Meesho Ltd — Q4 FY26

Meesho Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=Dvrhzl2xgDw Published: 7 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the MI show Q4 FI26 earnings call. 0:08 8 seconds As a reminder, all participants line will be in the listenon only mode and there will be an opportunity for you to ask questions. Should you need 0:16 16 seconds assistance during the conference call, please signal an operator by pressing start and zero on your touchstone phone. 0:22 22 seconds Please note that this conference is being recorded. I now hand the conference over to Miss Na Balura from city. Thank you and over to you ma'am. 0:33 33 seconds Thank you. On behalf of City Group, I would like to welcome all the participants to the Q4 FI26 conference call of Misho Limited. I would like to 0:42 42 seconds inform you that the call is being recorded and the audio call and the transcript will be available on the company's website. 0:50 50 seconds Joining us today to discuss earnings for the fourth quarter and FI 2026 are Vidit Atre, chairman, managing director and 0:58 58 seconds chief executive officer, Sanjief Kumar, full-time director and chief technology officer. Dire Bansal, chief financial 1:05 1 minute, 5 seconds officer, and Karthik Chandra Shakhar, head corporate development and investor relations. 1:11 1 minute, 11 seconds We encourage investors and analysts to review the shareholder letter available on Misho's investor relations website. 1:17 1 minute, 17 seconds During this call, management will focus on addressing questions beyond the topics already covered in the letter. 1:23 1 minute, 23 seconds Before we begin, please note that certain statements made on this call may be forward-looking in nature and should be considered in conjunction with the 1:31 1 minute, 31 seconds risk factors disclosed in the company's filings. With that, we can open the floor for questions. 1:38 1 minute, 38 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 1:47 1 minute, 47 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a 1:55 1 minute, 55 seconds question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 2:06 2 minutes, 6 seconds First question is from the line of Sachin Sawka from BSA. Please go ahead. 2:13 2 minutes, 13 seconds Hi, thanks for the opportunity convers uh I have a few questions. Uh first 2:21 2 minutes, 21 seconds question on now that the one-off issues are behind and the network looks optimized. How is management thinking 2:28 2 minutes, 28 seconds about the mix between insourcing and outsourcing? I think you guys are currently roughly at 50 51% in where do 2:36 2 minutes, 36 seconds you see this number moving in the medium term? 2:41 2 minutes, 41 seconds Yeah. Hi, this is Vidit. Um, so I think I think we have mentioned before we do not take a specific goal of how much 2:49 2 minutes, 49 seconds Valgo share should be. Um, we will continue to give volumes to the pair who the most cost efficient for every lane. 2:57 2 minutes, 57 seconds Um, we see third party logistics partners also compete on this across the board. So we generally don't take a goal. Our goal is more customer backward 3:05 3 minutes, 5 seconds of continuing to make all our products more and more affordable to them. 3:10 3 minutes, 10 seconds uh we believe like as Gu has done in the past it will continue to kind of innovate and improve the cost structure and as that happens the share will keep 3:17 3 minutes, 17 seconds increasing we do not take a specific goal in terms of what OC share should be uh in the short to midterm 3:28 3 minutes, 28 seconds got it uh but when you look at some of the global operators be it Mac or shopppee all of them have taken a conscious call of focus on insourcing 3:36 3 minutes, 36 seconds because they could benefit on the back of vaccine is there some kind the thought process in similar lines for you guys. 3:43 3 minutes, 43 seconds So which is already happening in BMA. I think the reason we have started because in many places we get much better cost efficiencies working with DMA as 3:51 3 minutes, 51 seconds compared to any other player and that is across the board. I think consolidation/batching what you mean even that happen that we 3:59 3 minutes, 59 seconds do scaling but many other cost efficiencies come into our supply chain uh as we have scaled it. So I think we 4:07 4 minutes, 7 seconds we take the same POV actually wherever we are able to get the best uh ROI we end up basically using that particular 4:15 4 minutes, 15 seconds partner and we'll continue to work with third party logistics partners for this second question as we head into next SQL 4:25 4 minutes, 25 seconds how should you think about your investments in new user acquisition which is pretty high in 26 but now that your world's AI shopping event is 4:34 4 minutes, 34 seconds running well and there are other AIE investor ments to acquire customers. 4:38 4 minutes, 38 seconds Should we expect this acquisition investment to meaningfully come down? 4:44 4 minutes, 44 seconds Um, so actually we do not again take a specific goal on what should be the advertising spend. Historically we've always taken uh as long as our 4:53 4 minutes, 53 seconds investments meet a certain uh return threshold, we continue to invest. So like we continue to basically do 5:01 5 minutes, 1 second innovation so that our return investment on marketing continues to improve. So we saw that with Bali we were able to 5:08 5 minutes, 8 seconds convert more rural customers in our platform and because of that our CAC went down and we plan to basically 5:15 5 minutes, 15 seconds invest a lot more in acquiring rural customers over the next one year. So I think that's basically the approach we take. Overall I don't think that 5:23 5 minutes, 23 seconds approach will change at all. We will continue to decide what should be the return on investment threshold for marketing at all points in time and as 5:31 5 minutes, 31 seconds long as we're meeting it we will continue to invest. If you look at overall we also mentioned in the letter um India is like quite low in terms of 5:40 5 minutes, 40 seconds number of people who are transacting online as a percentage of smartphone users even in other emerging markets that number is north of 80%. I'm not 5:48 5 minutes, 48 seconds even com comparing with the western markets India is closer to 30%. So and that's why even at a large base we are 5:55 5 minutes, 55 seconds able to grow our annual transacting user base at 33% ROI. So we believe there's a large growth there. So as we keep 6:03 6 minutes, 3 seconds innovating on our product and our return on investment continues to be attractive we will keep acquiring these new users aggressively. 6:14 6 minutes, 14 seconds Pretty clear on that. Uh third question u given the fact that we saw a sharp margin improvement and add as a 6:22 6 minutes, 22 seconds percentage of NMD continues to improve uh would management look to give some kind of a guidance when the company could be a bit break even because 6:30 6 minutes, 30 seconds directly one looks like you know it is not far off from users being break even and separately comments on free cash 6:38 6 minutes, 38 seconds flow last year you know looked oneoff in terms of your investments which had gone into logistics network but now with most 6:45 6 minutes, 45 seconds of these issues behind is it fair to assume issue will be precositive this 6:53 6 minutes, 53 seconds yeah hi this is Sajin um so in terms of I think guidance is short-term uh we 7:00 7 minutes don't have uh any specific guidances to share at this point uh on iota um I think LDMFC which you rightly kind of 7:10 7 minutes, 10 seconds pointed uh has been the guiding sort of uh line item there will will have impact 7:18 7 minutes, 18 seconds uh over a 12 month period. So anything which we had for instance in Q2 and Q3 of FI26 will continue to last uh for 7:27 7 minutes, 27 seconds some time and hence uh there will be consequential impact of that being carried over for the next uh few 7:34 7 minutes, 34 seconds quarters as well. But from a trajectory standpoint both with the improvement in margin that we seeing as well as growth 7:41 7 minutes, 41 seconds that we seeing our FCF overall um uh you know on a quarterly basis should keep on trying to improve. 7:49 7 minutes, 49 seconds Got it. And my last question is based on one of your comments from shareholder letter where you guys mentioned about macro environment when it is unfa 7:58 7 minutes, 58 seconds consumers focus mostly towards value. Uh I guess this is equally true for mid to high end users also. So is there a bit 8:05 8 minutes, 5 seconds more focus from you guys to focus on brands on the Nisho mall more to target more affluent users apart from the value users? 8:15 8 minutes, 15 seconds Yes. So I think we are scaling Misho mall for affordable brands or I would 8:21 8 minutes, 21 seconds say value brands or value packs of all the brands that you know. So I think and we've made a lot of progress over the 8:29 8 minutes, 29 seconds last one year. A lot of national brands that are popular in India have scaled their selection on Misho and they find that they're able to reach a customer 8:38 8 minutes, 38 seconds for the first time that they could not reach earlier and sell selection online for the first time that they could not sell earlier. So everyone is seeing a 8:47 8 minutes, 47 seconds lot of potential there. So it's going to be a big focus for us. Vishum not just focused on the premium customer. I think 8:54 8 minutes, 54 seconds it's going to be focused on anyone who cares about value. Um so it's going to be mass India. We still believe the 9:01 9 minutes, 1 second large opportunity is like serving brands for a billion people eventually. It's not just for the big cities. I think there are a lot of people who want to 9:09 9 minutes, 9 seconds get access to national known brands, regional brands, new upcoming D2C challenger brands and all of them have 9:17 9 minutes, 17 seconds generally struggled to reach these consumers in mass India because the typical distribution networks were 9:25 9 minutes, 25 seconds Kiranas, GT that were hard to access for majority of brands in India. We are basically offering that proposition and 9:32 9 minutes, 32 seconds a lot of people are excited. So we are going to continue to focus on mall for mass India not just on premium customers 9:39 9 minutes, 39 seconds and so far we have seen very very good signs there. 9:45 9 minutes, 45 seconds Super clear. Thanks a lot and all the best. 9:50 9 minutes, 50 seconds Thank you ladies and gentlemen. In order to ensure that the management is able to address questions from all participant we requested to please limit your question to three per participant. 10:01 10 minutes, 1 second The next question is from the line of Gorav Malhotra from Axis. Please go ahead. 10:06 10 minutes, 6 seconds Hi uh thanks for the opportunity and from a good of numbers. In fact few questions uh one is in the shareholder 10:13 10 minutes, 13 seconds letter you mentioned about the cood being almost uh uh having reduced to to to a to a good extent. So uh just wanted 10:23 10 minutes, 23 seconds to get some sense on the BNP initiative and how much is that helping the reduction in PUB. 10:32 10 minutes, 32 seconds Yeah, I think u uh BNPL is still fairly early in its life cycle. So I think right now the key 10:42 10 minutes, 42 seconds initiatives that we have had within our prepaid kind of product uh which is payment before delivery um I think the 10:51 10 minutes, 51 seconds cost of prepaid orders kind of coming down and passing consequentially uh some of them back to our consu consumers uh 10:59 10 minutes, 59 seconds with better prepaid discounts etc have been the driving force so far in terms of cash on delivery share coming down or 11:06 11 minutes, 6 seconds prepaid share increasing um going forward forward as we kind of continue to invest behind the NPL and we're 11:14 11 minutes, 14 seconds seeing uh good sort of early signs there uh that will become a driver but at this point in time it is more direct share 11:22 11 minutes, 22 seconds kind of increase in terms of the ad spend you mentioned that uh in the the letter that there 11:30 11 minutes, 30 seconds seems there's a decline in the entrance there's a decline in CAT so is it because like you mentioned in the 11:38 11 minutes, 38 seconds previous uh comments that is it because they have more rural customers coming up more which is helping with the stack or there's something uh more to it. 11:50 11 minutes, 50 seconds Yeah. So I think the CAC reduction is happening due to the investments that we have done historically in terms of 11:57 11 minutes, 57 seconds technology uh in terms of improving the value proposition from a price perspective as well uh versus kind of 12:06 12 minutes, 6 seconds rural users. In fact, I think as you go deeper into India, uh on a like forlike basis, taxs only go up because you have 12:14 12 minutes, 14 seconds to convince a certain user more in order to transact. But with the improvements and products that we have made through 12:22 12 minutes, 22 seconds AI and uh otherwise um that barrier threshold has come down uh so Vani for instance our voice agent or other 12:31 12 minutes, 31 seconds investments that we've done in terms of algorithms as well have reduced uh that friction between a user installing the 12:39 12 minutes, 39 seconds app and placing their first order and that's the reason why CA continues to be in a fairly limited zone 12:48 12 minutes, 48 seconds in terms of logistics. fix cost. You know, obviously there's a long-term of of them declining. If you can give us 12:55 12 minutes, 55 seconds some sense on any near-term initiatives where you're seeing something, you know, um something which can be measured which 13:01 13 minutes, 1 second is actually leading to uh some some significant or meaningful reduction from from variables we have today. 13:12 13 minutes, 12 seconds Yeah, I think um there's no quantitative uh sense that we'd be able to provide 13:19 13 minutes, 19 seconds but broadly speaking I think if I have to kind of u share some of the key drivers there uh one I think which we 13:27 13 minutes, 27 seconds briefly touched upon the movement from cash and delivery to prepare transactions has been uh improving the 13:35 13 minutes, 35 seconds cost structure that we have um again given both the cost of serving a cash on delivery order itself is higher uh with 13:44 13 minutes, 44 seconds cash handling charges but also the delivery rates for uh prepaid orders are better and that kind of leads to better total cost optimization for 13:53 13 minutes, 53 seconds second as our volumes increase in the ecosystem uh that density increase across the board be last mile all the 14:01 14 minutes, 1 second legs uh also leads to cost improvement and again this happens both for us uh in Balmo as well as with our GPL partners 14:09 14 minutes, 9 seconds where we are able to see uh cost improvements. In addition, I think we are kind of uh doing multiple 14:17 14 minutes, 17 seconds innovations within Valmo um which we continue to kind of uh uh which we continue to kind of roll out and those 14:25 14 minutes, 25 seconds over a period of time will give us costs. Um at this point uh we we will 14:32 14 minutes, 32 seconds not be able to quantify but uh in the coming quarters maybe we will. 14:37 14 minutes, 37 seconds Thank you. Plus one small quick question. He gave us some sense on the salience of uh M& across the various 14:45 14 minutes, 45 seconds cohorts in the top cohort. If you can give us some sense on the frequency as well versus the 10 that is there at an aggregate level for the business. 14:56 14 minutes, 56 seconds Um sorry could you clarify the question? 14:59 14 minutes, 59 seconds What do you mean by top? So in the sense you have given us some numbers in terms of you know how much is the NMD fail 15:05 15 minutes, 5 seconds rate across uh you know users who have been in the system for FI24 and before and FI25 and also let's say the top 15:14 15 minutes, 14 seconds cohort say FI 24 and before what kind of uh frequent or frequency would they be having say versus uh system average 15:24 15 minutes, 24 seconds yeah so um I don't have a specific number of frequency off the top of my head but in general eneral um I think as 15:32 15 minutes, 32 seconds users kind of mature on the platform their frequency in almost a three-year time period starts uh going up to uh 15 15:40 15 minutes, 40 seconds times or more. Uh so I would suspect I think for the FI24 and the four cohorts uh it'll be uh a similar number. 15:49 15 minutes, 49 seconds Thank you so much. 15:53 15 minutes, 53 seconds Thank you. The next question is from the line of Geria from Morgan Stanley. Please go ahead. 16:01 16 minutes, 1 second I uh thanks for taking my question. 16:03 16 minutes, 3 seconds Congratulations on uh uh good performance on EITA. I have couple of questions. Let me just read out all of them uh in order to just be more 16:11 16 minutes, 11 seconds efficient. Uh my first question is on monetization. When I look at the revenue number on the marketplace uh and look at it on a per order basis, it doesn't seem 16:20 16 minutes, 20 seconds to have moved on a quarteronquarter basis. Uh whereas the NMV has grown. So why monetization has come down whereas 16:28 16 minutes, 28 seconds our ads uh contribution should have increased during the quarter. The second is on your comment on 145 basis point 16:35 16 minutes, 35 seconds one-time impact. Uh should one assume that this is not going to be there next year and hence it will be a straight flow through to the beta numbers from from next year profitability 16:44 16 minutes, 44 seconds perspective. Uh the third is the logistics issues that you talked about uh which kind of you know impacted your 16:51 16 minutes, 51 seconds performance. what have you done or what are the initiatives that you're thinking in order to make sure that the business does not see any such issues in future and become more resilient. Uh thank you. 17:03 17 minutes, 3 seconds Thanks G for the questions. So I'll pick up in the order itself. Um the first question was why has has monetization 17:10 17 minutes, 10 seconds come down uh or has there been any change in the trajectory of ad revenue? 17:15 17 minutes, 15 seconds So I think broadly uh we we've seen uptick in terms of overall ad revenue as 17:22 17 minutes, 22 seconds percentage of NMD uh within this quarter versus the previous quarter. There has been a change in terms of uh how 17:31 17 minutes, 31 seconds reported revenues are kind of uh being uh accounted for. Earlier we used to uh 17:38 17 minutes, 38 seconds provide the revenue gross of discounts for the first orders and then have the cost in the sales marketing expenses uh 17:47 17 minutes, 47 seconds which is kind of uh now uh being neted off against revenue. Uh and the second one is around the prepaid mix uh or 17:56 17 minutes, 56 seconds share which has also kind of been increasing and typically prepaid orders will have lower revenue but also lower cost. So from a contribution margin 18:05 18 minutes, 5 seconds perspective they will be uh uh they will be net neutral but from a revenue line item perspective it might uh impact some 18:14 18 minutes, 14 seconds of the QQ trends that's I think the primary reason apart from that I think if I kind of specifically look at ad revenues itself that has been on an 18:23 18 minutes, 23 seconds upward journey um the second question I think was around the 145 bits mentioned uh in the 18:31 18 minutes, 31 seconds letter around one time logistics headwinds. So uh just to kind of recap, most of this headwind was during the Q2 18:40 18 minutes, 40 seconds and Q3 period of FI26 from where we have kind of recovered. So that one time logistics disruption is kind of uh 18:49 18 minutes, 49 seconds behind us and and hence uh going forward uh the baseline from contribution margin perspective is is a 4% exit rate that we have. 19:01 19 minutes, 1 second Um and I think the third one was around logistics issues. Um so like we had 19:08 19 minutes, 8 seconds mentioned um the impact that we had during Q2 and Q3 uh of FI26 was 19:15 19 minutes, 15 seconds transient in nature uh primarily caused by some amount of capacity disruption that happened once when there was CPL 19:23 19 minutes, 23 seconds consolidation that happened somewhere around May last year and in order to ensure that uh our customer experience 19:31 19 minutes, 31 seconds doesn't suffer and consumers are continuing to get their orders uh we ended up uh doing some short-term kind 19:38 19 minutes, 38 seconds of capacity building at slightly higher rates. Now most of that capacity has been unwinded and uh more optimum cost 19:48 19 minutes, 48 seconds structures have been put in place uh both in Balo as well as other CPM partners. So that's the reason why this 19:55 19 minutes, 55 seconds is kind of structural in nature and should be a one time uh issue. 20:02 20 minutes, 2 seconds Thank you. All the best. 20:06 20 minutes, 6 seconds Thank you. The next question is from the line of Katik Maheshwari from HSBC securityities. Please go ahead. 20:14 20 minutes, 14 seconds Thank you so much for the opportunity. 20:16 20 minutes, 16 seconds I've got three questions. So first one is uh and first one is on frequency. So as you said probably the cohort uh which 20:25 20 minutes, 25 seconds are from said 24 or before are around uh have frequency of around 15 times right that would mean that probably the new 20:33 20 minutes, 33 seconds users are coming at frequency of five or below or probably the mid uh mid 50% of the users are at recess five to eight 20:41 20 minutes, 41 seconds times right so we just want to understand that as as the platform is growing right users are probably reaching users more or less right uh The 20:51 20 minutes, 51 seconds general assumption is that the frequency probably of these users will be lower uh versus the uh the users that you would have initially taken up in the platform. 21:01 21 minutes, 1 second Would that be right? And in that context, how much do you think the frequency can go up to? Probably it will become little more midterm due to perspective. 21:11 21 minutes, 11 seconds That's my first question. 21:14 21 minutes, 14 seconds Sure. Um so actually counterintuitively and uh again because of all the changes 21:22 21 minutes, 22 seconds that we have been doing in terms of pricing assortment the technology innovations team has been doing uh first 21:29 21 minutes, 29 seconds year frequency has been on an increasing trend for the last three years now. Um so new users which get acquired on the 21:37 21 minutes, 37 seconds platform start from a higher baseline now versus what they were at say uh 3 21:44 21 minutes, 44 seconds years ago almost uh a doubling of frequency has happened from a baseline perspective uh in the last 3 years and 21:54 21 minutes, 54 seconds that is a trend which is more than offsetting any potential uh let's say socioeconomic impact that 22:00 22 minutes we might see um when it comes to us going into deeper parts of India. Just to kind of zoom out again, we are still 22:08 22 minutes, 8 seconds a very small proportion of consumption of consumers in India. Um if you look at frequencies of uh comparable sort of 22:16 22 minutes, 16 seconds value focused e-commerce companies in China, those would be closer to almost 100 times. So I think there is a lot of 22:24 22 minutes, 24 seconds space to play. Um we continue to make our price proposition better, our relevance algorithms better and hence uh 22:33 22 minutes, 33 seconds users are able to discover lot better things in their first uh sort of year itself versus what they were doing 22:41 22 minutes, 41 seconds earlier and again with propositions around mall content commerce etc also uh getting introduced and uh leading to 22:50 22 minutes, 50 seconds more transactions that also leads to higher frequency in the first year itself. 22:56 22 minutes, 56 seconds Thank you. The second question that I had was on on um some of the some of the announcement some of the comments that 23:02 23 minutes, 2 seconds probably the uh end to end logistic partners uh that that they make right. 23:08 23 minutes, 8 seconds So basically there's been some consolidation industry over the past uh one year and now the focus from them seems to be more on margins rather than 23:17 23 minutes, 17 seconds probably chasing volume and probably offering better rates. Right? So in that context and since also probably if they 23:25 23 minutes, 25 seconds do not offer you more uh capacity or better rates probably Valmo will keep scaling up. So in that context do you 23:33 23 minutes, 33 seconds see the firm uh making probably investment into midmine as well probably sorting centers uh because because what 23:40 23 minutes, 40 seconds will happen is when when you look at the smaller smaller uh parts in your rally network right probably they not be they'll not have the capacity to make 23:48 23 minutes, 48 seconds large investments to improve the midmine cost right so and uh so in that context if keep scaling up you think yourself uh 23:57 23 minutes, 57 seconds they'll be making those investments and sorting sorting and cattle uh uh Uh let's say 24:05 24 minutes, 5 seconds yeah this is here um I think just splitting both first we believe that all our third party logistics partners make 24:14 24 minutes, 14 seconds money when they serve our volumes so I don't think there's any incentives for anyone to not work with us and historically that's always been the case 24:22 24 minutes, 22 seconds we work very closely with all our partners and it's always been a win-win relationship now second within Balmo will we bring a lot more automation with 24:31 24 minutes, 31 seconds within sort centers. I think the answer is yes. That's a big focus area for us. 24:35 24 minutes, 35 seconds We're already uh like for example experimenting with it in several places and our goal is in the next few years to 24:43 24 minutes, 43 seconds basically bring state-of-the-art automation within all our sort centers. 24:46 24 minutes, 46 seconds So I think that we will do and that will lead to a lot of efficiency for us in the coming years. So that's going to happen irrespective. 24:55 24 minutes, 55 seconds Right. And uh last question is on the ad. So as you said right when we helped you guys reduce the pack right and so 25:04 25 minutes, 4 seconds should we assume and you said probably this would this year would have the trend of larger editions and the revs 25:11 25 minutes, 11 seconds right so from that perspective should we see the 4Q number as a rebase line where we should think about the increase for 25:19 25 minutes, 19 seconds this year or u probably uh is there any other reason to think uh probably that could increase 25:28 25 minutes, 28 seconds I think As Will had mentioned earlier like the way we kind of approach sales and marketing spend is not look at it as a budget in terms of percentage of NP. 25:37 25 minutes, 37 seconds We look at what is the return that this spend is generating and as long as that 25:44 25 minutes, 44 seconds uh spend is generating above uh our sort of hurdle rate returns then we kind of continue to invest uh in terms of 25:52 25 minutes, 52 seconds growing our market because we're still at a very decent stage of the market. Um so the investment philosophy is on that 25:59 25 minutes, 59 seconds basis. Now um where where we are today is as our base of NMV will keep growing 26:06 26 minutes, 6 seconds the uh user spend may not kind of scale at that same amount but that is a longer term trend I would say versus specific 26:15 26 minutes, 15 seconds quarterly kind of trends where it might scale up or down depending on the opportunities that we see. 26:23 26 minutes, 23 seconds Okay. Thanks so much. 26:26 26 minutes, 26 seconds Thank you. The next question is from the line of Adita Suresh from Mquari. Please go ahead. 26:32 26 minutes, 32 seconds Yeah. Thank you. Good evening. Um two questions. The first is on contribution. 26:37 26 minutes, 37 seconds Um so you've seen that that sequential 130 basis points improvement in contribution margin. A lot of that is down to logistics down about 110 basis 26:45 26 minutes, 45 seconds points. This has come as you scale back your insourcing push. Right. So I guess the real question is that so if free 26:52 26 minutes, 52 seconds cash flow is your northstar then why not say for example further push down in sources right to say from 50% down 26:59 26 minutes, 59 seconds towards 30%. Uh with kind of the objective of kind of further expanding CM free cash flows etc. So that's the first question. Uh the second question 27:08 27 minutes, 8 seconds is on cash flow from operations particularly uh in absolute cases the scale of that negative number has 27:15 27 minutes, 15 seconds expanded quarter and quarter for the past uh three quarters now uh and you know if I kind of zoom into this specific quarter you've seen that that 27:23 27 minutes, 23 seconds cash operations further go negative even as you've seen that margin improvement whe whether it be at a CM level or that 27:29 27 minutes, 29 seconds adjusted margin level um so if you like square that for me please thank Sure. 27:38 27 minutes, 38 seconds So I think on the first question which is in relation to hey should we kind of uh change the insourcing mix further. I 27:47 27 minutes, 47 seconds think again we are optimizing for overall cost. So at this point in time the cost structure kind of solves for 27:56 27 minutes, 56 seconds this number. Um and again there are improvements that we keep doing and innovations that we keep doing in value. 28:03 28 minutes, 3 seconds Um as also other three partners keep kind of competing to uh sort of uh get 28:10 28 minutes, 10 seconds give better pricing as their volumes go up etc. So I don't think there is a specific number that we aim for at this 28:19 28 minutes, 19 seconds point in time. at 50% we were the most or at around that mark we were the most optimized in terms of cost structure. Um 28:28 28 minutes, 28 seconds and our belief is as as things keep kind of changing we keep kind of adjusting uh basis the cost reality that we see 28:38 28 minutes, 38 seconds I think on your second question cash flow from operations. So again um the trends that you're looking at may 28:45 28 minutes, 45 seconds include certain one-offs that have been kind of there from past periods uh or within past periods. But if I kind of 28:53 28 minutes, 53 seconds look at um the overall Ibitar trend as well as the credit period uh or negative working capital cycle that we've had uh 29:02 29 minutes, 2 seconds we have been on an improvement trajectory overall on a CFO basis as well. Maybe separately we can share a reconciliation on on what changes are. 29:13 29 minutes, 13 seconds Yeah, that'll be fantastic. Thank you. 29:18 29 minutes, 18 seconds Thank you. The next question is from the line of Aresh from CLSA India Private Limited. Please go ahead. 29:25 29 minutes, 25 seconds Hi, good evening. Uh so one question from I'm sorry to interrupt you Mr. G. We are unable to hear you clearly sir. 29:36 29 minutes, 36 seconds Hello. Yes. 29:38 29 minutes, 38 seconds Yeah. Can you hear me? Yeah. Yeah. Hi, this is Adita uh from CLSA. Uh so, uh just a quick one. Uh so, we uh following 29:46 29 minutes, 46 seconds on from on the previous question. So, we also saw a reduction in the cash balance in the quarter. So, so the cash balance 29:53 29 minutes, 53 seconds has come down by about 300 crores. Uh so, two questions on this. So, one uh why has the cash balance reduced so much when when the margins improved? uh and 30:01 30 minutes, 1 second and second uh I think there's some reclassification of the cash itself uh where uh I think income tax assets are removed from the cash balance. So again 30:09 30 minutes, 9 seconds if you can just uh throw some more light on this. 30:12 30 minutes, 12 seconds Sure. I think the cash balance movement typically happens because of end of quarter um NMB numbers. So let's say in 30:22 30 minutes, 22 seconds a quarter where there is uh more I would say sale or NMB which is coming in the last sort of 15 to 20 days of the 30:31 30 minutes, 31 seconds quarter um versus let's say a subsequent quarter then we see this kind of volatility that typically happens uh in 30:39 30 minutes, 39 seconds terms of uh cash flow for the quarter and hence we have kind of always maintained that in our business looking 30:47 30 minutes, 47 seconds at LTM FCF for last 12 months FCF is a better way to kind of judge the trajectory versus looking at quarterly 30:54 30 minutes, 54 seconds cash flows. So for instance, if in a quarter we have a sale event uh during the last 15 days, our NMB will increase 31:03 31 minutes, 3 seconds and uh the cash balance would kind of go up significantly um versus if that event 31:10 31 minutes, 10 seconds is kind of in earlier part of the uh of the month. So some of this volatility gets smoothened out when we look at LT 31:19 31 minutes, 19 seconds and MCF trends. Um I think in terms of uh taxes uh so some of the taxes that 31:26 31 minutes, 26 seconds have been kind of paid out uh in terms of cash payout uh those we expect to be refunded back this is the trajectory of 31:33 31 minutes, 33 seconds our sort of overall profit PBT and hence that's been kind of adjusted off from a uh net cash balance perspective. 31:45 31 minutes, 45 seconds All right. Yeah, that's clear. Thank you so much. That's it for me. 31:50 31 minutes, 50 seconds Thank you. The next question is from the line of Gimma Mishra from Kotak Securities. Please go ahead. 31:58 31 minutes, 58 seconds Hi, thank you so much for the opportunity. I have one question on your uh revenue line itself. Right. If I just 32:05 32 minutes, 5 seconds compute a revenue per order, now this number has declined from let's say 57 rupees odd in FI 24 to 47 rupees odd in 32:14 32 minutes, 14 seconds FI26 and a lot of the decline is I think explainable by the decline in your logistics cost uh plus you know some of 32:22 32 minutes, 22 seconds the accounting changes that you highlighted earlier. My question is going forward as we try and focus more 32:28 32 minutes, 28 seconds on getting more income from advertising should this number sort of stabilize from here on or at least the decline 32:36 32 minutes, 36 seconds should not be as much as what we have seen in the past. Is that the right way to think about it? 32:44 32 minutes, 44 seconds Sure DMA. So I think from our business standpoint the right number to consider from a trajectory standpoint is 32:52 32 minutes, 52 seconds contribution margin because as I was explaining earlier for instance things like prepaid versus cash on delivery orders. Now if you start getting a 33:01 33 minutes, 1 second higher mix of prepaid orders which is fundamentally good for the platform you would see that the renewable order would kind of decline uh but the contribution 33:11 33 minutes, 11 seconds margin would sort of remain the same because again the uh the lower cost of serving a prepaid order is what we kind 33:18 33 minutes, 18 seconds of pass back to our consumers in the form of lower pricing. So hence looking at revenue per order as that uh trend 33:26 33 minutes, 26 seconds line uh may not be quite constructive versus looking at contribution margin and there because ad revenues largely 33:34 33 minutes, 34 seconds kind of do not have significant cost associated with them as our ad revenue will keep improving the revenue uh or 33:42 33 minutes, 42 seconds the contribution margin would also kind of mimic similar trends across. I think the only difference we had in FI26 was 33:52 33 minutes, 52 seconds uh some of the margin that we make on our fulfillment uh came down which we are now sort of restoring back. 34:02 34 minutes, 2 seconds Got it. Understood. So my only point was that I completely take your point that versus the logistics revenue there's 34:10 34 minutes, 10 seconds also a logistics cost and if both go down the revenue line optically would look weaker which is fine but if revenue 34:18 34 minutes, 18 seconds monetization from ads goes up you know that's straight away an addition to the revenue line right so just from optics 34:25 34 minutes, 25 seconds perspective that should kind of make good any large revenue decline that happens on account of logistics So I 34:33 34 minutes, 33 seconds think that is what my understanding and given ad revenue is a very high 34:41 34 minutes, 41 seconds gross margin business versus logistics is a uh sort of lower margin lower gross 34:47 34 minutes, 47 seconds margin business um they they are quite different when it comes to just simple sort of revenue addition. So it may not 34:56 34 minutes, 56 seconds be true that let's say the it in fact what might be true is that the logistics uh revenue might come down sharper 35:03 35 minutes, 3 seconds versus kind of ad revenue increasing but on a contribution margin line uh you would continue to see improvement. 35:12 35 minutes, 12 seconds Sure. Understood. And then the last question for me again on advertisements could you just highlight uh what is the kind of response you're seeing from your 35:21 35 minutes, 21 seconds merchant partners? what is the kind of ROAS and the ad loads on the platform that you are seeing and uh yeah any 35:30 35 minutes, 30 seconds other efforts to improve ad monetization that are underway. Thank you. That's it for me. 35:36 35 minutes, 36 seconds Sure. I think uh we spoke about it last call as well and uh our trends here continue to be encouraging. uh a lot 35:44 35 minutes, 44 seconds more of our sellers uh continue to get activated on our uh new ad product which 35:51 35 minutes, 51 seconds kind of is ROS backwards. Uh our return on ad spend continues to be one of the industry best in fact multiples of what 36:01 36 minutes, 1 second other e-commerce players kind of offer in India or anywhere else in the globe. 36:05 36 minutes, 5 seconds Uh from a seller adapt adoption point of view um the number of cataloges or 36:12 36 minutes, 12 seconds products which are now live on kind of ads has improved significantly uh on a 36:20 36 minutes, 20 seconds bio basis uh more than kind of uh 40% but even on a Q basis continues to see 36:27 36 minutes, 27 seconds improvement and that is the key input that eventually goes into u lot lot more kind of uh competition ition in terms of ads and hence higher ad revenues for us. 36:39 36 minutes, 39 seconds So that trend continues to be on a positive uptick. Um albeit I think uh again we have measured about how quickly we want to kind of wrap some of this. 36:53 36 minutes, 53 seconds Thank you. The next question is from the line of Abishek Banerjee from ICS Securities. Please go ahead. 37:00 37 minutes Hey hi thanks for the opportunity. Just a couple of quick questions for me. 37:03 37 minutes, 3 seconds First uh do we uh so I think you mentioned that you want to do more automation in the midmine just wanted to 37:11 37 minutes, 11 seconds understand that does that mean you will actually spend on kix or or how do you kind of plan to do that 37:20 37 minutes, 20 seconds so I think we haven't uh let's say pinned down a specific model we continue to kind of see pretty good encouraging 37:30 37 minutes, 30 seconds results from some of our partners uh who who would uh want to kind of invest and set up some of these facilities on our 37:38 37 minutes, 38 seconds behalf. Uh but again basis payback period math and other things we can take a call if let's say any investments are 37:48 37 minutes, 48 seconds required from our side itself. Um so again some of this we'll discover as we kind of go. 37:55 37 minutes, 55 seconds Okay. Understood. and and second on the uh ROS part. Uh now of course the the 38:02 38 minutes, 2 seconds ROS numbers that you kind of get is is significant uhly higher than uh what 38:08 38 minutes, 8 seconds what any of your competitors do. But uh the point is uh that should actually make it easier for you to kind of push 38:16 38 minutes, 16 seconds through pricing a little more. Now I'm just trying to understand is there uh is there a tradeoff which we are kind of 38:24 38 minutes, 24 seconds operating at or what is the proportion of uh you know uh ad uh uh related listings that you want to get to before 38:32 38 minutes, 32 seconds you want to push pricing. If you could you know just give us some color on that that would be really helpful. 38:38 38 minutes, 38 seconds Yeah. So I think the big focus area for us at this point in time the reason we've been operating at very high ROS is 38:46 38 minutes, 46 seconds because we've been focused on activating more and more sellers on our ad product. 38:52 38 minutes, 52 seconds So a big focus area for some time we'll be just making that happen because as soon as like a lot of people are 38:59 38 minutes, 59 seconds becoming advertisers for the first time on our platform and if they become advertisers and they get very good IOS 39:06 39 minutes, 6 seconds the chances that they will spend more on the platform and put more budgets end up being much much higher. So I think that's the stage we are in. You're right 39:14 39 minutes, 14 seconds at some point in time we'll start to take pricing up to grow our revenue. We just want to be sure that we are doing at the right time so that our steady 39:22 39 minutes, 22 seconds state ad revenue is much higher than what we have today. 39:27 39 minutes, 27 seconds Understood. Just just one continuation on that. So I'm sure you have the ability to kind of uh uh single out one 39:35 39 minutes, 35 seconds uh seller who has been using advertising for some time now and you can uh you know kind of uh make those kind of uh 39:42 39 minutes, 42 seconds portiles and start charging a little on that. So have you tried any of those experiments to kind of see how the 39:50 39 minutes, 50 seconds propensity to advertise kind of changes with pricing? 39:55 39 minutes, 55 seconds So I think a better way we can't charge differently to different sellers for our product. It's a bidding product. So people decide but what happens is a good 40:04 40 minutes, 4 seconds way to see is are people putting a large budget. 40:07 40 minutes, 7 seconds So if I get good RO am I putting a much larger budget. Um and we today see that 40:14 40 minutes, 14 seconds the budget over the last one year for us has grown more than doubled actually much more than double over the last one year. So more people have put budget 40:23 40 minutes, 23 seconds basically there uh they want to spend a lot more on the black. So I think that's that's basically a signal to see whether 40:30 40 minutes, 30 seconds people even like the product and want to invest over time. Um and as I said at the right time we will start to play 40:37 40 minutes, 37 seconds with pricing and uh start to grow the revenue. Good. Thank you very sir. 40:45 40 minutes, 45 seconds Thank you. The next question is from the line of TJ Sha from Aenda Spark Institutional Equities. Please go ahead. 40:52 40 minutes, 52 seconds Uh hi, thanks for the opportunity. Uh see on the runway to add users that you highlighted. If you were to look at this 41:00 41 minutes base of 264 million users through a household lens, uh what would be that what would that translate to approximately? 41:10 41 minutes, 10 seconds So I think given again in India people kind of look at or input addresses fairly uh differently even people within 41:18 41 minutes, 18 seconds the same household uh it's hard to kind of uh guess a specific number of how many households are being served. I 41:26 41 minutes, 26 seconds think again zoomed out view here is e-commerce shopping especially of the kind uh and categories that we serve is 41:35 41 minutes, 35 seconds done more on an individual basis versus kind of household basis. This is less of grocery shopping but more uh sort of 41:43 41 minutes, 43 seconds browse based shopping where the feed algorithms that we have they are personalized for each user and hence the 41:51 41 minutes, 51 seconds likely overlap between users kind of using a single sort of device to place orders uh through the show is relatively 42:00 42 minutes less. We also see this when we kind of look at other markets, China, Southeast Asia that the number of e-commerce 42:08 42 minutes, 8 seconds transactors largely kind of mimics the number of say WhatsApp, WeChat uh users etc that are there in those markets. So 42:18 42 minutes, 18 seconds shopping uh e-commerce shopping of our branding is more individual in nature and hence household is not the right way to kind of think about this in our view. 42:29 42 minutes, 29 seconds Yeah. uh second in uh the the way the macro circumstances are evolving it seems that we see uh some high inflation 42:37 42 minutes, 37 seconds after a long time. So just from the past experience how your consumer how the user base behave in terms of AOV or 42:45 42 minutes, 45 seconds frequency because they seem to be much more inclusion sensitive than let's say the the broader broader market. 42:55 42 minutes, 55 seconds Yeah. I think typically if you kind of look at times like these um and again there is a fair amount of history uh 43:02 43 minutes, 2 seconds from the 70s till kind of now uh where value focused uh sort of companies 43:10 43 minutes, 10 seconds actually tend to um gain share during times when inflation goes higher because of course budgets are tighter for people 43:18 43 minutes, 18 seconds to cross. Um so I think that potentially is a tailwind. Now of course there might 43:25 43 minutes, 25 seconds be a headwind in terms of uh you know what is the absolute amount that people are spending etc and some of these might 43:33 43 minutes, 33 seconds kind of uh act in uh counter sort of fashion. So we'll see how this kind of progresses but 43:42 43 minutes, 42 seconds high inflationary environments for value focused players are u generally kind of tailwinds versus not 43:51 43 minutes, 51 seconds that's all from my thank you thank you the next question is from the 43:59 43 minutes, 59 seconds lion of aliyasar shik shaki from motila mutual fund please go ahead yeah thanks for the opportunity uh just 44:07 44 minutes, 7 seconds wanted to understand the margin uh a little more detail. So uh uh you know what are the levers for the contribution 44:15 44 minutes, 15 seconds margin? One of course is your you know uh ad revenue uh but other than that uh I mean you mentioned that you know from 44:23 44 minutes, 23 seconds all the disruption that happened Q2 and Q3 you are now at the base. So is are there any more levers or how should we see contribution margin improving from 44:31 44 minutes, 31 seconds here uh you know in terms of levers more than uh you know the trajectory and second is below contribution margin 44:39 44 minutes, 39 seconds where do you think are the you know relatively lower hanging fruits that uh can play out uh in terms of you know operating leverage when your growth is 44:47 44 minutes, 47 seconds strong. Uh yeah those are the questions. 44:52 44 minutes, 52 seconds Sure. Um so I think when you look at contribution margin uh specifically we kind of uh look at this uh as a split 45:00 45 minutes between two components which is the ads related sort of margin as well as what we kind of have on the fulfillment side. 45:09 45 minutes, 9 seconds Um so on the ad side like we kind of mentioned uh as well we continue to see improvements and that revenue uptake 45:18 45 minutes, 18 seconds there would largely kind of flow down into contribution margin because cost of serving ads is fairly low. Um from a 45:26 45 minutes, 26 seconds fulfillment perspective now if you kind of think about the cost headers there there are multiple cost headers. Um 45:33 45 minutes, 33 seconds um you know it includes things like uh both the forward cost of serving an order how many of those orders kind of 45:42 45 minutes, 42 seconds become failed deliveries and hence we incur higher cost on those. So as you kind of bring down fail delivery percentage which typically kind of we do 45:51 45 minutes, 51 seconds through various initiatives right some of those we've mentioned in the letter as well. For instance, during the last couple of quarters, we have improved the 46:00 46 minutes amount of orders which used to get misouted because the geographical accuracy of uh addresses was uh sort of 46:08 46 minutes, 8 seconds lower or the kind of partners we were assigning uh was based in a more aggregated sort of fashion where we've made improvements and hence the rate of 46:16 46 minutes, 16 seconds failed deliveries has come down which consequently reduces the cost of serving an order on a blended device. um the 46:25 46 minutes, 25 seconds cost of sort of cash from delivery transactions which is kind of uh as a proportion reducing and hence uh 46:32 46 minutes, 32 seconds improving uh so on so forth. So there are multiple drivers within this cost line item. We obviously aggregate it as 46:39 46 minutes, 39 seconds logistics cost overall. Uh but here the typical trend you would see is we will keep reducing on a long-term basis the 46:48 46 minutes, 48 seconds cost to serve a customer and we will kind of operate u uh you know with a certain margin structure 46:56 46 minutes, 56 seconds from a fulfillment cost perspective and every other or all other kind of efficiencies that we have we'll keep passing back to our consumers in the 47:05 47 minutes, 5 seconds form of lower pricing in order to make our value proposition even stronger on pricing and that would kind of hold us in goodstead from a growth perspective as well. 47:16 47 minutes, 16 seconds Um coming to cost line items below the contribution margin. Um I think we've mentioned a few of them in the letter as 47:23 47 minutes, 23 seconds well but especially on kind of uh uh sort of technology and infrastructure 47:30 47 minutes, 30 seconds cost uh on kind of our our sort of people cost etc. those cost line items 47:37 47 minutes, 37 seconds will not grow in the same proportion as the NMD growth that we expect. So we do expect to see operating leverage uh from 47:46 47 minutes, 46 seconds those line items over the short as well as longerterm price. 47:51 47 minutes, 51 seconds Got it. This is very useful. Just two quick followups. So below contribution margin can one assume that you know the 47:58 47 minutes, 58 seconds benefit will be linear in terms of you know uh operating leverage and uh at the contribution margin level I mean you 48:06 48 minutes, 6 seconds know you've seen very sharp improvement in this quarter from year on uh should we uh believe that you know uh by ad 48:14 48 minutes, 14 seconds revenue whatever progress you do should benefit but beyond that it will be a very slow and gradual uh heavy lifting 48:22 48 minutes, 22 seconds that will improve contribution Yeah. So I think first of all on below 48:29 48 minutes, 29 seconds contribution line items um again I think each of them have different trajectories. So the three large cost line items below contribution margin are 48:37 48 minutes, 37 seconds the new new user acquisition investment that we have which I think as we mentioned we decide on the basis of 48:44 48 minutes, 44 seconds return thresholds versus any particular percentage of the MB number. Um on people cost I think generally we will 48:52 48 minutes, 52 seconds kind of have a uh operating leverage come through um over the course of next next few years uh again as the cost 49:01 49 minutes, 1 second growth there would be lower than uh NMP growth rate uh on technology infrastructure investments apart from the operating leverage there are also 49:10 49 minutes, 10 seconds contract cycles. So a large proportion of this cost is in relation to cloud providers and there we have a certain 49:19 49 minutes, 19 seconds contract life cycle of two to three years uh where we kind of renegotiate some of those contracts uh and as kind 49:26 49 minutes, 26 seconds of our scale increases we start getting larger discounts. So that also comes into future and hence the cont the the 49:35 49 minutes, 35 seconds sort of trajectory may not be specifically linear for moving these sort of two three year contract cycles. 49:45 49 minutes, 45 seconds Got it. And above contribution if you can just clarify. 49:48 49 minutes, 48 seconds Yeah above contribution margin. Um you're right. I think some of the more significant transient impacts that we 49:55 49 minutes, 55 seconds had had uh we kind of uh done away with those. Um I think there is still in 50:02 50 minutes, 2 seconds addition to ad revenues improving there is still some scope to increase our margins which might happen over three 50:10 50 minutes, 10 seconds quarters. U so the delta in contribution margin would be obviously slower than 50:17 50 minutes, 17 seconds what what has happened between Q3 and Q4. uh and their improvement would come both from ad revenues improving as well 50:25 50 minutes, 25 seconds as some data restoration on the fulfillment side as well. 50:31 50 minutes, 31 seconds Got it. This is very useful. Thank you so much for the detail answer. 50:38 50 minutes, 38 seconds Thank you. The next question is from the line of Yeshua Nagarval from Capital Asset Management. Please go ahead. 50:46 50 minutes, 46 seconds Yeah, I think congratulation on the sense of number clarification the report is on the basis of the orders that are 50:54 50 minutes, 54 seconds sh is that correct? 50:59 50 minutes, 59 seconds Sorry, could you repeat that question using your voice of Yeah. Is it better now? Yes. 51:05 51 minutes, 5 seconds Yeah. Uh the LMG number that we is on the basis of orders sh or paid. Is that correct? 51:14 51 minutes, 14 seconds So NMBB is on the basis of orders delivered and not returned. So it is not shipped. Basically GMBB is basis number 51:24 51 minutes, 24 seconds of placed orders and NMBB is basis number of delivered orders. Uh and I think we've kind of shared disclosures 51:32 51 minutes, 32 seconds around this in the data book uh that be correct. Uh and after that has that number has been 80% since last year. So 51:42 51 minutes, 42 seconds has the trend been changed the after 26 as well? 51:47 51 minutes, 47 seconds Yeah, I think uh roughly the NMBB to GMBB ratio has been between 58 to 60% for the last 3 years. Uh I think for 51:55 51 minutes, 55 seconds FI26 as well the number is about 58.8% % uh specific I'm talking about the numbers of the 52:03 52 minutes, 3 seconds orders shipped after return uh divided by orders that number has been around 50% 52:11 52 minutes, 11 seconds orders shipped after returns I don't think we disclose uh these numbers so I I won't be able to 52:19 52 minutes, 19 seconds okay okay I will check it later on okay uh my other question is uh on the fail edition especially those those who are 52:28 52 minutes, 28 seconds nonst to the district uh maybe satisfaction on that. Um we have been seeing that uh the decision in last one 52:36 52 minutes, 36 seconds year has been pretty strong. Uh so how has the return rates have been uh and is that increased meaningfully and if yes 52:45 52 minutes, 45 seconds then as a platform what are we doing to now manage the quality control? 52:54 52 minutes, 54 seconds Yeah. So I I'll take this question. So actually like the quality of sellers 53:01 53 minutes, 1 second even in non BST that we acquire are pretty good and our systems have been built over the last 10 years that it 53:09 53 minutes, 9 seconds takes into account how the quality of a news center on boarded in the platform. It's their quality is not that great. 53:16 53 minutes, 16 seconds They do not get visibility or orders and products that have very good quality continue to scale on the platform. And 53:24 53 minutes, 24 seconds the number that we share are of people who are active on the platform which means they're getting sales on the platform. So these are people who have crossed that threshold. Um so actually 53:33 53 minutes, 33 seconds return the thread would not be a problem. We've seen our returns to be quite stable every year actually uh in return. So non GST sellers 53:42 53 minutes, 42 seconds impacting that metric is not going to happen because we have quite robust systems built in uh to take care of it. 53:49 53 minutes, 49 seconds Now the reason this number is growing fast and I think will continue to grow at a fast pace is because you said in the past if you look at total number of 53:57 53 minutes, 57 seconds businesses in India that these products is tens of millions and that number used to be sub million for us because non GST 54:05 54 minutes, 5 seconds sellers were not allowed to sell on online now that has changed so we believe there's going to be a big uh a 54:13 54 minutes, 13 seconds big focus for us as a platform but even like a large base of sellers who really want to come online and go their business and that will keep reflecting 54:21 54 minutes, 21 seconds in the growth of these businesses on our platform. 54:26 54 minutes, 26 seconds That is interesting. Uh my next question is on what would be the average number of HTUs per order and uh and is trying 54:35 54 minutes, 35 seconds to be aggressive here by offering shipping on second limit from the same customer 54:41 54 minutes, 41 seconds effectively less than 60 rupees per two SKUs. So uh what are our views on that and could that show anything? 54:52 54 minutes, 52 seconds So the way our platform has been built it is to kind of ensure that uh users are kind of placing orders as 54:59 54 minutes, 59 seconds frictionlessly as possible and kind of uh hence the number of SKUs per order uh 55:07 55 minutes, 7 seconds are are uh pretty close to one or sort of slightly higher than one. Um from a 55:15 55 minutes, 15 seconds consolidation perspective again in our business because a lot of these orders are shipped from within sellers and their factories directly to consumers. 55:25 55 minutes, 25 seconds Uh we have been identifying opportunities of consolidation wherever we can within the supply chain. But 55:32 55 minutes, 32 seconds these are not warehouse origin kind of uh orders which is typically the case for some of the other players. And hence 55:39 55 minutes, 39 seconds I think u our focus is not so much on increasing um sort of ST per order uh as a metric. 55:51 55 minutes, 51 seconds Thank you and best wishes. 55:54 55 minutes, 54 seconds Thank you. The next question is from the line of Sam Patel from Equid Securities. Please go ahead. 56:01 56 minutes, 1 second Uh thanks for providing me the opportunity and congrats on great set of numbers. My first question is on the advertisement uh comments that you 56:09 56 minutes, 9 seconds provided like what percentage of our sellers are currently actively spending on advertisement versus let's say a total base of 9 lakh 60,000 sellers that 56:18 56 minutes, 18 seconds we have and extension of that is like given that sellers are ro sensitive what 56:25 56 minutes, 25 seconds is the minimum RO threshold that needs to be provided to the sellers across categories so that's the first question 56:34 56 minutes, 34 seconds sure I I think more than twothirds of our sellers when rated uh by GMV uh are 56:41 56 minutes, 41 seconds active on ads. Uh having said that I think again an important driver is not just kind of looking at number of sellers active on ads but also how many 56:50 56 minutes, 50 seconds products are they advertising on and that is the core metric that we kind of consider which I'd mentioned has grown 56:58 56 minutes, 58 seconds by about 40% Y. Um so again we continue to see good progress there from a 57:06 57 minutes, 6 seconds minimum ras uh threshold perspective I think obviously it varies from category to category there's no uh sort of 57:14 57 minutes, 14 seconds specific number that we look to solve for a lot of this is market dynamics driven margin structure of those 57:21 57 minutes, 21 seconds categories etc uh and we don't kind of control these numbers and they're more sort of market set so I'd not be able to 57:29 57 minutes, 29 seconds comment on specific thresholds Understood. That's really helpful. Now my second question is uh the miso mall 57:36 57 minutes, 36 seconds NMB is growing really well for us. So now as you move beyond let's say unbranded goods and into uh from 57:44 57 minutes, 44 seconds unbranded goods to FMCG and beauty, how does the contribution margin for mall transactions compared versus our core marketplace business? 57:54 57 minutes, 54 seconds So I think at this point in time our focus is not on expanding the contribution margin. So the contribution margin would be lower than the whole 58:01 58 minutes, 1 second marketplace because yeah right now in the investment phase our goal is to onboard a lot more brands a lot more selection uh across the country introduce it to more of our consumers. 58:13 58 minutes, 13 seconds So since it's in the investment stage, the focus is not on maximizing contribution margin. I think that phase will come when the product has and the 58:21 58 minutes, 21 seconds business has more matured and I think that's going to be um the phase for us for the next few years is going to be 58:28 58 minutes, 28 seconds the investment phase. We want to grow this really fast. Make sure that every brand considers mall a critical part of their distribution and until then we are 58:37 58 minutes, 37 seconds not going to focus so much on contribution. 58:41 58 minutes, 41 seconds Understood. That's really helpful. My last question is uh you have uh provided good data around uh user cohorts. Now uh 58:48 58 minutes, 48 seconds uh similar to that if uh if you can just let's say talk about how the seller covers are evolving and uh is the 58:55 58 minutes, 55 seconds stellar concentration increasing or uh uh it's decreasing. So any flavor around that would be really helpful. Thanks for comment. 59:05 59 minutes, 5 seconds Sure. I think we had provided some of this disclosure as part of our DHP. uh in terms of trajectory since then the 59:12 59 minutes, 12 seconds concentration on sellers continues to kind of reduce as we have more and more sellers uh who kind of become active as 59:21 59 minutes, 21 seconds well as larger on the platform. So that uh number of sellers who kind of form the paro of uh the platform uh continues 59:31 59 minutes, 31 seconds to be uh continues to kind of increase at a fairly rapid pace as well. 59:39 59 minutes, 39 seconds Thank you very much ladies and gentlemen. We we will take that as the last question for today and we thank everyone for the for the participation. 59:47 59 minutes, 47 seconds On behalf of city that concludes this conference. You may now disconnect your