but it's much better than a year ago. I think most predictions are that over the next year supply will exceed demand. And that's probably the best conditions for us. But it's not fully -- there are still a lot of dealers or manufacturers who advise less because the products are not short supplier. So that's the first. I think if the conditions were quite bad a year ago, it's much better today. And probably in the next 4 to 6 months, we'll get even better as supply exceeds demand. The second question was -- sorry, the second question on dealer -- adding more dealers, right? Yes, I think it's a combination of adding more dealers as well as, at the same time, penetration of budget within the existing dealers' budget. They're still very early days as we put out reports earlier, hardly 13%, 14% of manufactures of dealer money is spent on digital advertising. In most countries, the 35%, 40%. So you should see a long-term shift of dealer's budgets to digital, number one. Number two, you should see more and more dealers coming on the platform both for new cars and used cars. So it's a combination of both those sectors. And that's one of the reasons you've seen the dealer business now grow at a faster rate than the OEM business.

Yes. Yes. So Vinay, can you share some numbers as to what used to be the marketing spend of dealers and how much it has come back and how much is yet to come back? Any broad numbers just to get a sense how much of it is back?

We'll send it to -- it's on a [indiscernible] done report for us, which captures some of this. We will share that with you.

Okay. And would you be able to share some details on how many new car dealers we are in panel or we are getting business from. So you just mentioned that one thing which is very clear is that the digital spend of dealers will increase, so that will benefit you, right? Their overall spend will probably increase that will benefit you. I just wanted to understand how many dealers we already have who are paying us and how does it compare to the overall dealer...

We'll share that as well. The 3, 4 buckets of dealers for us. There's a new car dealer, a used car dealer and then used auction dealer who buys in an auction, all 3. We'll come back on this data for you.

Sure. And secondly, Vinay, the second question is on the tougher business right now which is auction, right? So if I look at that, the last couple of years have been good for auction business, but was not good for overall auto industry. So probably, repossessions were happening, people were not able to meet the MIs. Now the growth is back, business is back. Is that the reason you think that the repossessions are down? And if that is true, then for the next 2, 3 years, if auto industry looks good, then don't you think that repossessed vehicle auction business could continue to be under stress? And secondly, if I heard the numbers correctly, you mentioned repurchase vehicle at 59% in this quarter, which was 70% y-o-y, right?

It is -- in this quarter, it is 53% and was 72% last year, same time.

53% versus 72%. So you are seeing some growth, the mid-teens kind of a growth in your rest of the other business, 20%.

Yes, yes. The rest of the business is actually growing a fast clip, because this is degrown. I mean at a fast clip, make sure that's even the 9% -- it's only minus 9% because the repossession degrowth is much stronger.

Yes. So your comments on the first part of the question, which I asked that can...

Yes, this trend is a good question. We ask -- this is something we've been debating and talking to multiple people or stakeholders like banks and NBFCs, et cetera, et cetera. I mean there are multiple schools of thought. One is you did have a period of last 2 years in COVID, where loan disbursement itself was lower, right? I think for -- there are some quarters where there's no disbursement of loans at all. People were mostly collecting money rather than disbursing, so it's possible that the loans are not disbursed maybe in the last 2 years is hit the business because if you're not disbursing a car loan, how do you repossess a vehicle, right? That's one part. And then most of them were -- they were just reworking existing loans and -- making sure that during those COVID quarters, there were restructuring loans rather than disbursing loans. So it could be partly that. It is partly also the fact that industry is better. So collections are better, maybe repossession itself is lower. It also a fact could be that used car prices are reasonably higher or retail values are better during markets like this. So maybe customers rather pay than let the vehicle get you for this. It could be a combination of all these factors. It is hard for us to really tell that repossession is going to change or not in the next 3 months or 6 months. I think what we've got to do with the business is really grow other verticals, right? If repossession does come back, we have cost there, and that will help the company, but it's better than we focus on growing every possible vertical, which is within our control. And I think that's where our focus is.

Just 2 small follow-ups, Vinay. One, have you seen like -- repurchased vehicles have come down, have you seen a significant increase in passenger car mix in your auction business? Number one. And number two, in terms of profitability, will repurchased vehicles be more profitable? Probably we are able to -- we would be able to make more -- offer more value-added services in that segment.

So we make a margin better on retail just because the supply is more fragmented. And did you say -- and the first side of the question before that was? Sorry.

So the mix of cars, has it increased significantly?

No, nothing. No change. I mean it is pretty similar. I don't think we've seen any product mix change.

So if I remember correctly, it used to be 1/3 of the total volumes. Is that still the right number?

I think the way we track it, commercial vehicle is about 20%. That's the way we track it. It's the other way around.

Commercial vehicle is 20%.

About 20%.

This used to be 30%, 35%, right?

No. There was -- it was a little higher. It was -- that was just pre -- our acquisition of Shriram AutoMall 4, 5 years ago. I think that is much -- once we moved to our online business then, it has been around just 20% commercial vehicle.

The next question is from the line of Jeetu Panjabi from EM Capital Advisors.

So what I'm trying to get at is, can you give us some color on both the new car business and Shriram side. What do you -- I don't want numbers. I just want to understand what are the -- what trends are you seeing there? And what do you think the next 3, 6 months trends look like? Are you seeing some signs of weakness? Are you seeing buoyancy? Are you seeing a new class of buyers coming, whatever? A little bit of color on both of this would be really useful.

Yes. On the consumer side, which is our new car, used car, consumer platforms, actually, we are seeing reasonably good trends. We are seeing -- obviously, the penetration of consumers is already pretty high. Consumers use Internet to research or buy a vehicle. On the OEM dealer side, which is far more pertinent in this business, we are seeing far more adoption of digital generally in the last year, 1.5 years. And I think that trend will only get stronger. So our relationship to dealers is getting stronger. Our relationship with OEM is getting much, much stronger. We're also seeing OEMs interact deeply with us on digital -- deep digital integration, which is this whole theory about how do you come online and get a complete experience to buy a vehicle, right? Whether it is just booking a car, whether it's getting a loan for a car. Whether it's -- so we're seeing multiple, multiple interactions with OEMs and us around. So the basic trend towards digitization is getting better. Market conditions, as I said, from a new car demand supply standpoint seems to be getting more favorable, which is always for us -- growth in the industry plus supply more than demand is probably the most favorable market race for companies like us, and I think we're getting there. It has been probably the worst over the last year. It's got better than last quarter, but it's been probably quite bad because demand has outstripped supply. That's really not favorable for companies like us, where manufactures and dealers spend money to advertise to sell their cars. So this is what we are seeing here. On the remarketing side, I think the biggest issue for us has been the repossession volumes coming down. But on the other hand, we've seen good growth on retail suppliers of vehicles. So I feel that the used car industry or the remarketing side, generally across the industry, it seems reasonably buoyant is we have to -- who have to work hard on building other verticals within -- outside repossession.

Okay. Okay. So how to summarize next 3, 6 months [indiscernible] in aggregate as well and things look like...

We see the market conditions are okay and really similarly. I don't think we see any reason that the market conditions are changing any further from here -- from what it is today.

Okay. Okay. And one last question. So we're also seeing a bunch of new model launches, which normally happens, but it seems like they're punching up now and also the EV side, there's a few things happening. What -- how would you read that, you think it's all positive from your point of view?

Yes. We feel product launches are highly positive for our business. So EV, I feel it doesn't matter whether it is an EV or IC vehicle for us, but new launches are definitely favorable for us.

[Operator Instructions] The next question is from the line of Vijit Jain from Citi Group.

Vinay, I just wanted to check back on the comment you made on the remarketing business, the split between repo and retail. So clearly, that repo going from 72% to 53% means retail is up -- if I do the math, right, it's up about 60% Y-o-Y, right? Just from that...

Yes, possibly. It is. That's correct, yes.

So what I wanted to -- what I was wondering is 2 things. Obviously, the repo is down significantly, 30% Y-o-Y, might be even close to bottom. Do you think the retail momentum remains as strong as it is in these numbers, 60% Y-o-Y. And therefore, if I think about repo, even if it bottoms at this end, the retail growing at 60% should give you still decent growth in the overall remarketing business going forward, right? Or...

Yes, the mathematics is that. But the growth of retail is on a lower base, based on the company. So of course, the growth rates become harder. I would just say that, yes, we see retail growing because there's serious effort going behind it. But -- and also, it's a far -- it's -- for us, our margins are better. So it's a better business as well and far more defensible as well because it's defragmented supply. So it has all the elements of what we like, but I can't predict it will be 60% or what percent. What we see this -- there's a lot of effort going in here. But as a company, repossession has bottomed out or does start to go back and grow, and our retail continues to be stronger now, it makes us much stronger. If we can -- if the repossession does come back.

Got it. And also just a quick question related to that. When I do the simple math of your realizations per vehicle auction, I know there are other limits in remarketing business as well. I can see that the realizations are going up, right? And is that to do with this mix shift into retail. That is...

Yes, a little bit of that. It is true. That is correct. A little bit. It is because of the retail. The margin is better.

Got it. And just a final question on the retail remarketing side. So most of this will be on the -- will be driven by the used car listings from consumer on the website and...

No, they're not actually. It is not -- that's still some part which we're trying to plug and get the synergies across on both platforms. But it is also independent people giving vehicles to these auto malls and then being sold an auction. So it's not just -- it's not CarWale -- it's not dependent on CarWale, if that's the question.

Okay. So should I think of this as more of a mix of local dealers...

Local fragmented supply sources, right, which could be a consumer, it could be a very small broker bringing consumer vehicle in multiple sources. But it's 1-1 vehicle. It's fragmented. It's not bulk from a bank or an NBFC or a leasing company, et cetera, et cetera.

Got it. And have we hired a lot of people to kind of push that segment of business?

Yes, there have been hiring done. In fact, most of the hiring is there to push the segment, absolutely correct.

The next question is from the line of [ Sachin Shah ] from [ Shah Investments ].

First of all, congratulations on a very good set of numbers. I have a couple of questions. The first one is that how much would be your ESOP cost of funding over the next 4 to 5 quarters? And the second one was that I wanted to understand if there's anything in the...

Please, let me answer that. The ESOP cost is roughly INR 27 crores a year, and that's been factored in our quarterly accounts and will be probably around what will be this year. We don't see any significant change in next year, if that's the question. Aneesha, is that number correct, about INR 27 crores?

Yes, yes. That's absolutely right. Yes.

And we don't see any significant change in that?

No.

Understood. And the second question, as I said, is there anything in the pipeline which you see from an inorganic expansion perspective?

Inorganic. Is that the question?

Inorganic, yes, yes.

We can't comment on this. We keep looking at businesses and companies, but we can't comment on this at this stage.

[Operator Instructions] The next question is from the line of [ Abhishek Dave ] from [ Wright Securities ].

Congratulations on your number. So I had a couple of questions. One is on the abSure business, I wanted to know what is the current number of outlets. And previously, we were guiding for 120 outlets by the end of the year. Are we on track for that as of...

No, we're not. I think on the call, it was earlier asked, we had about 73 now. I think we'll end up adding about 20 by March, which should be around 90, 95 by the end of the year. That's what it should be.

And are the revenues from the segment becoming more meaningful now? Or is it too early?

No, it's too early. It's a very early business. It's almost like an early-stage business within the portfolio.

Okay. And the second question was on the media business. While the remarketing business has been subdued, the media business has performed strongly, what according to you is the steady state sustainable number of unique visitors? And do we ever plan to monetize them directly?

At this stage, there's no plan to monetize the consumers directly. See the steady growth in our consumers now if we think that most people who buy cars are on the Internet, then the steady growth should almost be similar to industry level growth in a way. But we're also having 2-wheeler platforms, et cetera. So you might find a little better growth rate in terms of our user than industry. But on the whole, do you remember that our revenues are not dependent on number of consumers coming to the platform. It is highly dependent on the amount of money manufacturers and car manufacturers or vehicle manufacturers and dealer spend. Revenue are not completely correlated number of customers coming to the platform. So this is one thing you should keep in mind. The revenues are dependent on the percentage of digital money spent by a car manufacturer or dealer to the advertising money to spend.

[Operator Instructions] As there are no further questions, I would now like to hand the conference over to the management for closing comments.

So I just want to thank all of you for joining the call. As I said earlier, it's been -- although we achieved higher revenue and adjusted EBITDA, it's been a mixed quarter where we had strong performance from our consumer group, and it's been a tough quarter for the remarketing group. So thank you once again for joining in and taking the time out to hear us out. Thank you, everybody. Thank you.

Thank you.

Thank you. On behalf of CarTrade Tech Limited, we conclude this conference. Thank you for joining us, and you may now disconnect your lines.