One97 Communications Limited (PAYTM) Earnings Call Transcript & Summary

Thank you for joining and a warm welcome to the earnings call to discuss Paytm's financial results for the quarter, which ended on 31st December 2023. Joining us today from Paytm's management team are Mr. Vijay Shekhar Sharma, our Founder and CEO; Mr. Madhur Deora, President and Group CFO; Mr. Bhavesh Gupta, President and COO; and Mr. Anuj Mittal, Senior Vice President, Investor Relations. A few standard announcements before we begin. This call is meant for shareholders of Paytm, potential investors and research analysts and not for any media representatives. The information presented and discussed here should not be recorded or distributed in any manner. Some statements made today may be forward-looking in their nature, which may differ from actual events. Finally, this earnings call is scheduled for 60 minutes. It will have a presentation by the management followed by Q&A. [Operator Instructions] The presentation showed here today are replay of this earnings call, and a transcript will be made available on the company's website subsequently. With this, I would like to request Mr. Vijay Shekhar Sharma, to kindly initiate the earnings call.

Thank you. Good morning, and happy new year, everyone. I'm very excited to present all of us together for our quarterly earnings. You've already seen our numbers. My colleagues, Madhur and Bhavesh in this call, who will talk in detail. I wanted to tell you that last 2 quarters technology world has seen a dramatic revolution due to AI. The power of AI will dramatically shift company's capabilities who are able to leverage it versus those who are not. We've seen our company using AI in different, different business use cases to the technology and product. And I would rather use the word dramatic because it is dramatic to see the acceleration of deployment and abilities of computing that we are able to harness with these various copilots and our own LLM models that we are seeing. Our business in financial services and payments will leverage the power of AI more than probably anyone and any time before we imagined. Our capabilities and marketing services to the merchant will also be very, very much accelerated because of the capabilities that we've been able to develop. With this, I offer my colleague, Madhur, opportunity to talk the business and then I'll come back and we both -- and all of us come back for your Q&A. Thank you.

Good morning, everyone, and it's great to see everyone on a Saturday morning. I'm very pleased to report our earnings for the quarter. Our revenue for the quarter is up 38% year-on-year, which is fantastic. It has accelerated compared to the previous quarter. Part of this was because of the timing of the festive season, but overall normalized revenue remains very, very strong. Our contribution margin -- sorry, contribution profit grew 45% year-on-year. Our contribution margin was at 51%, which has expanded 2% year-on-year. There was a slight dip sequentially. All of that was because of seasonal factors. During the festive season, we do have a little bit more cash back. We do have a little bit tighter payments margin. We also have our events business, which has a large amount of direct cost, is a profitable business, but it does see a big scale up in Q3 and Q4. And as a result of that, you can see a little bit of a sequential dip. We do expect the contribution margin to remain in the mid-50s going forward. In terms of EBITDA, our EBITDA before ESOP has increased to INR 219 crores, as you can see from this chart. This has been a consistent improvement every quarter for the last 6 or 7 quarters that you can see since we turned breakeven and profitable. We expect because of the very strong momentum that we have across several businesses that we'll talk about as well as operating leverage that EBITDA will continue to improve and next quarter will be better than this quarter. We also just highlighted our profit after tax, which is improved by INR 170 crores, still at a negative number, negative INR 222 crores. But the reason we highlight this is we are very focused on bringing ourselves to PAT positive in the very near future as well. Can we go to the next page, please. This is our payments business profitability. As you know, net payment margin is sum of payment processing margin and the subscription revenue that we make. This number has gone to INR 748 crores this quarter. It has grown by 63% year-on-year. So we continue to perform extremely well on this metric. And we'll just try to explain this a little bit more clearly, our payment processing margin without UPI incentive, and I should just highlight that there's no UP incentive this quarter that is usually expected in Q4. Even without UPI incentive, we were in the 7 to 9 basis point range. As you can see, our GMV growth was very strong, both on a year-on-year basis as well as sequential basis, and we for the first time crossed INR 5 lakh crores of merchant payments this quarter. Our merchant subscriptions continue to show very strong growth and actually an acceleration. So some of you may remember that we were at about 10 lakh net adds a quarter for several quarters. And last quarter, we saw that accelerate to 13 lakhs. And this quarter, we have seen that accelerate to 14 lakhs. So we're seeing a new base for addition of merchant subscriptions. And as you may remember, we make about INR 100 per month per merchant for the subscription. As a result of all of this, 63% year-on-year growth in net payment margin even without UPI incentive. Can we go to the next page, please. This is our financial services business, which -- where we wanted to highlight a number of points. One is, our value of loans distributed through our platform is now at INR 15,500 crores. That is a 56% growth year-on-year. You will see that the yellow line, which is Paytm Postpaid has seen a sequential decline. I'm sure a number of you were on the call that we had in early December where we talked about Paytm Postpaid potentially declining from the -- Paytm Postpaid declining from the base that we had through a conscious decision that us and our lending partners have made, we have calibrated that. Next quarter, you'll see the full year impact of that. So that's -- this is a number that we had for this quarter. Our personal loan and merchant loans continue to grow very, very well. Our portfolio quality, most importantly, continues to remain stable and healthy, well within the parameters that we have talked about. And we, obviously, on the top right, share every quarter what the collection performance and as a result, the portfolio performance is. Our merchant loan, in particular, is showing very healthy trends. We've been very excited about this business. As you know, our number of subscriptions keeps growing. So we are now over 10 million over 1 crore merchants who are -- who have taken a subscription from us and more and more of them are becoming eligible from our partners for a loan and more and more are showing interest in taking these loans. So that continues to be a huge growth driver going forward. We talked a little bit about high ticket loans 1.5 months ago, and we just wanted to elaborate on that. We have made significant progress in that business in the last 4 or 5 months and even since the last time we spoke. We now have 2 crore whitelist users from our lending partners, and it is showing early trends of scale. So Q3 distribution of this number, which is the first time we're disclosing this number separately, was INR 490 crores. For a business which is very, very early and very recent, this is a tremendous number, and we're very excited about where this number goes going forward. And like we said on the previous call, and we would like to reiterate that we'll continue to calibrate Paytm Postpaid or postpaid loans as we call them as per regulatory guidance and then their expectations. So this is an ongoing exercise, and we'll continue to do that. Collections I've already talked about. I did want to highlight 2 other businesses in financial services where we are seeing very good momentum and very large opportunity. So insurance distribution, we're seeing great product market fit for some of our embedded insurance as well as for merchant insurance products. So this is a business that we'll talk about more going forward and also scale. You may recall that Vijay, in an earnings call about a year ago, had said that insurance is about a year from now activity for us, and this is where we are. We are a year hence and we're seeing the efforts that we have put in here starting to give us great opportunity going forward. So we'll start to talk more about this. Equity broking, as many of you know, we have Paytm Money, which is a mutual funds and equity broking platform. This is a huge market, very profitable, and we are seeing huge scale of opportunities here for both F&O and equity trading customers. Go to the next page, please. This is marketing services, which we previously used to call Commerce & Cloud. The reason we call it marketing services is this business has become primarily about providing marketing solutions to our merchants. So going forward, we will call it marketing services because that's really the core of what we are doing. And also cloud might be slightly confusing because we don't really do cloud computing services or data centers and so on. So just for clarity, we are going to call it marketing services. The core of this business is it drives enormous amount of high-margin monetization from our merchants. This business has grown 22% year-on-year to over INR 500 crores. So it's the first time this business has crossed INR 500 crores of revenue. We sell discount deals, gift vouchers and other digital goods like tickets, travel tickets and entertainment tickets. We're pleased to report that our GMV grew 48% year-on-year. So that's a very strong performance from our various teams, and that is partly as a result of growing market share in travel. We have had a huge ramp-up in our new gift voucher business, which is relatively early a year ago. And we're also seeing some positive momentum in entertainment. We offer brand marketing, advertising and loyalty services to brands and businesses, and that business is also growing very fast year-on-year. And finally, our credit card distribution business is also here. And we, for the first time, crossed 10 lakh Paytm consumers acquired for credit cards. So that is 125% growth year-on-year. So I would like to say that all of these businesses are effectively firing on all cylinders and contributing to the strong momentum that we have overall as a company. Can we go to the next page, please. I'll just hand it over back to Vijay to talk about our key focus areas going forward, and then we'll take Q&A.

Thank you, Madhur. So as you would have seen here, we've been able to leverage the AI in 2 key areas. One is that we've been able to see accelerated deployment and code generation, QA, et cetera, that is in the production technology, and we are working with various co-pilot technology companies, and this is showing already deployed and doing incredible. Secondly, it is also enabling us to create operating efficiencies because in many, many mundane tasks, we are able to now remove humans and have machines to take care, and that is able to scale and create adversary system. So these 2 things are our key AI-led initiatives. We're talking about monthly transacting users and financial services approach here. If you notice, we also crossed our 100 million active customers in last quarter. This is also a key milestone. As many of you would know, that there are visitors, registered users, users that logged in, et cetera, et cetera. We always show the active transacting users. Registrations are upward of 600 million on our platform just in case, but that is not the number that is material, but the material number is monthly transacting users that crossed 100 million. And we have been able to do it very prudently and our focus is on acquiring strictly monetizable incremental user, which means that we've been able to do, as you noticed, acquisition very, very prudently. And there are products like UPI Credit, UPI AutoPay, which are actually going through the roof. And we believe that, that will generate even a higher quality of customers on our platform, and we will continue to acquire customers with that insight. Our merchant payment side, which is very, very important. And I think as Paytm, we want to be known for the payment merchant network that we are creating, partnering with all payment networks. Here, our approach has been led by multiple devices. As you know, we created soundbox and card machines and various hybrids of those. And we have even a few more in pipeline and in -- continued in next year, you will see tons of our multiple device formats serving different, different, different needs of merchant and that remains a focus area for us. In fact, I also want to share here that we've been able to do good work on sourcing and supplying and building homegrown capacities on this. That's a USP that we've been able to build on. You heard from Madhur on high-ticket loans, and Bhavesh is going to talk more about when you ask more in detail. But overall, I can tell you is that we've been able to drive high-ticket loans as you saw in -- literally for the last few weeks in the quarter and the numbers you saw were very, very encouraging. We keep focus on that. And as far as insurance is concerned, it is sort of something that we are able to bundle in our core offerings, whether they are merchants, whether they are consumers where we are doing embedded insurance. And the results have been very, very encouraging, actually. In fact, I can say that it is better than what we had imagined this to carry on. So that is why we are talking about insurance out there as one of the key KPI. In fact, equity trading is very simply Paytm customer needs to be cross-sold and we will bring lots of offerings of Paytm, stock broking and mutual fund, et cetera, on main consumer app. So you will see better cross-selling opportunities for our Paytm consumer base on financial services overall. Marketing services is -- I'm going to say this is like a byproduct of the traffic on consumer app where we have consumer business. Obviously, merchants can offer deal, gift vouchers, discounts, coupons, et cetera, and they can sell those even tickets. We've been able to also create lots of marketing, branding opportunities for brands like you're seeing here some brands showing up. We've been able to create customer acquisition and branding opportunities for businesses, brands and even credit card issuers, which are our partner credit card issuers. So we are very, very happy. And that is our focus area for the next 4 quarters. Thank you.

Thank you, Vijay. We will now proceed to Q&A. [Operator Instructions].

In fact, I wanted to say this, I want to reinforce one extra thing when I was talking about forward-looking guidelines because of efficiency and so on, the important thing that Madhur said was that our next quarter seems even better than this quarter and -- in bottom line. And I think our attention to the fact is what is showing up in the results and it continues the momentum in next quarter also and next quarters. Thank you.

Thanks, Vijay. The first question of the session will be from Mr. Vijit Jain from Citi.

Congratulations on a pretty decent set of numbers. I have 2 questions. One is can you talk a little bit more about what use cases have you eliminated on the merchant side in Postpaid, which is what you talk about in the earnings letter? And associated with that, if you can talk about the reduction in whitelisted customers by 15%, is that comfortable enough from an ongoing perspective? Or do you think you'll be tightening standards a little bit further here? That's my first question.

Yes. Thank you, Vijay, for the question. So, Vijit, the use cases that we have taken out are predominantly where we could see that consumers were fundamentally spending a larger portion of their postpaid line in a single use case. What I mean to say here is that what we basically double click is typically a postpaid user. They do between 5 to 7 transactions a month using postpaid. But we also used to find or were finding users who are kind of consuming either through 1 or 2 transactions the entire limit as certain category of merchants could be online lifestyle, could be high ticket off-line, et cetera. So we have calibrated that acquisition of postpaid to bring down the disbursements of postpaid, which could be argued was kind of on the edge of riskiness and was discomforting to us and obviously our lending partners. When we say we eliminated, I think the way we used to do, and I've said this for the last many quarters, that we every month look at not just for Paytm Postpaid business, but even for all our credit business. We look at what's happening to various cohorts of users and cohort definition is fundamentally to do with what the user is doing in terms of vintage on the platform, geography, spends, delinquency trends, recovery collections, et cetera. And we used to kind of clean out maybe a couple of percentage point users every month. That number has got enhanced by us. So instead of taking out, let's take about 3% to 4% every month that we used to take out from our base, we have taken out close out 15%. These were the cohorts that our lending partners suggested to us, were showing high leverage as far as bureau data was concerned with them. And hence, they were not very comfortable. And we also felt that it is the right thing to do given the macro environment. So this is what 2 things have happened. Going forward, I think the sense that we understand is 2 things that are happening. One is because you've calibrated use case and because we have calibrated the number of customers who are getting incrementally onboarded or are remaining on the platform. While remaining on the platform is still a very large number, but the use cases have been calibrated. The user who was using postpaid, the frequency is coming down. So while there was an anticipated cut in GMV that we expected, there is more than anticipated cut of usage also that we are seeing, which means that this number that we've reached out in this last quarter, especially December, which is a drop from the peak of postpaid disbursement by about 50%, 60%, will continue to look downwards in quarter 4 and could stabilize maybe after quarter 4 and/or maybe in early quarter 1. But it's too early for me to say. But at this point in time, we believe this would be a number which will slide down further.

Got it. And Bhavesh, my next question is the loan performance indicators that you publish, I can see that there's a little bit of positive move on the bounce rate for personal loans there, but there's no change otherwise. So I'm just wondering how to reconcile that with all the events and commentaries leading up to the December '23 -- sorry, December thing where you tightened standards. Should it not have reflected in at least some of those numbers?

Yes. So I think, Vijit, there is a lead and a lag indicator bouncing as you can see. So postpaid, there is no change in delinquency parameters for us. We did not reduce postpaid loans because we were seeing any delinquency trends. I want to repeat that number very, very clearly. Our portfolio, both of the GCL and the expected credit loss numbers on postpaid, remained range bound at a lower end of the range that we have given. So we are very comfortable and so are our partners. It was done predominantly because overall on the macro side, our partners were seeing higher stress on less than INR 50,000 loan and we were of the opinion it is better to be ultra conservative versus just looking at our portfolio. So that decision of postpaid loan was taken in that light and we continue to go with the direction that less than INR 50,000 seems to be something which is not necessarily showing great signs in the overall macro and overall credit bureau trends that the overall industry is seeing, while our portfolio continues to be very, very strong. On the PL piece, yes, we've been cutting down on PL for the last 4 quarters. We've been conservative on personal loan growth while we have grown decently. But as you can see from our data, last 2 quarters have been flat or negative on the personal loan business, especially the business we used to do, non-high-tech edge. And we believe that in the next 2 quarters also that line of business will remain flattish and the growth will come from high-ticket PL, which is showing tremendous momentum. So bounce rate coming down is a very good sign for us. While we understand in general, overall, the bounce rates have either remained flat or increased in the rest of the ecosystem, but for us it has started to show down. So on a lag basis, we believe, let's say 2 quarters forward, we could start seeing some impact to ECLs and GCLs coming down. But it's too early to say because we've just seen this quarter the bounce rates to have come down. I would like to wait for another 2 quarters before I can give you a more forward-looking direction on GCL.

Got it, Bhavesh. My last question, just on the payment margins. So I see in this quarter, if I take the payment revenues, remove the payment processing charges, it's about 14.7 bps, 100 bps down Q-o-Q. Now I know there is a seasonality associated to sales and everything. But there's also the increased PIDF benefit that you're not getting, right? Your other operating revenues is up from INR 24 crores odd to INR 50 crores odd. So just I'm wondering that when you talk about payment margins in the 7 to 9 bps band, excluding device rentals, does that include PIDF benefits? And if -- or at least will increase PIDF benefits? And if you remove that, will you still be in the 7 to 9 bps band in this quarter?

Maybe I'll answer that, and Bhavesh can add. No, the payment processing margin does not include any incentives or marketing or anything else that we get on devices. That is all included in devices part, so much in subscriptions you should effectively think of as money that is paid to us by merchants and the small contribution from any incentives or schemes that we might be a part of. So to answer your question, that PIDF piece or any other incentive goes in the subscription part rather than the payment processing margin part. And excluding UPI incentive and excluding these incentives, which I just clarified, that payment processing margin is still comfortably in that 7 to 9 bps. And if you recall, when we had -- in December '22, I think it was, when we had first talked about the split in payment processing margin, that 7 to 9 bps was actually including UPI incentive. So while we had guided that this trend may be downwards, so far it has actually been strengthened. Bhavesh, I don't know if you have anything to add?

Yes. No, I think Madhur, you've answered in detail. If there's incremental question with it, I'm happy to answer.

No, no, that's it from my side. I'll jump back into the queue.

The next question will be from Mr. Pranav Dheeraj from Bernstein.

Just a couple of questions. I think the first is on the merchant loans. What percent of your soundbox base would be of a size that you would be comfortable lending to? In other words, if you can give us a sense of what's the minimum payment flows that's required for a merchant loan, vis-a-vis that's required typically for a soundbox, that will help us understand what's the headroom on the penetration front?

So I think we've said this earlier also, the math is the merchant loans eligibility is highest for devices merchant. And while they're paper QR merchants, but our focus is always on devices merchants because they tend to perform much, much better as a cohort. We today have close to 10 million devices in the market. We've been adding, as you know, close to less an average 12 lakh, 13 lakh devices a quarter. So it takes about 6 months before our lending partners are comfortable to start looking at data. We do not offer loans for merchants who have not been on our platform using devices consistently, at least for a period of 6 months because they demonstrate better credit quality. So fundamentally, to say, if you remove 2 quarters of sales of devices, that number comes down to, let's say, about $6-odd million in the system, of which half of them are kind of whitelisted, half taken a loan. So that's a very, very large funnel for us. And that's the reason we remain excited that this business while has grown Y-on-Y by almost 95% will continue to demonstrate very healthy growth for us. And there are various criteria, Pranav. I don't want to really get into the -- those criteria on this call. But I can say that it's not a unilateral -- univariate criteria. It's a multidimensional criteria between users, GMV, type of device, type of merchant, new locations, et cetera, which leads to the lenders whitelisting and then they have their own underwriting criteria to go ahead and offer. We don't have any role to play in that.

Understood. So if I understand right. So you're saying that the -- when you give out a soundbox, if everything else holds up, those typically are customers who would become eligible for a loan from a size perspective.

Yes. So 50% of them because soundbox is delivered in 500 locations, whereas credit -- merchant credit is given at about 175. And hence, there is about 70% of soundbox sales is done in locations where lenders give credit, of which you can say about 70% get whitelisted after 6 months.

Understood. Very helpful. Just other question on the postpaid loans, right? So you mentioned that the portfolio -- the BNPL portfolio for you has held up very well, whereas the partners -- lending partners are seeing stress maybe elsewhere in the system. In that context, would you rethink your decision not to have a balance sheet of your own? Or would you have done something differently given the numbers that you're seeing, if you had a balance sheet that you could lend off?

See, that's a very hypothetical question. I would not like to get into that question very honestly, Pranav, because we don't have a balance sheet. We don't intend to have a balance sheet. We are a technology company, which has consumers and merchants on our platform. And we would love to work with the lenders and the wisdom that they have of doing credit over so many years, multi-decade. We are a young company, so we would love to leverage the knowledge of the lending partners. If they feel comfortable to do more, we would love to do more. If they feel comfortable to do less, we will do less.

The next question will be from Rahul Jain from Dolat Capital.

Hope I am audible.

Yes, you are. You can go ahead, please.

Yes. Just 2 questions. Firstly, you've mentioned that for high ticket, you have close to 2 crores whitelisted users. So can we say that with the induction of a low-cost lender like Axis Bank conversion to whitelist to actual lending could be much higher as probability for such user also may get better match with the underwriting criteria versus what you see for the lower ticket loans where the data is lower, the profile of the borrower could also be lower. So there is a mismatch between the risk criteria versus for high ticket the mismatch may be much lesser.

Yes. I think it's a very good question, Rahul. Early trends suggest to us that the funnels, as we track on whitelist, are holding -- or performing better than the low ticket funnels because the rejection rates in low tickets are fairly larger than the rejection rates in higher ticket. But it's early trends. I think on a longer arch, when we take, let's say, a full of next year, this particular whitelist itself will grow from the current standards that we have of 2 crores to an upward of 3 crores, 3.5 crores. This is exactly what we see in our credit card business that where we do profile is largely similar wherein our multiple banks are going and issuing credit cards to the platform, where the whitelist is almost closer to about 3.5 crores. So 2 things we clearly feel very confident. One is that the whitelist will increase further as more and more partners come on the system, and the funnels will perform better. So mathematically, the high-ticket business will perform much, much better than the so-called lower ticket business. But the scale of this business is contingent to various factors. And what we are seeing as early trends are giving us very good comfort that quarter-on-quarter basis, if those trends play out, this business should become a materially large business for us as we see the next year.

Right. And on the postpaid side, since -- so the criteria may not improve, materially different than what we observed in December in a near future perspective. Is there a revised strategy in terms of getting a different set of partners for it or maybe increasing the size of this exposure changing the cohort which needs to be target on that product because if product is pretty good and unique, but if we don't grow on that kind of a product, I mean, that's a serious differentiating offering and why not to leverage that?

Yes. So I think, Rahul, there are 2 different elements of your question. I want to ask them differently. We -- at a macro level, when we see and hear that overall basis, there is a concern that banks and nonbanks have on a lower ticket volume of business. I don't think as a strategy, we want to arbitrate and move to a partner who could technically say, "Hey, I'm happy to take this risk and let's do business with -- you can do business with me." Our belief here is that we would love to build a business which on an overall basis is aligned to the way the regulatory is thinking and the lenders are thinking. So if there is a concern either regulatory or otherwise, we would like to play with that and make sure that unless and until the overall macro environment and regulatory environment is positive, we are not necessarily going ahead and building this business at a scale that we were building earlier. Having said that, every product goes through calibration. While you -- while what you've said is correct, that postpaid is genuinely a differentiating factor. But I also want to mention that we have been doing multiple lines of business, including merchant credit, personal loans, now high-ticket personal, et cetera. We also have built strengths on those businesses, which today's environment allows us to scale those businesses over postpaid much faster. So we'll continue to calibrate postpaid, if you ask me, honestly, at this point in time. And we'll see as to how the environment is changing to positively in this area. And does that mean that we have to make some changes in the product. We'll do that in due course of time. But at this point in time, we don't propose to make any changes in the product to kind of navigate the environment, we would like to play the environment and be conservative.

Right, right. Understood. Just one bit, if I can. So since our profit improvement is quite consistent and our commitment on the cost management is also very obvious. All our monthly metrics are very healthy, be GMV, MTUs and so on and in one direction without any disturbance. Then just trying to understand what refrains us from giving a PAT guidance either for a short term or maybe more medium-term basis. Is there any reason to that?

I think we have seen -- so our analysts also have assumptions in their models about PAT guided -- PAT and so on. We do think our business is now relatively easy to model, right, which -- and we obviously have, I think, about 15 or 16 analysts, really high-quality analysts who cover us. So I think there's enough projections out there to -- for analysts and investors to be able to sort of get their head around what does the business look like 2 or 3 or 4 quarters from now. And how does that sort of translate into -- from revenue to EBITDA before ESOP cost to EBITDA after ESOP cost and to profit after tax. So I'm -- so I guess what I'm trying to say, Rahul, is that there might always be some incremental benefit of giving PAT guidance. But the way we see it is, this trajectory is pretty clear for people to see and model and see -- and the only thing I would say is that our conclusion from this is that we should be PAT positive in the relatively near future.

Right. Madhur, you're giving too much responsibility to our community. I think more the input better the precision on the thing. So you have a bit more idea than what any of us put together can, but I got the sense.

The next question will be from Mr. Jayant Kharote from Jefferies.

First, I wanted to touch upon the employee count. I think you've guided in the past that you want to maintain our -- the device addition at this 14 lakh, 15 lakh number, so does this mean we have the ground force fully deployed now? Or do you need to add more? How should one sort of look at this? And then also, this also -- an add-on question is Vijay spoke about AI benefits on the non-sales piece as well. So if you could just help us understand how this plays out on the employee cost front?

So Jayant, the on-ground field for us, largely in Q3 was stable. We were adding a lot of people till Q2 because we wanted to make sure that in festive period, there's a decent expansion of the market, and we are able to attack that market with full force on the ground. I don't think that we will see the kind of expansion of sales force we've seen historically in quarter 4 and beyond even next year. So there will be a moderate expansion. I can't give any guidance to that, but it will be a very moderate expansion. But nothing of the kind that you've seen in the past because I think now we are in a fairly decent expansion and penetration in 500-plus cities where we don't necessarily need to add more people to grow. The other important element I just want to say here is that the last quarter growth is at least a couple of lakh devices is an outcome of the festive. So the normal run rate for us on devices, I personally believe over the next 12 to 18 months, should be seen between 11 lakh to 12 lakh increment devices and not 14, 15 lakh devices. I just wanted to make that point clear because that's a bump up of festive. This is not necessarily a common trend line. 11 lakh, 12 lakh devices also is a very, very decent number on the back of the 1.1 crore device that we have in our system. Vijay, you want to take the AI question?

Yes. So there is clarity that instead of expanding the more number of, let's say, different, different business functions, we are trying to add the capabilities of -- we're clearly trying to add the capabilities of machines and systems. So the systems and capabilities will continue to grow on our platform, which will necessarily create not so much of demand in a linear way of number of people that we need. That's the answer.

Second, on credit card on UPI, Madhur, if you could also help us put this in perspective from a slightly longer or medium-term, how much of a GMV can you think can come from here? And what are the early trends or indicators? And tied to that, how meaningful is this for our payments processing margins?

Bhavesh, do you want to take that?

Yes. Let me put this as an early trend question first and then on net payment margins. I think early trends are fantastic, very clearly, both on because we do credit card marketing for our partners. We are seeing a very, very high demand overall on RuPay issued cards versus other logo issued cards. So really customer is appreciating the product very well, then you can use this card, link it on our app and start making payments on QR code. So customer expectation and appreciation of product is high, which basically means that incremental issuance in our country on cards, you will see a fairly large portion or majority of those cards will be coming with the RuPay cards. Now the merchant acceptance part is split into 2 elements. I think the -- we have been pleasantly surprised that a smaller merchant who was not accepting cards in the past, either because they didn't have devices or was wary of MDRs, whereas -- every month, I would -- say the word, every month, we are seeing that more and more merchants are getting onboarded who are happy to pay MDR and allow their QR codes to be enabled with RuPay CC acceptance. So I think these trends, while they're just about 4, 4.5 -- 4 months to 5 months back trends are very, very encouraging. And it will be very early for me to comment that what percentage of UPI GMV it could end up becoming. I personally believe that we should wait out for a couple of more quarters for this number to stabilize, both on the acquiring and issuing side by then we can say that this number will become what as a percentage. But today, it is not very significant but it's still growing very, very rapidly, and we remain very positive on this business because we are dominating the acquiring side, and we are also doing fantastically well on the linkage of the card on our app. On the net payment margin, again, today, it's not very consequential, but let's say, if you were to take a 12- to 18-month future view, just the fact that has 2-stage revenue. One is when you link the card on the app, the app gets paid between -- depending upon different types of calculations, the app gets paid between 4 basis point to 8 basis point every time the card is used through the app, and you get the net payment margin from the merchant between 5 basis point to 20 basis point. This could end up becoming a decently profitable business. But I think we'll have to wait it out for the next 12 to 18 months of this business to be meaningful in our contribution.

If I could just squeeze in one last question. You mentioned BNPL is stabilizing possibly in 1Q '25. Do you see it can extend the stabilization process even beyond the first quarter of next year?

See, a bit hypothetical to -- for me to give you beyond that because there are multiple factors. It was all contingent on how does the macro trends start to behave. At this point in time, we have visibility for more -- next 2 quarters that it will continue to have a downward slope in terms of its contribution to our overall lending business. And -- but beyond quarter 1 should it stabilize? I think I would wait out for another quarter to be able to give that answer. I just want to remind, once again, while postpaid is a good product and has been a very material differentiator as far as low-ticket business is concerned, its contribution to the P&L has been very marginal. Because the take rate of this business, as you guys may remember, between MDR to the net margin we make, it was not necessarily very, very high, right, versus merchant loan and personal loans which is in excess of 3.5% to 4%. This business was are very, very low. Now its impact of P&L is very overestimated. Its impact to P&L is very marginal. And that is getting very easily compensated by high-ticket personal loan and other forms of businesses that we have been accelerating be it insurance, wealth management and including payments. So we are mindful that we want to align with how the overall macro trends are showing, but it does not have any impact or I would say it has a very, very marginal impact to the EBITDA guidance or the EBITDA contribution of our overall lending business, our overall Paytm's business.

The next question in the queue is from Mr. Piran Engineer from CLSA.

Congrats on the quarter. Just a few questions out here. Firstly, on BNPL. So sorry, am I audible firstly?

Yes, Piran, you're audible.

Yes. Okay. Okay. So on BNPL, our lending strategy has been that we attach a customer to our lenders. It's not a marketplace. Now we've seen Aditya Birla Capital wanting to scale back. From a contractual point of view, can we move the customer to another lender? The same customer, just contractually I am asking, what are the legalities around it?

Yes, yes, we can. We can 100% move the customer from one lender to another. But it's important to note that we, as an organization, very, very clearly do not necessarily play on contracts otherwise. We play on the thesis of our business and the partnerships that we carry. Every decision we take is in consultation with lending partners. When they believe would comfortable to do something, we would love to do that part. So to your specific question, and I don't want to use a particular lender partner because we have at least 3 partners whom we currently do BNPL. And all the 3 partners today believe that we need to be conservative in this business. So movement from partner A to partner B is not something that we have to worry about. But yes, we can move the customer from partner A to partner B if that partner who has the original customer gives us the permission and is okay for us to move that particular customer.

Right, that guy has to be okay...

Piran, it's not contractual. It is more -- what can I say, it's in the spirit of partnership.

Got it. Okay. Okay. Fair enough. Secondly, on your 2 crore whitelisted high-ticket personal loan customers, just wanted to get a sense, how many of them already have a loan from the industry?

Yes. So that data will not be readily available to us because we don't have the credit bureau information, et cetera. The important element here is that these are all credit-tested customers, right? So they would have had a loan or may have a loan currently, but they are all credit-tested customers. That's the reason they're eligible by various banks and non-banks for being allowed to be given a higher ticket loan.

Okay. Credit tested by the system, right, not in Paytm?

Yes, credit tested by the system. So the process is simple, that the lenders look at the kind of consumers, et cetera, they would like to underwrite. And their criteria is that they should be credit tested. Basically, they have existing trade line or a historical trade line on the credit bureau, and that is the customer they would like to underwrite. And then they have their own underwriting criteria, what is the depth of the trade line, what's the score, et cetera, et cetera, on which -- on the real-time basis when they apply, they could get a loan or not get a loan.

Got it. Got it. I have a couple of more questions, just feel free to stop me when you need to. So firstly, on the news articles, the 1,000 employees are being laid off, is that true? And is that what Vijay was saying the consequence of AI -- using AI for operational efficiency?

See, I will let Vijay also answer this question in particular. But the -- I don't want to comment on the news article because we have not gone and given any information to the press. The press obviously is free to put what they believe they are getting in the market, et cetera. There is a lot of focus that we've had -- we have had since the last 2 quarters on operating efficiency. We had scaled our manpower looking at our business efficiencies going forward, and we have realized those business efficiencies in quarter 2 and obviously in quarter 3. Thanks to AI, in many of our functions, we've been able to demonstrate operational efficiency, as Vijay had said in his opening remarks. Let's say that we had a sales team and we had operations team, et cetera, who were doing a lot of manual lifting and business processes, et cetera, et cetera. Today with technology, which is powered through AI, we are able to do, let's say, that work very much more efficiently with less number of people. So there is some efficiency, which is technology led, powered through AI, but there's also a lot of efficiency that we've been able to build into our business primarily by making sure that there is a focus on cost and there is focus on operating leverage. A combination of 2 has resulted in our people costs going down. And as I said, I don't want to comment on what press is writing but we have seen our people costs come down, and we will remain much focused and tighter on our people costs, especially on the ground sales team, which is a very large part of our overall people cost.

Got it. Got it. And just lastly, in stockbroking and mutual fund distribution, I just struggled to understand the sort of impact, like what differentiation would you all have, A, because mutual fund distribution is generally direct plans so you don't really earn anything; and b, in stock broking, typically, the discount brokers make it on F&O where you all will need to have a large market share to make any big impact. So if you could just spend maybe a couple of minutes talking about your thought process there? And what the plans are there? That would be great.

Yes. I think, Piran, thank you for asking that question. So there are 2 clarifications I want to give. Yes, Paytm historically has had built a great business on direct mutual fund, and we continue to build and grow that business, right? The important element here is that in the last couple of months, we've also gone ahead and set up a separate line of business, independently of direct mutual funds by taking an ARN code on which we are focusing on building newer products on daily SIP, monthly SIP and general direct mutual fund on which we earn commission which is a decently good number. But the AUM under that business is currently small, but it's growing rapidly, right? And given the size of MAUs that we have, you can imagine that any product that we are able to add value through the number of customers coming in the Paytm app, that number can multiply very, very decently. And we've seen early trends on a mutual fund distribution business on the back of SIP and otherwise, the one-time mutual fund investment on which we earn incentives growing at a decent size and pace. Early trends, but obviously, we feel very positive. To your other question, I think this business is hinged on 2 levels. One is the platform's ability to attract users who either could be existing equity or F&O traders in the market and to attract users who could be the first time equity traders. I think again the same answer, just like we've demonstrated in our credit business, we have demonstrated in our marketing services business, Paytm platform offers a wonderfully unique opportunity to be able to target this 10 crore MAU customers who are coming on the Paytm platform, who could very conveniently through the product that we have built called Paytm Money, be able to open their Demat and a trading account and use the technology interface, which in our opinion is best-in-class and be able to trade, right? And yes, we are discount broker, but we still are able to do a wonderfully good job in giving the product differentiation versus many other platforms available in the system. Why we feel excited, Piran, is that we've been working on this product for the last 2 years. It's only in the last 2 quarters, we have seen that the scale of new customer acquisition has become very, very decent. And the depth of customers who are coming on our platform and trading either an F&O and equity trading is also becoming significantly large for us, for us to now further invest in this business and grow. So our right to win is our distribution franchise and the product innovation and the product convenience that we offer over other platforms. And we believe that right to win will further accelerate this business into a zone where we -- this could become meaningful in the next 12 to 18 months as a part of financial services revenue.

Got it. This is useful. Just one suggestion, if I may, a humble request. We've got a lot of companies reporting on Saturdays. If something could be done where your Board meeting is moved on a weekday and the call is moved on a weekday, it will be really helpful. It's just that the bandwidth we give to each company that -- Yes, please this is something I've asked Anuj a multiple times.

Piran, thank you so much. Like Madhur said, next time, we will definitely try to make it a weekday. Thank you. Good input.

[Operator Instructions] The next question in the queue will be from Mr. Jigar Valia from Ohm.

My question is basically, we had about a couple of lakhs extra devices because of the festive. So does that also come along with a slightly discounted subscription rates? And as we -- instead of 13, 14, if we are doing 10, 12 lakh devices on a normal basis, the subscription rates also would be slightly better.

Jigar, it's a bit tactical play on pricing. The honest answer could be, yes, we could have lost maybe $5 a device rental in festive just to make sure that we are capturing the market. Rental is important, but the GMV through the device, the opportunity for us to earn MDR and then eventually get credit on to the merchant is a much bigger opportunity. So that's the way we see it. So short answer is, yes, we could have lost maybe $5 a device in that quarter. But on an ongoing basis, if we are putting out 12 lakh devices, 13 lakh devices or 10 lakh devices, I don't think there is any material change in our rental per device from an ongoing basis perspective. So that number will remain in that range of $100 that we've reported in the past.

Got it. A quick second was that with regards to the mutual fund or the equity broking, Paytm Money, client acquisition, would it -- is it largely a function of product differentiation and convenience? Or does it entail any acquisition cost or any schemes, offers, et cetera?

So it doesn't entail any kind of scheme offers. Anyway, it's very restrictive as you know. You can't offer much schemes on enticing or getting clients on board. I think it's a leverage of product and the fact that the Paytm Money is now an integral part of the consumer app of Paytm. The natural or organic traffic, as we call it, of 10 crore people coming and using the Paytm app every month, allows them to explore this product. And obviously, the journeys are build in a manner that the customers are able to activate their equity trading account and started trading through the Paytm platform. So the product differentiation is an experience, but the acquisition engine is the Paytm app, which is a massive differentiation versus anybody else because I don't think any other platform out there who's doing equity trading has 10 crores customers coming on the platform. So we feel very bullish that, that traffic could just give us a very accelerated pace of acquisition in this business.

Right. I have a few clarifications with regard to Slide 5, if I may. So one is INR 490 crores that we would have done would largely be a lot back-ended and probably like a monthly rather than a quarterly type of number. And 2 crore whitelist users is on what base? So if this has to expand, so is this like the best of the entire 10 crore? Or is it 2 crore out of a certain set of things which is there? And if 2 going to 3 or 4 or whatever based on the number of lenders increasing and the profiles improving, so would that be a part of a static base or it's a partial base which we have covered for the 2 crore whitelist?

I think it's a good question, Jigar. So let me answer the latter question. So 2 crore is, I would say, a part. So 10 crore is obviously for many, many, many cities and pin codes, and not every lender is available with the pin code. So the eligible base which broadly, I would say, high-ticket business will be done -- will be about 65%, 70% of our MTU because everybody will not be comfortable lending in every corner of the country digitally. So from within that, we are currently at 2 crores. So you could say at a shorthand answer from me that maybe about from 6.5 crores to 7 crore customers who are eligible for credit out of the 10 crores because this is where on -- pin codes where credit has been disbursed, currently whitelisting is 2 crores. Will this number go up? As I said to -- in a previous answer, yes, this number will go up as we add more lenders and people get comfortable. To your INR 490 crores answer, no, it is not back-ended. As I have said on the December call, we had started high-ticket business in -- sometime in quarter 2 mid. There were early trends that we saw with 1 partner. We grew that business in end of quarter 2. And whole of quarter 3, we saw one more partner getting added into the system. So this number was not back-ended. But yes, we had more than INR 200 crores of disbursement in December, and that number continues to keep growing from here on.

That's great. And this thing the matrices should keep improving as the high delinquency low-ticket loans are going off and the better quality, high ticket are improving, so overall ECL, et cetera, would also improve as a function of the mix changing, right?

Yes. But currently, the portfolio that we show for merchant loans and personal loans, does not include a high ticket because high ticket, we are not linking our incentives to the portfolio performance yet, but we will have a collection obligation in some form and factor. As the business matures, we'll start declaring those matrices accordingly.

Finally, would you have any penetration target for any of the segments, including the high ticket?

No. I think our focus is not to drive volume. Our focus is drive portfolio and what is convenient to our lending partners. Paytm platform and the user base presents such a large opportunity to every partner that we don't have to worry about what's the penetration. I think we only have to worry about, are we able to offer the best product experience and the best quality of lending partners. So that's our focus. Penetration will be low in our platform.

The next question in the queue is from Mr. Saurabh Kumar from JPMorgan.

Just 2 questions. So one, this bounce rate you have given includes the first week of the payments from what have taken in the postpaid portfolio, right?

You mean first week of January?

Yes. So if you've cut the lending in December -- so this includes that?

Yes, this for the quarter. I just want to mention Saurabh clearly, while we had a deep cut in the month of December, but we've been cutting since the month of August, so we are cutting less, but we had a deep cut in December. So our bounce rates have not materially changed. Even for the December -- after December also, our bounce rate has only gone up by about 0.5% to 0.6%, which is very, very marginal and that also has gone up, so as to clarify very clearly by that 0.5% to 0.6% for the December cohort in specific because then you have cut and taken out 15% of customers, they generally have some bit of delay in making payments because you block their lines. So it takes a bit of time. And when we're looking at that number, let's say, today, most of those people have paid back. So the impact to GCL and NCL is not -- nothing meaningful, maybe INR 1 crore here or there.

Okay. That's great. And Bhavesh, can you comment on what is the NPL in this whole postpaid portfolio, so you've given the bounce, but what is the NPL? I just want to compare it to the bureau data.

Yes. So we don't track it the way lenders track it, Saurabh, as we have mentioned. On a [ 32-day ] basis, our ECL operates between 0.65% to 0.85%, and that has not changed. It's actually somewhere in the middle in the numbers. So that number remains the same.

So basically if I just kind of go through a disclosure, it should have been the 6% odd ballpark, your...

If we multiply it with 12, yes, so it could be in the range of 6% to 7%, if you will see on an ANR basis for a lender, yes. But then, if you do that and just for a mathematical clarification, we should also multiply the take rate into 12. So obviously, from an ROA perspective, even with that kind of credit loss, it looks the ROA is phenomenally large.

Yes, yes, that I understand, Just one last thing, on this contribution margin, should we now expect this -- I mean, even if you add the pro forma UPI incentive, you would stabilize at this 56%, 57% odd level? Or how should we think about the contribution margins from here on?

Yes, I think Madhur clarified that it will remain in the mid-50s. I don't think that number is going to change. There was an aberration on festive wherein we obviously offer better incentives to merchants to process payments to building platform. That incentives go away in a normal case scenario, so we should be largely in that range.

Saurabh, we have been largely reporting it without UPI incentives. So UPI incentives on our current revenue base could be another sort of number on top of this, but we have typically been reporting this without UPI incentives. And we have mentioned it in writing in the earnings release as well that we expect this to be in the mid-50s. So it's as official as it comes.

The next question we'll take is from Mr. Nitin Aggarwal from Motilal Oswal.

Congrats on the good set of numbers. So 2 questions. First is again on the whitelisted customers. So what is the success rate in terms of customers accepting the high-ticket payer loans that you're offering as some of them may already have some preapproved offers from the banks. So how do you compare the success rate of these loans vis-a-vis the normal PL that you have been doing till now?

Yes. So the approval rates, Nitin are much higher than the less than INR 2 lakh loans that we were doing. So typically, there the approval rates were in the vicinity of 15%, 20%, between because we used double filtration, we declined majority and the lending partner declines at their end. Here, the approval rates are in excess of 40% as the early trends suggest, and I think they will only become better because the whitelist will keep getting refined by the lending partners and the credit quality is going to become better and better and better. With regards to the overall conversion that these customers could be preapproved by a bank, et cetera, yes, at a fundamental level, your point is correct. But what we are seeing clearly here is that the customers not necessarily are always aware of what they have with their existing bank. So they are not that much used to using that -- their bank's platform or lending partner platform that actively versus how they're used to using Paytm platform. So when they come to the app and they're applying, we are seeing that they are getting a good offer irrespective that they may have a similar or a better offer from the existing lender. Just because the product efficiency is completely digital and very instant, they are happy to take credit through Paytm platform, even if they have had a whitelist sort of preapproved from their bank. So I don't think that is becoming any kind of a challenge or inertia in our system.

Okay. So then the disbursements overall should pretty much be on track and -- but this quarter, we are seeing some moderation in the mix of financial revenues. And while you explained that this moderation will not have any impact on the -- or any significant impact on EBITDA. But from a revenue perspective, how do you look at the mix of financial revenues over the next 1, 2 years?

I'll refer the mix to Madhur. But I can give you a sense that postpaid contribution in a quarter for us used to be about INR 8,000 crore, INR 9,000 crore disbursement. That number, as we've said, has come down in December to about 60%, et cetera and will continue to slide down. So there, the revenue, the gross revenue -- that gross revenue will go away. In quarter 4, there will be a reasonable compensation through high-ticket personal loans, which have higher revenue than the postpaid revenue. Their revenue is much higher than the postpaid revenue and their EBITDA contribution is significantly higher than postpaid. So maybe 2 quarters forward, the loss of revenue of postpaid will get compensated. And in the next quarter itself, the loss of EBITDA of postpaid will get compensated. Madhur back to you.

Yes. So I think one of the lines that you can, for example, see is other direct expenses which has gone up over the last few quarters. and that has largely been because of sort of the collection efforts that we do on postpaid, which is a very large number of loans, even though the value and like Bhavesh mentioned revenue and profitability is lower. So those sorts of line items should moderate, given lower scale of postpaid, and that is going to be the math to get to what we're saying, which is that the other products are higher margin. They are higher take rate, but more importantly, they are significantly higher contribution margin and EBITDA margin.

Okay. And lastly, just one small clarification on the payment processing charges. In this quarter, we have seen an increase in the processing charge by almost 20% sequentially. So I was just curious to know why the spend mix across different payment instruments vary so much from one quarter to others so as to cause this variation?

That one is relatively simple, actually, which is that it was just a season where people use a lot of credit cards, and we are very large on credit card, all of payment processing both in the on and off-line world. You'll also notice that year-on-year, that number has gone up meaningfully, and that is partly because festive season last year was split between Q2 and Q3, the festive shopping was split between Q2 and Q3. Whereas this year, nearly all of it was in Q3. So it's mostly to do with festive shopping behavior where there's a lot of credit card, which has payment processing costs associated with it. Obviously, it is a profitable business for us. But if you're just looking at that line item, you will see a jump.

Yes. So this then should likely come back in fourth quarter?

Yes. So if you look at year-on-year trends, it should normalize. And quarter-on-quarter trends will obviously, like I said, Q3 was an anomaly. I shouldn't say anomaly, I should say it's seasonality.

We'll take 2 more questions. The next one being from Mr. Sachin Salgaonkar from Bank of America.

Congrats for a good set of numbers. My first question is on the soundbox side. You see a few more players looking to come into the market. So the question out here is, how are you guys looking to differentiate on the soundbox given the fact that it's turning into a commodity? And a related question here is, DNA has consistently increased in sync with the number of soundboxes deployed. So any clarity, any guidance in terms of where it could move? Should it stabilize in a year or so? Or will it continue to increase?

I'll take up on the differentiation on Soundbox, and then obviously, Bhavesh will add to the scale of deployment. So every smartphone is a commodity until it is not because the features and nuances start to become even detailedly differentiated that people stick with 1 or the brand name or feature or services. I was in Ahmedabad, I was on the road, and I was trying to learn what Soundbox they the use and why? The shopkeeper literally went on to say that, "Oh, I use it because this is what works better than other soundboxes." And I did say that what if the other guy gave you for free, would you still continue with it? So the guy said that this works better, my settlements come early, my product is superior. I mean the cost is not so much that -- I mean, $100, he said that is not even so much, that somebody offering free is a material for him. So here, I believe that the nuances of the product, including -- for example, like I'll just tell you this, what I just now told you, we do settlements before 6 am. Our target is that before the day starts, the settlement should happen. And the guy very clearly himself told me that the other settlement comes around 8, 9, 10 a.m., and that is where the cash doesn't show up also on. And then the notification speed, success, surety and then nuances like bluetooth, et cetera, that we have added and we continue to add those features are actually a differentiator. So I'll still stand for the differentiator on the product, but Bhavesh, because he runs it on the street, so I would want him to add and expand more.

Thanks, Vijay. I think Vijay has really well summarized. And what we see on the ground here is that one metric that we track, Sachin, is that I have 11 million devices on the ground, every month, how many are getting deactivated and what is the cohort of deactivation. And then we go and meet the merchants to figure out, does deactivations an outcome of our bad service or a company replacing my box. So we clearly see deactivation in the range of about 100,000 devices to 150,000 devices, right? But interestingly, not even 15,000 to 20,000 devices in a month on a base of Paytm of 11 million are deactivated because competition could replace my product, right? Yes. Do we like 15,000, 20,000? We don't like 15,000, 20,000, but that number is so small. So it just tells us very clearly that our product and a significant enhancement in the product that we keep doing both in form factor, feature, pricing and the capability the product is able to demonstrate gives us the edge over competition, and there are 19 players today in the industry who are giving a product equivalent to Paytm soundbox with a different name. So we feel very confident that our product innovation and control on the form factor and the technology inside it, because we manufacture in India, will always give us significant competitive differentiation in the market for us to keep growing and differentiating. Will the market give us an opportunity to keep scaling at the level that we're scaling. I think putting out between 4 million to 5 million boxes incrementally, net additions, net of deactivations, net addition is a number we feel very confident over the next 4 to 5 quarters. I think I would like to calibrate that number after 4 to 5 quarters as to will FY '26, et cetera, hold, again, a similar number of incremental devices. But at this point in time, adding another 5-odd million devices, I don't see at all a challenge.

Very clear on this. Second question is on the 2 crore whitelisted users, and I know there are multiple questions on that. My question is more on the fact that these are high-quality credit-tested users, almost every credit card or a fintech is looking to target. So what is the differentiation or competitive advantage you guys bring out here? Is it -- what Bhavesh answered one of the earlier questions, is the ease of getting loans? Is it the interest rates that you're giving are lower? Or is there some other kind of a differentiation where you guys feel confident that the growth out here will be strong?

So I think Sachin, this is -- my answer may look very simple. But honestly, in the business of credit, what we have figured out historically also and obviously in Paytm, is there is a demand of credit, multiply that with availability of credit and obviously amplify that with ease of getting credit. So we're not changing demand. Demand is already there in the market. What we are changing is availability. 10 crore people are able to see the icon to get credit, right, in the system of Paytm which I don't think any other digital mean other than Google and Facebook from advertising point of view, any other mean is able to show 10 crore people availability of credit. So that is the first differentiation Paytm brings on the table. Then is the amplification through ease a product journey, offering, simplicity, pricing, et cetera, et cetera, et cetera. And that is where our technology, our product, our nuances of understanding how journey should be built is able to help us. So multiplying these 2 things gives us significant right to win and which we've already demonstrated with 2 partners. And I think over the next couple of quarters, you will see these numbers start to reflect what I'm saying at this point in time. And we will also learn in the process and make our product even better.

Got it. And my last question is, I wanted to understand, you guys have 2 partners today right now on the personal loan unsecured [ 50k ] and above. How many more partners could we have in, let's say, a couple of quarters?

I think we are already integrating with about another 2 partners currently. And we have a lot of interest from various banks and non-banks to integrate for not just for personal loans, but even for business loan, high-ticket. So as the time goes by, we will take maybe 2 partners a quarter and see at what point in time, we need to stabilize and then keep servicing the demand of each lender into our system. But we don't have a challenge or partner, we'll add at least 2 more in the near future.

And by the way, we don't have just 2, the 2 is incremental.

We'll now move to the last question of the session from Mr. Satish Kothari from SageOne.

I think Satish is not there, so we may close the call here.

Kind reminder to everyone that the presentation showed today, the recording of this call and a transcript of the call will be available on the company website. Thank you all for joining.

Thank you.

Thank you very much.

Thank you very much.