Release Date: July 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aurum Proptech Ltd (BOM:539289, Financial) reported a 45% year-on-year increase in total income for Q1 FY 2025, reaching INR69.10 crore.
- EBITDA for Q1 FY 2025 was INR12.05 crore, marking a 6.7x improvement year-on-year.
- The company has seen significant advancements in its tech platform, integrating AI and machine learning to provide smarter solutions.
- The rental business, including HelloWorld and Nestaway, manages 30,000 rental units across 17 cities in India, showcasing strong market presence.
- The distribution business turned profitable across all offerings, with the marketing and sales automation business reaching EBITDA positive this quarter.
Negative Points
- Despite improvements, the company still reported a loss before tax of INR13.74 crore for Q1 FY 2025.
- The SaaS revenue saw a decline from INR8.8 crore to close to INR6 crore this quarter.
- The company faces challenges in maintaining the efficiency demonstrated in the last quarter over the next three quarters.
- There is a mild impact on the student living segment in Kota due to the deferment of NEET exams, affecting demand for hostels.
- The company has begun capitalizing product development costs, which may raise concerns about long-term financial sustainability.
Q & A Highlights
Highlights of Aurum Proptech Ltd (BOM:539289) Q1 FY24-'25 Earnings Call
Q: Despite improvements in the real estate as a service model, the SaaS revenue is down this quarter. Is there an issue with the SaaS model?
A: (Onkar Shetye, Executive Director) The SaaS business faced some headwinds due to election-related expenditure by the state developer segment. However, this is temporary, and we expect improvements in the coming quarters.
Q: Can you provide more details on the fractional ownership initiative?
A: (Hiren Ladva, EVP, Investments) We are preparing for the license application for Aurum WiseX. We have around 400 investors with an AUM of INR180 crores. The regulation will make investments more liquid, and we are positive about the market's growth.
Q: Can you explain the adjusted EBITDA calculation?
A: (Hiren Ladva, EVP, Investments) Adjusted EBITDA accounts for lease-related costs and one-time expenses. This helps us track operational performance more accurately. We have provided a detailed table in the investor presentation.
Q: When will the final call for partly paid shares be made?
A: (Ashish Deora, CEO) The next call of INR30 is planned for Q4 of this year. The company does not require the funds immediately, so the timing is flexible.
Q: How aggressive is the company in sales and marketing for the rental business?
A: (Onkar Shetye, Executive Director) We focus on targeted marketing using data analytics. Recently, we rebranded Nestaway in Bangalore and will extend these efforts city-by-city. Our strategy is to optimize marketing spend while leveraging existing brand recognition.
Q: What is the revenue breakup for HelloWorld, Nestaway, and other segments?
A: (Onkar Shetye, Executive Director) Approximately 60% of revenue comes from the rental cohort, 30%-35% from the distribution cohort, and 5%-10% from the capital cohort.
Q: What is the target EBITDA margin for FY25?
A: (Ashish Deora, CEO) We aim to maintain and improve our EBITDA and adjusted EBITDA ratios over the next three quarters, targeting a 450 bps improvement.
Q: How is the journey from a software company (Majesco) to a proptech company? Is it more lucrative?
A: (Kunal Karan, CFO) The proptech market is larger and less contested compared to the insurance software market. The real estate market in India is poised to be a $1 trillion market by 2030, offering significant growth opportunities.
Q: Will the restructuring of the business for value creation be in the distribution vertical? Will we see segmental breakups in the future?
A: (Ashish Deora, CEO) Yes, the restructuring will focus on the distribution vertical. We plan to present our business in terms of rentals, distribution, and capital segments for better clarity and value creation.
Q: How will the revenue and EBITDA shape up in FY25 and FY26?
A: (Onkar Shetye, Executive Director) We target a 45% year-on-year revenue growth while improving EBITDA by 450 bps. The focus is on balancing growth with profitability.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
