Eternal Limited (ETERNAL) Earnings Call Transcript & Summary

Ladies and gentlemen, a very good evening, and welcome to Eternal Limited's Q4 FY '25 Earnings Conference Call. From Eternal's management team, we have with us today Akshant Goyal, Chief Financial Officer; Albinder Singh Dhindsa, Founder and CEO, Blinkit; and Kunal Swarup, Head of Corporate Development. Before we begin, a few quick announcement for the attendees. Anything said on this call, which reflects outlook for the future or which could be construed as a forward-looking statement, may involve risks and uncertainties. Such statements or comments are not guarantees of future performance, and actual results may differ from those statements. Additionally, please note that this earnings call is scheduled for a duration of 45 minutes, and we will be starting directly with the Q&A section of the call. [Operator Instructions]

The first question is from the line of Manish Adukia from Goldman Sachs.

My first question is on the competition in Quick Commerce, which you said that you expect it to intensify in the future, particularly from next-day delivery platforms. Now the question here is, is that an expectation? Or are you already seeing that play out? And where is this higher competition showing up? I understand higher marketing costs, but your take rate, your contribution margins are both quite stable quarter-on-quarter. So does that mean that there's been almost no impact so far or any meaningful impact so far of competition on either user fee or store rental cost or, let's say, store-level employees costs, et cetera. I'd love to get your thoughts on that. That's my first question, please.

Manish, Albinder here. I think the impact of competition is visible in the lack of margin expansion, significant margin expansion that we would have otherwise expected. That is both because there are now more players in the market, and there is obviously more competition across categories to market to the same set of customers, which is leading to some margin pressure, both in terms of being able to charge higher delivery fees in some of the geographies and also in being able to sort of be able to sell more of the higher-margin categories on the platform. So the answer to your question is that the pressure that you're seeing is all -- you can see it in the lack of margin expansion.

Right. And again, in the shareholder letters, you specifically talked about next delivery platforms where you expect competition to intensify, but some current quick commerce platforms, how have the trends been in the last 2, 3 months? Has competition continued to increase? Has it been stable? Has it reduced? Would love to see the dynamics between Quick Commerce versus next-day delivery? How is that moving on competition?

I think the competition has been in different shapes and forms coming from both players, who are already in the quick commerce space and the new players that are trying to enter the quick commerce space, right? And I think it's just different shapes and forms that it comes in, whether it is in terms of aggression in discounting or aggression from other players in marketing activity or aggression from other players in being able to offer free delivery or store expansion in certain geographies.

Understood. And just last question on this one. I mean, in terms of just the stores, which have continued to remain -- our rollouts have remained elevated at about 300 stores in the quarter. Have there been any meaningful challenges from a store rollout perspective? Again, from a competition landscape, whether it's in terms of, I don't know, like finding stores in the right locations or just the inflation and rental costs there? Has that been meaningful or that's been more manageable?

There has been significant competition for the same real estate in most of the cities that we are in -- elevated rentals.

Yes. So Manish, competition, just to add to what Albinder said. I think like last quarter, competition hasn't produced in any way. I think it was definitely way more comparative in terms of price action we saw in the market that, for example, in the quarter prior to that. So anything you pick up, whether it is pressure on real estate cost, marketing cost, incentives, et cetera. I think all of that only peaked -- I mean, like continues to peak at least so far going into the last quarter. So yes, we are continuing to see that elevated competition in the market so far.

And right now, Akshant, you would have very limited visibility on June quarter from a margin profile perspective, like the shareholder whether it gets better or worse that at this point in time, we don't have visibility on.

No, I think we have a fair bit of visibility and like nothing meaningful in terms of direction we see changing. I think as -- and that's why we are saying that we believe that competitive intensity remains high, and therefore, the pressure on margin that has Albinder alluded to, I think it stays, at least so far, we haven't seen any change.

Just my second question on food delivery, if I may. Of course, like your guidance remains 20% plus. And in the quarter, we have 16% year-over-year growth and you explained quite well as to what's driven that slowdown. But again, I mean, why 20%? I mean, again, when you say 20% guidance, what is driving confidence that 20% is the right number? And when you talk about those 3 things, affordability, assortment and low delivery time line, I mean, at least as a consumer or an outside, it feels like they are all moving in the opposite direction of where they should, right? I mean, you obviously said in the shareholder letter that the Zomato quick experiment didn't work as well as you would have liked. From an affordability standpoint, the prices between aggregators and what restaurants have on their menu probably has continued to widen. So I'm just trying to think in the near term is 20% like a realistic number at all to assume? Or is that like a much longer path to get to that 20% number?

See, near term, of course, we cannot commit to anything, and we don't know how that shapes out. And you're exactly right, Manish. I think see, we are a marketplace business. So unlike the quick commerce business here, we don't control the end-to-end experience for customers. And I think in some ways, on these 3 metrics, assortment, delivery times and affordability. You're absolutely right that as a business, we've not been able to actually make a meaningful dent on these 3 vectors despite us trying multiple things in the last 1 or 2 years. And I think -- but the eventual answer in driving more growth than what is -- what we will see without any effort is in actually breaking through one or more of these vectors, right? So I think we will continue to attempt to try different things to bring -- to sort of make progress on these 3 fronts. And I think if you're able to do that, we can see that acceleration in growth down the line. And 20%, therefore, is more a long-term 4-, 5-year CAGR guidance. We're not -- I mean I'm just clarifying that even in the past, we have stated that it's not an immediate every year growth guidance. Having said that, each of the last 2, 3 years, the growth has been north of 20%, right? So despite the slowdown even FY '25, NOV, GOV, whatever you look at it, has grown 20% plus. Whether we will get there in FY '26, we don't know. But again, we feel confident that there is potential in the market to grow at that pace over a more longer-term period.

And next question is from the line of Aditya Soman from CLSA.

Sir, 2 questions. So firstly, in terms of business stores that you've added, can you give us a sense of how many have come in new cities and then just an extension of that how many cities you are present in today? And second question on Zomato Every Day. Now -- but this was one attempt to address the affordability and sort of frequency of use, but it seems like you are shutting the business down. So can you give us a sense of what really didn't work out with that business? And is there another similar business or something along those lines that you're tracking? Maybe does Zomato Bistro filling that gap?

Yes. So Aditya, on the -- we're not sharing the data on cities, et cetera, at this point. But yes, broadly, we are going into smaller cities every quarter. And incrementally, I think a larger portion of our new store expansion is happening in the non-top 8 markets, right? Having said that, even in the top cities, we are growing, but more and more share of new store openings is now going towards the smaller markets, where we are seeing equally good adoption and customer adoption of quick commerce even in these markets. On Zomato Every Day, I think I won't call it -- I won't say that it didn't work. I think for the markets we were in, the business was doing well, and we did see that it can make money in those markets. But I think the overall size of that business in our mind, we didn't feel that it will move the needle for the food delivery business. So given that it's a more operational-intensive business, it's a different business model, et cetera, we just didn't see the value in continuing to run that when we don't really see an opportunity to grow beyond a certain scale. So that's why we've decided to shut it down for now. Yes. And Bistro, yes, is a separate business, it's very early days. We don't have a point of view on whether that fills the gap for, let's say, Zomato Quick or Every Day. But maybe in the next few months, quarters, we'll have better answers to that, and we'll share that with you over time.

Understand. And just in terms of the first -- the new city additions, would it be fair to say that, let's say, the time taken for these new stores to hit breakeven remains unchanged more or less in line with the system average? Or is there any difference in the end of these new cities?

So far, I think we're not seeing any deterioration in sort of the time stores are taking to ramp up to breakeven. It remains pretty consistent with the past.

Next question is from the line of Swapnil Potdukhe from JM Financial.

My first question is on quick commerce. So one of your competitors seems to have mentioned that their GOV numbers include subscription fees and ad income. But your definition does not seem to include that. What I can understand why subscription fee may not be included in your numbers, but I wanted to understand how do you report ad income? And what percentage of your take rate on GOV maybe or NOV whichever way you want, will be coming from ad income and customer fees?

Yes. Thanks, Swapnil. So yes, we definitely don't include any of these sort of ancillary income streams in our GOV definition or NOV definition. So it's without that. And it's not just NOV, even GOV definition was without that, just to clarify, right? So that's how we report. And therefore, the ad income directly goes to our revenue. It's not part of the GOV definition. And yes, I think it's north of 4% of GOV today for us.

And okay, that's great. On customer fees, the delivery fees and handling fees and other fees like that?

Yes.

About 3%.

That's -- Yes. Swapnil, that's part of GOV clearly. It's mentioned in the definition.

Got it. Got it. And second question is on your recent changes in your reporting GOV to NOV, right? So I do understand that Blinkit level, the difference is around 22% odd. But just wanted to get a sense on category-wise, how big a difference could be there between F&B, packaged grocery or some other general merchandise, the difference between GOV to NOV in those categories?

So it can vary a lot, Swapnil. I think in some of the more unbranded categories, like the ones you mentioned, the difference can be much, much higher than 20%. And that is why I think we felt the need to introduce this metric because increasingly, our business is going to move more towards such categories. And hence, incrementally GOV will start sort of giving an incorrect picture on the overall size of the business.

Okay. Any numbers you would like to call out on this side? Or...

I mean, like it's a big range, like there could be categories where it is also 70%, 80%, right?

That is, Swapnil, for fruits, vegetables, these kind of categories, we've -- because there is no MRP. We've always reported it on the selling price, so whatever the customer paid. But if you have categories, some of the other categories which is a long tail in general merchandise, as their penetration is growing, we felt it was right to give the clarification because some of those categories, the difference between what it sells at and what is the stated MRP could be as high as like 50%, 60%.

Got it. Got it. And the next question is on your recent plans to get the shareholder approval to lock in the foreign ownership. Now -- just wanted to get a sense as to the -- what would be the inventory days in this model? I presume basis, the numbers we have given that would be 15 to 16 days of inventory, if you were to do it completely on your own balance sheet. But how do you see those inventory-related investments going forward, especially if you start doing low ordering frequency categories like electronics, white goods. I mean is there a chance that this 15, 16 days can go closer to 20, 25 days kind of inventory?

Swapnil, I think there is a chance that, that happens. That, however, is usually offset by the fact that the categories that we want to do are not well solved in the marketplace model. What I mean by that is that even when we hold the higher inventory, today, when we work with sellers, we basically end up accepting a lot lower commissions on these categories because they are holding the inventory. And so we are in a way paying for the risk of that through our commissions today, right? And it still doesn't get solved well. So the categories which we are keen to do ourselves, hopefully, are the ones where even if you build the inventory, there is still a very healthy return on capital even after holding that inventory at a higher number of days. So yes, there's definitely a chance that the number of -- the inventory days on books will go up as a result.

Okay. But just to get a sense as to how much improvement can you see on the commission side, if you were to do the -- if you were to completely mover to an inventory-led model?

I think we haven't gotten to it yet. We are still in the stages of -- once we get the approval, then we'll start evaluating it, whether we want to go down that path at all.

And just a last one on the food delivery side. So there have been some thoughts about Rapido trying to disrupt the food delivery business model, where you right now work on the commission-based model but they plan to introduce subscriptions. Are you by any chance evaluated, implemented this idea yourself? Are there any pros and cons? Or is it too early to think about it? I mean, just a sense as to what your thoughts are if this idea picks up?

So we'll wait and watch, Swapnil. I think we are not clear on how that model can make sense in the long run for all our stakeholders and us. But -- so we don't have like -- we only heard as much as you have. So once it's out there in the market, we'll, of course, take a look and see if we need to change anything. But as of now, we don't have a point of view on that.

Next question is from the line of Sachin Salgaonkar from Bank of America.

A few questions. Firstly, what -- how do you guys look at your market share? I see a statement in the shareholder letter saying that we'll aggressively look to grow our market share in quick commerce, are you able to maintain? Are you able to gain your market share basis, your understanding in last 1 to 2 quarters?

Sachin, so our understanding is that even with the new competition, we have more or less maintained our market share over the last few quarters. I think the competitive intensity has been fairly high. But at the very least, I think we've maintained it.

Got it. Second question, Blinkit clearly has a slight different approach in quick commerce as compared to the traditional quick commerce competitors. And I'm saying that because you guys don't have private labels. You don't -- you guys don't have the supersaver or the max saver equivalent of your competitors. Any particular reason why you guys are not doing it? Is it economics? Is it something else?

So Sachin, we don't think that from a customer perspective, those are use cases that -- one that we think add a lot of value for the customers. And so we don't do them.

Got it. Third question, as you're expanding into Tier 2, Tier 3 cities, how do you look at the appetite and the ability of consumers to pay out here? And I'm saying that because in food, we face this problem where we had to shut down business in a few cities and come back. Do you see a good appetite in demand for quick commerce services right now?

Yes. That is why we are expanding aggressively.

Got it. And last question, a bit of clarification on numbers. I do see in EBITDA, there is an other losses suddenly became INR 16 crores versus close to INR 1-odd crore number in last quarter. Anything specific which is going out here in experiments perspective, which has led to such a huge loss in this quarter?

Yes, Sachin. So I think all of our sort of new initiatives, whether it is Bistro, Nugget, the B2B business, and 1 or 2 other small experiments that we are doing, I think all of that cost or losses are reflecting in the other segment.

Got it. Akshant, I thought Bistro might sit in food, but you guys are looking to keep it separate right now?

Yes, it is not part of food. It's a totally different business. So even if it scales, we want to report it separately.

Got it. So logically, this is the way the losses could remain high for some point as and how you experiment, right?

That's right.

Got it. And lastly, other income has increased from INR 252 crores to INR 368 crores. Is it treasury? Is it something else which has led to this increase?

No, it's because of treasury. We raised money in the QIP past -- I mean, last quarter, November. So the full quarter impact of that is now leading to the higher income.

Next question is from the line of Aditya Suresh from Macquarie.

So Albinder for you maybe on Blinkit. This quarter, I thought it was really interesting that contribution margin was maintained. The loss expansion is more at the adjusted levels, you're kind of more the incentive spends and et cetra, right? So as we -- just reflecting your comments on competition for the next few quarters or maybe if I just expand it as well, in the face of competition, could we expect even contribution margin to drop? Or should we expect contribution margin to be flat?

Aditya, it's very difficult to say, like I mentioned in the letter also. See, our business is one -- it is affected very heavily by seasonalities. So the effect of competition with every sort of change of season also shows a different aspect of the business, right? So we are also -- this is -- as the competition remains high and the season also changes. So I think there is a lot of variability, which we are also not certain and able to give guidance as to where it leads to.

Got it. And just in terms of the prior state in the first half when you were at the breakeven position, would it be fair to say that maybe back in the path towards breakeven only once competition settles? Or do you see any other levers here to kind of pull to get us back on the trajectory even as competition is expanding?

Aditya, too many moving parts here. And honestly, we're not thinking about our goals and targets in that performance shape. I mean just getting to like breakeven is not enough anyway. So long term, we have to solve for much higher profitability than just that. And we are at minus 2% margin today in terms of adjusted EBITDA as a percentage of NOV. So we are not really deep in red. So yes, if we have a strong point of view on that, we would, of course, love to share that with everyone. But as we have said in the letter on this front, I think we don't want to stick our neck out and give any guidance at this point, given the sort of multiple moving parts.

I appreciate that. And on food delivery, would transacting users be a primary kind of growth vector for the next couple of years? Or are you looking to drive more through frequency?

No, I think even frequency increase is like going to largely reflect in the monthly transacting users going up because most of our consumers actually don't even transact every month today. So yes, from a tracking perspective, we expect to see the MDUs to continue to increase.

Next question is from the line of Gaurav Rateria from Morgan Stanley.

Congrats on good execution. A couple of questions. On your comment on competition intensifying in quick commerce. So far, our investments were focused on growing network of stores, increasing assortment while not necessarily focusing a lot on subsidies. And now you have talked about growing aggressively market share. So any change in priorities from investment point of view?

No, Gaurav. I think no change in priorities even in the last quarter or last 2 or 3 quarters since the time competition really started increasing. I think our approach has been fairly consistent in terms of the key focus areas we have mentioned in our letter. So far, we haven't really seen any loss in business because of not being able to subsidize at the levels at which we are seeing the competition doing in the market. So that's great news for us. And hence, I think we don't need to sort of course correct and just focus on what we are doing.

Got it. Any color that we can get on your SSG growth in the top 8 cities, if not quantification, some qualification or comments on how has it been trending over the last few quarters? Any signs of slowdown or it is still trending on the upward direction?

Gaurav, it's -- I think -- overall, I think it has been growing, and we haven't seen any slowdown. However, when we look at the numbers, it's a little bit different because we don't look at it at a store-wise level. We look at it at a particular area. So particular geography might actually have gotten multiple stores where it had a single store earlier. So therefore, being able to provide actual numbers around it is much harder.

Got it. My third question is on your comment around the shortage of the last mile workers, which may have impacted the overall food delivery business. I'm just trying to understand like over longer term, how are you going to be solving for that and unless a material increase in supply happens, it will be a constrained factor for growth, both for food delivery and quick commerce or else structurally the cost of last mile can go up compared to what it is today?

Yes, Gaurav. So I think we do expect the supply to increase over medium to long term. Even the gig work economy is now multiple million large, right? And it's not like we haven't seen this kind of temporary pressures on supply in the short term. I think it has happened to us a couple of times in the last 4, 5 years. Whenever we have seen emergence of increased competition, either in food delivery or a new use case or a category emerging like quick commerce. So I think the supply always catches up with some lag, and that's what we expect here as well that over time, we will see the supply increase and therefore, this pressure should ease off.

Okay. Last question, why there's a decline in the going out business? And are the investments going to remain elevated in this segment? At what point in time do you think you will have to taper off the investments and this business moves towards steady-state profitability?

Yes. So the decline on top line is seasonal. If you look at year-on-year growth, the GOV going out is still growing by more than 100%. And on profitability, I think we are at minus 2%, 2.5% of adjusted EBITDA as a percentage of NOV. And I think at least near term, we expect this business to sort of remain in that range while we sort of invest in transition of customers from different platforms, PayTm, Zomato, et cetera to this new district app. And we're also investing a little bit in supply creation in some parts of the going out business. So I think that investment phase will continue for the next year or so. And hence, we are not expecting this business to become profitable in that time frame. But at the same time, we don't expect that losses will go up from here as well.

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

So my first question on the food delivery. Now that you've shut down the quick thing and 1 of the 3 growth vectors you've called out here is delivery time lines. As you know, one of the mechanisms to grow the food delivery business and the other was affordability, where you obviously shut down every day. So specifically to the delivery time line thing, what is the path to lowering that going forward in the medium term now that you think the quick model didn't work?

Yes, Vijit, so I think quick was an attempt to bring down the delivery time from the average, let's say, 30 minutes for the platform to 10 minutes. So I think what we've realized is I think that is extremely hard, and we don't see any incrementality in demand if we do that on the business given that customer experience is poor. But of course, there's a wide range between 10 and 30 minutes. So I think our view is that we should try and bring that 30 minutes down to maybe 20, 25 minutes over time by sort of making our overall logistic fleet delivery system more efficient. And I think those are the gains we want to chase now rather than trying to build an extremely quick service, which without end-to-end control on the supply chain, we think is extremely hard to do.

Got it. So if I understand it right, the kitchen infrastructure side improvements is really hard to do in -- with restaurant partners and in a very quick time frame. And whatever you could do on the delivery fleet optimization, where you place them those kinds of improvements you would. Is that a fair understanding?

Yes, that's right.

Great. Got it. My second question is on the Blinkit comment on competition, right? So if I look at these numbers, it looks to me like your new store ramps in terms of quarter 1 GOV, quarter 2 GOV, that trajectory seems pretty similar. I mean, based on these numbers, it seems to me that it's probably pretty similar to what you've said before. And you've obviously had one of the best MTU growth quarters and contribution profit is the same Q-o-Q in rupees per order, even though your AOV was lower. So in general, the competition has only really affected you in terms of ability to charge, say, those higher delivery fees?

No, I think it's across the board. It's more than that. I think every part of the business becomes more expensive once there is the level of competition that we are seeing today, I mean, the last mile delivery becomes expensive, marketing cost goes up, real estate and so on. So I think -- look, I think the contribution margin remaining flat doesn't mean that competition has eased, right? I mean it's relative versus to the expectation. I think in this business where the stores get to breakeven in a matter of few months. In absence of competition, we would have expected the business to be fairly profitable by now. And I think all of that is what is not reflecting in the P&L because of high competition.

Got it. And just one last question. The INR 1,000 crore of working capital comment that you made. I just wanted to be clear that this is essentially 15 days of working capital, right? And I mean just based on that math, because it would be.

More or less, yes.

And I wanted to understand, you've talked about how business in quick commerce has Pareto nature in general. So as you grow into broader categories and go into these high-margin toys and all kinds of long-tail categories, right? How does that change how you think about the working capital? And this is including both the dark stores as well as your warehouses, right, in any case?

Vijit, most of those categories, which are high assortment remain on a marketplace even today. So the sellers directly sell on the platform, so that doesn't have any working capital impact for us.

I see. So the INR 1,000 crore comment is for the non-marketplace business that you would do?

I think that was more an example of even if we were to take our entire.

That's illustrative of the entire business, right? So the entire business includes all the categories, right? Now if the share of these categories where inventory moves slowly increases, of course, the inventory days will increase. But then we will have to evaluate whether being in that category makes sense from a ROCE perspective or not, right? So I think whether it's a marketplace or whether we own inventory, I think like every category and expansion in category is a function of the return you see by being in that category. And I think we'll continue to evaluate the business in that same way.

Next question is from the line of Ankur Rudra from JPMorgan.

Just the first question on quick commerce, maybe a follow-up to the last question. Hyperpure is currently doing some of the non-restaurant business for Blinkit. Could you maybe highlight what is the level of working capital that's currently being deployed there?

Yes. So I think we don't share that data, Ankur. It's different for different sellers for different products, right? But -- so yes, we don't disclose that data.

Okay. In the quick commerce business, the MTC growth was quite nice, but you all keep -- you've referenced in your competition a lot in the letter in this call. Are you seeing any kind of loss of customer wallet share in existing areas where store density is going up because of competition?

Not yet, Ankur.

Okay. In terms of the NOV to GOV ratio, I noticed there was a slight uptake this quarter. Does that -- is that just seasonality? Or is that moderating subsidies in the ecosystem?

I think that was seasonality because O&D quarter is fairly festive heavy, which has a lot of unorganized items, which are sold in the market during that time.

Okay. Understood. Maybe just a couple of questions on food. Can you highlight whether this rider availability problem is -- will need a commission-based solution? Or is something else that you can do?

No, I think it's not a function of the commercial modeling with the delivery partners. I think as I mentioned in response to an earlier question, I think it's just a temporary supply/demand mismatch, because of the rapid expansion of e-commerce in the last 3, 4 months. And usually, summer is a season where we anyways see a slight supply crunch on the delivery partner side. So this time, that got sort of compounded in some ways because of rapid quick commerce expansion across the board. And hence, I think last few weeks and months, we've seen that impact. But I think going forward, it should ease out without any drastic changes.

Okay. Typically, 1Q is usually strong for food delivery historically. Can you highlight if you've seen any meaningful seasonal pickup in April so far? And if that will help the Y-o-Y growth rate?

I mean, yes, seasonally, this is a better quarter. And so far, nothing surprising. We're trending as per the expectation we have from this quarter.

Okay. If I can squeeze one last question. I think I missed the answer to a prior question on private label. Why have you chosen not to do it?

We didn't answer it, but I think it's a strategic choice that we have. We work with a lot of brands, and we feel that they are better equipped to create and sell products that customers need, we would like to be in the business that we do best, which is operate as a platform.

Next question is from the line of Gaurav Malhotra from Axis.

Just a couple of questions. So there are already 3 quick commerce players of reasonable size and scale and a couple of horizontals, like you mentioned also entering. So from your perspective, given these platform businesses with some sort of network effect, how many such players can potentially exist in the market like, say, in the medium term and not in the near term for sure, but at least in the medium term?

I think we are worried about our own existence.

Gaurav, it's very hard to -- like I think -- I don't think anybody has an answer to that.

Got it. Got it. And in terms of given the kind of expansion which you are doing and obviously, which the other players are also doing in terms of store expansion within the cities outside new cities. And this all expansion is coming at a time when there is generally the subsidies being offered. So what -- so how much of a demand overestimation you think is happening over here? There would be some bit, but any sense, is there -- is that a worry for you guys?

Gaurav, as somebody had asked earlier also, like we've taken a different view on how we want to grow our market. And I think each of the players, I don't think all quick commerce is the same. And I think the other players might be taking decisions or going into markets, which we don't have any idea like what is the kind of economics they have or what is the kind of customer demand that they're able to serve. So it's very hard to -- for us to be able to comment whether those strategies are something which impact us or not.

The customer segments, by the way, for different quick commerce players could also be different. So it's not like we'll be able to address all the customer segments and that exists today in the market.

Ladies and gentlemen, in the interest of time, we will now take the last 1 to 2 questions. The next question is from the line of Abhisek Banerjee from ICICI.

So yes, first of all, congrats on a robust set of numbers under these circumstances. So I have a few questions now, you've spoken about competitive intensity impacting your costs. So can you give us some idea of how much your last mile delivery cost would have gone up Y-o-Y?

Sorry, Abhisek, we can't share these details, these are like nuts and bolts of the business sense -- competitively sensitive.

Sure. You also spoke about your marketing spends going up, right? So can you give some sense on what you spend on? Was it more performance marketing based or BTL, ATL...

I think across the board, Abhisek.

Okay. With regards to -- so one of the things that I saw that your other income has gone up, but your taxation has actually come down. And you have given an explanation for that? You've talked about some unabsorbed depreciation, which was set up here. But that has given a very significant INR 30 crore kind of saving, right? Now is that something that would be recurring in nature? Or if you could just explain that portion a little more?

So Abhisek, the comment is not related to this quarter. That comment was related to the time when we started providing for this tax where we said that the unabsorbed depreciation is finished. So therefore, our treasury income will become taxable. I think the drop in tax that you see this quarter is specifically because the amount of tax that we provided for in the previous quarters was a little higher, but the actual tax to be paid, came out a little lower, and therefore, there was that adjustment that was made in Q4. And therefore, you see a dip in the tax amount in Q4.

Now with regards to this [indiscernible] category, you mentioned that you want to private label side. But you've also given some data regarding the non-restaurant B2B sales in Hyperpure. Now in a scenario where you're moving out sellers, does this business not become like a private label in the future?

So Abhisek, first of all, I think that's a B2B business when Albinder and we're talking about not being private labels, that's more from a B2C perspective. And yes, I think if there's any change in business model in the future, like you mentioned, we'll have to see what -- whether we want to still continue to build the B2B business outside of restaurants or not. So we'll take that call in the next few weeks, depending on whether or not we get shareholder approval for the resolution.

Understood. And just one last question. You may choose not to answer it, but my understanding was a lot of these competitors, the new entrants especially that you were talking about, were actually trying to move some of their slotted delivery customers into the quick commerce segment, right, because they were fearing you would take over that share otherwise. Is -- has something intrinsically changed there [indiscernible] , I mean, which is leading to this cautious return?

Sorry, Abhisek, we couldn't fully get your question. Can you please repeat, if you don't mind?

So my understanding was that a lot of these new entrants for example, even Flipkart was trying to move their existing grocery slotted delivery customers to a quick commerce model, so that we don't -- they don't lose out for you in the longer run. But has something changed there? I mean, why are you becoming a little more cautious on this?

No, I think so for the next-day delivery business, I think there are two things here, right? One is their focus on building quick commerce, but I think what we wanted to highlight in the letter also is that even their next-day delivery business is shrinking in terms of the delivery time lines. And on Amazon, Flipkart, now you can see a lot of products actually get delivered on the same day in 4 to 6 hours, right? So that is also in some ways going to compete with the quick commerce business that we have at some point. So I think there are two separate things. You are right. So nothing has changed.

Ladies and gentlemen, we'll now conclude this conference call. Thank you for joining us, and you may now disconnect your lines.