Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Jigar Jani from Nuvama PCG Research. Please go ahead.

Yes, hi, sir. Am I audible?

Yes, Jigar.

Yes, hi, sir. So, sir, let's address the elephant in the room which is the margins. So essentially, what changed drastically from say Q4 end or Q1, because we were fairly confident of 11% to 13% kind of margins. We have kind of dropped below the bottom end range also. And now, I believe I've heard Hem sir saying that we are looking at a 10% EBITDA margin, which essentially means no growth again this year on the bottom line, even if we grow at say 18% or 17% on the top line.

So, two questions, what changed drastically and what is driving this pricing pressure because the mix essentially, if I compare to Q1 of last year, mix was 60, 40 for ETS, again this year it is fairly similar, 59, 41, so impact it has slightly improved in favour of CCR. So, what is driving this pricing pressure and at what EBITDA we would start ignoring business that we won't do business below this margins because this has been a consistent problem since the last couple of years.

Yes. Thanks Jigar. Great question. And I think everybody would want to know that. And definitely last quarter, we were already seeing these signs and the results of a lot of competition in the market and I had did flag it. However, the decline in the margins or the competitive pressure was higher than what we anticipated. And that is what the market dynamics are and that is what the ground reality is today especially in ETS. So, at the same time, we had to revisit a lot of our pricing strategies and keeping in mind the quality of the business that we are pitching for and the credibility of the names that we're onboarding as our clients. We decided to revise our threshold. And now, I think we have – and internally, we have decided on a certain threshold, below which we will not be doing the business. Going ahead given that we are looking at various ways to cut our costs and increase efficiency -- the operating efficiency right from automating processes to improving productivity, we are hopeful of maintaining these margins going ahead this year. And at some point of time in the future, definitely, the operating leverage will also pick in.

So, what is that margin level at below which you could share below which you wouldn’t do incremental business or you would sacrifice growth for margins?

Yes. That depends on market to market, client to client and these are internal thresholds that we have set. As a company as a whole, when you look at it, which is a mix of CCR and ETS, we hope to maintain the same margins now.

Okay. And sir, on this new event management thing that you have reported in your press release where you intend to go into event management, what are the details on this, what kind of investments you are looking at, what are the margins that you are looking at, how scale up if you could share some more details on that?

No, this is not very material. We will -- because we have been getting a lot of requirement sometimes -- not lot of requirement but sometimes we've been getting this requirements that where we provide transport, they also want us to do the events. So, since we do have in-house capabilities with managing the event itself also, we decided to make this addition in our articles.

Okay. And sir, lastly, any updates on any inorganic acquisitions because now we are closing on INR150 crores odd on our balance sheet in cash and investments. What is the thought process here because as shareholders we haven't seen a lot of return. Would it be fair to assume that we will see some acquisitions done pretty soon or are there any chances of a buyback or some sort of reward to the shareholders out of this cash?

Yes, we will be looking at certain opportunities. Only last month we have onboarded senior professional in strategic finance, who would be looking into these opportunities. And given the attractiveness, we would -- in the coming quarters be able to give you a better picture of that.

Sure. And just lastly just housekeeping. I think Hem sir mentioned 30% or 13% employee expenses. I couldn't hear the number. The growth rate in employee expenses?

Around 20%.

Around 20%. Okay. Thank you. Thank you for answering my questions. I'll jump back in queue. Thank you.

Thank you.

Thank you. The next question is from the line of Pulkit Singhal from Dalmus Capital Management. Please go ahead.

Thank you for the opportunity. I think first is more of a suggestion for the management as well. In the previous call, you had come in May end, with where you already had two months of data to know how the quarter is probably growing and what kind of competitive intensity is there. We probably expect a bit more transparency around your guidance and so that sudden changes are not provided this basis one month of data. So, just a suggestion to the management to please give us these guidance’s with a lot more clarity and transparency going ahead. Because just changing them in one quarter does not help. I think the question really is, how do operate the business going ahead, your costs have been going up, you've been investing in the business. How do you change your strategy going ahead? Can you provide a bit more detail as to what kind of cost cutting measures are you taking or productivity measures are you taking?

Yes, so for example, in CCR this quarter we have rolled out our new technology which automates a lot of the stuff that was happening manually. This technology was under development last almost two years. And this -- so right now we are in that transition phase. And once it's settled, which we hope so within this quarter, this will start delivering results in terms of productivities. Beyond that, yes, for margin expansion, we would -- we are having strategies to negotiate harder with our vendors to expand our margins down the line. So, these are the two basic strategies which I can publicly reveal that we would be doing to look at expanding our margins or maintaining the margins going ahead. At the same time, definitely, the decisions to pitch at more competitive prices depend also on the market dynamics, which do keep changing time to time. A lot of times it's hard to predict the way your competition is going to behave or the way the markets are going to behave at micro levels. So, I can understand your angst or frustration that we should have been able to better guide. But you can be assured that we operate with the maximum transparency with our shareholders that we can.

Sure. Can you elaborate on that automation part that you talking about as to what kind of aspects are you automating and what kind of cost savings can come from that?

Yes, so they would come at almost all the departments, let's say, within the CCR, right from our contact centre with a more efficient reservation capturing mechanism and our online booking tools for our customers and the apps for our customers. It would come in at the operating level at dispatch with more efficient dispatching. It would come at billing. It would come at every step of the entire lifecycle of the service that we give to a customer.

Sure. Can you quantify the savings please? Like it comes in the other expense line, the saving or employee expense?

No, it would typically come in the employee expense. And it should lead to a lessening of our operating cost with better utilization of our owned vehicles and our vendor's vehicles.

Okay. So, utilization as well?

Yes of course.

Yes. Lastly, at 10% margins and given the kind of investments we've already made so far in employees as well, what kind of revenue growth should we assume? Because right now, despite the investment it was a 17% growth. So, I'm just trying to get that sense.

Yes, our guidance remains between 15% to 18%.

Okay, understood. Thank you and all the best.

Thank you, Pulkit.

Thank you. The next question is from the line of Keshav Garg from Counter Cyclical PMS. Please go ahead.

So Mr. Loomba, my questions are also in line with the previous participants. I am just wondering that in this industry, where there are no entry barriers, where the cost of operations is the same for everybody, more or less, the salaries of drivers or the fuel is the same. And on the other hand, the realizations are also very competitive. Basically, nobody is going to pay us anything extra, especially in the ETS segment. So basically, I'm trying to understand that in such an industry with no entry barriers, ultimately the return on capital will come somewhere around the cost of capital. So, I mean, what are we doing to basically, which gives us an edge over the competition?

So, while I understand your point that there are no entry barriers and anybody can buy 10 cars and say I'm in the car rental business. We look at our business and our right to win in three parts, if I can say that. One is the quality of the -- on the one side is the quality of the clients that we have and the deep relationships and that we enjoy with them over decades, literally. On the other side, we have built up this huge supply base ever available and ever reliable. Again, built up over decades and built up a great reputation over that, so that we don't really need to be

dependent on our own capital to sustain that supply and sustain the growth. And in the middle comes our various processes and people where we are constantly evolving those to bring in more and more efficiencies and maintain a strong and positive culture over there. So this entire combination that we look at is what makes our company versus the others, this is the entry barrier to having an organization which can achieve scale and deliver more importantly, deliver that same predictable and consistent quality of service on trip after trip, doing more than 5 million trips in a year, with this kind of consistent quality of service is what gives us the right to win and organize this fragmented market, which is where the majority of the opportunity lies. Let’s now forget it’s still fragmented industry with only 15% to 20% of it organized and the rest 80% is where the opportunity lies in the future. And that is what we are gunning for and aiming for. I hope I was able to somewhere give you our perspective.

Thank you. The next question is from the line of Swechha Jain from ANS Wealth. Please go ahead.

Hi sir. Thank you for giving me this opportunity. Am I audible, sir?

Yes, please.

Okay. So, my questions were also on the margins, but I want to understand on the gross margins, our gross margins have also declined. So, if you could help me understand the reason why the gross margins have declined.

Typically, in a very high competitive environment, if you have to give a lower rate to our clients to win the business. In that case, our gross margins do go down because we have to absorb some part of that low rate that we give, out of the margins that we have vis-a-vis from our vendors.

So, is it because of the competition pressure that we had to reduce our prices?

Yes, you can say that.

Okay. So, have the gross margins both in ETS and CCR declined for us?

This is more evident in ETS. Because that is where it's a bulk business, mass business and so and at the same time we have to look at it case to case, wherein the kind of quality of the revenue that you're getting, if it is minimal risk in terms of credit risk and they're dealing with Fortune 500 companies or very, very large enterprises be it Indian or foreign. You are able to take that risk because it comes also without deployment of too much of capital.

Okay. So as the competition intensifies with big names coming into the industry, sir, my concern is how much lower can these gross margins go up to? And with what level of gross margins we are comfortable with?

Yes, that's the million-dollar question. And at the same time, internally we have certain set, certain thresholds below which we would not go. Our objective is to grow but also to grow profitably because that is in our DNA and that is the way we have grown and managed the last

30 years and we have been through various cycles. And we have seen also such cycles in the past. But yes, it's a little more intense. And definitely, this also is an opportunity for a lot of organizations to get into the business and which is both good and bad because it helps speed up and catalyse the transition from unorganized to organized also. So, in a way, we do welcome that competition. But it's a new -- when new competition gets in, they typically do reduce prices and we have to be cognizant of that and be able to adjust ourselves as per the realities of the market dynamics.

Okay. So, my another question was you did mention about the clients that we have added. So just wanted to understand are there any clients that we lost in this quarter? Did we lose any client to competition or for any other reason?

Not majorly. It's not -- we didn't lose much clients to competition. There would be the one or two renewals which should not happen or you take part in an RFP and you have a certain success rate. But it's not as if we have basically lost anyone. We have grown our revenues by 18% or 17%.

Okay. And sir, I believe the clients that we have added, were they more on the ETS side or on the CCR side? I mean, would be more on the ETS side is what I understand, right?

Both in terms of revenues, in terms of numbers, more on the CCR side. In terms of revenues, more on the ETS side.

Okay. And sir, just one more question, if you could give us the EBITDA margins separately for the ETS and the CCR, would it be possible for this quarter?

No, we do not declare that because at a certain point the costs are common of running the organization, be it at the operating level, be it at management level. So, it's very hard to give an accurate division of EBITDA.

Okay. And so, can I just squeeze in one more question if you allow me?

Sure, ma'am.

Okay. So just wanted to understand, we had some tie up with SIXT, right? So just wanted to understand what is this tie up and how do we strategically make our commissions or what is the tie up with SIXT here with us? Just wanted to understand that.

We are the exclusive GSA, general selling agents in India for their entire line of products globally for self-drive and we offer these services sometimes as a bundle, sometimes separately to our corporate, leisure and travel agent clients in India. For which, yes, we have certain commercial arrangements with SIXT.

So, do we get like per trip, what SIXT gives us or how do we make our revenue there, sir?

It's a combination on retention, per trip, various parameters around that.

Thank you ma'am.

Thank you. The next question is from the line of Samay Shah from Nuvama Wealth Research. Please go ahead.

Yes. Hi. Thank you for the opportunity. Sir, my question is about the margins itself. So sir, you've mentioned already that the competitive intensity was high and you've already mentioned that some sort of enhancement in margins will be coming in soon with the operational efficiencies and improved wallet share. So how -- when and by how much can we expect these margins to enhance? If you could give a sense on that.

So, our guidance is that we would be maintaining this and because we are not sure of the longevity of this intensity of competition, how long is it going to last. And at the same time, it is our -- anyway our duty to keep looking at the cost structure and making it more efficient and keep reducing the costs. So, in the long run, of course, this operating leverage, as I mentioned before also, will start kicking in at some point of time, which we feel at a point something over a thousand crores only of revenues. And some part of that efficiencies that we bring in may be passed on to customers also to accelerate the growth. And some may result in higher gross margins that we have.

All right sir. That's helpful. And just one data point question here. I see in the previous quarter’s presentation, you've said we have over 1,750 clients and this quarter we've added 61 clients, but the total client base is mentioned at 1,400. So, am I missing anything here?

So, we have a large number of clients, almost more than perhaps 1,700. These are the active clients in a given quarter. So, these are the clients which have given us business in that quarter.

Okay, sir.

These are unique clients who have given us business in that quarter.

All right. Got it sir. That's all from my side. Good luck. Thank you.

Thank you. The next question is from the line of Prisha Shah from Shah Family Office. Please go ahead.

Hello sir, good morning. So, I have a couple of questions. So, starting with the something about the fleet capacity which has expanded significantly ahead of the revenue growth. So, regarding that, could you please share the current level of fleet utilization and indicate how much of the additional capacity here can be observed before there is a need to add further fleet. So, if you could help us on that.

So, the fleet capacity is actually the vehicles that we have on our network. Out of which on a daily basis, let's say if we say 19,000, we end up using between 10,000 to 11,000 vehicles every day and the rest are what we use as spikes or which are being -- which have been onboarded onto our system by our regular vendors.

Now, in terms of the capacity increase also, it is in tandem with the increase in our number of trips. If you see the number of trips in this quarter, it has increased by almost 27%, right? Obviously, revenues have increased only by 17% because there has been that element of price reduction that has happened. But our number of trips has actually gone up by 27% and so has our fleet that we keep ready to serve any kind of spikes that may be there in demand from our customers.

Okay, sir. Understood. So, my other question would be on the macro environment and how are we handling the competitiveness? So basically, I just want to understand, how the competitive industry in the ETS business, specifically, has evolved comparing to what it was in FY'26. And regarding that only, are you seeing any kind of moderation in the pricing pressure from this quarter onwards? And particularly, during the new client acquisition and the contract renewals, if you could provide some colour on that.

Miss Shah, it's very hard to predict the actions of your competitors. So, I would not like to comment if we would see a moderation in that or not. But definitely, internally we have set certain internal thresholds, below which we would not be going. And accordingly, because these are long-term contracts and we do not want to be in a situation where we end up losing money in any contract.

Okay, sir. Understood. That's from my side. All the best. Thank you so much.

Thank you.

Thank you. The next question is from the line of Saloni Shah, an individual investor. Please go ahead.

Hi, thank you for the opportunity. So, you've indicated that the employee costs are expected to go up from here. So, could you elaborate on the key areas where we are investing this incremental cost and what capabilities you are looking to build? And secondly, I just wanted to also understand about the trajectory of customer acquisition costs as well going forward.

Yes, so in terms of employee costs, this year we expect it to be up by around 20%, what Hem had mentioned. Number two we are looking at -- hello? Am I audible?

Yes, sir. You are audible.

Okay. In terms of the capability building, we are building a leadership bandwidth, hiring more people at leadership positions to sustain our growth going forward. So those are investments into the future that we are making now. Thirdly, the costs also, of course, with the growth in the number of operations and the scale and the number of trips, you need people to manage that growth also, which is more binary and so you need X number of people whenever the business goes up by a certain number. At the same time, we are improving productivity by bringing in more and more technology, automation, AI in a lot of the processes that we're doing. So that the growth in the employee

costs is also tempered with the growth in productivity. As far as acquisition costs of new -- for the new acquisitions is concerned, we are well within our budgets in terms of new acquisition. Also, we are looking to improve our conversion and our -- further improve these costs by investing actually more in our marketing and our brand building. So that is where also the focus is going to be rest of this year.

Got it, sir. That's it from my side.

Thank you. The next question is from the line of Deeya Jain from Sapphire Capital. Please go ahead.

Hi sir, thank you for the opportunity. So, the B2C app launch that is going to happen in this quarter, what sort of expectations do we have from this? Rajesh Loomba We looking to address the growing premium market for car rentals in India with the B2C app. We -- for this year, we do not have -- this year would be like the start of the year and we do not have much of a high target for that but from next year onwards we will be able to share you a guidance.

Okay sir. And with the increase in oil prices, have the vendors been reluctant or how has the effect of that been? I am just trying to understand.

I'm sorry I did not get that. Can you repeat your question? I could not understand the question. Hear it properly.

Miss Deeya, can you hear me? Miss Deeya? Due to no response from the participant, we move on to the next question. The next question is from the line of Swechha Jain from ANS Wealth. Please go ahead.

Yes. Hi sir. Sorry, I just had two more follow-ups. One was sir, I wanted to understand in this quarter what percentage of booking has come online through our platforms or apps that we have?

14% has come in from that.

Okay. And what was this last quarter?

Around same, 15% to 16%.

It's around the same only, what Hem tells me, it is around the same.

Okay. And sir, what was the current active client base that we had in this quarter?

Around 1,400 clients.

Okay. So, they are the active client base, right, 1,400?

So, how do we categorize an active client? I mean, in the sense like...

Any client who's given us -- even as long as we have a signed contract with them, typically an organization who we have a signed contract with and who gives us a booking at least once in a quarter, so he's active.

Okay. So, even one booking a quarter that happens is an active client.

Yes, of course, because they are using us.

Right. Okay. And sir, on the number of clients that you added, you said you had more clients in terms of revenue on the ETS side. So, if you could just help me understand how many clients, we've added in this quarter on the ETS side?

We added 15 clients in the ETS side, which is one of the highest actually we have added in ETS in any quarter and the rest 46 clients from CCR.

Okay. Thank you, sir. Appreciate this.

Thank you.

Thank you. We take that as a last question of the day. I would now like to hand the conference over to Mr. Rajesh Loomba, ECOS (India) Mobility and Hospitality Limited for closing comments.

Thank you very much for listening to us and for this opportunity given. We are hopeful of keeping the momentum going and we look forward to building on this momentum in fact delivering a sustainable growth and creating greater value for our shareholders in the quarters ahead. So, thank you once again.

On behalf of Adfactors PR, that concludes this conference. Thank you for joining us and you may now disconnect your lines.