Xelpmoc Design and Tech Limited (XELPMOC) Earnings Call Transcript & Summary

Ladies and gentlemen. Good day, and welcome to the Q2 FY '23 Earnings Conference Call of Xelpmoc Design and Tech Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ravi Udeshi from EY Investor Relations. Thank you, and over to you, sir.

Thank you, Steven. Good evening to all of you. Welcome you to the Q2 FY '23 Earnings Conference Call of Xelpmoc Design and Tech Limited. We have sent you the press release and the investor presentation, and the same has also been uploaded on the Xelpmoc website as well as on the stock exchanges. In case anyone does not have a copy of the theme, please do write to us. To discuss the results and the outlook for the future going forward. We have with us today the top management of Xelpmoc represented by Mr. Sandipan Chattopadhyay, Managing Director and CEO; Mr. Srinivas Koora, CFO; Mr. Madhu Poomalil , Group President, Strategic Initiatives and Mr. Srinivas Kollipara; Group President, Startup Ventures. Before we start this call, I would just like to remind you that the safe harbor clause applies. With that said, I would now like to hand over the call to Mr. Srinivas Koora. Over to you, sir.

Thank you, Ravi. Good evening, everyone, and welcome to Xelpmoc's earnings call for Q2 FY '23. I hope you and your family are doing well. I'm pleased to inform that we have maintained our business momentum while focusing on sustainability of operations. We continue to be high with our execution plan, which is centered on identifying the target sector that corresponds to the impactful technology approach. Our operating revenue for the quarter was recorded INR 43 million as compared to INR 11.2 million in Q2 FY '22 and INR 20.1 million in Q1 FY '23. We saw renewed interest from our clients, which lead to year-on-year increase of 24.2% and sequentially, revenue increase of about 34.2%. Operating EBITDA adjusted for ESOP for the quarter was INR negative 16.9 million as compared to negative INR 12.9 million in Q2 FY '22 and INR negative 20.1 million in Q1 FY '23. I would like to give a context on that increase in EBITDA loss in Q2 of FY '23 as compared to Q2 FY '22, which we have highlighted even in the previous quarter call as well. We are seeing the demand for onboarding manpower talent, especially in the new technology space has increased drastically across the IT sector, resulting in dramatic increase in manpower onboarding and retention costs. We have also expanded our headcount as compared in the past 1 year. We have also incurred lease rental costs relating to expansion of our Hyderabad's office. Further, the interest in project-based expenses, in line with our business expansion plan, which are resulting in the revenue increase in the Q2 FY '23. We expect that this revenue increase to sustain and the corresponding costs will gradually decrease in the future. Net loss for the quarter was INR 40.4 million, partially due to INR 23 million of resort expenditures. This in comparison to a net loss of INR 39.4 million in Q1 FY '23. And a net loss of INR 33.7 million in Q2 FY '22. Regarding the change in revenue we would like to state that our revenue stream was diversified with start-ups, corporates and government form 44%, 38% and 18% irrespectively of our Q2 FY '23 ranges. We expect that we plan focus on corporate, government and start-up will enable us to sustain the recent increase in revenue momentum in future also. Our team size is 115, including employees, interns and consultants as compared to 105 in Q1 FY '23. Till date, we have 456 clients and our sustained interaction with the clients is a foundation for good performance. The fair value of our investments in portfolio companies stood at approximately INR 684.6 million, as on 30 September 2022 as compared to INR 611 million on 30 September 2021. Our portfolio company is doing really well by engaging new opportunities. We hope -- has under several market price in the recent past, we have doubled the number of customers compared to previous year. In terms of revenue, we have seen a 11x growth compared to previous year. It has 2 added 2 more languages, Marathi and Telugu and now supports 5 local languages and English. It is seeing greater momentum in terms of clients and maintenance and execution. Only the other portfolio -- only enables its users to shop socially with ramp up content creators. It's influenced to create short videos entries resulting into several million videos viewers per month. It has dropped a VNB ARR of about near to INR 12 million, which is an increase of around 16% on sequentially quarter-on-quarter basis. Currently, they are at annualized run rate of INR 100 crores. For the month of September, more than INR 100,000 are short-term book. This has grown at 6.7x on Y-o-Y basis. Similarly, overall growth in GMV on an annualized basis was close to 6.5x. PSM, PSM the other portfolio company, with star in me, is a global carrier advancement platform for women and the diversity partner for organizations. It is on track to grow its B2B client base and is requesting traction in conversations with large global companies across sectors. And so hopefully the brand of 1.6 Technologies Private Limited that still helps writers become authors and sold their books as our e-book and taper back globally via its technology platform. Its technology enables writes to right better using AI/ML, get their stories published. More than 32,000 writers have created over 1,150 books using PENCIL. The PENCIL 2.0 now enables writers to pitch their stories to OTT platforms, producer and studios, which is expected to enable greater momentum in its operations. Hopefully, moving towards breakeven over the next few quarters. For the portfolio company 4TiGO, 4TiGO saw some seasonal volatility due to subtracted period of monsoon and uneven business conditions from mid-June till October. However, the next 6 months used to be very promising period of business growth across its focus segment of the leaders in FMCG Metals and Minerals as also the Industrial segment. So one of our portfolio company accelerated learning EduTech Private Limited, runs the school of accelerated learning, the brand name is for and upstreaming start-up that designs and runs cohort-based courses, which helps students start their career in engineering and design irrespective of their backlog. Sol has replaced 45% sequential increase in students enrollment and we see acceleration in terms of steel. Sol is currently heading towards operating growth with the constant rise in employment and it's increased track record of 30 students the move towards the set breaking or structurally is significant and we expected to be cornered in the foreseeable future. I now would like to discuss our U.S. subsidiary. Our U.K. operations have started client onboarding. We have recently received the global business mobility, a certificate of sponsorship for U.K. expansion worker visa. This will enable us to deploy resources from India for project in U.K. Till we gain more clients and critical volume in terms of business. However, the current economic scenario in U.K., we are cautiously planning our expansion to extreme consultants and business development that will be in my budget. Now let me come to the outlook for the fiscal 2023. You'll see this year promising in our portfolio companies, given that they are focusing on unadjusted area of the economy. We expect our investments in Mihup, GoGreen, Signal to expand their access and reach the next generation of growth. There will be a onboarded portfolio companies only when they have a revenue and a positive EBITDA level plan. In line with the same, we expect several of our portfolio companies to achieve the sub-planning foreseeable future. In case any of them are unable to meet difference, there really other alliance with them to promote their strategy towards the set plan or we may look at exiting certain investments at appropriate stage. Our real focus on our startups as well as our services segment leads to a fairly confident of adjusted EBITDA level profitable by Q1 FY '24. With this, now I request Ravi to open the floor for question and answers.

[Operator Instructions]. The first question is from the line of Rudresh Kalyani, an Individual Investor.

I have got a couple of questions. First thing is on the trade receivables, which has gone up exponentially. Can you highlight on that?

Yes. So basically, we have entered into a couple of transactions with the government and also with the start-up portfolios where in some cases, there based on the performance, we might receive an equity or double payers cash. And as far as the start-up -- as far as the government is concerned, there is a payment schedule based on which they are going to pay us.

Okay. And the second question is on the -- see, is it possible to share pick date of the start-ups where we have entered, if it's not possible to share the recent one at least the upgrade one. So hardly like previous year or something like that, so that we can get the gist of what exactly the startup is doing.

So basically, what we are doing is in our investors that we are covering, even if you have seen we have changed, we have made a lot of changes in the current investor debt. We have included 1 slide about each of the startup where it gives into what space they are, who are the founders, who are their customers, who are their investors. And actually, the data, whatever the founders are comfortable with respect to this portfolio.

But the thing is for a layman like us, it hardly give us the decon picture. So the idea of that startup will give a better picture rather than the surface level data, which you are sharing.

So we'll see incase if it is possible, if they are comfortable will see what all further additional information that can be included -- that we can include about those types.

[Operator Instructions] The next question is from the line of Yashesh, an Individual Investor.

So, I have 2 sides of questions. One is on the portfolio comment side and 1 is a philosophical question for Sandipan and the management. So I'll start with a philosophical one. Once I was helping of like what am I actually owning when I own shares of Xelpmoc and I was actually lost up by the response. So now, something similar on sort, so I would just want to know that now that we are pursuing multiple interest, right, from a focus on the overseas right U.K., U.S.; subsidiary to tie up with the government to focus on the corporate service to Signal to now solve tracks. So I want to know what are the critical focus areas amongst all of it? Like what is keeping us most excited for the next decade.

So can you address that Sri? Is that okay?

No, go ahead.

Yes. So see, the thing is things have changed. A lot of management bandwidth has been added in the last 1 year. And we are essentially having different focus areas amongst the leadership group. So we are able to focus on multiple things much more than what we could do before. All the things that you're hearing are at different stages of maturity. So as the start-ups mature, our role becomes lesser because by the time they set up the team, but our role is still pretty active in terms of getting the market access forming new solutions, getting new rounds of funding, all those we are active, but what keeps our time more as a company are the new upcoming ones where our contribution at the start point is much higher. So of the ones that you're looking, services as a vertical is having a lot of focus, and many of the services there like Srinivas mentioned, are government oriented. So in government, we have 1 part which is more like a services part, but the other part where we are trying to form startups with the government with kind of a conjugate effort. So both of these are pretty active, and that's 1 government sector. On the start up front like Sri told about Sol, there are a new set of start-ups, which is keeping us awake in the night in that sense in an excited way. And we are looking at the new possibilities on that. The older ones keep going but the newer ones at once that we have met our second phase on. None of them are like something for the next 10 years or anything of that sort in the sense that we are not stopping here, there will be new ones coming in every 2, 3 years, but all of them will be for -- we are not stopping and saying this is all we'll do for the next 10 years. But everything that we do, we hope that they will last beyond the 10 years that you're talking of. Experience India, of course, is 1 big thing. Signal is another big area where we are reaching our focus. First Sense, which is a new portfolio, which is kind of doing for video, what we have done with voice with Mihup. And of course, the other start-ups on the regular part. I think that will be Sol that we talked of. So there are quite a few. And because it's now a larger team, the number of areas uniquely that we are looking at is also slightly large.

All right. Thank you for the detailed response. So another question is I have for Srinivas, sir, about the portfolio company. So I see there has been no change in valuation in graphic story for last couple of quarters. I would want to know what is the story there. And we did hear about the 1.6, but I would want to know that what exactly happened, which I saw the valuation. So just to update, if I can.

So as far as graphic story is concerned, in graphic story, we hold OCPS. And OCPS, we are recording a cost unless and until we want to convert into equity. Till the time, we are confident as to we want to redeem it. And as per the shareholders report what we have entered, if it is not convertible to equity, we are reporting at cost. That's the reason why you see graphic story the number is constant and approaching. So basically, I'll tell you the structure, what we do. Whenever we enter into any contract with any of the sectors generally, this is tenure based and we initially enter into an OCPS. So as and when we provide them the services, these OCPS will get converted into equity. And at any point of time, incase if you want to redeem, if you don't want to continue with the equity and these are redeeming with the cost.

All right, sir. And sir, about 1.6, like what exactly happened that -- call it level and the valuation.

So 1.6, they recently had 1 merger okay? Where the premerger, the valuation was close to about INR 60 crores in postmerger we are about INR 72 crores. And the merger processes and the process because they are going through the core process, which we expect it to be completed by end of November or December, post which they are trying to response to the company. There are a couple of interests, which are already generated, but the thing is, the merger process is going on, they are not able to conclude the transaction. So hence, they are waiting to complete that merger.

[Operator Instructions] The next question is from the line of Abhishek Agarwal from Jim Quest.

Am I audible?

Yes, sir.

Yes. So I just wanted to ask a few questions. First one being, sir, how do we see our product portfolio shaping up better in terms of our software and products that we intend to capitalize on.

So this is the third quarter that we have planned for the product on expansion and focus on it. We have just started on some of those aspects. We are trying to bundle some of the existing products and create new products, especially for areas that we have seen some interest. We'll keep you updated on the progress. But as planned that we have started from the third quarter, I think you will see some results happening only around, let's say, late fourth quarter or early next year, first quarter. It takes that much of time to get it started and have a strategy for that part.

Okay. And the next one is, sir, how is the landscape shaping up in terms of start-up ecosystem in India and around the world for you? I mean do we see signs of recession and opportunities that we get because of this simultaneous situation?

As I have said it previously we -- probably were in the sectors which are more not so glamorous and hence not so volatile. We have been lucky that we are focused on the core parts of it. As of now, there is obviously a kind of a sense of doom and gloom all across, we cannot be completely independent of that probably, but our companies are some of the least affected ones, depending on the fact that they are either in a sense of maturity, which has been there for some time and they are just going on the regular market acquisition part of it or they're in an area which is not exactly that Hi-Fi that global to have perception kind of net volatility kind of stuff. So yes, there is some kind of gray areas in other parts. But as of now, I don't think we have been affected that much by the ongoing issues that are kind of effecting the startup ecosystem.

Sandipan, may I add something?

Please.

This is Srinivas Kollipara speaking. One of the things that's happening is that definitely, there is a little bit of fear and hesitation in the startup ecosystem about funding. But let's not forget that a lot of funds did come into the areas where VCs at the beginning of the year that needs to be deployed. All that's going to happen is that they're going to be much more disciplined about which companies they invest into and more careful than they were. We obviously take our time. We only picked very few companies in a year, and we pick the ones that we believe actually make the difference in the world when they're going to actually have an impact, and therefore, funding will not be a problem for most of those companies.

Sir, my question was more to us. I mean, because of this...

Sir, sorry to interrupt but for any follow up, may we request you to rejoin the queue please. [Operator Instructions]. The next question...

Can we allow that because I think he was allowing -- he was asking for an explanation, which was in context of the question. So probably we should just allow it. And going forward, we probably can find that 2 questions limit, otherwise it would sound like incomplete.

No problem.

Yes, sir. I just -- this was in continuation to the question what I meant was, I mean, because of all the doom and gloom and are we seeing great deals that could come our way or we could get opportune because of all this situation currently?

I don't think it will affect us either way negatively or positively because we were as Kollipara explained, we were always focused on substantial ones. So it's not going to be an advantage or disadvantage for us. I think we'll go on medially, but that said, as to Kollipara's point, some of our start-ups may actually look much more reasonable and safe than previously looked at by the VCs.

[Operator Instructions] The next question is from the line of Ravindra, an Individual Investor.

Sir, am I audible?

Sir, your audio is not clearly audible. If you can change the mode of your handset please.

Is it better now?

No, sir. Still your audio is not clear sir. If you can just move to a better reception area please.

Absolutely, thanks for that. Is it any better now?

Yes, sir. Please proceed.

Okay. Sir, my -- first of all, congratulations on the highest ever quarterly revenue from the actual team. I just wanted 1 clarification of what I heard from Mr. Srinivas Koora is that we are seeing the adjusted EBITDA profitability in Q1 '24, was my understanding correct?

Yes. So that's correct. Q1 FY '24.

Okay. Because what I understand from previous calls is that in this year, we're going to see that, so I just wanted to get clarified.

Yes. So basically, previously, we said that the Q4 of FY '23, we would be. But as I said in my opening remarks with respect to the U.K. market, we want to be a bit cautious, and we said that it is always better to be cautious and we move into Q1 FY '24.

And my second question Sir, in Q4 '22. We had 1 bad debts provision, about INR 2-plus crores. What is the fit that receivable as on date.

So basically, as far as the status is concerned, we have already issued a legal notice to that party, and we are perceiving it. And yes, we are perceiving it -- and the moment we realize anything or if you -- we will keeping you update, what exactly is happening on that case.

Okay. So is it a corporate start-up or the government kind of thing.

It's a corporate. It's a startup created by corporate even we had a follow-up around of a couple of calls with them. We see something mature but can't assume anything on that front right now. But yes, the discussions are on, and we are also issued billing the notice.

The next question is from the line of Dharmesh Patel, an Individual Investor.

This is particular to Mr. Sandipan. Sir, what is more important to Xelpmoc? Is it the quality of idea or the quality of entrepreneur?

I mean, they are one and the same to us, to be very frank. Quality of the idea can mean several things. Obviously, sectoral entity, growth opportunity and all are independent of the entrepreneur. But when it comes to us, the entrepreneur is a prime mover. So unlike other people have explained this before, we have some hypothesis. We have ideas around which are the only areas where we're looking at business. Unless something is startingly astonishing, we essentially try to stick to our research and hypothesis. So given that we already have that framework, entrepreneur is the whole and sole purpose, which makes us choose the person to work with.

Okay. And sir, what are you seeing in an entrepreneur when you select a company for investing?

Subject matter inclusion and persistence. I think these are the 2 things that we mostly look at. But it's very undefinable. A lot of it is chemistry, how the 4 of us, 5 of us feel when we meet him, the fact that we can work with them that intuitive feeling. So yes, there is a method to it, but I can't say that there is a question mark -- sorry, questionnaire-based or a mark sheet-based approach that you can apply to these things.

[Operator Instructions] The next question is from the line of Mr. Rudresh Kalyani.

I got to know that Woovly on the street to raise funds again. So are we interesting fund again in this round? Or are we taking part in and the shares which we get.

So basically, yes, what you heard is right. That Woovly is in process of raising funds. But yes, but we are not participating in this particular round.

Okay. Any picture on the valuation or anything on that thought?

No, that's solely at the discretion of the company. We don't disclose those things. And firstly, we don't even know those things.

[Operator Instructions] The next question is from the line of Dharmesh Patel, an Individual Investor.

Sir, how do you see the startup season currently as there are less unicorns happening these days. And because many start-ups will work like they just want to sell themselves to a big company like on 1MG for Tata or Flipkart for Walmart instead of going for a perpetual company.

Firstly, I think we should respect every startup who has given a shareholder value increase. It takes a lot of qualities for any startup to even go and get acquired by something so substantial. So all due respect to all of them, I don't think that's something that we look at in a very derogatory way or it is something which is a way of life for the start-ups. But yes, we have our focus, a philosophy wherein we like to have that respect for them, but our pathway is to make sure that we create long-term companies which have a substantial part of it. And kind of building a company to -- is 1 of the ways for the exit, but that's not the motive with which we start our companies on that part. So to answer your question, how do we look at the start-up environment, for us, there has been no change. We are still looking at good businesses. We are still looking at good entrepreneurs. We are still looking at businesses which create impact and affect lives. I don't think anything has changed from that perspective in the startup business for us. There's always a lot of space for everyone. Each of us have our hypothesis, and we are trudging along with ours quite similarly and nothing much from that aspect has changed.

[Operator Instructions] The next question is from the line of Sri Siva from Siva.

So can you just throw some light on school of action retaining as to how this is different from other websites, Scaler? Because I come from a finance background, I don't know much about this technology.

Kolli, you want to take that.

We didn't hear the question.

He said that basically sold, how is it different from others like Scaler and all? And what it exactly does.

So actually, at this point in time, since we've been working with them, we're actually we're looking at the entire model. They're continuing the work that they do, which is very similar to scale in certain ways. But they have the difference being that they only focus on 3 or 4 key areas, not -- they're not as broad as Scaler is. But the truth is that actually they're reworking all of this, and we'll have more news to by the next call. I don't want to say much more than that.

[Operator Instructions] The next question is from the line of Abhishek Agarwal from Jim Quest.

Sir, 1 question related to Soltrack. Last time you said that Soltrack had already started generating revenues in the first 45 days of OpEx operation that was around, I guess, INR 1,400,000. So -- and there were significant plans of scaling that design and all of that aspect of that business. So how are we doing? And if you can spend and share some thoughts on it.

So, Sandipan will share you from the execution point of view, how we are doing. But in case, if you look at it, the difference between the consolidated stand-alone revenue, the additional revenue is coming purely from Soltrack. Soltrack has generated close to about INR 5,200,000 of revenue in the first 6 months, out of which about INR 1,800,000 or INR 1,900,000 belongs to Q1 and the balance is from Q2.

So to tell about the plans for Soltrack, yes, it has -- we have tried a few things and it has shown the kind of market like as usual that we do. we didn't try to stick to 1 thing and over specialize on it till we found the right product market fit for the skill set that Soltrack can do. So we're aspiring to the variety of things and the revenues speak for themselves. But now we are getting fine-tuning it more you'll probably take some more time to create some more original content and try that out also. So you will see that hopefully, that growing at a pace faster than what we anticipated in the beginning. But then it's still within moderate levels of growth is what we assume. But the kind of content that we should come up with the kind of influential innovation we can do in that content. I think that will augur well for many of our other ventures and for other ecosystem things that we are playing.

[Operator Instructions] The next question is from the line of Sri Siva from Siva.

Sir, from the investor presentation, what I could see like our projects and where startups are completely ongoing. So I'm going to get the name of those products. And now are those investment kind of things are, they are revenue generating projects.

So basically, you must be aware to see all these -- we are uploading on our website et cetera. Especially from a confidentiality point of view, these are more on the services side and the solution side. Based on the request and based on the agreement with the customers, we are not disclosing, but whereas as the portfolio is concerned, we are free disclose, and we are disclosing accordingly.

Okay. But these are investments, right?

Completed, et cetera. The names, what we have not given -- what we have given is those are not the investments. Those are the projects where we have provided solutions to the corporates. Either they must be based out of India, U.K. or U.S.

Just to be clear see whether we can't do any investment to the disposing the name, that's not possible. Only thing that where the name cannot be disclosed is when we have an understanding or a contractual requirement or generally, you don't give out your clients' name because it's not a strategic good thing also for everyone to know who you are serving and all those things. But whenever it comes to giving money, investing or taking equity in the company, we have to disclose the name. It can't be that for XYZ company, and we will not define that. We have taken 30% stake. So that can never happened. So it's logically that wherever there's an investment, there always be a name for a project, we choose to give labels that we can disclose and are willing to disclose any further others we don't.

The next question is from the line of Dharmesh Patel, an Individual Investor.

Sir, what is the rejection rate of ideas, like out of them, how many ideas do you reject?

Let's incase the number to 20 and probably out of 20, 19 gets rejected.

Okay. So 1 in 20 gets selected.

It may not be 19 ideas which are unique. It may be 19 approaches, which could have the same idea being talked about in 3, 4 ways. And of that, probably in a 20:1 ratio, we get towards with, yes.

And 1 more question, sir, just out of curiosity, where do you get good ideas in U.S., India, London or Singapore?

We are mostly focused on India. So we look at it, exceptional people have -- sometimes we start from all these places, and we have worked with them. But mostly, we seek ideas mostly from India. The rest is incidental and accidental in essence.

Mr. Patel, do you have any other questions?

No, that's it.

[Operator Instructions] Next question is from the line of Ravindra, an Individual Investor.

Sir, on the funding of start-up side, I understand the goal is rising funds, is there any other companies that are looking for funding in the next couple of months?

We can't name them, but yes, there are quite a few companies in the startup in our ecosystem, which are looking for funds, yes.

Got it, sir. On the cash list, has it started generating revenue?

It has started doing some POC kind of paid POCs, but we would not say it's revenue. See, these are all deep take long-term projects. So yes there point, the paid POC stage, but not exactly in the revenue generation pace per se.

Sir, one last question, if I may ask. How do we approach to get a hard copy of annual reports sir?

Sorry.

How do we approach to get the annual report, hard copy of annual reports?

Okay. That Srini, can answer, but...

I reached out to Company's Secretary, couple of times to get the annual report.

I couldn't get -- how do we approach -- your question needs to...

Sorry. So how do we approach to get the hard copy of the annual report.

So as far as the hard copy of annual report, the consumer has dropped us an e-mail, all the hard copies we had couriered either from our corporate office or from the registered office. In case, if you have requested and if you have still not received, please drop an email will ensure that it will dispatch tomorrow itself.

That said I am a firm propagator, we should not print and waste paper for things which are better electronically. That has always, in my stance, I don't understand why we have to send hard copies, and that's the hard stance I did, but I guess there will be compliance there.

[Operator Instructions] The next question is from the line of Sri Siva from Siva.

Sir. So in the last conference call, I heard that from the prospect of reporting numbers in thousands and to invest in a hospital why do, why don't company report it in lakhs or millions each of thousands, even this time, I see in the financials, you have reported in thousands. From the prospect of readability, I request the management to report it in lakhs or millions from next time onwards.

Well, we have taken a call on that, even though the compliance says that there are certain provisions which way either we need to report in thousands or when do you need to report in crores, et cetera? But still, we would be publishing 2 formats, 1 for the compliance as 1 for the investors going forward, affected from either December or from March onwards.

[Operator Instructions] The next question is from the line of Elango, an Individual Investor.

In the Woovly there is a percentage drop in the equity, but there is no valuation increase. Can you give a clarification on this.

So basically, what we look at is we look at the last order funding, and we also look at their projections. We take a very, very conservative approach. So what we did was see, even though we see the numbers have grown, et cetera, as we stick to the last round of funding. But in case this year if the parameters are not in the upward trend, if you see there is a downward trend either in terms of the user base or in terms of revenues or the losses, et cetera, then we do come down, even though last rounds of funding was at ex-valuation, we do go below that.

Yes, you mean the valuation might reflect in the coming quarters, but the percentage drop would happen this quarter itself.

No. So, basically in case if there is no funds have being, the percentage will not drop. But yes, juxtapose it just early April from November to December in the next presentation, what happens is Xelpmoc's percentage might drop, but overall increase in the clients with respect to our holding is leading.

It's not clear. Say, for example, around 3.5% drop in Woovly?

Let's say, suppose, they dilute 10% or 20%, hypothetical example, 10%. So what happens is Xelpmoc will get diluted to an extent of 10%. But the value of this 10%, the value of the holding might increase than whatever we are a suppressive right now.

No, I think, Elango, what was name of the company you said?

Woovly, last quarter, it was reported about 13.68%. This time, it's 11.2%, but the valuation increase is only INR 5 lakhs. 2.5% as usual, is it by mistake an upper chain?

No, no, no. Woovly has gone for certain fund raise and where there is a convertible, which is back to the next round of valuation. So that's one of the reasons why you think that our holding must have gone down, but you are not seeing subsequent including it. We have raised some debt fund, which is also linked to the holding.

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

Thank you very much, everyone, for joining us. Please do drop us an email incase if you have any further queries, we are happy to answer on the best effort basis. Thank you.

Thanks, everyone.

Thank you. Ladies and gentlemen, on behalf of Xelpmoc Design and Tech Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.