Just Dial Ltd

NSE:JUSTDIAL

Earnings Call Transcript 2020-Q4

[Operator]

Ladies and gentlemen, I am Rudy, your moderator for this session. A very good evening. Thank you for standing by, and welcome to Just Dial Limited Q4 FY '20 Earnings Call. [Operator Instructions]I would like to now hand over the conference to Mr. Rishit Parikh. Sir, over to you.

[Rishit Parikh, Associate]

Thank you, Rudy. On behalf of Nomura, we would now like to welcome you all to Just Dial's Fourth Quarter FY '20 Earnings Call. Today, we have with us the Founder, MD and CEO of Just Dial, Mr. VSS Mani; and the CFO of the company, Mr. Abhishek Bansal.Without further delay, I would now like to hand over the call to the management. Over to you, guys.

[Abhishek Bansal, CFO & Whole]

Hi, everyone. Welcome to Just Dial's earning call for fourth quarter of fiscal '20. Operating revenue for the quarter stood at INR 234.9 crores, which grew 1.2% year-on-year. Operating EBITDA stood at INR 74.4 crores for the quarter, witnessing 26.4% year-on-year growth. Adjusting for ESOP expenses, operating EBITDA margin stood at a very healthy 34% for the quarter. At operating PBT levels, margins stood at 25.2%.Now net profit for the quarter stood at about INR 76 crores, which was up 21.6% year-on-year. This was aided by INR 38 crores of other income for the quarter, which was robust due to mark-to-market gains on our investment portfolio due to decline in bond yields. Coming to full year performance, operating revenue stood at INR 953 crores, growing approximately 7% year-on-year; EBITDA stood at INR 273 crores, growing 19.2% year-on-year. Adjusting for noncash ESOP expenses, EBITDA margin stood at 30.4% for the full year. FY '20 full year net profit stood at INR 272 crores, witnessing a growth of 31.7% year-on-year.Coming to operational highlights. We had overall about 139 million unique users for the quarter, which was about flat year-on-year. Mobile traffic was almost 80% of overall traffic. While traffic in absolute numbers continues to be a very high number for us, growth was majorly impacted due to 2 reasons. Firstly, March month was significantly impacted due to COVID-19 shutdown. And secondly, we also spent later on advertising. For the quarter, we spent about INR 12.5 crores on advertising versus about INR 18 crores to INR 19 crores a quarter, which we were spending during the first half of the year.We added another about 780,000 listings to our database, and we now have about 29.4 million active listings, which was 14% year-on-year increase. Paid campaigns at the end of the quarter stood at about 536,000. Coming to the impact of COVID-19 on our business. As we all know that things have started slowing down from mid-March and thereafter lockdown happened from 25th of March. Our utmost priority, obviously, was safety of our employees. And thanks to timely efforts of our technology and other support team, within a week's time almost entire organization of approximately 12,000 employees was operational from home. From February end itself, we had started contingency planning to ensure that technologically we were fully equipped for any such scenario.As far as traffic impact is concerned, traffic was significantly impacted once lockdown started. For April month, our average JD traffic dropped about 49% from pre COVID levels, say, average of December to February. For the month of May, there has been some improvement. And lately, traffic is at around 65% of pre COVID levels. Coming to monetization. As we have mentioned earlier, SMEs were already facing pressures for last few quarters. Prior to lockdown, we had implemented our strategy of selling more on monthly payment plans to customers versus upfront payment plans. For the month of February, that strategy worked very well for us. We were able to grow our run rate of signing up customers by almost 15% to 20% versus the previous quarter. However, with COVID-19 hitting all of a sudden, obviously, that brought monetization to somewhat a halt.We reworked on our pricing, decided to give better discounts to customers to retain them, decided to let customers opt for a late activation of their contract post lockdown getting over to ensure that we could monetize to the best extent possible. For April, just to give a brief idea, new revenue was impacted almost 80% versus pre COVID levels. Ever since we also have payments coming from our past monthly payment customers, we did see collections of about 35% compared to pre COVID levels, even in the month of April. At the same time, we initiated measures to cut down on our discretionary costs, such as advertising. We renegotiated certain other expenses, such as rentals, implemented measures to rationalize our employee costs. While some of these decisions obviously are challenging but necessary for business in such uncertain times, we are satisfied to report that for the month of April, as far as operating cash profitability is concerned, we were negative hardly by just INR 3 crores, INR 4 crores only. Obviously, if treasury income were to be considered, we would have been positive.Coming to cash and equivalents. That stood at about INR 1,591 crores as on 31st March, growing about 19.6% year-on-year. The Board has already approved the buyback of INR 220 crores on 30th April, and required approvals are in process. The buyback shall be via tender offer route and at a price of about INR 700 per share. And at this particular price and quantum, almost 4.84% of company's outstanding shares shall be bought back as part of the buyback. Now on our cash and equivalents, approximately 65% of our treasuries are parked in debt mutual funds, another 21% into long maturity tax-free bonds and rest about 14% into FMP, Fixed Maturity Plans. Overall, in terms of underlying exposure, 98% plus of treasury paper is AAA rated or equivalent. Within that also, approximately 75% is government securities or PSUs. We, obviously, keep evaluating [ expected ] exposure. And as of now, treasury seems to be in a healthy shape. I thought this update should be useful in the uncertain or volatile times.Lastly, while COVID-19 impacted the business significantly, one good thing that we did was utilized our workforce to create enriched content for our B2B listing. If you visit our platform, you'll see there is now a dedicated section where you can not only see B2B sellers, you get to see their products, detailed catalogs, prices and other attributes. This content would, obviously, help us draw more traffic and subsequently help us monetize the strength of the platform better. We also intend to have a dedicated B2B portal which should get launched shortly. It would be a separate website, separate tabs focused on B2B vendors and products.With this update, we shall now open the floor for questions. Thank you.

[Operator]

[Operator Instructions] With that said, sir, the first question is coming from [ Krishnan from Indian Advisory ].

[Unknown Analyst]

I just wanted to get an update on what has been key reasons for the drop in unique visitors in Q4 quarter.

[Abhishek Bansal, CFO & Whole]

Sorry, could you please repeat, key reason for drop in...

[Unknown Analyst]

Yes. Yes. Just reasons or I just wanted to get a sense of what are the reasons for the drop in unique visitors in Q4. And have you done any analysis in terms of -- I think they all seems to be keep on multiplying.

[Abhishek Bansal, CFO & Whole]

Sorry, your voice is echoing. I would have to request you to please repeat and be a bit louder.

[Unknown Analyst]

Okay. No, I just wanted to get an update on the key reasons for the drop in unique visitors in Q4. And have you done any analysis on why the numbers have dropped drastically?

[Abhishek Bansal, CFO & Whole]

Okay. See on the unique visitors, in quarter 4, there are 2 or 3 reasons that I mentioned in my opening remarks as well. Firstly, on the advertising itself, if you see, we spent about INR 12.5 crores for the quarter. So that particular advertising was significantly reduced. And the advertising that we reduced happened more on the digital side there. It directly impacts profit. For last few quarters, we have been seeing that there were pressures on monetization, et cetera. So we consciously decided to optimize our ad spend for those particular categories which yield better results for our particular customers. And another reason, obviously, that for the month of March -- 1st of March itself was quite weak because COVID-19-related impact had already started. And then from about third week onwards, traffic was significantly impacted. So these 2, 3 items were the ones that impacted traffic. As and when we see things returning back to normalcy, we should be stepping up our particular advertising spend. Plus our particular optimization and efforts on B2B side, that should help us growing traffic in coming quarters.

[Unknown Analyst]

Okay. I just also want to understand how much of the traffic is organic -- through organic search or Just Dial versus paid or advertising or a search engine-based search?

[Abhishek Bansal, CFO & Whole]

So of the overall traffic, approximately 20% of the traffic comes directly to us. Rest comes indirectly to us. Of the 80% indirect traffic, approximately 2/3 comes completely free of cost to us. We don't pay anything for that. And for the balance, 1/3, that is that comes part of our digital advertising spend.

[Unknown Analyst]

Okay. So you are saying 1/3 of 80% is the paid search?

[Abhishek Bansal, CFO & Whole]

Yes.

[Unknown Analyst]

Okay. And what are the trends looking at? You also did give out some numbers of how April and early part of May is looking like. If you can just give a little more details on how the traffic is looking like in this quarter for the first 50, 55 days.

[Abhishek Bansal, CFO & Whole]

So as I mentioned that as soon as lockdown started traffic took a hit drastically. So the immediate impact was about 55%, 60% drop in traffic. For the overall month of April, it dropped about 49%, 50% or so. In May, we are seeing some particular recovery. As we speak, say, for the last week or so we are at about 65%, 68% of pre COVID levels. So traffic -- as and when geographies are opening up, restrictions are getting eased, traffic is inching back up.

[Unknown Analyst]

Okay. One last question. Any potential buyback dates that you finalized?

[Abhishek Bansal, CFO & Whole]

So day before yesterday, the postal ballot notice has been sent out for shareholders' approval. At this point of time, we expect the record date to be anywhere in around first or second week of July. And post that maybe in about a month's time or so based on how fast we can get all the required statutory approval, buyback should get concluded.

[Operator]

The next question is coming up from Pranav Kshatriya from Edelweiss.

[Pranav Kshatriya, Research Analyst]

My first question is on -- thank you for the color which you have given on the COVID impact. But can you tell us how much is the impact in terms of the collections? In the month of May, how much you have recovered from almost 80% of the new business loss which you told? Where does it stand in the month of May? And my second question is with regards to your cash flows. If I look at -- I mean because of Ind AS, there is some adjustment. But if I adjust INR 26 crore rents expenses, the free cash flow for this year comes at around INR 124 crore. Is that number correct or -- some clarity there will be helpful.

[Abhishek Bansal, CFO & Whole]

Sure. So firstly, on your question on collections for the month of May. So as I mentioned that for the month of April, broadly, we had about 35% of pre COVID levels. That was around INR 30 crores, INR 31 crores or so. For the month of May, new business or the new revenue that we generate is picking up. We do expect -- however, the pickup obviously is gradual because as of now all our particular geographies or offices are operating at a limited capacity. We do expect top collections to be somewhere around INR 34 crores, INR 35 crores for the month of May. And coming to your second question on...

[Pranav Kshatriya, Research Analyst]

Sorry, I didn't hear that number. How much percentage terms?

[Abhishek Bansal, CFO & Whole]

I said for the month of May collections could be broadly around INR 34 crores, INR 35 crores or so.

[Pranav Kshatriya, Research Analyst]

Okay. Okay. So broadly on the same level?

[Abhishek Bansal, CFO & Whole]

So collections obviously have 2 aspects to it. One, which comes from new customers. Second, what comes from existing monthly payment customers who had purchased our listings in the past. So a combination of 2 is what we are expecting to be in that particular range. Coming to your second question on free operating cash flows. So yes, based on that particular rental adjustment, et cetera, broadly, it was about INR 124 crores, INR 125 crores for last year.

[Pranav Kshatriya, Research Analyst]

Okay. And lastly, would you want to give any color on what sort of growth you would be looking for this year? Or how do you see this year turning out?

[Abhishek Bansal, CFO & Whole]

So Pranav, on growth front, obviously, situation is very fluid at this point of time. You would agree that most companies are, first of all, trying to ensure that they survive or pass through this particular phase and subsequently focus on growth. So for the month of April, as I mentioned, that against INR 30 crores, INR 31 crores of cash inflows, our particular swift action ensured that we were able to bring down our particular expenses from, say, INR 53 crores a month -- cash expenses of INR 53 crores a month to just about INR 35 crores a month. For the month of May, most likely on a cash EBITDA level, we should be breaking even. So the idea is that this particular first quarter, we want to ensure that we still stay operating cash flow positive. And thereafter, how lockdown gets lifted, that is what will determine the rate of growth going forward. Having said that, the fact that we have created a lot of B2B content, et cetera, we are quite confident that once the lockdown improves, we should be able to monetize that particular piece quite better, and we should be able to bounce back quite swiftly.

[Operator]

The next question is coming up from Rishit Parikh from Nomura.

[Rishit Parikh, Associate]

Sir, just wanted to understand from a monthly payment plan perspective, you would have roughly, what, 25%, 30% of the overall plans under the monthly piece, right? If you could just help us understand from a 1Q perspective, what will be the fall off in terms of sales decrease in 1Q? And then for the full year, how does it look like, given that the SME business environment is likely to be challenged for the full year?

[Abhishek Bansal, CFO & Whole]

So you are right that monthly payment plan campaigns from broadly 25%, 30% of our overall active paid campaigns. But just to give a perspective, for the month of February and the first half of March, this 25%, 30% had gone as high as 70%, wherein we realized that since we were aggressively offering multi-payment plans to customers, there was a decent uptick in number of customers that we were able to sign. Now coming to how do we look at active trade campaigns for fiscal '21. So the feedback that we get from our particular sales team is that whenever they are reaching out to customers, it's not that the customers are saying that they don't want to have their paid listing on the platform, but it's -- the discussion is more like not now or maybe once the lockdown gets eased. And that I think is a natural behavior for all of us. Like our particular first reaction also was to cut down some spend, which we thought that, okay, we can live without these particular spends at this point of time. So my sense is that as soon as lockdown gets over, there could be a bit of pent-up demand also. So customers who did not renew their particular listings in the month of March and April, those particular customers should also come back. In fact, there is a possibility that customers would realize that this particular spend should be essential for their particular business to get back customers. So we'll have to see how things go moving forward.

[Rishit Parikh, Associate]

Sir, just the question was largely to understand from a 1Q perspective, right. I would assume the monthly part of the payment plan contracts would have had a higher risk wherein customers would call back saying that I will not want company service, let's say, April and May, right? So that's under 25%, 30%. How -- what percentage of that would have dropped off first one? And second, from the other part of the business, say, the 70%, 75%, which are more like 6 monthly to annual contract. Of that, what customers will come back to you saying that look, let's try and default the services for the time being and then we can focus on -- we can get back to those services maybe post the lockdown or maybe a month or 2 down the line.

[Abhishek Bansal, CFO & Whole]

Okay. So for the monthly payment customers, we did have customers who came to us and said that we don't want to pay for next 1 or 2 months or we don't want to pay for the lockdown periods. So we gave them an option where they could skip 1 particular payment. And we told them that once the lockdown gets over, we would again resume that particular billing. So that particular component was about, say, 8% to 10% of our monthly payment customers, so which would -- in the overall scheme of things would broadly be, say, 2%, 2.5% of our overall campaign rates. On the second component where customers had already prepaid us, there were certain customers who came back and said that, okay, we want to pause that particular services for the lockdown period. Please resume those particular services at a later point of time. So a certain percentage of customers were in that particular bucket. And for the new business that we were able to generate for the month of April and May, there were certain customers to whom we ourselves offered that, okay, you pay us now because we are running great discounts or great offers at this point of time, but we could activate your particular listings after the lockdown gets over. See, my business is a [ mandate definite ] as far as sales or monetization is concerned. So it is very important for us to have as much productivity keep coming in on a daily basis. So the blended impact of all these 3 items, we will have to see. Last broad update that I had was compared to March trend. Our particular active paid campaigns were down about 15%, 16% as of, say, third week of May or so, which having said that captures all of these items. A part of it possibly could get upside once some of those particular campaigns resume their particular services, et cetera.

[Rishit Parikh, Associate]

Okay. No, that's very helpful color. And given, I think in the incremental what we've been selling this quarter, has there been any impact in terms of realization? How are you sort of selling versus what we were in terms of the other realization numbers?

[Abhishek Bansal, CFO & Whole]

So definitely, in such an environment, one thing that happens is that your big ticket customers, they are the ones to defer their particular purchase or renewal decisions. However, in many of those cases, the decision could be deferral rather than a decision of not resuming any time in future. So others who actually sign up, the ticket size could be lower. So for the month of April and May, whatever new revenue that we were able to pick up, yes, the ticket size was lower. So -- but I think that over the long run, once collection starts coming back to pre COVID levels, realizations, by and large, should be similar to what we had so far.

[Rishit Parikh, Associate]

Okay. Fair enough. And just lastly, on the cost structure side. So we had a fair amount of cost in terms of the overall cost structure, right, which is a bit -- help us understand what portion of that will be sustainable and what portion of that will sort of come back in the coming quarters?

[Abhishek Bansal, CFO & Whole]

So on the cost structure, if you see that about 55%, 60% comes from primarily the employee expenses. So broadly, if you were to take Q4 operating expense structure. So on a monthly basis, Q4 had about INR 58.5 crores of operating expenses. If you remove INR 5.5 crores of ESOP expenses, we are left with INR 53 crores. Within INR 53 crores, we have about INR 31 crores, INR 32 crores of employee expenses, then another about INR 7 crores, INR 8 crores of incentives which are in unit as variable. Large portion of it is variable, directly linked to revenues. Then the biggest expense items typically are advertising, followed by rental, et cetera. So as I mentioned earlier that we were able to cut down our particular spend for the month of April and May to about INR 35 crores. Having said that, once things start looking brighter, some of these expenses obviously would come back. For example, advertising, we would want to spend on advertising to promote our B2B platform, et cetera. Similarly, incentive expenses, et cetera, would start coming in. So my sense is that those particular expenses which would resume would, in any case, have a linkage to how top line is faring.

[Operator]

The next question is coming up from Keshav Garg from Counter Clinical (sic) [ Cyclical ] Investments.

[Keshav Garg;Counter Cyclical Investments;Analyst]

Sir, I wanted to understand the logic of the buyback price being decided at INR 700 when the CMP was around INR 300. Sir, so ultimately, shareholders will have to pay a higher capital gain tax. And also the number of shares that can be bought back is less than 5%. Now if this buyback price would have been INR 400, then shareholders would have bought the same amount of money, which is INR 220 crores, returned to them. And as the number of shares bought back would have been over 7% of outstanding share and the taxation on the shareholders, the capital gains, would also have been lesser. Sir, so if you can do something about it, then please do it or next time please keep the buyback price more reasonable.

[Abhishek Bansal, CFO & Whole]

Okay. Keshav, just to clarify, this time when the government introduced buyback tax at company's level, my understanding is there is no particular capital gains tax that needs to be paid at shareholders' level, which was not the case earlier. So irrespective of whatever is the price, there will not be any particular taxes at shareholders' level. Second, as far as price is concerned, our particular tender offer buyback is mainly a medium to return cash back to shareholders. In a way, it's a quasi-dividend. So it doesn't really matter whether the price is INR 700, INR 600, INR 800. The key thought process behind that particular price was that we looked at whatever was the average price of last 1 year, what was the maximum price and average of those 2 is what the Board decided to go ahead with. So the thought process is that we want all shareholders to participate and post buyback we ideally want the shareholding pattern to, by and large, remain the same.

[Keshav Garg;Counter Cyclical Investments;Analyst]

Okay, sir. Sir, in any case, had the price been lower the number of shares bought back and extinguished would have been higher, so the EPS would have increased more. That was my limited point. And sir, otherwise, I wanted to understand so that after 2015, we had around 3, 4 years of fall in our operating profit. And since the past 2 years, again, the company is making like all-time high EBITDA. So sir, what exactly happened during the 3-year period?

[Abhishek Bansal, CFO & Whole]

So post 2015 or taking a step back closer to our particular IPO, the next 2 years, we were operating at about 25%, 30% top line growth with about 25% to 30% EBITDA margin. Next 3, 4 years, we were making certain investments due to which our particular operating profitability took a hit. And in last 2, 2.5 years, we have done a lot of optimization in terms of -- firstly, there is a lot of automation that has come in due to which non-sales employees, they have been reduced from a peak of 4,400 non-sales employees to about 3,100 at this point of time. Similarly, on several other expenses as well relating to IT, technology, infra, et cetera, there again we did optimization by signing up long-term deals, et cetera. So all those initiatives ensured that our particular operating margins have been improving. And as you would have seen, the recent quarter was one of the highest in the last 6, 7 years or so.

[Keshav Garg;Counter Cyclical Investments;Analyst]

Sure, sir. And sir, also, sir, recently, one of our competitors, IndiaMART, got listed and, sir, their performance is dramatically better than ours. Since we are in the same space, so what exactly are they being able to do that we are not able to do? And how do we hope to address that gap?

[Abhishek Bansal, CFO & Whole]

See, while I cannot obviously comment on specific competitor, but as we would know that, for us, 80% of the revenue comes from B2C-oriented categories, and these are the categories which have seen massive disruption over last 5 to 6 years. We had done a detailed analysis in last about 6 years. There is almost about $40 billion plus of capital inflows that have come in. Having said that, in these times, like some unprecedented events such as COVID-19, that obviously will end up exposing [ weak lurk ] in some of these particular business models. So it is great that some of our competitors are opening up the market, which also opens up more avenues for us. So far, we have focused on running the business efficiently, and I think we should be able to get our particular top line growth, traffic growth, again, back to the levels that we had witnessed a few years back.

[Operator]

The next question is coming up from Alankar Garude from Macquarie.

[Alankar Garude, Analyst]

Abhishek, you mentioned that cash expenses have come down to about INR 35 crores per month in the months of April and May from INR 53-odd crores, and you also mentioned that some of these costs could come back once things start looking a bit brighter. So just wanted to understand this particular comment of yours, and you mentioned about advertising costs will be -- looking to come back. But if I also look at some of the other costs, like employee costs, for example, where you have seen the absolute number of employees coming down on a sequential basis. So can you also throw some color on the employee side? Could we see some further rationalization happening? Any comments on that will be really helpful.

[Abhishek Bansal, CFO & Whole]

Okay. So on the cost side, see, for the month of April, May, we had drastically cut down on our advertising spend. So we curtailed our advertising spend by almost by 90% or so. But once things start looking better, I would want to bring back that particular advertising so that we can reach out to as many end users as possible. So that is one particular expense item which would come back. But as I said that we always would keep an eye on how our particular monetization is panning out. Secondly, on incentives as well. So whatever incentives that we gave to our employees, which are directly linked to revenues, so as and when revenues scale up, those particular incentives also could come back. Having said that, there will be certain set of expenses which would permanently be down. For example, we have taken a decision that in certain departments, automation is, obviously, the way to go. So there will be a strong thrust on automation to try to reduce that particular requirement of workforce in certain departments. Then -- if that particular requirement is reduced, that obviously reduces my requirement for equivalent office space and with office space going down related expenses such as power, fuel, whatever, those particular expenses go down. By and large, the theme would be that technology-related spend, those would be stepped up to ensure that company remains technologically robust, and other particular spend would be optimized as much as possible.Coming to your second question on employee count. So employee count this particular quarter we intentionally held back on our particular hiring. So that is primarily one of the reasons that there is that particular sequential fall of about 400, 500 employees. Having said that, there is a significant skew that we have in our particular sales productivity. So we are looking at ways by which we could sort of have similar monetization by having say 10%, 15% lesser workforce. So there are works in pipeline on those particular items. The idea is, since the environment is very challenging, we have to be prepared for any worst-case scenario. And even in such particular situations, we don't want the company to do that even operating cash flow level. But at the same time, we would not do anything silly to ensure that, that compromises either product development or long-term growth potential.

[Alankar Garude, Analyst]

Understood. Abhishek, the second question is I wanted to ask you as well as Mani is how exactly are our sales and marketing teams interacting with the business ones now? What is the medium of infraction? Has the quality as well as the quantity of interactions been significantly impacted because they basically even want to kind of connect with our field sales at this point of time?

[Abhishek Bansal, CFO & Whole]

See, to answer this, but yes, the quantity of interaction has gone down, which is reflecting in, say, April run rate of new business generation being about 80% down. Having said that, even earlier -- so out of our particular 9,000-odd sales force, about 4,000 are telesales executives. Those telesales executives, in any case, even earlier used to interact with customers via electronic means such as either by calling them or staying in touch via messaging, et cetera. For other feet on street as well, with their existing customers, they already had running relationship. So we were able to smoothly transition all of them to start getting in touch with customers solely via either calling or sending them messages. So in this particular digital era where customers are used to online payments, et cetera, I think that if reaching out to customers, yes, there was a challenge, but to some extent, with the use of technology, we could overcome that. The key challenge, obviously, was that since everyone is realizing that we don't know how the situation is going to be, everyone wants to be in a conversation mode, which is where the feedback came from our particular sales executives that the customer is saying, "Not now. Let us speak once the lockdown is over." So temporarily, yes, there is a hit. Once things start opening up, a platform such as us should eventually benefit because we do know that our particular customers hardly have any other alternatives on which they could spend. And the amount that they pay to Just Dial, our sense is that, that particular amount is not that high a money that they have to shell out. Yet they would want to optimize their particular spend. But with some visibility of their business resuming back to normal, they should be resuming all such spend.

[Alankar Garude, Analyst]

Right. And then final question from my side. Do you feel that given that the situation we have currently, the startup ecosystem is likely to face increased pressure, both on their operations as well as on the ability to get funding easily, at least for the next few months. Do you believe that there could be some opportunities which will come up on the M&A side, which we might want to explore?

[Abhishek Bansal, CFO & Whole]

So on the start-up side, all of us are hearing day-to-day news flow of drastic steps in terms of reduction of workforce. So my sense is that the well-funded startups, they would want to conserve whatever funds they have in their kitty. So that once this particular period is over, then that is when they would resume those particular investments. But again, this kind of event clearly would demonstrate that a business model which works on solely gathering users by giving discounts, cash backs, those particular business models will face issues going forward. And as far as any M&A opportunities, et cetera, are concerned, so in case there is anything which has synergies with a business such as ours or which we believe could be a immensely profitable business in future, but today is in a very initial stage, yes, we could be open to looking at it. But at this point of time, internally itself, we have so many things on our plate that we are focusing on that itself.

[Operator]

And Mr. Bansal, since we don't have any further questions at this point of time, turning the program back to you for your closing comments, sir.

[Abhishek Bansal, CFO & Whole]

Thank you, everyone, for joining us. While these are uncertain times, our focus continues to ensure that the business is run as efficiently as possible, getting traffic and monetization back to pre COVID levels and then scaling it up thereafter. Our monthly payment plan strategy pre COVID gives us confidence that the same should yield great results as and when economies start opening up. In case you have any further queries, please do reach out, and we will do our best to address. That's it from our side. Thank you so much.

[Operator]

Thank you so much, Mr. Bansal. Thank you respected panelists, members. Thank you, participants, for joining the call. Wish you all have a great evening ahead, and requesting to please stay safe. Thank you once again.