BLACKBUCK LIMITED (BLACKBUCK) Q4 2026 Earnings Call Transcript

Good evening, ladies and gentlemen. Welcome to the Q4 and FI26 earnings conference call of BlackBuck Limited hosted by Radhi Capital. As a reminder, all attendees will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. If you have any questions, please feel free to press the raise hand button. We will call you on in turn and unmute your line so you can speak. Important note, if you need to ask a question, please ensure Microsoft Teams has permission to access your microphone when you log in. Otherwise, you will not be able to unmute. Please note that this conference is being recorded. Kindly also note that the audio of the earnings call is a corporate material of BlackBug Ltd and cannot be copied, rebroadcasted, or attributed in the PR media without specific and written consent of the company. Please note that anything said on this call that reflects the outlook towards the future, which can be construed as a forward-looking statement, must be reviewed in conjunction with the risk that the company faces. A copy of the disclosure is available on the Investor Relations section of the website as well as on the stock exchanges. To give you an in-depth understanding of the company and answer all your queries, we have from the management side today, Mr. Rajesh Kumar Naidu Yabaji, Chairman, Managing Director and CEO, And Mr. Satyakam, Chief Financial Officer. I now hand over the conference to Mr. Rajesh for his opening remarks. Thank you and over to you.

Uh, uh, thanks, Vinita. Uh, are you able to hear me? Is it, uh, clear?

Yes, yes, yes.

Good. Thanks, Vinita. Uh, ladies and gentlemen, good evening. Uh, welcome to, uh, our earnings call of the financial year 2526 end and for the Q4 of F526. Um, You know, as in every earnings call, just, you know, re-articulating what we're trying to build at BlackBuck. BlackBuck was founded about 11 years back to solve the trucking problem of the country. Any space you pick up within trucking has massive opportunities, massive inefficiencies because of the fragmented nature of the space and application and use Use of technology. There are possibilities to lift it out and put it in an orbit where a new world of trucking for India could be imagined. That is how the whole journey of BlackBug started. We have toyed around with a lot of experiments in this space. As we speak, BlackBug's definition today is nothing but all the experiments, all the successes we've got over the last 11 years, which has... You know, taught us a lot. We've learned a lot. And what has become is the largest digital platform for truckers in the country. We have close to about. 8, 8.5 lakh monthly transacting customers on average across the whole financial year, which roughly represents at an India level in excess of 25 to 30% close to of Indian truckers using this platform. And they use this platform very deeply because the platform we have built has so many use cases solving for the trucker that he ends up spending 45 minutes on our platform, our mobile app, BlackBug daily. And because of the nature of the business, nature of the customers we have, we've got a very strong offline presence, having over 10,000 touch points on the ground, through which we service, through which we acquire and retain our customers. That's the, you know, crux of what BlackBuck is and what we've built. Diving into a summary of numbers of last financial year, on a gross income level, we have done close to about 715 crores in total income, which is growth of about 55% on a year-on-year basis. On a EBITDA basis, we have done close to 167 crores, which is an 80% growth on a year-on-year basis. This is our first full year of profitability at a PAT level. We have done 160 crores in PAT in the full year financial FI 2526. Not only the financial numbers, we continue to compound on our operating metrics, which are the top of the funnel metrics for our revenues to grow and compound. We grew in our transacting customers by 13% on a year-on-year basis to close to 8.2 lakh monthly transacting customers across the whole year. Users who use more than two services, who are our power users, we've compounded at 22% year-on-year. That's why you find the revenue to be compounding much stronger than the transacting customers because customers use more and more products on the platform. One of the leading metrics on payments vertical is tolling. The GTV of tolling for us in the last full year grew at about 27% on a year-on-year basis in a very, you know, matured and penetrated industry, largely driven by a strong product play and a distribution play. So, speaking about the core highlights of this growth, more talking about the recent quarter of FI26, the last quarter of Q4, FI26, year-on-year growth on the Q426 basis, we did about close to 52% on a year-on-year basis. And if we split that into core and the newer businesses or the growth businesses, core businesses grew by about close to 30% on a year on year basis in the last quarter on a full year 34%. This business, obviously, you know, on the back of the, you know, the payments business, which is tolling business grew at 27%, which we spoke about. In the GTV growth was 27%, which is forgot in the last slide as well, which when you compare to the NETC-CV growth, which was about 16%, so still driving 11 percentage points, you know, delta over the industry growth, largely because of a strong product and largely because of the strong distribution. Overall business definitely has grown at a higher level, largely because a stronger growth in the telematics business, which continue to deliver strong sales numbers. Under telematics business, we have different product categories, where there is a basic GPS, basic vehicle tracking service, then there is a AIS specialized vehicle tracking service, which is largely driven through mandates. The sales of the AIS vertical doubled during the last quarter, which was largely driven by mandates and largely driven by a strong distribution and a product play. So that's the narrative on the core business. So, coming to the growth businesses on a year-on-year basis, they grew roughly close to about 300% in the Q4 of last year, right? Largely there, the gross revenues are composed of the vehicle finance business and the superloads business. Superloads business, the narrative continues to be the same. Our matured, or let's say our first hubs of Bangalore and Hyderabad, we continue to scale, continue to double down, and these continue to show signs of strength from a unit economics from a scale perspective. We had updated to you a couple of quarters back that we started our business in 10 new cities. And most of those cities or all the cities are growing much faster than the earlier established cities. And largely because of the network effects of existing customers relationships, if you've activated in the older cities, they have translated to the business for these cities directly. And the supply base, which was activated on super loads in the existing cities, continue to get activated, continue to be leveraged and utilized in the new cities as well. So that narrative continues to be the same, and we're doing everything it takes to grow that faster. In the vehicle finance business, which is, you know, under the growth business, a bit older business, you know, compared to super loads. There, this last two quarters were very strong in terms of disburses for that particular business. The previous quarter, we delivered a growth of 30%. On top of that, the disburses further grew by 25%. Definitely a seasonally strong quarter for that business. But on top of that, strong execution has led to driving this growth. Good part about the vehicle finance business under the growth business umbrella is that, as you all know, we basically are investing a lot of money in our growth businesses. A lot of money which we generate in the core businesses, we are investing in the growth businesses. Vehicle finance business, probably by the end of this financial year, would no longer be in the investment mode and would start probably churning, you know, cash flows, Which will also enable us to move that into a core business kind of a trajectory from a narrative perspective. Moving forward, commentary on profitability. Broadly, following the trends of the last three quarters, overall yearly growth in EBITDA has been at 84%, which has moved to 190 crore trajectory, which we spoke about. On a recent quarter basis, the growth in profitability is 30% on a year-on-year basis, and we delivered a 50.2 crores of adjusted EBITDA in the last quarter. Largely, the narrative, if you cut across, The momentum and the quality of revenue growth and profitability growth has largely been consistent compared to the last 8 to 12 quarters in the core businesses. Regardless of a bit of, you know, unfavorable macro headwinds in the last quarter, we continue to execute and deliver this profitability, right? And even if you look at metrics like operating leverage in terms of translating the revenue growth moving into profits, most of that is holding good in the core businesses as we speak. Moving into the newer businesses, that's where we, you know, continue to step up our investments because these are in the rapid expansion phases. We are conducting multiple experiments, be it on the supply side, be it on the demand side, be it for faster scale up, be it for quality customer service, be it for, you know, maximizing profitability, be it for, you know, blitz scaling in certain customer segments. We are taking up most of these experiments parallelly, which makes it imperative to add teams, add product and technology, you know, team members. This is also the area of strong investments in AI for us because Superloads probably will be one of those businesses which will be an AI native business for us as we, you know, strongly execute this, you know, vertical. One area we wanted to give a heads up, I think this is something which is not a hidden topic, but everybody knows about this, probably being in the heavy truck movement, intercity movement, which typically can feel the headwinds maybe quite early on compared to others, right? So we believe that the West Asia conflict, which is a widespread conflict, not only for us, but for the whole Indian economy, will have short term headwinds with anticipated drag on trade movement. And which obviously, because most of our revenue comes from flow throughs, but we continue to climb on our revenues that will be consistent, but maybe create a drag on our short term growth, long term growth profile, long term projection of how operating metrics will play around. Everything will always remain the same. Long-term retention rates, long-term ARPU rates, everything will be consistent. But I think in the short term, there would be some headwind which we need to be watchful of, we need to be prepared into, and we are actively doing that. One small narrative on that, which is a very direct impact is, you know, as you know, that we make, we have a fuel business which goes on, which is basically built on top of the loyalty program, which OMCs, you know, work on. And they have suspended their loyalty program temporarily. Good, like, that's a bad part. The good part is, this has happened, you know, a bit of hiccups on this business segment has happened in the past as well. And some of this takes a bit of short time. Then it comes back. But yes, so some of these headwinds, you know, minor headwinds you'll be facing. Some of this impact has already been absorbed in the last quarter's profitability. And some of this impact will show up in the next quarter as well. But again, reiterating, none of these is a structural change or none of these impacts long-term customer acquisition, neither long-term customer retention, neither ARPUs, and yeah. So that's the broad narrative on the business. Giving you a broad highlight on the P&L, as we have narrated already, on the top line, 46% on a quarterly year-on-year basis, on a full year basis, 55%, net revenue growth 31% on the recent quarter on a year-on-year basis, adjusted EBITDA growth of 30%, right? Right. And full year, as you can see here, adjusted EBITDA is 190 crores and PAT is 160 crores. And we've always given this narrative that our adjusted EBITDA mimics the free cash flow from operations. So in the full year of financial year, we've delivered close to 185, 190 crores of free cash flow, which has been a consistent trend of EBITDA to adjusted EBITDA to free cash flow conversion for us. And that's, you know, again, on adjusted EBITDA basis, a growth of full year growth of 84 percent on a year on year basis. Broadly zooming out and giving you a four-year view, broadly from the timeline we went public. So that, you know, you guys would be, you know, it's easier to look at these trends, because we articulated, you know, that this is sort of the business model, which will, you know, be playing out. So if you can see on adjusted EBITDA basis, from FI23, where we were in a strong, strong user acquisition mode, we continue to be in a strong user acquisition mode, but the annuity revenues had not played out till then. And that converted into roughly close to negative 6 crores in FI24 and then turned around a strong profitability on it just a bit at 103 crores last year. That has moved up to 190 crores. So that's a fillip of, you know, close to 400 crores, 360, 400, 364 crores over a three-year sort of a time period. Same thing on PAT is even more stark to observe from a negative of 290 crores in FI23. That's a 450 crores turnaround in profitability in three, you know, financial years. And that will be that has been the trend. And as we have accelerated in FI 2526 into newer businesses, we are investing, you know, the core businesses will have a continuing follow through trend as these as as you can see here. But the growth businesses will consume money, and in the overall basis, we will have a balanced trade-off of continuing to churn profits from co-businesses and continuing to invest in the future so that, you know, we probably end up building a massively large company and massively transformative company in this space in the long term. Reiterating the strategy. As I always explain, I personally take a pride in executing the same strategy every year, because that also gives a testimony that the strategy articulated a year back largely, you know, was profound and sound. And it helps us, you know, have a longer run through and our decisions stick with the test of time. So, strategy largely remains the same that we have core businesses on tolling, fueling, fuel sensor, vehicle tracking, ASGPs, and multiple experiments within the core businesses, the new businesses and the core. Here, the key focus will be to continue to compound on profitability, which will be enabled through operating leverage, will continue to expand our market share. As the landscape continues to evolve, you know, because the space is attractive, continues to, you know, will continue to attract few players here and there. So we will keep track of that and we will not let the long-term picture, you know, go out and we will, you know, keep investing in this business as well. And, you know, while we've delivered consistent operating leverage in this business in the last two, three quarters also, we've also stepped up investments in core businesses as well. Last time I highlighted that, I thought I will remind that again. In the growth businesses, again, the playbook is same. We are betting on super loads and vehicle finance over here. And classifieds continues to grow. And we have, you know, an armory of new experiments to continue to do. And these are the businesses we believe in with a very long term potential. And, and as we execute the roadmap continues to get clear, the confidence on execution in these businesses continue to, you know, improve. And, you know, some of these businesses, if God's kind, and we execute well, will move into the left side of core businesses as we move into the next year. So, yeah. So, simply put, doubling down on execution in the core and turning more and more innovative and stepping out investments on the growth businesses. That's a summary of the strategy for the next year as well. We will pause here and we can take questions. That's from my side.

Thank you. We will now open the call for questions. Kindly raise your hand to ask a question. We will unmute your line. Please announce your name and organization name before you ask the question. And as a reminder, we request all the participants to restrict themselves to two questions and come back in the queue. The first question is from the line of Atul Borse. Atul, please go ahead. Unmute your line.

Hi, Tim. Hope you can hear me. Thanks for the opportunity. My first question is basically on the super low business. While you have mentioned in the PPT that Bangalore and Hyderabad are showing strong unit economics, do you want to elaborate a bit on this? Like, are these hubs operating on breakeven? Any quantifiable metric that you can share or highlight? That's my first question.

Yeah, I think largely it depends on the, you know, it's a technology business enabled through manpower, right? So the cost, the direct cost of business are manpower costs. So largely upon tenuring of manpower, you know, people hit break-even periods. So more tenured manpower is definitely, you know, definitely, you know, returns money to the company. Newly hired manpower does not. So, from that point of view, it's consistent, right? And upon continuous scalability, the equation continues to hold. So, that's the strengthening unit economics part. And, you know, when you launch a new business, you first reach an ability to plot a P&L for the business in the future. I think we are able to do that strongly. And, yeah, I think that's all we can share at this, you know, point in time.

Just from that space, are we continuing to invest in our existing cities as well for the manpower, like we are increasing manpower in those?

Yeah, we are, we are. We continue to scale teams rapidly in the existing cities also. If we stop that, we can side-break even very fast, but that's not the objective.

Okay, understood. And in the vehicle financing space, could you shed some color on like what's the book size as of FY26, how much is on our books, or let's say, disbursal growth or ticket size growth, any metrics you want to highlight?

Yeah. So close to 600 crores is the assets managed by our partners overall, like partners in our books. About 10%-ish is basically on our books. Their strategy remains constant. Basically, whenever we onboard a new partner, for the new partner's confidence, we do a, you know, co-lending book together and any new experiments. So, if you see our book, large part of the book is new experiments as well. So, anything we want to launch or we want to see, we first perfected on our book. So, our book, we will only use, you know, for newer experiments and to probably launch new partnerships. So, we continue to build the vehicle finance on asset-light model as we have always articulated the last three years. The strategy remains the same. Yeah. And as you always understand, because we get a sourcing fee and then we get a, you know, let's say operational fee continuously. So as and when partners make more and more money from the book, the revenue share, you know, in revenue, absolute revenue made by us also increases. So that's the broad nature of this business. And the fixed costs, if they get covered out, this business will enter the break-even phase.

All right. If I can just squeeze last question. You've seen the improvement in your working capital days, mainly because payable has increased. Where is that coming from? Is it like mainly because of the super loaded business?

Yeah, I'll ask Nathya to take this question.

Yeah, working capital days always has been pretty robust for us. If you can see, no receivables exceed more than three months. Everything comes in like more than like some of, at least 50% of the revenues are received in advance for a year. If you look at the telematics business, on the other businesses, it's less than 30 days. On payables, there's nothing much that is there. It's a very small number. Some of the, let's say, purchase of telematics, etc. is what would be the AP that would have been built up, but nothing material has changed.

Okay. Okay. Thank you. Those are my questions. Best of luck.

Thank you. The next question is from Raghav Mittal. Raghav, please unmute your line and go ahead.

Hi.

Good evening. Thank you for taking the question. I wanted to touch upon, Rajesh, on the MLFF system that the government is now aggressively trying to target. I mean, the couple of pilots, as per news articles, has gone well, and they're targeting like 200 corridors in a couple of years and potentially nationwide rollout by 2029-30. So can you just talk about MLFF being postpaid? Of course, you can also have a prepaid fast tag wallet, but... How do you think about our relevance to our customers sort of reducing over time? And how do we mitigate that? Thank you.

Yeah. So basically, the whole framework of MLFF is on prepaid collection. That's point number one, right? Because in India, small ticket sizes, postpaid and enforcement and the cost of collection of that is going to be very high. And even now, in the current framework, if you pay later, there's a penalty fee of double. Right. So, when you use the word postpaid, first of all, it will be prepaid. Right. And second is that in the MLFF construct, right, the way to understand is that there are two ecosystems. There is a acquirer ecosystem and there is a issuer ecosystem. 100% of our revenues are from the issuer ecosystem. The MLFF replaces the existing acquisition ecosystem to a MLFF-based acquisition ecosystem, which uses cameras and much better quality RFID readers. So that's the construct. And in the in the in the full scale rollout of MLFF as well, the the payment ecosystem that the payments methodology is basically fast act that is what has been articulated and that will continue. So point number one, the relevance of issuer ecosystem in terms of fast act being the, you know, lead vector of, you know, conducting payments from the issuer side is going to be there forever. However, now, so that that's like base case, right? Then the next context is MLFF graduating into a satellites based system is basically the next thing in even in that change, the change is again on the acquirer ecosystem, not on the, you know, issuer ecosystem. That's like even if you even if you fast forward MLF into the satellite and GNSS based tolling era, right? Now answering your I have a question on, in MLFF again, right, because MLFF again provides an opportunity on the acquisition side, you know, to enter, because largely it's a, you know, it's a telematics-led capability with a technology stack-led capability, and being present in this ecosystem for a long period of time, would we as BlackBuck, you know, would be looking at keen, like keen to participate on the acquirer side, right? So that is something we are, like, let's say, in talks with various players to discuss and see if we can, you know, jointly enter into some of these, you know, these opportunities as we move forward.

Thank you. That's very helpful. Just as a follow-up, what percentage of MLFF payments today are prepaid? Is it 100% or is it lower? Because I might be wrong. From what I read, it's like, yes, there's a penalty if you don't complete the fine with the stipulated period, but it's a post-rearrangement.

Whatever offline information we've received, we believe 99% plus of the payments are prepaid. Okay. And what kind of opportunity? Because if the tag doesn't have a balance, it's considered as an offense as per the way it is defined. And there is a penalty for it, that you don't have a balance in your tag and you've crossed it. It's a penalization framework and not an encouragement of postpaid framework.

But how will we even check the tag? Because there is no barrier where you're stopping to check your tag.

So, the whole gantry system which is created on top of the, like, toll gate, the RFID readers, which erstwhile used to be very close to the RFID tag, are now on top of these, you know, gantry systems, number one. And number two is that they're using cameras to read the number plate and government with one vehicle, one fast tag has already implemented the unified mechanism where a truck or a car only has one fast tag. So with this whole ecosystem, they are able to achieve this high level accuracy of collections.

Okay, and lastly, what kind of partnerships are you exploring when it comes to the acquired side of things?

We are in very early stages of exploring these. Once there is more concrete plan on this, we would be happy to share.

Okay. Thank you so much. All the best.

Thank you. Participants, please announce your organization name before asking the question. Next question is from Mr. Ritvik Agarwal. Ritvik, please unmute your line and announce your organization name and go ahead.

Hey, hi, I'm Noram. My name is Ritvik. I'm from 3B Investment Managers. I just had one question. I wanted to understand more on the telematics business. Any updates on the number of telematics devices that we have now, and how do we see the growth in this business going forward?

Yeah, so telematics business growth, you know, I'll give you some color so that you will be able to get a feel of where the devices may be, etc. Right. So basically, if you split the business of telematics into, you know, three to four parts, one is our, you know, core vehicle tracking device, which is regardless of mandates, which is a basic, you know, GPS tracking. Second is the AIS, you know, device, which is driven by mandates, right? And in terms of your third is your fuel sensor. And let's say the new initiatives like dash cam, etc, right? The basic GPS device penetration, obviously, coupled by a bit of cannibalization by AIS, because AIS is now mandatory across 10 states, which drives the growth of AIS. But for the basic vehicle tracking device, that growth rate, like let's say, you know, is on a lower side, right? than the overall core business growth rate in the range of that 15% levels. The AIS device, because it's a mandatory device in various different geographies, etc., is seeing a very strong growth. As we also gave you a narrative that over the sequential quarter, we doubled the AIS numbers as well. So sales is increasing at a very fast pace, and revenue will follow suit in time or the other. Fuel sensor business, again, because it's a newer business in the stack, that continues to compound, right? So, overall, as a telematics category, because of a mix of each of these, you know, kind of, you know, businesses sort of put together, delivers a much higher growth rate, right, than the rest of the, you know, core businesses. This is the broad model to understand.

Understood. And the second question on the disruption from the Middle East world, just wanted to understand, is that the reason why we have shifted to a tooling GTV only metric?

Yes. Yes. Yeah. To be able to better appreciate what's happening beneath, we segregated that metric and started giving tolling GTV so that, you know, that's the largest part of the payments GTV also and also drives large part of the revenue also. So that gives you a direct indicator.

Any sense on how much percentage would be tolling GTV of the total payments GTV so that we can make a...

I think broadly, like, you know, I think broadly, you know, you can assume 90%-ish, basically, yeah. Understood. Okay. That's all from my side. Thank you.

Thank you. The next question is from the line of Jitu Punjabi. Jitu, please unmute your line, mention your organization name, and go ahead.

Hi, Jitu Punjabi from EM Capital Advisors. So I joined a little late, but a basic mundane question. When I see your growth numbers, they look pretty good, and then your margins have come off. Is this a function of you investing in the growth businesses and those costs adding up, and does the margins have it softer?

Hi, I can't hear you.

Sorry, Jitu, we lost you. We only heard part of your question. Okay, I'll repeat.

Can you hear me now?

Yes, we can hear you.

Okay, so my question is, sorry, I joined a little late, but the headline question was, and I saw the growth numbers, your growth numbers look good, but your margins have softened. Is that a function of y'all investing more capital or more money into the growth businesses, and thus those costs adding up and coming and hitting margins?

Of course. Yes.

Okay. Second linked question is, is there a thought process in terms of the balance between growth and profitability, and how would you manage that as you navigate the next three, four years, and also what is, in your mind, the growth that you'd be comfortable with for the next Euro 2-2 guide?

Yeah. So, I think a good question, but I think the way we think about growth and the balance of profitability is a little opposite because for us, growth is actually an outcome because we don't like, you know, we don't manufacture a growth rate. Let's say, for example, core businesses are there. They are basis some of the strong fundamentals of the economy works and how our acquisition engine works. Right. And at every point in time, we try to go into invest till the time, you know, it's not profitable to acquire that customer anymore. Right. So that's the way we go about driving growth. And the growth percentage comes as an outcome. Right. That's point number one, because, you know, getting a customer in an unprofitable way doesn't help. You know, the company doesn't help anyone in the long term because that's not sustainable. Right. Point number one. Point number two on how do we balance growth versus profitability from a long run perspective? Again, whatever number compounded profitability number you are seeing, it's again not a, you know, not a calculation that we should have done 100 of core profit and then we should have, you know, invested only 20 and 80. We should deliver as profit. Again, that's not a number. We are in a very large industry. Right. It's a 200 billion dollar kind of an industry. And we've built a company which is very small till now. And there are so many avenues to grow, right? So the way we look at always is that are there opportunities to pursue? Are there like, let's say, and in the testing phase, what will it take to really invest into, you know, these opportunities and God's being kind, the kind of platform we have built, most of the new opportunities we're able to test it out on a very small base. So that even does not ever affect burn. The burn comes in only when, you know, we try to scale up and that scale up has a very strong bar on being able to define micro markets, being able to define ability to turn profitable whenever we want. Right. So the way to look at is we define the quality in which we want to build a business. And inside that, if we get an opportunity to invest and an investment makes sense. Right. We like typically look at allocating capital regardless So what that quantum is, right? So this is our framework of going about newer initiatives and the existing core businesses because this just keeps it very clear in terms of that, you know, we are building a company which always has to be highly innovative. We will invest in every opportunity we get to if that's going to be long-term profitable and that's going to solve a customer's problem and that's going to return immensely to shareholders in the very long term, right? So that's how we look at it and whatever you are seeing, it is an outcome of, you know, such an input process.

And thank you. And that helped clarify a lot of things. But what kind of growth, headline growth do you think the company would sustain at?

I mean, we as we like generally don't give growth guidance. I think, you know, this is, you know, yeah, we've typically helped you guys to plot how to, you know, look at the business, how it is scale, etc. But yeah, but we have like we've decided not to give guidance, you know, on our numbers.

Okay. And one last question, if I may sneak in. There was someone on the senior team who left. Can you talk about the reasons and what happened there?

So, we've spoken about this topic in the past, like the team at BlackBuck, which reports into me, typically has an average tenure in the company of like eight years, right? And that was the case even when, and the company is like 11 years old. And that was the case even when we were going public, because we were going public when we were nine years old, and the average tenure of people who were reporting to me was seven years. So, they were like the earliest of the employees, built the whole company, did, you know, good for themselves, right? So, one of them, two people left as, you know, three people left from an S&P perspective, right? You know, one of them, I think, left within about two to three years, and other two of them were very long with us, seven to nine years. One of them left to pursue building his own company. One of them left to pursue more balance on health, etc. So, that's the context.

Okay. Thank you very much. Good wishes. All the best.

Thank you. Next question is from the line of Ankush Agarwal. Ankush, please unmute your line and mention your organization name.

Yeah, hi. Am I audible?

Yes, you are.

Yeah, hi. This is Ankhush from Search Capital. Just one question. So, a few quarters back, the growth business was, I'm looking at net revenues, was around 10, 11 odd crores. And last few quarters, as we have scaled up the superlots, we have reached around 15 odd crores. Say run rate, so about 5 crores extra. What I'm trying to understand is when do we expect this say 5 crores of super roads kind of net revenue starting to become say 20, 30, 40, 50 crores kind of number because in terms of cost, I think even if we consider that there are some extra incremental investment in the core business, the cost base has jumped from say 70, 75 crores to 100 crores now. So, obviously, the investment look kind of high versus the incremental net revenue that we're generating on the super-loads, like 4-5 curls, quite basic, to be honest, to begin with.

Yeah, so I think the answer is absolutely right. I think the question is absolutely right. I think the pace of superloads definitely could have been, you know, much stronger. The, you know, in terms of when that would, you know, come through, probably when the confidence on really going further all out in terms of strategies across all the newer hubs, etc. Maybe I think that is the time when such kind of scaling can be expected. And talking about the increase in the overall costs, remember that the investments in the core businesses also have been stepped up. So the number which you're looking at it, a good part of that, like let's say, has also gone into the core businesses. It's not only the cost of super loads, right? And a good part of that also has gone into scaling up of vehicle finance, though vehicle finance, like the revenue growth of vehicle finance continues to be at a higher pace. And the investments, you have an increase in investments, obviously, right? And a part of that has gone into super loads. So completely is not super loads, point number one, point number two, definitely the growth rate could have been faster, right? And that's also our pursuit, you know, to make that happen. But as we have always, you know, maintained the playbook building on super loads, you know, is taking time. And, you know, we are also taking an air native approach to ensure that, you know, we build the business in a much, you know, faster way and a better way. And so that's some of the narrative on how we are, you know, going about it. But yes, you know, we can expect that. We don't know when. Is it like, you know, one year down the line or two years down the line? But then, yeah, that's the goal. Exactly.

I mean, the reason for asking this was, I think we peed in terms of profitability, say, back in Q1 of F526, almost 36% of, say, adjusted about the margin, and now we have sort of stabilized around 31 odd percent. So just once trying to understand, is this the kind of profitability that we could expect for, say, next one, two years during which you sort of scale super loads and some of the newer growth businesses? Because unless those businesses scale up quite rapidly, the profitability might even come down or say at this stable level about 30-ish percentage. Is that the right way to assume that that's how things play?

Yeah, I think the way the earlier gentleman was asking the question, right? Profit percentage is actually again a much more further outcome. Like, let's say, because we generate X in core, we invest Y, now we see rapid growth, we increase Y, right? X largely follows secular trend, which I was mentioning, follows the operating leverage construct, follows the growth construct. Y is all independent on that quarter need and probably subsequent two, three quarters, right? So I would say that it's hard to put a number to this, but the way to look at it is an outcome metric, and it is, you know, determined by X plus Y, and if X minus Y, in fact, Y is a negative sign, and then depending on what Y is, your X comes, and X divided by overall net revenue is a percentage. So, that's why you see, because the overall revenue growth happens, like, and then there is increase in burn also, and then you have a profit which also increases. So, it's a pretty much composite metric, right? X minus Y by total R, right? Rx plus Ry. So, that's how you should look at it. Right.

So would it be possible to sort of split like how we're splitting revenues for the core and, you know, growth business? Would it possible to split the profitability as well? Because then it's better for us to appreciate how the core business is playing out and the investment if you're doing in a growth business and even if there's burning cash, I mean, that is understandable as investors. But if we have a combined metric, it is very difficult to judge how the core business is sort of, you know, performing.

I fully agree with you, but I think we believe it's still too early. We will evaluate this, you know, down the year on when can we improve the visibility. And I definitely understand your pain because modeling is tough for you.

Okay, that was all. Thank you.

Thank you. The next question is from the line of Arun Sirumalai. Please unmute your line, mention your organization name, and go ahead.

Arun, please unmute yourself. That was the last.

Sorry. The next question is from the line of Abhishek Banerjee. Abhishek, please unmute yourself and go ahead. Please mention your organization name.

Hey, this is Abhishek for my sake. Hey, thanks for the opportunity. I wanted to understand just, you know, a couple of things. One is, you gave kind of a cautious outlook on, you know, the Middle East conflict. Do you, I mean, how bad? You know, do you see your revenues getting impacted? As in, if you could give some idea whether, you know, it's a growth slowdown or could there be some sort of a decline also, that would be, you know, really helpful. And secondly, on the vehicle financing business, and this is a question that I keep getting from investors, so I wanted to also check with you. Is there any right to win that we have in this business? Is there something of a unique offering that we are doing which is kind of giving us the confidence to, you know, try to build here, given that there is already, you know, enough number of NBFCs and financial companies who kind of operate in this space?

Yeah, I'll answer the question sequentially. So, the Middle East crisis, the cautionary context was in terms of, as I think clearly articulated also, I think there will be a drag on growth, right? I think that's the thought process, point number one, right? Right. And what we are seeing, as I mentioned, right, let's say because intercity trucks typically sit at the top end of the value chain and mostly till March, I think there was a lot of inventory, you know, stocks which would definitely move. But I think, you know, going into April, you know, and May, we're finding some kind of drag on it taking off. So I think that's the, you know, broad, broad. I don't think because a lot of our revenues are also compounding in nature. So you will see it in the very small subsection, you know, some kind of a number up down here there. But I think that's the broad narrative on the Middle East crisis. On vehicle finance, I think very good question. See, basically. So, vehicle finance in, like, let's say, you know, the major players who do large competency, one of the large capabilities or differentiations or right to win there for all of them is distribution, right? And obviously, the whole aspect of create engine, you know, building intelligence as a customer, right? Distribution and being very close to the customer is one of the most important right to wins for them. And the whole, you know, if you look at for a truck operator, digital means blackbird, right? So our vehicle finance play is largely predicated on being a digital first, you know, company being in the like our mobile app is in the pocket of like large number of fleet operators across the country. We generate real time data about these truck operators. So our vehicle finance play is predicated on this aspect, and that's yielding results. And it's also more like growing a growing market. It's a very big market. And the whole technology-led approach to vehicle finance in terms of, you know, from, right from. You know, meeting a customer to disbursing the loan for a large part of the customers, we're able to do it within like 24 hours, you know, to 48 hours. 24 hours is something which you've achieved for a lot of customers. So I think there is a technology play where there are small 1x's, 1x's, 1x's. When you add up, it clearly gives the 8x to 10x play. But, you know, that's true from a differentiation perspective. But if you look at it from a... It's a technology kind of a business where you can, you know, architecture a non-linearity. We believe that at the end of the day, it's a risk business for our partners, right? So partners will take, you know, cautious calls continuously. So we believe that it may not be a non-linear business and we have to work with the partners, with their own approach to cycles, with their own credit writing frameworks and the delinquency management. So we believe that it will be a strong tech led, you know, vehicle finance origination play, which is not nonlinear, but will give sufficient profit generation in the long term, if built in the right way, you know, with the right partners. I think that's the broad takeaway of that business.

Just to expand a little bit

more on this bit, so you are not going to guarantee any sort of

performance of these loans from their transaction behavior on your platform, right? So that is a call which is completely with your lending partner.

Yes, that is completely with the lending partner. And we make an origination fee and a collection fee depending on how well the portfolio behaves for them.

Got it. Got it. Thank you. Thank you so much. This is very helpful. Thanks.

Thank you. Next question is from Abneesh Diwari. Abneesh, please unmute yourself and go ahead. Mention your organization name, please.

Hi, this is Avnish from Vekar Raya. My question is around this growth business. Is this business, as you said, is an investment mode? So do you sort of have any profits at contribution level or they are also because of being in investment mode, it remains a negative number?

Yeah, I mean, this is the good part and also holds us back from going crazy. So in trucking business, what we've understood over the years is that building a business with negative contribution creates a lot of negative behavior and sentiment amongst the market participants because the nature is at the end of the day, it's a B2B relationship, right? So, most or like all our businesses across, regardless they are new or experiments or whatever, we are always contribution margin positive. We make money on every order we do. So, if orders scale, our profitability converges.

Great. So, it's only at the EBITDA level or below that, around that line item, it would be a negative number, right? Great. Thank you and wish you really best.

Thank you.

That was the last question for the day. I now hand over the call to Mr. Rajesh for his closing comments. Thank you and over to you.

Uh, I think, uh, that's all from our side. And I think we've covered everything which was on Tower of the Mind. Um, at least it's given you a flavor so that you guys have a feel of what we're building. Uh, and, uh, yeah, again, as I articulate, um, we always love to, you know, keep it consistent. Uh, because I think, uh, building businesses with consistent strategies over a long period of time with laser sharp focused on few, you know, values and tenants, uh, you know, creates, I think, you know, big businesses and enduring businesses. I think that's what we are, you know, here to build. And, uh, yeah, thank you so much, uh, for attending our, um, you know, financial year end, uh, earnings call and, uh, see you guys soon.

Thank you once again for your time and participation. On behalf of Black Buck Limited, this concludes today's conference. For any questions, please feel free to write to us on the email IDs mentioned on the invite. We appreciate your engagement. You may now disconnect your lines.