CarTrade Tech Limited ($CARTRADE)

Ladies and gentlemen, good day, and welcome to the CarTrade Tech Limited Q4 and FY '26 Earnings Conference Call organized by MUFG Intime India Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Aryan Sumra from MUFG Intime India Private Limited. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone. I welcome you all to the Q4 and FY '26 Earnings Conference Call for CarTrade Tech Limited. To discuss this quarter's financial performance, we have from the management, Mr. Vinay Sanghi, Chairman and Managing Director; Ms. Aneesha Bhandary, Executive Director and CFO; and Mr. Varun Sanghi, Chief Strategy Officer. Before we proceed with the call, I would like to mention that some of the statement made in today's call may be forward-looking and may involve risk and uncertainty. For more details, kindly refer to the investor presentation and other filings that can be found on the company's website. Without further ado, I would like to hand over the call to the management for their opening remarks, and then we can open the floor for Q&A. Thank you, and over to you, sir.

Thank you, and welcome to everybody to the Q4 FY '26 earnings call, and thank you for taking the time out today. I just want to start off by saying we've completed a year, which has been a very strong year for the company. Its growth in revenues, its growth in profits, and it's obviously growth in margins. If you look at the investor presentation shared with all of you, if you go to Slide 3, which is really looking at the last three years story of the company, at the center of our company is really innovation, and that drives our growth and profits. If you look at the three-year growth story and if you look at the compounding of the company from a revenue standpoint, the three-year CAGR is 29% of revenue, EBITDA, the 98% three-year CAGR and the PAT CAGR is 82%. As you all have seen over the last many quarters, margins have continuously gone up. Margins have now gone from 9% to 33%. And if you look at the strength of the company in terms of the capital strength, we've now got INR 1,244 crores of cash reserves. Last year, we added a cash balance of approximately INR 300 crores based on profitable growth. And as you can see, the return on equity is getting better and better. If you look at the real growth for -- on various other metrics, EPS is up 86% over the last three years, CAGR business. The earnings per share now is actually INR 47 a share. And if you also look at the profit after tax has jumped to INR 244 crores. It's among India's most profitable listed digital platforms. If you go to the next slide and look at the consolidated accounts, which is Slide 4. As you can see here, revenue growth is 22% for the year, 20% operating growth for the quarter. EBITDA growth is 70% for the year. Margins are 33% for the year. For the quarter, margins are 35% and EBITDA is up 55%. If you look at profit after tax is up 54% and first time crossed INR 70 crores is INR 70.84 crores in a quarter, so 54% up PAT and PAT for the year has jumped from INR 145 crores to INR 243 crores, which is up by 68% for the year. So it's been a very, very strong yearly performance. And we obviously feel very optimistic about not only the year gone by, but we also feel very, very optimistic about the years going ahead. So yes, we feel competitive dynamics have improved for the company. Overall, customer engagement has improved. And as you can see here, revenues have improved and margins have improved and obviously, profitability has dramatically gone up as well. So we feel very strong and in a good position to really guide the future of this company. If you go to Slide 5, which is the Consumer Group, as you know, BikeWale, CarWale, these brands, it had a really, really strong year at a growth of 30%. And not only has it grown revenue at 30% for the year, it's grown EBITDA by 96% and profit after tax at 55% due to the increase in the deferred tax provisions of the company. If you look at the quarter, quarter revenue is up 25%, EBITDA is up 72% and pre-profit after tax is up 64%. So it's been a really strong quarter for the consumer group as well. If you look at the remarketing business, and I want to highlight here that in the year this year gone by, every company of ours, all the three businesses have achieved the highest ever revenue, the highest ever margins and the highest ever profits, all of them. So it's been a really, really strong year for us gone by. So if you look at the remarketing group, it's up 22% on yearly revenues. Profits, EBITDA is up 57%, margin has jumped to 28% and profit after tax is up 66%. And if you look at for the quarter, revenue is up again 22%, EBITDA is up 56% and profit after tax is up 42%. So it's been, as I said, again, a really strong quarter for the remarketing business as well. If you look at OLX India, for the year, revenue is up -- total income is up 22%, EBITDA is up 54% and profits up 77% and for the quarter, it's 16%, EBITDA 34% and profit after tax 44%. So they had a strong year as well. These are the high-level financial metrics, which I wanted to share with all of you. Obviously, I'm happy to take all your questions and share and clarify all the doubts you might have as well. So we can take questions now.

[Operator Instructions] First question is from the line of Siddhartha Bera from Nomura.

Sir, first question is on the classified business, I mean, we have taken quite a few initiatives in the last few quarters and have rolled out new products as well on both right buyer as well as verification. But the growth momentum seems to be taking longer to sort of see an acceleration. So if you can share some more color on where are we in terms of monetization? How is the response for some of these products which we have launched? And how should we expect the growth to be for the next few years?

Sure. I think you mean in the OLX business. OLX has grown by 16% in the quarter. And we obviously -- any buyer and both verification, verification was launched in the last few weeks of the quarter -- and any buyer has been around for a few months. The adoption of both these products have been extremely strong. I think you will very soon, maybe this quarter, start seeing the impact of it because, in fact, it's been in almost very rarely in platform that these are buyers monetized and we've actually had, I would say, strong success in both the products, verification and Elite Buyer. And like I said, you'll start seeing these numbers play out immediately, in my opinion. And you can already see it on a daily basis. But I think from this quarter onwards, you'll start seeing the impact of these products. When you look at OLX as a whole, we feel very optimistic about the monetization opportunities within OLX. Last quarter, we launched a couple of other AI initiatives as well in OLX. And as we go on this year, there will be a series of launches of new products. So we feel very, very confident about Elite Buyer verification and the other B2C and C2C initiatives being done by the company. I think you should see this momentum of monetization step up now immediately. You should see it.

Sir, any more products, can you sort of elaborate what are we planning to do for the coming years, which you said that we should see a pickup?

Sure. First, within Elite Buyer itself, Elite Buyer is a product -- is a suite of products for us, right? So we started off with visibility, bringing in trust to the Elite Buyer. We are moving to Agentic AI with Elite Buyer. So it's got a very unique matchmaking tool, which has gone live. So if you are looking to buy a product, it helps you find that product and match makes it to exactly what you want, which enables you to do transactions. It's, of course, using what we call a matchmaking agent, which has been built grounds up. It is moving also as we disclosed earlier in presentations to various other agents, which suppose you're buying any product, used product, it help you price it. So if you don't know what price to pay, it will instantly tell you how do you -- what price you should pay for it. And in many products, it will also give you a condition check. So what we're able to do today with photographic image recognition, we're able to judge condition. So I think what we are trying to do is when you buy a product, when we buy a program with multiple agents now, which will get launched and as I said you'll see them one after the other as consumers to use. You will be able to buy a used product by understanding how to find and match make a product, a seller, understand the price, understand the condition. So that's one family of initiatives. There's another family of initiatives that we're going to sell your product. And this has also got rolled out. There's a matchmaking on that side too. So if you're going to sell a car or a bike or a refrigerator or something, how do we instantly give you a customer waiting for this product, right? And that also requires a matchmaking agent, which has been built. Also when you're going to sell a product, you understand price. Are you able to negotiate price? So there's pricing agent, negotiation agents on the other side as well. So these are various AI initiatives which are using OLX core proprietary data to give you a better experience. These are various stages of rollout. So the matchmaking in a very small way is already rolled out to consumers on OLX. And as I said, these are all at various stages of this launch. There's also a verification product, which we've talked about, which brings further trust and safety in a platform like this. So it tells you who can be trusted or not -- who can be trusted. And it also comes on the fact that a very large number of OLX users are more than five years old. So from the behavior, we are able to analyze intelligently who can be trusted or not -- who can be trusted actually at this point. So that's another family. We've talked about building fintech and there are various stage of development or building a financing product for people who want to buy used products. And then there are multiple such initiatives. But the intent is to keep building products which help transactions on the platform and obviously help us monetize in a far better manner.

Understood, sir. Lastly, sir, on the consumer business, I mean, good performance here as well. Can you just elaborate a bit more on the OE-dealer mix? How has it changed in the quarter? And in terms of outlook, given some of these rising steep cost pressures we are seeing across the industry, how do you see the growth going from here for the next year? Do you see any risk of deceleration? Or do you think this growth momentum is -- can continue for you? So some thoughts there.

So one is that the car industry in the last seven months has had steep growth, including April as well. As you know, that the car industry grew by approximately 20% in April itself. We feel very optimistic about the year ahead for growth for the consumer business. So any growth rate which we've already shown last year or the year before or the year before that, we obviously feel very optimistic about the next year or the years ahead as well. We also feel reasonably optimistic about the car industry itself that there should be some growth momentum just looking with the GST tax reduction and demand escalation, which has taken place post that. We continue to see that. So I don't -- we completely feel very optimistic about the growth in the car industry or the bike industry for that matter, for the next year or two, three years ahead actually. So nothing has changed. We feel as optimistic as we did three months ago or five months ago. Market condition in the car industry are quite favorable or the 2-wheeler industry for businesses like ours. Aneesha, do you want to give the breakup of this dealer and OEM? I don't think much has changed, but do you want to give a breakup?

Sure. So it's about 70-30, OEM being 70 and dealer being 30 [indiscernible].

Next question is from the line of Vijit Jain from Citigroup.

My question is on SuperDost. So first off, good to see a unified C2B product. Do you need to spend on advertising and promotions to popularize SuperDost?

Look, so SuperDost has already launched. It is in the initial phase launched for all the dealers in India. As you know, OLX and CarWale have almost all used car dealers in India listing or buying vehicles from the platform. And what it does today, it basically -- it's also already live. If you're a dealer looking to sell your car, and the dealer can just take a photograph of a car they want to sell and instantly match make customers around in a local environment which can buy that car. So it is basically something we promised in an earnings call earlier as well. It's something called instant sale, right, which basically uses AI to align customers to a particular kind of car and does it instantly so that if a dealer keeps inventory for 60 to 90 days, how do you bring inventory down to five days, right, of stock? Because it gives you customers immediately. And I think it's been very well received. It's just been launched about 30-odd days ago. So it's done extremely well and very well received. It's early days as yet. So we are using AI in that form. And SuperDost will get more functionality as we go on for dealers. There's a consumer version of that, which I talked about in the previous question, which is really -- this is matchmaking actually. But pricing and condition check will come with matchmaking and it will come to consumers too. So SuperDost for consumers will get launched very soon, where they can instantly do the same as dealers can. If someone, you and me is looking to buy a car, you'll be getting -- you'll get a feature like this available to you with the Elite Buyer program.

Vinay, so essentially, right now, from what I can understand, this works on WhatsApp. So the idea being a dealer gets on to WhatsApp or a consumer gets on to WhatsApp and they put those messages and get this matches, right? To what you're mentioning, it seems like this, you would build this out into a full-fledged platform. And I...

It won't be an independent platform. It's rendered on WhatsApp. The underlying technology, it's only a communication -- WhatsApp is the communication or the tool at this point. So you could put a photo on WhatsApp and it'll instantly give you three customers. The back-end technology is being built at OLX and CarTrade, right? So it can be rendered across on any platform. It will go live on OLX. It could go live on CarWale. It could go live on any platform we have to render it. We've just started WhatsApp because that's been very convenient for consumers and dealers, but it will go across all our platforms.

And then when you -- in the presentation, you mentioned that there are 2 million-plus buyers and sellers. So is this the count of people who have already engaged with or messaged SuperDost as of now? Is that how...

No, no. The 2 million buyers and sellers are people who come every month to buy or sell cars on OLX or CarWale. Used cars, only used cars, sorry. Only used, it's not new. So a significant scale every month. This is not a one-off. This is like every month. So yes.

Right. And so sorry, just to get back to that question, would you -- do you think you would need to kind of promote SuperDost as is...

No, you don't need to actually because as you know we have almost like 31 million people on OLX every month and 50-odd million on CarWale, BikeWale. So we don't -- it will be available to the 80 million people. So it's right now available for dealers for cars. It is also, by the way, a version of it, matchmaking will be available for all our products on OLX, not just cars. That will go live soon. Yes. So it started at cars, but it's going to go to -- even if you're buying a -- I don't know, a refrigerator, it would apply the same way. It goes across everything.

Understood. And then just imagining that people use this for cars, for refrigerators, everything. And then if they're engaging with this on these different platforms, the proposition here is not that people can hold an account on SuperDost separately as such. That's not the proposition.

No, you actually have to buy something on OLX to get on SuperDost even today, that is the case. SuperDost is a brand of a tool which assists you. You have to buy something on OLX to give access to anyway. So if you're an OLX Elite Buyer, you might get access. But you have to buy something on OLX to become -- even today, by the way, to get access to SuperDost. It's not a free product. It's not a free product, yes.

My next question is on the remarketing business. So there are two components to it, right? One is, of course, the institutional sellers, the corporate sellers where you can have these macro cyclical-driven growth momentum and the other is obviously the retail one. Any broad sense you can give me on what is the underlying growth that you think you can sustain in the retail segment? I'm not necessarily asking for the next quarter, but maybe just to kind of visualize and help understand how much of that cyclicality has been blunted by retail from an ongoing basis?

Sure. I think the first thing is the institutional is not cyclical. I think there was a period for about a year in between post-COVID where repossession dropped because loans were not given at COVID time. That is a one-off. It is not a cyclical cycle where it goes up and down every quarter or every year. So that's the first correction. Even the institutional business is not necessarily cyclical, but I actually think both the repossession side and the retail side will keep growing is our view, right? The retail side is, of course, small dealers, small or owners coming in buying or selling vehicles. The institutional side is just a buy inventory coming in bulk. That's the difference. But we don't -- we see actually strong momentum of growth in both areas to be honest. We don't see any reason not to believe that for the next two years ahead. As long as I think -- like I said, as long as new loans have been given in India, which is happening for any automotive product, I think you're going to have repossession, right? It was just a period in COVID when that -- for about a year and a half that did not happen.

Vinay one last question from my side. Any thoughts on acquiring the Automall business 100%? I know it...

No, not at this point I think I can comment on. No, I don't think so. I think for us, the partners we've got, they are fantastic partners to have. So I think we've nothing to update on it or nothing to say on it at this point. So no. But having them obviously is a huge, huge advantage for the company and for us.

Next question is from the line of Nishit Jalan from Axis Capital.

Congrats on very good set of numbers. Just two questions from my side. On OLX, this initiative of Elite Buyer, Elite Seller has been -- is doing well and you have now included SuperDost. Just wanted to understand in OLX, can you share some breakdown in terms of revenues coming from advertisement and subscription? Subscription as in used car dealer taking a subscription, right, and advertisement versus from these new initiatives like Elite Buyer, Elite Seller or SuperDost where buyer and seller needs to pay, right? Because this could become a much bigger opportunity. And my second question is on remarketing. Just wanted to understand what would be the broad mix now on repossessed and retail segment? And if you can throw some light on remarketing in terms of which segment is witnessing stronger growth compared to others, right in terms of retail or repossess or anything, right? And if you can also add, apart from take rate, right, we do offer some value-added activities in remarketing. So what would be the share of revenues coming from that value-added activities? And is it on the rising trend?

Sure. I think the first part is what -- whether it's Elite Buyer verification, what part of the revenue is it and what is the traditional revenue? The traditional revenue is pretty much most of it. It's very insignificant at this point, the Elite Buyer. I mean it's really kicked off in the last two, three months. So it's very insignificant in the last year. But one thing is going to change is that from this year, I feel in the next few quarters, you will see Elite Buyer and verification becoming significant for the company. We're very optimistic on definitely Elite Buyer in terms of monetization in the very near term. So you'll start seeing that significant. It is not--it would be, when I say insignificant, probably I do understand correctly, probably less than 5% last year for sure. So -- but it's going to become significant in our opinion this year, which you'll start seeing maybe from this quarter or the next quarter. We can already see that trend, as I said, in the last month or so. That's one. The second question is around the new -- versus the new segments apart from repossession or retail in Shriram Automall. We feel really optimistic about that we are focused heavily on commercial vehicles, for example, where we feel we are right now working closely with the OEM on trade-in for all their commercial vehicles, right? So if you want to buy a new commercial vehicle and you want to trade in the old one -- we're building a partnership and a product with one OEM right now where the vehicles can come back to Shriram Automall auction, right, all the trade-in vehicles. So if you want to buy a new commercial vehicle and you want to trade in the old one, we're building a partnership and a product with one OEM right now where the vehicles can come back to Shriramutomol auction, right, all the trade-in vehicles. So there are multiple such initiatives on commercial vehicle side. I also feel very optimistic on the farm equipment side, apart from repossession, retail and all the other things we do. So these are some of the initiatives on new supply sources we are building. I think the third question was around what is the value-added service income versus the auction income. So value-added service and the auction income, we are correlated, right, in a way. So because if you have a buyer fees or buyer management fees or you have some small clients paying a little bit of parking fees, they're very correlated with the auction revenue. So I would take it and really say these are all correlated with each other. So a very large percentage of these fees are auction related in a way because they're all bunched together. I think the one area of fee, which is slightly outside, which is about 10% or less is the inspection fees. But otherwise, all these other are really very auction related by itself.

My thought process to understand what remarketing was, like I asked on the OLS side, is the share of value-added revenue in remarketing going up, right? Because there is always a limit to how much take rate can you take from consumers, right?

So I think yes, the growth it comes from two different places, if you're talking about take rate, it's to be answered this slightly differently, where if the take rate was to grow, like, for example, one of the initiatives we're thinking about financing dealers who buy on our platform, right, not ourselves again, a marketplace model. So thousands of people buy vehicles every month. In fact, the total turnover is almost -- transactional turnover is almost INR 4,000 crores, INR 5,000 crores is a question that can you finance some of those? That will be value-added financing. So we think value-added is not the core auction fees or related. We think value-added is completely a new line of fees, right? So, those are the kind of fees we work on. Inspection is completely a new fees, which I've told you, it's about 10% or so. But we think value-added is not related directly to an auction of a vehicle. It's something people need when they auction a vehicle, buying or selling.

Yes, that's the reason I'm asking.

We actually - think financing is one area, marketplace financing is something we're looking at very closely there to increase margins.

So what I was also trying to understand was like you mentioned, inspection is 10% of revenues, right? Similarly, are there any other big value-added activity that has already started contributing to revenues apart from take rate and parking fees?

No, I wouldn't say anything significant at this point. No, it's mostly auction fees.

Okay. And one question on OLX side again in terms of follow-up, right? When you talk about that active buyer and seller will become significant, right? So let's say, let's not talk in quarters, 1, 2, 3 quarters, right? Let's say, three years' time, right? In three years' time, where do you see this segment? Can it contribute like a 30, 40…

It could be... No, no, it could be actually more than that, I would say. It could be more than that. I actually think because just remember one thing that I think one data point which is very important is that there are 6x buyers to sellers on the platform, which is obvious. If someone is selling too many buyers, right? I mean, so the bulk of the users in the platform come to buy, right, so -- on a daily basis. So the monetization opportunity is multiple fold there, multiple fold I would say which is why such a significant initiative for the company.

Okay. And sorry, just to harp on it and maybe if I could just ask one more follow up. Obviously this buyer can become really big for you in the next three years. What kind of growth should we assume in the traditional channel in terms of advertising or in terms of the subscription fees that you charge from used car dealers? That would be more linked to inflation or whatever annual increase that you...

I actually think -- no, no, no, there's so many new products for sellers, which are being built today and the seller base is growing. So it is -- to me there is no inflation or any growth rate which you could apply. It can be completely disproportionate in the years ahead, the way the product's being created. I would not put it -- I don't want to give a guidance anyway, but I would not think that this is going to be inflation. We are just way too early in the day to look at the number of seller products or buyer products being created right now that, like I said, the growth would be any percentage. There's just no limit.

Next question is from the line of Sachin Dixit from JM Financial.

Congrats on decent set of results. I had two questions, both on OLX. The first is, obviously, I think you have explained already that there are some initiatives which will work out well in the near future. I just wanted to understand what happened this quarter, right? Because you had guided very clearly about there being higher momentum in the coming quarter when we were discussing the same result last quarter. I mean why did it drop from 18-odd percent growth to 15.5% this quarter? What happened?

No, I don't think. I think it is pretty similar. I mean, first of all, I mean, not that it matters, but this quarter is two days less. And some of the online platform, it does matter.

So, we are talking about…

Yes. No, no, Y-o-Y, it's anyway grown 16%, right? So that's one. I think it is -- normally, Q3 for us is a slightly better quarter. It's just the October pace of consumer products in India. Generally, honestly, Sachin, it's not much different, and we feel pretty similar to what we saw the previous quarter. Some of the initiatives like...

The reason why I'm pushing on this Vinay is, I mean, OLX obviously has a checkered track record. Finally, in the last couple of quarters, we noticed that, yes, we are seeing some momentum pick up and which is what you highlighted in the last earnings call as well. Again, Y-o-Y growth has dipped, which is why I'm asking. Is it a sign of something falling apart for us or...

No, I don't think...

Very notable is my question.

No, no. I actually feel the other way around. I feel I'm more optimistic than I was last quarter. So in my opinion, it's the other way around, I think. And like I said, we did launch verification like about 45 days later than we thought. It's a completely new product, and we wanted to go out with it completely done. So a lot of these things, sometimes in product development may take a little longer. But we feel extremely optimistic as we did the previous quarter. Nothing has changed for us at OLX.

Understood. And just one more question on OLX only and which is on the employee cost side. There is a lot more variability in OLX employee cost compared to what we see in new auto, for example, on the consumer... Is there a significant portion of our employee workforce here, which is slightly more variable that revenue goes up, it goes up, revenue goes down, it goes down compared to most of our other businesses where it's largely fixed sort of employee base?

No, the employee base is same. Just one moment. Employe base is absolutely the same. In fact, the employee cost year-on-year is up 4%.

No, I'm just talking about quarterly, right? So I do understand that there will be appraisal [indiscernible] but every quarter, it seems to be like moving up INR 1 crore, INR 2 crore on a INR 19 crore base seems a decent sort of movement.

No, it's up for the whole year…

A lot more variability.

So if you see here, employee cost for the year is up 4% ,it's INR 73 crores to INR 75 crores. So the movement, it could be in a provisioning, but there is not really the whole -- and anyway the other way to answer the question is the cost of or the kind of people are very similar to other businesses, especially CarWale. We also don't see much change in employee cost next year. So that's a question that I can give you guidance on.

No, the rise in employee cost is not a concern Vinay. What I was trying to understand if there is a significantly more variable component…

No, there is-- in fact is the least income -- in the group it will be the least variable – people... The least in OLX because it's a very online tech-driven business, so it will be the least. The way I would think almost -- yes, if you look at the cost growth of OLX it's actually 1% for the year and 4% in employee cost.

Yes. That's what I'm saying. Cost growth is not a concern. I was just trying to understand the nature of the cost.

Not different. It's not different from -- in fact, like I said, it's even less variable than other companies. And I think that's all the reason the margins are also up, right? If you see the margins are up year-on-year. Margins have gone from 23% to 31%. I think that also shows.

[Operator Instructions] Next question is from the line of Hardik Doshi from White Whale Partners.

So clearly, the last fiscal year and even going into FY '27, the business momentum is very strong. But I just want to ask more from a, let's say, medium-term perspective. Obviously, the big elephant in the room is AI. And I appreciate all these efforts and initiatives that you've taken to embed AI into our business. But from a more, let's say, larger picture perspective, how do you view the risk of ChatGPT, Claude, Gemini kind of the traffic shifting from Google to these platforms and thereby supplementing the traffic that comes onto our platform?

Yes. So the first part is we are 95% organic, right, so -- as a company. For example, OLX, almost all this traffic comes on an app directly. So it's 100% of its traffic actually is organic. So you must remember that when you look at the opportunity ahead for us, the first thing is people come to our platform because of the brand and the trust in those brands. The second is because there is differentiated IP and platform experience. Buying a used car on OLX or finding a used car in OLX or finding the price for the car you need to buy is almost impossible in any third-party platform, horizontal or vertical. A lot of our data sits behind -- which is not publicly available. So the underlying data, whether it's customer data, vehicle data, other data, which we have, sits behind which obviously LLMs and others cannot access. And therefore, the fact that the brand trust, the IP of technology, platform services as well as the data is proprietary makes AI for us a massive opportunity. That is why when you're looking to sell your car, we can in one second match three customers right for you in your locality because of the data we carry. We're able to matchmake and understand the car you're selling, what price people should pay, what the condition of the car might be through all the data we carry and then how do we give three customers that suit you or 10 customers that suit you. So to me, AI is a massive opportunity. What we're doing this year is building a series of agents -- matchmaking agents, pricing negotiation agents, condition checking agents. Tomorrow, it will be listing agents, buying agents, loan agents, which actually help -- which will use all our proprietary data and technology and make the consumer experience platforms even better than what it is today. So for us, it's a massive, massive opportunity for the next few months, few years ahead as well. We just see is like a massive, massive benefit for the company going ahead.

Got it. So I appreciate that on remarketing and OLX used car platform, it's difficult. But on the consumer side, how are you viewing the potential risk of the people using agents and kind of directly dealing with dealers and not coming onto your platform?

Yes. So there're two parts here, right? First is when you're looking to buy a car you -- it's a INR 12 lakh car. It's not like booking an airplane ticket for INR 20,000, right? So it's not commoditized. You're looking to buy a car, the process may take 30 to 60 days, depending on what your sense of urgency is. But you're going to do a deep amount of work to buy that car. I think when you see Google AI mode or anything come out, search has gone up, but the relevance to platforms like ours has gone up even more. Our traffic has gone up as search has gone up, in fact, during this phase of the last 18 months as well, as you can see the numbers always, our traffic has continuously gone up in this phase. Number one. Number two is a lot of the data we carry on platforms like CarWale or BikeWale are proprietary to us and to our users. It's not available on third-party platforms at this point, right, or not likely to be available. Number three, the integration we have with OEMs and dealers -- for example, if you want an exact price or the discount on the car or you want to get a loan immediately approved or you want to get a trade-in price for your car, these are not accessible to third-party horizontal platforms. So there's enough differentiated data, enough differentiated depth of experience, which makes us feel very optimistic, obviously, of greater use of platforms like ours. And that's exactly what is happening. As you use Google AI more, which is probably the larger used platform in the country, you come to CarWale even more because it may answer one question. But when you buy a car, you want more than one answer. You want to go through a series of immersive experiences to really decide what you want to do with it and then where you want to buy it from and what price you want to pay. So we feel actually this has worked heavily in our favor in the last 16 to 18 months.

Next question is from the line of Ritvik Agarwal from 3P Investment Managers. Please go ahead.

I had two questions. First was on the lines of quality of dealer leads. Are there any measures that we are planning to take or that we have taken to improve the quality of dealer leads in the consumer business? And additionally, anything on the pricing side for the leads? Any sense on the value proposition that you're hearing from dealers?

No, not really. I mean -- we continue to see the continuous effort of the company every day to work closely with dealers to improve conversion ratios, right? Whether conversion ratios involves improvements in our platform or improvements in dealer follow-up and closer closing, it's a permanent exercise, which is going on for years and years. And we continue to do that. We obviously have lots of metrics in place to track this and measure this. But this is a absolutely important initiative for the company, and we keep doing this every single day. What was the second question, sorry? It was around leads? And what was the second question?

Yes. Basically, I just wanted to get feedback on the pricing.

The pricing is pretty static. We don't -- we mostly focus on volume increases and the depth of the impact we make with the dealer. There are price increases, but they're more inflationary in nature. The bulk of the growth comes from higher relevance and volume.

Okay. And one more question on the AI aspect. Is there any change in discussions that you're having with OEMs basically that from the onset of AI, is there any change in the discussions or the tone of OEMs regarding their marketing expenses being diverted towards?

Yes. There is a lot of initiative from our side and with OEMs, too, on how we can improve the experience using AI for consumers which come on our platform, right? So can we have agents which gives us more data from an OEM, which helps the customer buy it? Can we have agents which integrate the consumer, us and the OEM and the bank even closer. So there are everyday discussions on how we can improve experience for our users on our platform with the help of the OEMs, sometimes on our own, sometimes with bank's helps with all our partners actually. It's a very central conversation across all our companies to improve consumer experience on the platform or enhance it with multiple AI tools and that also involves integrating people with banks and OEMs and dealers.

Understood. Any -- sorry, last question, just on the traffic on the website. Across the websites, was there any dip or any seasonality that you saw in this quarter, maybe increase in the volume or a decrease?

We saw traffic grow last year actually in this quarter, so Y-o-Y growth. Normally, post Q3, traffic is -- Q3 is the highest in traffic for the year always. So a slight decrease from Q3, but Y-o-Y, we saw traffic increases actually.

Next question is from the line of Deep Shah from NV Capital.

My question is again on OLX. Sorry for hopping on this again. But I mean, just want to understand monetization a bit better. So if you just could give me some metrics as to how much -- I mean, revenue is from like consumers, how much is from dealers? And currently, do we only monitor dealers currently? Or I understand you've launched new products like verification, Elite Buyers. So I mean, consumer are also being monetized. But just over a medium like two- to three-year period, you said this could be -- the new verticals could -- I mean, give you 30% to 40% of the revenues, right? So just wanted to get more understanding on what drivers you have, what products…

Sure. We've got two basic sets of customers, the sellers and the buyers, right? In sellers, there are consumers and the dealers. We monetize both today. Sellers like you and we can also come for free. But many times, sellers like you and me come and pay for more visibility or other services or if they want to multiple. I mean, I think the first time for a lot of consumers who come and list a car or any other product, it's free. But the second time it's chargeable. So many people come multiple times and therefore, we charge consumer sellers even today. We charge dealers at all times when they sell, right, for selling. The Elite Buyer program is aimed at charging for consumers and dealers for buying services, right? So as a consumer, if you come to buy today, it's completely free, unless you use an Elite Buyer service. The Elite Buyer service is superior to obviously buying without the service. And that product is getting better and better every day. And that's another monetization tool. Verification is really for consumers like you and me again. So there are dealer initiatives and consumer initiatives across all the spectrum of activities. At this point, the consumer listing business, which is people like you and me selling a product, the revenue is quite high actually from that business. And as we go on, we think even the Elite Buyer program primarily right now is monitoring consumers like you and me more than dealers at this point. We actually think the consumer side of monetization, buyers or sellers will become a large part of the company. And even within that, the consumer buyers, which is the largest population of people on the platform is going to become extremely significant in this year and probably very large in the next two to three years.

Got it, sir. And secondly, on margins for the consumer platform, I think we are at -- for the full year, we did, I think, 38% EBITDA margins and OLX, we did around 31%. So I mean, just speaking next -- I mean, do you see this trend continue for the consumer business, I would say we are at a pretty high 38% margin. So do you see this...

Yes, margins will expand this year.

And OLX do you see this...

Yes, I think margins across all businesses will expand. I do see OLX it's already close to consumer business, but we will probably get there, if not quite even. I think margins across the businesses will go up in the current year. Costs are likely quite stable. And also here, even if you look at a three, four, five year, how we think about the business, we've got a profit after tax, as you've seen is INR 243 crores this year. We are pretty -- I mean, one of the goals we set ourselves is to get to approximately INR 1,000 crore profit in the next four years or four to four -- maybe five years between four and five, which is 4x. So we'll see margins shoot up in all these businesses as we head towards that INR 1,000 crore objective in the next four to maybe five years.

Next question is from the line of Shrenik Mehta from IndoAlps Wealth GmbH.

So I had only one question. This was about your ROE. So your EBITDA has already gone up to 33%. Margins are looking healthy. But still the ROE is very low at 10%, which is below the cost of capital. One of the...

The ROE actually -- the cash in the company. The major reason for the ROE is mainly because the cash in the company. The business ROE is much higher, as you know… I feel like in due course, whether it is returning money to shareholders or other modes is something we will consider. I think at this point, the current regulation because of our tax shelter and carryforward losses prevents us from doing that. But you're right, I think the ROE is at 10% because of the cash balance. If the cash balance didn't exist, the ROE would be much. much higher, of course.

Yes. So when do you think that possibility would come in from your...

Aneesha, you want to answer that question? I think maybe two to three years. I think we've also got tax shelter that the company benefits from. So I think it will be two to three year, Aneesha, is that correct?

Yes, Vinay, absolutely right.

Okay. So you're not looking at any acquisition in the meantime or any other way of utilizing this cash, right?

No, there's nothing at this point to report on a prospective M&A or utilization of cash at this point. We obviously keep looking at M&A, but there's nothing at a level where we can at this point, give feedback on our report.

Next question is from the line of Vimal Jamnadas Gohil from Alchemy Capital Management Private Limited.

Congrats on a good set of numbers. I just want to make sure one aspect, whether we have any seasonality in our consumer business, which is CarWale, BikeWale in the March quarter?

There's always a seasonality actually not in the March quarter. There's a seasonality -- a little bit of seasonality in the October to December quarter because of the festivities in India, right? I mean, typically Diwali, Dussehra, the automotive market tends to be far more buoyant, a lot more launches, a lot more going on. So there's a little bit of uptake, which is higher then. And then -- so it otherwise tends to be quite even actually after that. It's only the one quarter which tends to be slightly different.

And just on your comments on OLX, you mentioned the Elite programs, both buyer, seller may contribute roughly 5% or maybe less. Given the fact that you are seeing an immediate impact of these from Q1 onwards, is it a fair argument that these -- the contribution may double in FY '27?

You mean the contribution by margins..

Revenue.

The revenue might double is your question? Is that your question?

Yes, from Elite only.

Yes, yes. From Elite -- I mean the Elite is very small base. So I don't think we should think of it doubling or tripling or anything because the base last year was very small.

A couple of data points, sir. If I may have the auction listings for this quarter and the auction volumes?

Aneesha, you want to give that?

Sure. Auction listing is about 1.7 million and volume is about 3 lakhs.

3 lakhs.

Thank you. Next question is from the line of Ujwal Seal from ANR Capital.

Congratulations on a good set of results. Almost all of my questions have been answered. I just wanted to reconfirm about the ROEs because actually, my line got disconnected. I just wanted to confirm that there are no acquisition plans or utilization plans in the near future, and we're looking at giving back to the shareholders after two or three years, right?

Well, at this point as I said, there is nothing which we can report back on any M&A. Obviously, our attempt would be that there's no utilization of cash. And we, of course are generated -- as you know, last year, we generated INR 300 crores of additional cash. So we obviously believe that there will be significant cash generation for the next two to three years as well. And obviously, based on that, at that point, we'll have to take an appropriate decision whether there is an M&A in play or the natural thing would be to, when possible, return money back to shareholders, of course.

Sir, next question was again on OLX. Just a follow-up question on one of the previous questions that was asked. I just wanted to understand that…

I think… it's an important question because one of the things which is very evident also is that the company has also generated EPS of INR 47 a share. So I think one should keep in mind that there's a significant cash generation in the company and obviously, profit creation pool in the company. Just further to your return money question.

Right. Exactly. That was the main thing. That is why I asked the question because a lot of cash generation and ultimately, that is why ROE was depressed. Secondly, I wanted to ask again on the OLX side that we have taken a lot of initiatives in the last few quarters. And shouldn't we have seen like a quarter-on-quarter growth as well because we were very optimistic in the Q3 con call as well. So I just wanted to understand, is there like a seasonality because...

Yes, there is October. Like I said earlier in the call, in October-November, there tends to be some seasonality in any buying, right, whether it's a new car, used car, et cetera. So it tends to be every year. We feel very optimistic about the growth, I'll be honest, and all the product creation and even the consumer traction to this -- to the platform. So we feel the next few quarters ahead, you will start seeing the growth momentum dramatically changing.

Next question is from the line of Arpit Shah from Stallion Asset.

I just wanted to understand the revenue aggregation, let's say, from the verification product and the Elite Buyer product. What kind of revenues are we currently? And what kind of growth are we seeing month-on-month since we launched it in Feb and March? And can it add up, let's say, INR 5 crores, INR 10 crores of revenue every month? Do you think that is possible or is already happening in the month of April? Just wanted to understand that bit.

Yes. First of all, as I said, growth is impossible to say because it's very early. I mean it's obviously rapidly growing, but it's impossible to give a growth rate.

I just wanted to understand what are the early trends that you're seeing right now. If you could...

I would say both on Elite Buyer and verification, the early trends are really strong…As I said, right now, the revenue is just insignificant. I think we'll all have to wait out maybe this quarter to actually be able to give you some stable answer to the question. But like I said, the early signs are very, very strong. I can put it this way. And like I said, this year, it will be significant to the company. As we go on in the next, it'll be significant. Last year, it was not significant because it was launched very late. But in the next year, you'll find it significant. And I think in the years ahead, we also gave the guidance that it will probably be one of our largest sources of revenue.

Got it. Given the acceleration in revenues from the new products and… is growing very strong, do you think INR 350 crores is a conservative PAT estimate according to you?

Sorry, just repeat the last question -- last part of the question.

INR 350 crores PAT is a conservative estimate according to you...

I don't want to comment and give a guidance. Actually, I just gave you a view that our goal -- and I don't want to comment on next year's profitability. We did tell you that our goal, of course, is to get from the INR 243 crores last year to about INR 1,000 crores of profit in about four years or five years. So that's the line we are drawing. We don't want to give a year-by-year guidance, but we had told you what's next -- within four, maybe five years, we want to get to the INR 1,000 crore number, which is a little more than 4x today, right?

And the kind of momentum that you are seeing in the new products, do you think the OLX revenue can start stepping up from here onwards. What we saw last quarter is about 18%...

We believe that. Absolutely, right. Absolutely, we believe that. You're right.

Do you think this number can start crossing 35%, 40% once the product starts...

I don't give guidance, but obviously, we believe the growth will be stronger than what it is today. We believe that.

Are you seeing that earlier times in April?

I can't tell you about -- I don't want to give guidance for this quarter either. But…

What you're seeing already. I don't want a guidance. What you are seeing…

Like I said, it's only one month over. We definitely see April better than obviously some of the other months because new products have also got launched. But it's early days, and I don't want to give guidance for this quarter or this year. I've given you a 4- to 5-year profit objective of the company and the group as a whole. And we've definitely also given guidance that we feel very optimistic about monetization and the consumer traction at OLX both.

Hi Vinay, this is Amit [Jeswana] here. So would that be right that for us to go 4x in profit our revenues will have to go 3x. And by that point of time, OLX, which is a INR 200 crore product, will become like a INR 1,000 crore kind of product, like a 5x, 6x...

I don't want to give a revenue guidance Amit… I think it'll come across all our three platforms, to be honest. We feel optimistic about all three. I don't want to give you a revenue guidance, whether it's 3x or 2x or 4x. I feel our margin structure is strong. And therefore, we feel optimistic that in all the work we do that normally when we add INR 1 of revenue, a very large part goes to profit, which continues, right? And our margins will become -- they're already best-in-class and get even better in the three, four years ahead, which will contribute to getting us to this longer-term goal of the company. But yes, this is where we're at this year in the journey at this point. So I don't want to give a further guidance on revenue. But yes, generally, we feel good about the fact there's enough opportunity and time in the company that we can aspire or get to this goal of what we're giving to you today.

And at this point of time there's no -- our stock price has fallen 40% odd only because of the AI. At this point of time, Vinay, you don't see AI as a risk, you see it as an opportunity for us?

Of course, we believe AI is a massive opportunity for the company. I think for us because of just the brand trust, technology platforms, differential IP, data, it's a massive opportunity for the group across all its businesses actually.

If AI is a risk, the first...

Sorry to interrupt [Mr. Shah], please request you to rejoin the queue, sir, for follow-up question. [Operator Instructions] Next question is from the line of Rehan Syed from Trinetra Asset Managers.

I have two questions. First of all, over the last few quarters, we have observed [indiscernible] overall auto industry growth was effectively muted. So the company advertisement platform revenues continue to grow strongly. However, with auto sales now recovering after GST related benefits, so advertisement growth appears to have moderated slightly. So is there any counter decreasing behavior in this business model or is this more related to changes in OEM marketing spend and content timing?

I think over the last many years, we've shown growth in the consumer business in CarWale, BikeWale, across all kinds of markets, right? There were times when the market did not grow for 18 months and we grew at a rapid rate. The time when the market grew and we grew at a rapid rate. So I like to think we are completely agnostic to beyond the level two new car growth or new bike growth sales. We benefit when car and bike sales grow. I think we're seeing that trend also in the last six months which we've shown to you in both the quarters. We also feel optimistic with the GST cut rate that the two-wheeler and the car market should have a reasonable headway to grow for the next one, two, three years ahead. So it's become far more affordable for every consumer. So naturally, we feel optimistic in this market situation where car sales, bike sales grow. We normally always grow, but even in the slowdown, we grow. So -- but it is always better than the industry growth and that growth for us is far more impactful, I would say.

So I just wanted to confirm, is there again a correlation between the GST cut, sales and [indiscernible] momentum...

Are you saying the growth rate of the car industries because of that? Is that the question?

Yes.

It's not clear. The car industry growth rate has changed from the GST cut. So that is clear. That's from the October sales of automotive cars, I mean new cars in India, new bikes in India, the growth rate is obviously impactful because of the excellent decision to cut taxes on cars and bikes. So it has an impact in India, of course.

Okay. And sir, my second question is around the company has built a very large physical auction infrastructure across India. So how difficult is it for a new player to replicate this network today? And have you seen any [indiscernible] pricing or [indiscernible] competition in the auction business?

It is -- I mean, we carry, I think, almost 130 auction sites, right, where a lot of our customers park vehicles and then we do an online sale. I think in a country like India, the defensibility for us in that business and our remarketing business is multiple. It is of course the physical infrastructure, it's impossible to recreate. But it's also the technology, the underlying IP in the platform, it's the buyer and seller, the network effects of buyers and sellers, thousands and thousands and millions of buyers and sellers across the platform. So it's many things which creates the defensibility. It is difficult to duplicate the physical infrastructure, but there are many more defensible, I mean, many more moats in that business.

Next question is from the line of Nikhil Gupta from Vayu Capital.

Can you please provide the percentage of our revenue from advertisement in our consumer business?

It's insignificant. I mean it's less than I would say, advertising less than Aneesha -- from normal Google advertising or third party advertising less than 5% would be?

Yes, sir.

So is it a fair understanding that in all our three segments, the revenue share from advertisement is almost insignificant, right?

No, no, no, that's not correct. I said in Shriram Automall it doesn't exist. In CarWale, it may be less than, as I said, very insignificant. And OLX also it would be less than 10%. that is correct.

Okay. And you already mentioned that you do not have any plans to use the cash to maybe acquire another business. Why is it so? Because we have -- if I see all the three segments we operate in, we have acquired almost all the three businesses. So why the strategy has changed? And do we not see any significant value in the market? Just wanted to know the opinion.

No. We --what we said at this point, we do not have anything to report back on. It doesn't mean we're not looking at acquisitions or we won't do acquisitions or anything of that sort. We just said at this point, there's no update to be given. And I think at this point we also have to remember that we're a company which has done M&A very successfully over the last many years. We had three major M&As, all have been extremely successful. We always continue to look out for M&A, right, which is strategic in nature, if the teams are good, where we feel there's synergy value, where we feel we can add value to our own customers. These are things we do every day. So it's part of our whole CarTrade ventures initiative. We are normally very picky and choosy. So obviously, valuation has to match and many things have to match. So -- but when we do come out with something, then we aggressively go after it -- like an OLX. So it's not like we're not looking or we don't look. It's just that we haven't got something which we feel at this point, we can close on. That's what the point is.

But we are actively -- looking for M&A. Whenever we'll find opportunities, we will go about it…

Yes, I don't want to say we're actively or non-actively or looking or not. I just think that it's something we do, we do well. If something came around, we would definitely look at it. If we felt that we could add value to our customers or our shareholders or yes --or there's some synergy value or strategic value, of course, we would look at it.

Ladies and gentlemen, we will take this as the last question for the day. I now hand the conference over to Ari Somra from MUFG Intime for his closing remarks. Over to you, sir.

Thank you. I would like to thank the management for taking the time out for the conference today. And also, I would like to thank all the participants to join the call. If you have any queries, feel free to contact us. We are MUFG Intime, Investor Relations Advisors to CarTrade Tech Limited. Thank you.

Thank you, everybody. Thank you.

Thank you.

Thank you, sir. On behalf of CarTrade Tech Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.

Thank you.