Blackbuck (NSE:BLACKBUCK) Q1 2027 Earnings Call

1:28 Good evening, ladies and gentlemen. Welcome to the Q1 FY twenty twenty seven Earnings Conference Call of BLACKBUCK LIMITED hosted by RADI 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. 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 BLACKBUCK LIMITED and cannot be copied, rebroadcasted or attributed in the PR media without specific and written consent of the company.

2:19 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 risks 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 Mr. Sathikam GN, Chief Financial Officer. I now hand over the conference to Mr. Rajesh for his opening remarks. Thank you and over to you Rajesh. Thank you. You're able to hear me, hear my voice?

3:06 Yes. Loud and clear. Good evening, ladies and gentlemen. Welcome to f I twenty seven q one earnings presentation. We'll walk you through what happened this quarter, and, we'll discuss the flavor and, the usual proceedings. So at a summary basis, on the total income of the company, we grew grew by about 38% on a year on year basis. On the EBITDA, we grew by 23% on a year on year basis, reaching closer to 50 gross of EBITDA this quarter. On a pad basis, we grew 25% on a year on year basis, reaching 42 crores in pad basis. On some of the key KPIs, which typically indicate the health of the platform, we had close to about 900,000 transacting customers on the platform this quarter, monthly average transacting customers this quarter, which is a 13% growth on a year on year basis.

4:05 Users who use the platform more deeply by the metric of who use more than or greater than equal to two services, then we grew about close to 20% on a year on year basis. GTV of tolling, which is one of the lead metrics of how the flow through in the... On the platform is happening. On that, we grew by about 16% on a year on year basis. As we highlighted the last earnings call that q one FY twenty seven, we were, because we were having the earnings call, you know, into the month of May. We had highlighted that, you know, some macro headwinds were impacting the whole logistics movements. Despite, you know, a very probably tough April month from a movement perspective, I think, there was a decent recovery through, you know, end of May and June, which has enabled the business deliver, you know, strong results and something which has helped us get back back on track and, you know, do well from a BAU perspective.

5:03 So just reiterating the core crux of the strategy. As you all are aware, the whole work of BLACKBUCK to disrupt and organize the trucking space lie... Like, it sort of surrounds around the life of a truck operator where we design offerings for him. As you know, tolling, vehicle tracking, fuel payments, all these offerings have been live for a good enough time, and we continue to build and innovate on new offerings. And, you know, our BLACKBUCK app, which is the, you know, product which our customers use, continues to scale on engagement, continues to scale on the breadth of the users, which is, know, who are using this. We are reaching close to 900,000 transacting customers, and the usage continues to be the same, hovering around forty five minutes daily. And on distribution, as we've always discussed, you know, we are present in almost every relevant trucking village in the country. So we continue to go deeper, and we continue to be with our customers in the market to help them, get onboarded on our products or get them serviced on our products.

6:04 On the key KPIs, you know, basis, broadly, I've already touched some of them in the introduction. Going into... If you see the metric on number of tolling transactions, which has grown by 12% on a year on year basis and has actually declined sequential quarter by 3% largely because of the headwinds. And as you've seen, the GTO of tolling on a year on year basis has grown by 16%, which probably at a... Any TC level has grown by a very small single digit percentage number. You know? And then if you compare that to CV number, would probably be in a little bit of a higher single digit. Despite that, because of the value prop of the platform and the widespread distribution, we have continued to compound at 16%. And, you know, as the, you know, as the con... You know, country grows, as India grows, as India invests in infrastructure, we believe some of the secular trends in the way tolling has grown in the past are going to sort of come back. By doing all of this, revenue from operations, which is at a gross level, we've grown by about 42% on a year on year basis. And on a sequential basis, that's roughly about close to 10%.

7:15 Coming to net revenues, year on year basis, we've grown by 25%. Contribution margin continues to be at that 93% level, showing the quality of business. We we continue to build is of the same quality. And on a adjusted EBITDA basis, we have grown from 47 crores to 55 crores this quarter from a year on year perspective, 16% growth, you know, on a year on year basis. So that is the narrative on, you know, your overall business. Just wanted to highlight that on a pat, numbers, which you have seen in the headline, sequentially, you would see a decline largely because of the deferred tax asset, which has got recognized in the previous quarter. So if you look... If you remove that impact, largely, most of the metrics move in line with adjusted EBITDA in the business, you know, which is business as usual over the past.

8:05 Now moving into giving a bit more color into what's really happening. As we saw, 42% is the growth in operations, revenue from operations in the year on year basis. If we split that out, the core businesses grew by about 21% year on year, continued to maintain its growth path while the industry headwinds were negative, which is a, you know, a strong, you know, metric. And tolling in that continue to deliver 16% on a year on year basis. What is very important to note is that we've been in the telematics business now probably for more than half a decade. And the last quarter, we saw the highest sale of new devices, the... At a quarter level, which was very encouraging. This is, you know, this is this is a record number not only on the AI side, but also on the non AI side, and also on the other specialized tracking... Specialized telematics devices you are building. So the telematics vertical is gaining strength to strength.

9:01 And, you know, you will see that because the the the revenues of telematics devices, despite this, we... You know, we onboard the customer with the annual subscription revenue one time. Most of the revenues are spread out over the course of twelve months. So you would see the strength of the revenues kicking in over the course of the year, And you would not see a sudden spike in this year. That's how the whole revenue accounting is built out. And what's also more interesting is that because in the future, the renewals of these devices are go... Will will kick in, which which are largely, you know, you know, come at a very, very... If you look at only the revenue... Renewal revenue, they largely come at a very, very, very high contribution margin, and the flow through to EBITDA is very strong. So so net net, the narrative on the core business is that the... In the in the payments business, we continue to compound strongly. And telematics, I think we're achieving ever highest numbers on sale of new devices, which will result in very strong profitability and very strong revenue growth in the quarters to come. Coming on the growth business narrative, as you can see at a gross level, there is a growth of close to about 2.5 x on a year on year basis, and more importantly, acceleration of revenue growth in the recent quarter.

10:15 So, you know, there there used to be questions around that, you know, we're investing in the super large business. We need to be seeing probably a faster growth. And I always had admitted that, you know, some of that, you know, will come as we step into the future. So last quarter, sequentially, we grew about 20% in our growth businesses on a sequential basis. This quarter, that number of 20% has accelerated to 44% on a sequential basis, which is largely delivered by compounding in, obviously, both the businesses, both in Superloads and vehicle finance. But in Superloads businesses, both the existing cities have strongly compounded largely because of... Because the the... That business is evolving as a AI led business, and there have been lot of productivity gains which we've been able to, you know, deliver in the last quarter, which has resulted in such compounding.

11:01 And the newer cities which have, you know, been formed have also caught in momentum. So so that's a, you know, very positive news from the super load side. Coming to the commentary on profitability, as we've always, you know, highlighted, I think our view on going at profitability would always be segmented that core businesses would continue to deliver profitability. So core businesses have again delivered a record quarter from a profitability and cash flows perspective despite the macro headwinds. The operating leverage story there between 60 to 85% of revenue growth converting into EBITDA continues to be delivered, you know, every quarter. And as we've always highlighted, super loads is an opportunity, which is a, you know, clear opportunity to invest in, and we are calibrating, you know, our investments, which are stepping up every quarter. And we continue to, you know, increase in investments, you know, over there. And, you know, that's the, you know, sort of a two pronged story on the all... Whole profitability.

12:02 And as we've maintained beginning of this year that vehicle finance, you know, would converge into profitability in this particular by the end of this financial year, and that continues to happen. The conversion continues to sort of flow through. So largely, on the color on numbers, BAU with very strong signs on growth compounding And, you know, everything else consistent with the strategy outlined over the past four to six quarters, we continue to execute. And that's a good news because we are able to bet on the same strategy. As the strategy matures, more results come in. Our strategy is getting more and more stronger, and we continue to, you know, go in the same direction. P and L overview, summarizing whatever we said. On the total income, growth of about 38%, which is revenue from ops growth of 42%.

12:49 Core 21 growth one fifty three. Net revenues, you know, net growth of 25%. And, you know, as you see the direct cost of the business growing largely in line with, you you know, the growth in revenues about, you know, of 42%, which is 27%. Contribution margin growth of about, you know, 25% on a year on year basis. Adjusted EBITDA, 55 crores, which is 60%... 16% growth on a year on year basis, and similar walk through on EBITDA, PPT, and PAT. As I highlighted in my commentary, if you look at PAT of q four effect '26, which is 66, the drop of PAT from there to 42 is largely the deferred tax line item, which is causing that on a adjusted PAT basis, adjusted to the deferred tax line item. Largely, it is in line with EBITDA and and and PBT. So that's the summary, you know, from our side.

13:38 You know, happy to answer, you know, any questions. Thank you. Thank you, Rajesh. 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 participants to restrict themselves to two questions and come back in the queue. We'll just wait for the queue to assemble. The first question is from Gaurav Malhotra. Gaurav,

15:10 please introduce yourself and your organization. Please go ahead. Gaurav, please unmute yourself and go ahead. Yeah. Yeah. Can you hear me? Yes. We can. Please go ahead. Yeah. Hi. Hi. Hi. Hi, Harish. Hi, Satya. Just wanted to get some better sense on the on the Superload business. If you can give us a sense on, you know, which all hubs you are present in. Right? What kind of monthly... Daily, you know, loads is being carried? You know, what kind of traction you're seeing in the in the... Beyond the the Bangalore Hyderabad hubs? And and where do you sort of see this business, say, in the next, say, one one to two years? Thank you.

16:00 Yes, Gaurav. As, you know, we've highlighted, at the moment, we'll continue because it's a very new business. We'll continue to have limited disclosures. But giving you a bit of color, as, we've always maintained, we had initial, first four cities launch, which was largely Bangalore, you know, bang... Bangalore, Hyderabad, Mumbai, Chennai. Right? And we launched another 10 cities in, you know, sort of... You can imagine the launch happened by March, April, the other 10 cities. So now we're present in 14 cities, and, you know, we we are in a very strong investment phase. And the the growth outlook of next one year, obviously, we would be doing everything it takes to sort of, you know, mature our first four cities and then also put these 10 cities in the same direction as these four cities are maturing.

16:48 I think building of Playbook is what is continuing, but every quarter after quarter, we're getting better. And we are able to better understand the growth levers. We're able to better understand what is giving results. We are able to get hold on productivities. We're able to get hold on... Deliver predictability on contribution margins. Able to get predictability on, obviously, the the demand growth on the platform, ability to add supply. So it's... It works as a flywheel, right, because you need to generate demand, you need to start fulfilling, and do the whole ops, and then make margin out of it. Right? So I think the whole playbook building, we're learning newer things every quarter, and and and that's causing us to also go to a newer scale frontier. I think that's that's what is happening at the moment. And and, yeah, it's a very, very nascent business. But, yes, you know, you would always expect that we would continue to invest aggressively in this direction because we are definitely far better than what we were last quarter. The last quarter, we were definitely far better than what we were probably two quarters back. So as I was giving in my narrative as well, the sequential growth in super loads also has been pretty strong. It has been, closer to 50% on a sequential basis, up from 23, 24%, a quarter back. So that's, you know, a strong indicator of how we are going in this business.

18:09 Thank you. Thank you, Bharat. The next question is from, Atul Borsi. Atul, please unmute yourself and Hi, team. Thanks for the opportunity. My first question is this macro headwinds that we're talking about in tolling and in fueling, do you see them tapering down in two q, you know, for at least in FY '27? And how should we look at this steady state growth for tolling or fueling business if you want to give some color on that? Yeah. So, two parts. I think both of them had very different flavors.

18:57 Talking on the tolling, part of the business. Right? Tolling part because the inherent movement was showing a very high volatility between days and, through the first, half of April and whole April, actually. We were observing normalized metrics. Normalized metric, like, for a particular type of trucks, which are, like, largely the intercity movements. We were observing how many swipes were they typically normally doing, right, you know, on a sequential basis and a year on year basis. So we're observing a very sharp contraction in in the normalized metrics in the month of April. Most of that impact largely has got normalized. So I would say that the narrative on something, you know, we need to be a bit cautious, we iterated last quarter. That cautiousness has gone away, and largely a BAU has got restored. That's on tolling. Right? So whatever narrative we've, you know, we've explained in terms of how we can model tolling, in terms of, like, road growth, in terms of, you know, inflation on toll fares, in terms of number of trucks growth, we can go back to that normal way of modeling that. Right? That's what I'm talking. Coming to the other part, which is fueling, which is obviously a very small portion of our revenue. Right? Because the uncertainty in the... And and and as as we were mentioning in the last quarter as well, the whole loyalty margin is a discretionary spend to drive sales. Right? Because supply is short, the reason to spend on that was basically lower. Right?

20:25 As we speak, there is a partial recovery because, you know, the crude touched low prices, you know, early part of, this month, and then there is a partial recovery, you know, partial strong recovery in that business. But I would say that till the time some of this fully stabilizes, we don't see full recovery happening on the fuel. So I would say I'm still more cautious, you know, from a fuel recovery perspective, but, we are much better... We are in a much better position compared to where we were we were giving you the commentary three months back. But I don't I don't have a full hold on or, let's say, to give you a a guidance on when will the full recovery sort of, you know, set in. So that's the commentary on tolling, and that's the commentary on fueling. I hope I've answered your question. Yeah. Yeah. Understood. And I have one more question more from a strategic point of view.

21:14 So delivery in their recent filing that highlighted that they might enter into this overall tolling, fueling, and even vehicle financing business for truck operators. So do you feel that this could be a substantial threat to BLACKBUCK's business? Not... May not be in the near term, but let's say from a medium term perspective? Yeah. So I see this as a very, you know, a positive direction in the industry because there is hardly any qualified competition in the space. And, you know, there are so many problems to solve. The space is hard. The space has... You know, needs more investment. So I would see this more as a positive move that, you know, there are there are... There'll be players from whom we can really learn a lot.

22:02 But at this point in time, I think... Because as I've always explained the business model, there's a lot of leg work on the ground. There's a lot of blowing the ground to get to the, you know, get to the business model, get to the value delivery to the customer. So, so... Yeah. So as you rightly articulated, you know, we don't see much of near time... Near term threat. But, yes, we'll always be cautiously watching, you know, how how things are moving. And, you know, we would, at any point in time, would want to, like, you know, keep a very strong hold on market share in this business and continue to compound. As I gave the commentary, largely, you know, tolling growth in line with what we were observing. Telematics, we've been, like, supremely, you know, happy with delivering a very record quarter there. And and even on top of that, we probably will have, you know, further good quarters as well in Telematics. So so...

22:55 Yeah. So I think... On absolute position, I think we're doing fantastically good. Yeah. Thanks. Thanks. And best of luck. You. Our next question is from Abhishek Banuji. Abhishek, unmute yourself and go ahead. Hey. Thanks for the opportunity. Just a couple of questions from my side. The transacting user base has gone up double digits this quarter on a way where we see. So what is driving that? And also on the the minutes of usage, honestly, I would have thought that, you know, with super loads, that can go up more.

23:42 Right? So if you can give some color on, you know, what percentage of your, you know, transacting customers are using super loads, and what what would be the, you know, minutes usage for those customers. That would be really interesting. Yeah. Abhishek, so, first of all, the 13% growth in, transacting base has been a secular growth trend always for us. So if you pick up any quarter in the last, like, you know, ten, twelve quarters, we've grown in the range of that 20% to, like, 30%... 13% because the base continued to grow bigger. That's why the growth rate is now 13%. Right? What drives that, as we've always maintained for us, the whole acquiring customers on tolling, acquire... Acquiring customers on telematics, and acquiring customers on the classifieds part of the marketplace platform, adds users on the platform. Because most of these basically, use cases are first time use cases for these customers. Right? So that adds users on the platform. So so the story behind how users grow on the platform has largely been same for us in the last, like, you know, six, seven years. Right? That's point number one. Coming to explain the minutes of usage. Right? If you... If you're aware of history of the platform as well, right, we we attempted at solving the whole loads marketplace using a enterprise business in a full stack approach, which did not work for us.

25:07 Right? That's when we learned that loads is actually the most infrequent use case for a truck operator. Because a truck operator who has, like, three trucks, like like, let's say, would be doing 15 to 20 loads a month in intercity state... Cities. So he essentially is using for loads once in, like, you know, two days. And because he also has his his own proprietary network of demand, the use case essentially goes down a lot. Right? And that's why the the the whole story of building a digital platform changed towards first building the whole payments platform, then the telematics and so on so forth. Because all other use cases are very high frequency use cases. Right? So answering your question, even in the long term, even though, like, for example, if more than 50% of our users also use super loads or the loads, the usage time will be still driven by high involvement use cases like the payments use cases or the telematics use cases. The highest u... Usage at a session level or usage at a product level is actually in telematics because it tracks his driver. That consumes a lot of time. Right? Payments because he's actually recharging every alternate day and checking the balances continuously.

26:14 That consumes a lot of time. Right? So that's the answer towards, first of all, like, let's say, broadly, how how to track usage. Now coming to the question on the usage on super loads. Right? Super loads, India has, like, 300 plus industrial hubs. Right? Super loads is live only in, like, 14 cities at this moment. So the share of users for whom super loads is, first of all, relevant is a very small proportion. So so extrapolating super loads into the minutes usage is a very, you know... Is is not something which will ever correlate. Right? So... Because a, as a use case, it consumes lower time, number one, and we would want it to be having lower time. And number two, we are, first of all, Superloads very, very early. We are, like, in less than 5% of the hubs across the country. So that will never move the metric on, basically, usage.

27:05 Understood. Understood. This is very helpful. Thank you so much. And just one more thing. So from what, you know, I have understood, you know, speaking to you on super loads, is that, you know, as the number of routes kind of increase, the the number of, you know, connections kind of increase at NC 2. Right? So if you're in... Increasing, say, one route, the number of connections increase much more. And and that kind of brings in a lot of, you know, scale benefits. Right? So are you kind of seeing that in the in the older nodes that you can start with? Yes. Of course. In the older cities and older lanes we have started, there is obviously pretty much very strong repeat and very strong recollection of the product, very strong customer retention on both the sides, and, you know, of course, thereby the impact on margin as well. So everything generally compounds a bit densities.

28:07 Right. So so any any, you know, any clarity on how much kind of time it it will take to mature, for a typical note? Can you can Yeah. So... I mean, yeah, I've always answered this, you know, in the the metric of loads per day. I think we believe that in a hub, being able to do 5,000 loads a month, which is roughly about two fifty loads a day, 250 loads a day, is a place where some of these become really relevant. Some of these network effects will come to very strong fruition. And I think in the, you know, the first hub of ours, I think, we have gotten, like, you know, decently close to that, you know, milestone. I think on the playbook building, I think every quarter, we're advancing by five to 10 percentage points. And I think that would be the...

28:54 That is the progress, and I think that's that's that's how we... That's the right direction, and we will continue in that direction. Right. Thanks a lot. Thank you so much. Thank you. The next question is from Monica Joshi. Monica, please unmute yourself and go ahead. Hi. Can you hear me? Yes. We can hear Hi, Monica. We can hear you. Yeah. Hi, Rajesh. Satya, hi. Rajesh, you've been extremely consistent in your commentary. Thanks a lot for that. Just wanted to understand, you did mention that you're getting better in the subsequent city that you launched. If you could share a couple of learnings that you would have made, you know, or done, mistakes you would have done earlier, which you are implementing in newer cities, That would help us understand how this playbook really works.

29:46 So from one city to the other, I believe the time will contract for you to reach that milestone of 5,000. So what are those two, three learnings that you had your initial experience to what it is today? Yeah. So I think the whole strategy... I mean I mean, the biggest learning is the whole strategy in the new cities is... Was very layered because you experiment one and then it works. You you onboard it and you scale that strategy. Then you experiment few more things, what works, you layer it and then you scale that strategy. I think I would say that I would say that from a mistake mistake point of view, I mean, generally, we look at it more like we run three experiments and one works, and then we onboard that and we keep moving forward. Right? So I would say that the the strategy was more layered because we we learned everything. You know, every three to four months, we'll we'll have a new learning. We'll, incorporate that in our strategy, and then we'll keep moving forward. Right? In terms of pace of scale, in terms of market, be it, like, you know, like, from a demand perspective, like, serving three p s transporters, serving SMEs, in SMEs, the mid market, the top end of the market, the lower end of market. Right? And then in terms of how do you work with them, how would collection processes work, how would execution work, how would pricing work. Right? So I think in each of these, there have been, like, largely, I would say, transformation of processes from one maturity to the other and layering of these processes when to do, you know, what. I think that's been probably one of the strongest learning where when we are launching a new city, we know that if

31:16 this gets cracked very easily, I think we should, you know, go in that direction first. And then we can do three to four things pretty much simultaneously rather than doing, you know, one thing once and the second thing in the second time. Right? So I would say that the the biggest, you know... Like, I I think this has been the biggest probably learning which we are taking forward from existing to the new. And other one, obviously, is that earlier we saw this business as a lot... Like, let's say, the way the offline, you know, market works is broker centric, and then we were essentially thinking how could we, you know, enable that within using technology processes. But I think another thing which has happened in the last two years is basically, you know, AI, which has really transformed how we build, you know, p... People led workflows, you know, really better. And I think incorporation of that has, like, resulted in, you know, a strategy which is sort of also AI first and, you know, very less people dependent, much more granular, much more easier to scale. I think all those have been, you know, newer things which were not available before. We're able to do now much more powerfully.

32:23 No. Thanks for this, Rajesh. Very helpful. So if we can put some clarity on this, may not be accurate numbers, but you are closing in on 5,000 loads per month in Bangalore, right? And it has taken you about, what, one and a half or two years to get there. How how are you seeing this timeline? Sorry, Monica. I'll correct you. There is some more time to sort of get there, but I would say that we are good good... In terms of playbook building, we probably are 60 by 70% there. But, yeah, in terms of numbers, we may be, you know, more than halfway there. Yeah. Got it. So how do you see that timeline compressing, you know, for the the recent densities that you have added? And you're you're not there, but how... In your mind, how do you see that happening?

33:11 Yeah. Yeah. So all... Yeah. So so good point, Monica. I think 70, 80% of these cities are growing faster than the, you know, first four cities. So that is very clear. Much faster. So that's, I mean, that's what I was explaining to you that we we are able to do lot of things from day one in these cities. Got it. And the like for like growth in Bangalore, if you could just put some ballpark number, you know, on either a sequential basis or a year on year basis. How is that shaping up for you? Yeah. I mean, that's what... As as I as I was mentioning, you know, for the previous question also, I think at this point in time, Superload's disclosures, we'll keep them a bit limited. We'll give the overall color. And I think when the business is of decent size to be able to, like, cut this out and start reporting, I think that's when we will get there.

33:59 Probably we have... We're we're probably three to four quarters down the line, I think we'll get there. Yeah, Rajesh. Just last question. And you mentioned renewal rates, you know, as renewal for your telematics, you know, kickstarts. In your experience, how are the earlier renewal rates for devices you had sold? What do they generally stabilize at in months twelve, month twenty four? So first of all, as you rightly said, the renewal happens yearly. So whenever we onboard a customer, we either onboard on a... For one year plan or a two year plan or sometimes even a three year plan. Right? So the renewal rates are more, annually once. So that helps us, have better control on renewals. And number, two is that as the second and the third renewal approaches, they are largely in, like, you know, early to late eighties, is how they stabilize over a period of time.

34:55 So your month to... Well, so that's the first renewal that the customer does is 80%? First renewals are roughly in the range of, early seventy. And as the second renewal and the third renewal keeps coming in, it goes in the eighties. Yeah. Understood. Understood. Thank you so much for this, Rajesh. Thanks, sir. And and the higher end products typically have 10 percentage. Whatever I gave you the number is largely for the GPS products. Higher end products typically have about, you know, five to 10 percentage points better renewal rates across all the years as well. So let's say our fuel sensor renews, it will renew with more closer to 80% kind of a renewal rate. Got it. Thank you so much, Rajesh. Thanks. Thank you.

35:42 The next question is from Atul Borsi. Atul, please go ahead. Unmute yourself and go ahead. Hi, Rajesh. You mentioned that you're, you know, you're implementing AI workflows and seeing a productivity gain. Could you just elaborate a bit on what use cases you're finding and how it has changed your current workflow, basically, to deliver the productivity gains if there's some elaborate terms that you want to give? Yeah. So, I mean, I will I will just segment, like, this in, like, three parts. Right? One is basically, you know, new new parts, new new, you know, old new, and then old old.

36:28 So the, you know, three parts are that... You know, new new is that with the advent of AI, what can we do, like... Because AI is available. Right? And which was not all happening before. Right? That is how the first category, which is the most exciting category. The second category is that earlier we were doing something. And because of AI, we'll do the same thing but better. Right? Better and more cost efficient. And the third part is what's running will keep running. Right? So, obviously, you know, in the first bandwagon, we took the new new efforts, which will be probably into nine months of implementing those road maps. Right? Where, for example, in, like, let's say, the super loads business, if a load request comes in, ability to reach out to, let's say, you know, thousand people at one go. Right? Let's say, assuming the audio workflow is that a a load comes in, and then you send the load basis the information you have about the truckers. Let's say these truckers have swiped their toll in the city of Bangalore, and we know that this is a Bangalore to Delhi trucker. Then a Delhi load comes, and then we send a notification to that guy. And then he opens the load, and then he converts on that load.

37:33 Right? So that's typically a very high latency process. Right? So you identify truckers, you send them a notification, then they open it, blah blah blah. Right? Versus, let's say, you had to call them, you would need, like, a very high call center bandwidth to sort of do that. So it was not possible during, you know, the pre AI phase. But in AI with very low cost calling, you can elastically expand this capacity, you know, how much ever you want. Right? So outbound use case in placing a truck became a very strong use case, which basically helped us identify, curate truckers who are ready to take up a load and which improved our placements, which improved AI enabled sort of placements for us. Right? So so the good part is in case of super loads, I think close to about 40 to 50% of the loads give or take on any day are AI enabled today in terms of how we, you know, get the placement done.

38:23 That's a typical use case in new new. Right? Now explaining a old new, which is, let's say, let's pick up a business. So by the way, I'm just giving one use case, and like that, there are several use cases which we are solving. Now let's say in a old new use case, let's say, assuming we're doing a toll card issuance to a customer, and we have to do a KYC of the customer, we need to... Under the KYC, we will do a KYC, then we'll understand the vehicle. We'll understand the customer. We'll under... Know... We'll know the customer and under... Understand, like, the truck RC and etcetera. Right? So in that way, we do few 100 thousands KYCs, you know, a month. Right? And for that, we have operation center where there are people who do all this, like, manually. Right? And who have APIs, but they, in the end, trust the, you know, manual outcome. Right? Now the same use case with AI is very easy to solve.

39:12 So, we've seen, we've been able to reduce the headcounts in these desks by, like, 85%. We've been able to reduce cost by, like, 65 to 70%. So this is an example of how productivity gains, you know, are coming in from a AI sort of, you know, use case. And and and and just to highlight, when I'm... When I explained AI led productivity gains, that was largely for super loads in the earnings call narrative. All of this, I was not talking about because this is a business as usual for most of the companies to implement AI and deliver productivity gains. And like that, we are enabling, like, multitude of processes using AI, and, you know, we continue to invest in that direction. Are you guys able to hear hear me?

40:06 Yeah. Now we can hear. Post. So did you guys lose me? Did did did... Was I not audible with me? Yeah. Last ten, fifteen seconds. Oh, sorry. So I will just reiterate. Atul, where did you get me, Atul? You're talking, like, most of the business are doing this, you know, routine AI. Yeah. So I saying that... Yeah. Yeah. So that old new is what something I think is very exciting because that'll help probably improve margins further. And, you know, I think that's that's the direction we will obviously take. And then I was saying summarizing the old old is, you know, something which you are doing physically and the physical person has to go, we'll continue as it is. That's how, like, we've divided the whole activities of the workflows we do as a business. And we are strongly as p naught going after new new, and, obviously, p one, we've expanded the bandwidth to accommodate p one, which is the old new. So that's the AI framework for us as a company.

41:05 Yeah. Thanks thanks for that elaborate answer. Thank you. The next question is from Gaurav. Gaurav, please go ahead with your question. Follow-up, Sathya, what would be the effective tax rate for this year and maybe next? How should we think about it? Yeah. So for the next two quarters, broadly, this trend should continue with deferred tax offsets the, tax that is there. At the end of the year, for the quart... For the fourth quarter, we'll reassess how we can utilize the losses and then take a view of it. But at least for the next two quarters, you should expect largely that, there will be a set off between the current tax and the deferred tax.

41:51 Cool. Thank you. Thank you. The next question is from Lokeesh Manik. Lokeesh, please go ahead with your question. Yeah. Hi. Good evening, Rajesh and team. I have a couple of questions, bookkeeping. One is that depreciation cost has gone up. So what is driving this? Yeah. Lugesh, so as we highlighted, we had a very strong quarter on telematics. So telematics, needs investment in the device, which we depreciate over a period of two years. So you see the depreciation typically goes up, in the short term. And, the the whole, you know, narrative around very strong revenue to, EBITDA conversion, you know, or cash flow conversion which we have, typically kicks in with the subscription revenues which flowing on renewals, which typically flow into EBITDA straight.

42:51 So you will see the precision being, upfronted and, upfronted increase in depreciation, which is for us, you know, a good sign because it'll give us a very strong long term profitability and, largely because of the, investment in, devices, you know, for the, you know, growth sport which we're seeing in the telematics business. Great. Great. And the second question was on the GTB number. So last year's presentation mentions 6,800 crores. This year's presentation mentions 6,000 crores. So there is some, you know, this deviation out there. What is driving this? Any idea? Yeah. So earlier, we used to represent the GTB of payments, which is both tolling and fueling combined.

43:40 And because of the uncertainty on how the fueling business is panning out and also with the uncertainty in fuel prices, etcetera, We have taken out the fuel component, and we've given the GDV of tolling. And I think we've also provided across. Right? You know, so so basically, largely, what you're seeing right now is only the tolling part, and the fueling is not being provided. It's not a combined metric right now. It's a stand alone billing metric. Got it. That's it from my side. Thank you so much. Thank you. That was the last question for the day. Thank you once again for your time and participation. On behalf of BLACKBUCK LIMITED, this concludes today's conference. For any questions, please feel free to write to us on the email IDs mentioned on the invite.

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