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MSTC Ltd
Earnings Call Analysis
Summary
Q1-2025
In Q1 FY25, MSTC experienced a 15% decline in revenue to INR 86.01 crores, mainly due to Coal India shifting its coal auction operations in-house. Despite this, the Group saw a 22.31% increase in PAT, reaching INR 61.90 crores. Efforts are underway to diversify revenue streams, including new e-commerce platforms and partnerships with private sector clients. The company expects alternative revenue streams to show positive results from Q3 onwards.
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Ladies and gentlemen, good day, and welcome to MSTC Limited Q1 FY '25 Conference Call hosted by Equirus Securities. [Operator Instructions]
Please note that this conference has been recorded. I now hand the conference over to Mr. Deep Modi from Equirus Securities. Thank you, and over to you, sir.
Thank you. Good afternoon, everyone. On behalf of Equirus Securities, I welcome all to Q1 FY '25 Earnings Conference Call of MSTC Limited. From the management, we have with us today, Mr. Manobendra Ghoshal, Chairman and Managing Director; Mr. Subrata Sarkar, Director of Finance; and Mr. Ajay Kumar Rai, Company Secretary. We will begin the call with the opening remarks from the management, and then we will open the line for Q&A. I now hand over the call to Mr. Manobendra Ghoshal. Over to you, sir.
Good morning. Good morning, everybody. Welcome to MSTC. In the consolidated figures for this quarter, there has been a slow but steady increase in overall revenue and the PBT. There -- and as far as MSTC stand-alone performance is concerned, the volume of business, excluding e-procurement, has shown a 15% increase year-on-year over the same quarter. However, total operating revenue on a stand-alone basis for MSTC has dropped by about 15% year-on-year, mainly on the e-commerce front.
Income from marketing and other income has remained largely flat. Total expenses have also remained consistent and flat, considered year-on-year or sequentially and total PBT has therefore been lower as proportional to the operating revenue. Since we have shifted to the new tax regime with effect from FY '24, the total tax impact has reduced and the PAT is, therefore, at almost similar levels, in fact, marginally lower than the same -- than the levels of the previous year-on-year quarter despite a weaker revenue stream.
As far as the revenue stream is concerned, this has been impacted mainly because CIA, like Coal India Limited, which was [ given ] to a major client for us, has now shifted its entire coal auction and linkage auction work to its own portal. This has impacted our revenue stream. However, alternate revenue streams are vigorously being followed up, and we expect to see positive results from this from Q3 onwards. Apart from this, I'd like to share that MSTC was asked by the Ministry of Steel to develop the steel import management system version 2.0.
The previous version had been developed by DGFT and LIC. This is normally -- this was a 100-day agenda item of [ government. ] And despite the fact that now normally, such projects gestation period is around 9 to 10 months to an year. MSTC could develop this and bring it online in 2 months. This was inaugurated by honorable Minister of Steel at the end of last month.
Similarly, another portal for auction of timber has been developed for Chhattisgarh state and inaugurated day before yesterday. This should also have a significant impact on the entire process of physical auctions going over to the digital form in forest produce and timber in a very major way. Now for a brief rundown on the financials, I would request Mr. Subrata Sarkar, our Director of Finance to.
Good afternoon, everybody. So as already narrated by our CEO, [sir like it was ] a little bit down in so far as revenue stream is concerned and almost flatter in the pack. So let me give you the snapshot of quarter-to-quarter basis that is quarter 1 versus quarter 1 of last year. So total revenue is INR 86.01 crores as compared to INR 100.63 crores, down by 15%. So the main down has come in the e-commerce, which is down by 15% from INR 94 crores to INR 79.46 crores. And EBITDA, of course has come down from INR 72.27 crores to INR 56.87 crores and PBT from INR 70.56 crores to INR 64.48 crores. And profit after tax from INR 44.57 crores to INR 41.46 crores and of course, EPS from INR 6.33 to INR 5.75.
And in the segmental part, what we can say, there is a breakup of e-commerce part. So the INR 79.46 crores comprises of e-auction/e-sale, INR 58.75 crores; e-procurement, INR 2.80 crores and other income is INR 20.04 crores. And INR 71.22 crores, last year, it was INR 71.22 crores, so that's the decline of around 17%. And with the expenses remaining in the quarter, profit after tax has come down from INR 70.56 crores to INR 54.48 crores and PAT from INR 44.57 crores to INR 40.46 crores.
In the consolidated form, we saw very good performance coming out of [ equipment and funds ], they have compensated that part of MSTC and the revenue has gone up from INR 199.76 crores to INR 208.53 crores. And you can see that segment, scrap recovery and allied jobs which pertains to our 100% subsidiary, it was INR 99.12 crores and it has gone up to INR 122.53 crores.
So EBITDA has gone up from INR 86.02 crores to INR 88.71 crores, and PBT has gone up from INR 80.56 crores to INR 81.97 crores, and PAT has gone up from INR 50.61 crores to INR 61.90 crores, a significant increase of 22.31% on a Group as a whole basis. Although the daily profit, the daily loss that is part of our MSTC [ 16% ] loss that is remaining on a flatter side. Although low, but it remains constant and management has been able to contain the losses -- further losses that's supposed to be done.
And so far as break up is concerned, revenue from operations in the stand-alone basis reduced INR 69.04 crores from [ INR 60.34 crores, ] other income remained flatter INR 16.96 crores compared to INR 18.29 crores, employee benefit, of course, is not a significant increase from INR 20.82 crores to INR 21.72 crores. And with that, total expenses remaining at INR 31.53 crores as compared to INR 30.07 crores. And of course, with that effect, that carry forward of that decline in the 16% revenue, so PBT is declined from INR 70.56 crores to INR 54.48 crores and PAT from INR 44.57 crores to INR 40.46 crores.
And in the consolidated form, of course, it has -- total revenue has gone up from INR 199.76 crores to INR 208.53 crores. And total expenses has gone up from INR 80.56 crores to INR 81.97 crores, marginal increase. And like the PAT has gone from INR 50.61 crores to INR 61.90 crores. So that's all from our side. So thank you very much and over to you.
[Operator Instructions] The first question is from the line of Saurabh Ginodia from SMIFS Limited.
Sir, I have 3 questions from my side. First is, like we have done certain amendments in our Object clause where we have inserted certain objectives like data center and recycling. So just wanted to understand what exactly are you planning to do in those segments? If you can throw some light on that? And when can we expect some kind of revenue inflow from these verticals? And what are the CapEx requirements in these new segments? This is my first question. Should I ask my second question or you want to reply on this is first?
You can ask please ask your questions, and then I'd like to take it one by one.
Yes. My second question is to MD, sir, Mr. Ghoshal. Sir, you had joined this company sometime in January. So it has been now 7 months since you are looking into the business of MSTC. So I just wanted to get your sense how has been the experience and what is your 3- to 5-year vision for MSTC?
And the third point is a suggestion from our side is that if you go through the presentation, honestly speaking, this presentation doesn't add much value to us because the kind of data, which one requires to make an informed decision and investment in the company, the kind of data is not available on the presentation. So we would request the management to give certain more breakup in terms of different sector-wise revenue on your e-commerce vertical so that we can have some more clarity on the business and better understanding of the business. So this is my suggestion.
Right. So if I can take the questions one by one. We had some time ago, in fact, about a year ago, I thought that there would be certain areas of new business where we would be constrained unless we had a broad enough mandate through our Articles and Memorandum of Association. So data center is a logical extension because we already have our own data center.
And therefore, there would be possibilities that may come up for organic growth of adding on to the work that we already have of hosting different clients data on our own servers. So putting that in as a part of our MoA really was -- essentially considered as an enabling provision.
Now as far as CapEx is concerned, we are -- we have traditionally been an asset-light company, and that is the way that we are going to be. But as far as expenditure on either hardware or software of this nature is concerned is not particularly asset heavy. So yes, it would not be significant. It would not be significantly higher than what is the nominal level of CapEx investments that we are going through at this point of time.
And looking at additional business coming in from things like virtual data rooms, data center would be something that we would examine in the future. But as far as opening the door is concerned, to have an enabling provision, yes, that was the underlying sort of changing it in the in MoA.
Now as far as the recycling part is concerned, that is something that we are already into through our joint venture. And again, this is an enabling provision, which if an opportunity -- suitable opportunity comes up in the future, this would enable us to have a quick mover advantage. And therefore, that will be considered a wise thing to also have in our MoA.
As far as the experience of the first 7 months is concerned, it has been a great learning experience because this is a sector which is very different from the nuts and bolts sector that I have worked in for a large part of my career. It gels in very well with the fact that we, even in our traditional brick-and-mortar businesses, a substantial part of the work has been going on to digital platforms. So as far as digitalization is concerned, that has generally been embedded into whether it is transport, whether it is engineering.
And this is a company which essentially works in transforming physical processes into digital processes. That's what the entire development of this country -- of this company over the last 20 years has been about. And this is an area where we need to leverage, not only in stand-alone processes, but basically developing portal, which integrates multiple services for people. So that is the plan for the next 3 to 5 years. And we are looking at a substantial multiple increase in our overall turnover operations revenue streams over the next 5 years or so.
As far as sector-wide revenue, I would request our DF to respond to that.
So like we always endeavor to try to improve our presentation, it is like -- but so far as more informations are concerned, we will always try to explore. Your suggestion is well accepted. Let us see what we can do within the regulatory framework in the future days ahead. Of course, your suggestions are well accepted, and we appreciate the concerns of our investors. So whatever will be done, we will explore it under the regulatory framework.
Sir, just wanted to have some follow-up thoughts on that you just mentioned on the data center part. Sir, what kind of expected revenue one can expect from this business, let's say over the next 2 to 3 years? And has that started to...
For me to talk about numbers at this stage, but this, as I said, is an area that we are examining as to the possibilities and whatever possibilities would come up, would naturally be taken forward. Putting numbers to it at this stage is not really appropriate.
Understood. And sir, one last question from my side. Sir, if we just look at the e-commerce vertical growth over, let's say, the last 3 to 4 years. In FY '22, this vertical grew by about 33%; FY '23, the growth was 19%. Thereafter, the growth rate moderated to about 4% in FY '24. And in this quarter, there is a degrowth of about 16% Y-o-Y. So just wanted to understand what kind of targets you have set for e-commerce vertical for this year and maybe next year?
Our overall targets would naturally be ideally a double-digit growth. That is, of course, becoming more and more difficult because of the increase in competition and the increase in number of players. But what we are looking at is still trying to increase the pie itself.
[Operator Instructions] The next question is from the line of Prakash Bhuve, an individual investor.
I want to refer to the AGM questions last year. The shareholders had important questions about more information on portal. And I think Mr. Ghoshal will take care of giving more transparency and much more information to all the shareholders, which is not yet done. Being a public sector, you follow light type of security and demand tactics. They're not open to the public. Don't reply on website. The scrapping centers that we have. The scrapping center's speed is very low.
Now there have been the rampant trains in the whole country. And I feel because of rampant trains in all the states, and villages of the company. Minimum INR 2 crores to INR 3 crores more vehicles will be scrapped and will be ready for scrapping. But our speed of work is very, very, very low and we are giving no indication as to what is happening to the company and to the volume. This is what I want to say.
Second thing about the dividend. The dividend was increased for the remaining part of the year because the taxation has been streamlined. So we expect better returns from the dividend. What is our alternative source income, the raising of e-income e-commerce business, what is the development there? What are the options that we are developing? And selling of the subsidiary booking -- FSNL subsidiary, booking the profit and distributing that profit to the shareholders by a large dividend onetime is very essential.
Every year, the profit is given, next 6 months, next 6 months, you think we will look into it. We'll come to know when you will do, but there's no transparency. I think the Chairman and the new team Mr. Bhanu Kumar will take some decisive action, and give some indication. They are tight lipped and they're not answerable to anybody. If I think you, is this that you are not accountable to even persons of India to that extent. Who knows what's in this country. Shareholders are at the mercy of a public sector undertaking. But years together, 15 years and 20 years is a big part of life in the individual human life, not a country's life, but individual human's life.
So you have to show now the performance and the scrapping centers, how many are opened they are not -- you are very [indiscernible] on that. Last quarterly calls also, which is not correct. I feel so. We must give what is happening now to the scrapping centers and the scrapping speed so that we can encash the opportunity and new vehicles are coming. And there's no indication given from the management under [ Pokhal ] as what is happening to the company. Thank you.
Right. Prakashji, as far as transparency is concerned, it is our -- always our endeavor to give the maximum amount of transparency that is possible. But I think you have been a little confused about -- now as far as the scrapping centers are concerned, they are a unit of MMRPL, not of MSTC. So if you go to the MMRPL website, you will be able to find the details of the scrapping center. That is a joint venture between [indiscernible] it is not a part of MSTC directly. So that is where you will be able to get that information.
I know. So how many scrapping centers are you going to open in the next 6 months? What is going...
It's not the thing that MSTC would decide, that will be decided by the management of MMRPL. They have completely different management. As far as MSTC is concerned, MSTC is a shareholder in the company MMRPL.
You don't like investment in scrapping centers at all?
MSTC is, as I said, the scrapping centers are not owned by MSTC. They are owned by a different company on which MSTC has a stake. So I think it could be better if you went to the website of MMRPL, where you will be able to get much further details about this.
Can you throw some light and give some color as to what is happening because our revenues are not increasing because of trains, the number of vehicles being scrapped. I mean...
That is true. So there has been a policy framework, which has been given by the Government of India. All those policy framework has to be implemented by the different states, which are now at different stages. So that is one of the reasons why the numbers of vehicles being scrapped through the registered vehicle scrapping facilities has not increased to the extent that -- all -- I mean as you would yourself have expected.
All the issues which are being followed up by the union government with the different states and there is progress. And over the maybe next 1, 1.5 years, we would expect to see significant progress in this aspect.
Significant progress of how much? Is that 50%, 60% in volume and revenue?
That is something that the management of MMRPL would be able to indicate, Prakash sir.
Why don't you give some interview to the TV that your subsidiary company also for the knowledge of public investors?
Prakash sir, it is not a subsidiary company, it is a joint venture between us and Mahindra Auto Limited.
Okay. So can you...
Sorry to interrupt Mr. Prakash. May we request that you return to the question queue for the follow-up question?
Okay.
The next question is from the line of Vinay Nadkarni from Hathway Investments.
Yes. Sir, I'm a bit new to this company. So just -- could you just take us through the 3 revenue streams that you have, marketing, e-commerce and scrap recovery? I can understand scrap recovery and allied jobs. But -- and that is our subsidiary company that you have. But e-commerce and marketing, what exactly is the revenue stream?
Yes. So thank you very much for doing this analyst to know about our company. Like we are traditionally, we had 3 major wings. One is the marketing that is a trading business. So generally now, it has been tapered down, and you can see from the data that we have almost come out of that segment, except from certain business, which is happening [ additionally ] and it is backed by -- any trading is backed by 110% bank guarantee. And to make it as a asset which can be and has no impact on the financials of the company in the near future so far data realizations are concerned. So it is very small and insignificant part of our revenue as well as in the volume of the business.
Now our main foray is the e-commerce segment. So basically, if you can see like in the e-commerce segment, we basically are a platform -- basically to develop a platform to provide the auction services to various government POCs and upwards of certain private sector players. Of course, for private sector players are not that much in number in our city and the customer foray, but we are trying to hoping them also.
And we are also pioneer in e-procurement solution and what we can see that some of the flagship projects of the Government of India like mines and natural resources auction, allocation auction and the spectrum, recently which has happened. So that is our main business so far, e-commerce is concerned, so here, we can -- we do develop the e-auction platform. And facilitate the e-auction of different things like scrap, other materials like minerals, resources, timber, forest produces and other like spectrum, et cetera.
Recently, we are developing our dedicated platform, what CEO sir has told in his opening remarks that steels or Ministry of Steel. So we are into that also. Basically, it is in the mix back in the e-commerce part. I hope I will be able to brief you a bit more. I was able to explain you the nature of the business that we are in.
Yes. Yes, I got it. So this e-commerce revenue that you're getting is the revenue from whatever auctions that are carried out on the site, right? So therefore, what you'll get some percentage of the volume traded.
Not always. We have a different revenue stream also. Sometimes we get on a one-time basis. Sometimes we get on the volume traded basis, sometimes we get on the [indiscernible] basis. So these are revenues that are there, but we get out of that. The basic activity is that the source of that revenue is that auction only.
Then is it -- for this quarter, it has got reduced because of the election and what they call the code of conduct that was in place that you didn't have too many auctions? Why have e-commerce -- because that seems to be the biggest other than scrap recovery, that is a bigger chunk of your revenue, right?
Partially, very, very partialy yes, because of certain logistical and listing because the vehicles are used in a partial, but some part is, of course, as simply explained. We have one of a couple of revenue streams that we have lost like Coal India, which has been now doing their -- develop their own portal and [indiscernible] so this is a mix effect. But obviously, certain customers we have lost and for that, we are trying and striving hard. And of course, as explained quarter 3 we...
We expect that revenue streams should come back online, I mean, and more than make up for this by quarter 3 and onwards.
Okay. And Coal India was what part of your revenues in FY '24 last year?
Look, actually, by percentage it is very difficult to quantify because a lot of we are doing the coal auction and some kind of specialized auction on behalf of Coal India. But like with the customers left, so some portion, obviously, it has impacted.
It was a major customer. So yes, this has had a significant impact, but we should be able to hopefully make up that impact in the next couple of quarters.
[Operator Instructions] The next question is from the line of Miraj from Arihant Capital.
Just a couple of clarifications because while I was on the call, my line got disconnected twice or thrice. So I just want to clarify what you mentioned, if it was right or no. First thing is that regarding the slowness in business right now, one of the reasons is that Coal India has now opened up their own portal as they were mandated and the business coming from them has stopped. This was the first thing, right?
Yes, that is true.
And the other thing regarding one of the changes in MoA that you mentioned regarding data center and recycling. On the data center front, you are saying something that it is an asset-light aspect only. Can you just repeat that part? My line got disconnected at that point.
So what I was saying is that traditionally, MSTC has been an asset-light company. So it is not that there is any kind of plan to have very massive CapEx input into any kind of -- we would prefer not to invest in major CapEx unless it is something which makes a huge amount of business sense or the returns are substantially justifiable.
So as far as data centers are concerned, we, in any case, as a normal case of maintenance and expansion, we have our own data center. We obviously there is an element of CapEx in terms of software and hardware, which has to be constantly upgraded and so on.
So as far as data center is the enabling provision of data centers also being a part of our MoA. And as a service itself is something that we enable so that if an opportunity comes across in the future, we would be well positioned to take it. That is what I was getting at.
Okay. Perfect. Just a question regarding on e-commerce business now. Sir, since Coal India has now -- they started their own. So we have actually been trying to get a lot more accounts, I believe, for the last 4, 5 quarters, we've been talking about adding more accounts. I think in one of the portals we did add a few accounts as well. Can you explain that what pillars, what verticals are we looking at to add more accounts? Is it regarding nationalized banks somewhere where we can have the auctions of the properties that -- real estate properties that they acquired.
We have been doing the auctions of properties for nationalized banks. So basically, the kind of growth that one looks at is related areas. So it would not be really fair to ask me to specify that what is the sector of the client because that would put us at a competitive disadvantage.
But basically, any company would want to leverage the kind of strength that it already has. So there would be multiple sectors that we are already working in, in terms of minerals, in terms of stressed assets and it is a question of finding out which are other entities who would basically be looking at disposal of these assets and want to use a digital e-commerce platform for it.
So that is the general direction. So that is the organic growth of finding more clients or finding more entities who are into e-commerce of the kind of things that we already are doing.
And apart from this, we have also been working at integrating services. So that is a separate line of business, which would be somewhat inorganic growth, which would build upon what we are doing and developing more upstream or downstream activities. So that's two ways that one thing is growing which is what MSTC has also been doing.
Perfect. Understood. And sir, as you were talking that a lot of competition has actually come in, could you let me know who is the current competitors that we're facing this competition from? So any like-to-like peers that we can name?
It's not really very fair to ask me to name names. But yes, there are at least 2 or 3 major entities who are in the private sector or in the joint sector, which also work in a similar way that MSTC is. And of course, there are multiple players who deliver the vanilla auction services. Of course, what we would like to think is that the total bouquet of services that is delivered by MSTC is not really matched by almost anyone else in the business.
Perfect. And just lastly, and I would get back in the queue. If you could let me know our net debt currently as of Q1? And what do we plan to do with the cash that is available, almost INR 1,100 crores in FY '24.
Yes. Just now -- we will get back to you on the cash front because it is difficult, we have not drawn our balance sheet so far this quarter is concerned. So because it is required on half yearly basis. Obviously, we will let you know about the cash and utilization in the quarter 2 call. And by that time, this year will also get matured and we will have enough opportunities for the utilization of the funds and all the things.
Clearer outlook will be available.
Yes. Outlook will be available. So we will be able to give you a clearer picture at that particular point of time.
The next question is from the line of Anand from [indiscernible] Finance.
I just need to reconfirm some data points? You said your e-commerce segment had increased 15% in volume. However, it decreased 15% in value, am I correct?
That's right.
And are we concentrating more on the e-procurement version because I think I heard someone say that in e-procurement, we are pioneer but predominantly, our vertical has always been the e-auction.
E-procurement in terms of revenue stream has been -- even though volumes have been increasing, the revenue stream is not a very significant or major part of our overall revenue stream. Most of our bread and butter and jam comes from the auctions.
Auctions. All right. Just another suggestion, please could you upload your investor presentation little earlier? I mean, this time it was [Technical Difficulty]
We will definitely endeavor to do that. And our apologies for the inconvenience caused, we will certainly -- this is we'll note and we'll do this in time.
Last time it was [indiscernible] .
Sure we will definitely try to do it earlier. Noted. Certainly.
Hello, Mr. Anand, your vice is not audible. As the line of Anand seems to be disconnected, we will move to next question. The next question is from the line of Rajesh, an individual investor.
Sir, my first question is the contribution of the private sector in the e-commerce business, especially the scrap business was only 10% as far as the last communication that we had. So why is it so low?
Rajesh sahab, I think as far as the private sector is concerned, the right people to talk about low contribution would be someone in the private sector. But nevertheless, as far as our take on it is concerned is that most competitors, whether in the private or public sector provide vanilla services, basically simply the auction platform itself.
We, as MSTC have been traditionally providing a full array of services right from helping the seller to create the auction, to create a catalog, to determine what should be the lot size, what should be the reserve price and so on and so forth.
And right up to post-auction activities that the seller would have to do, including the integration of payments and so on and so forth. So that is one of the reasons why MSTC is a pioneer and has consistently been -- having a large market share in this segment.
Despite whatever you said right now that you -- MSTC provides an array of services, again, so the question remains, why is that the private sector is not a big contributor in the scrap business?
So that is not something that -- if a seller or a buyer essentially gets a higher array of services, I would think that they would basically go for that service provider, isn't it? If I understand your question correctly.
Yes, sir. So my question was that since MSTC provides an array of services as you just mentioned, why is that the private sector is still not big contributor?
You're talking about private sector as a part of our business?
About the customer.
I was talking in terms of private sector being also a service provider. So as far as the scrap business and the private sector is concerned, most private sector entities have direct 1:1 arrangements which is what is essentially different from public sector entities or government entities, which would normally go through an auction process.
Now what we have been trying to educate people about is that overall revenue realization for the private sector also would be higher to go through a process like this which is what has been helping us get into the private sector and on building more and more clients of that sort.
Okay. All right. Sir, my second question would be on the car recycling business. I think Prakashji also had some questions. If we look at the last 2 years or so, there's hardly been any contribution from MMRPL as far as the revenue is concerned or even as far as PAT is concerned. here.
Here as far as the details of the business are concerned, I mean, we, MSTC is an investor in MMRPL. I mean it's a joint venture. So very broadly speaking, yes, there has been a time required for the entire framework of vehicle -- the end-of-life vehicle recycling to that implemented first of all, as the overall central framework and then in the different states that individual enabling framework has to be put in, in terms of regulation frameworks.
So that has been taking a time and that is what has basically led to a situation where the unorganized sector is more by individuals for end-of-life vehicle recycling. Now once these enabling provisions and the framework comes in, in terms of MORTH guidelines, that should reverse. For anything new, it is obviously going to take an amount of time for that kind of framework to get implemented.
It's already been 6 years since MMRPL was formed. And...
We are also looking forward to the implementation being fast-tracked by the different entities.
Okay. Sir, last question, any update on the fintech business for which you have changed the MoA?
So that is another area where we would be examining what are the possibilities. And as and when we come across some possibilities, we will update our investors and our stakeholders.
The next question is from the line of Vinay Nadkarni from Hathway Investments.
Yes. Sorry. My question was on the FSNL sell-off. Nothing has happened so far, right? No further developments.
So this is something which is being handled by the DIPAM. So it will not be appropriate for us to comment on this.
Yes. But if I see the revenues from this company and the margins that contributes to your top line and bottom line, it's pretty significant, isn't it? So if that gets sold off, MSTC will have a setback in terms of its earnings.
I would not try to speculate because that is -- as I said, I mean, the entire process has been decided upon and processed by the DIPAM.
No, my question was slightly different. My question is knowing that this is going to happen today, tomorrow or maybe 5 years later, whenever it happens...
I would not assume, Vinay. I would not [indiscernible]
No, no. Then let me frame my question differently.
On a revised, which is -- so let's not go there.
Okay. Okay. Let me frame my question differently. I'm saying in terms of, therefore, additional streams of revenue, one is the scrapping JV that you have, which you are saying that it is taking its time to develop. The other is the e-com revenue, which is you are trying other avenues to really grow that. I was told that there were some tickets -- some ticketing arrangements you have done with Reliance, Indus Towers and Tata Power earlier. Anything like that, anything that private sector with the earlier question was also related to.
We have definitely reached out to the private sector. And we have onboarded clients, in fact, more than one client -- more than one major client. And we hope that, that trend will continue, and we will be able to convince the private sector also that auctioning scrap or auctioning assets that they no longer use. Better option for them also. This is something that our teams have been very consistently working on. And we have had some success. We hope to have more success in the future as well.
Okay. And your business, is it related only to metal scrapping or even plastic or other recycling can be...
We are completely metal agnostic. So we have not only been auctioning or providing an e-commerce platform for scrap, but also for resources, for even intangible assets like spectrum and so on and so forth. So we are across all kinds of sectors. If anything needs to be sold through a process of an auction or -- so that is something that MSTC has well expertise in creating the process and putting it on the digital platform.
[Operator Instructions] The next question is from the line of Saurabh Ginodia from SMIFS Limited.
The next question is dedicated to Mr. Sarkar. Sir, our last year's e-commerce vertical revenue was like INR 364 crores. So can you just broadly help us give some breakup between scrap sales, coal auction, e-sales and other segments? A very broad breakup would be helpful.
Yes, I think I didn't have handy this last year's investor presentation. But what I can broadly tell you that 364 part, majority was scrap and e-sales. So the 364 -- out of that 364 the part that you are talking about, it was around 200-odd was from that particular segment. So basically, still, scrap is around 50% of the total business -- e-commerce revenue, which is broader. So we -- still, it is the main [indiscernible] for MSTC. So still, it is a 50% of that pie that is coming up from scrap e-auction, it is still happening and still that is being maintained, almost [indiscernible] for the year.
Okay. And what could be the revenue from Coal India contribution last full year?
That is exactly the reason it's not particularly [indiscernible]. But of course, what we can see the drop this year, it is basically attributed to the -- mainly to the revenue from Coal India because on quarter-to-quarter basis, we have lost that particular client. So that is the main drop in the quarter-to-quarter basis.
Okay. So sir, to point here, we -- as shareholders, we are quite concerned about the core business revenue, which is going down. And as MD sir has mentioned that we intend to make up for this lost sales from this customer maybe in the next couple of quarters. So just wanted to understand what is the roadmap which we have set, which will take care of compensate for this loss in revenue from Coal India?
It will basically be in sectors of our resources and minerals which is, as I said, I mean, it is an organic kind of growth of finding more customers or more clients on -- of the kind of work that we are already doing. And we have certain possibilities, which are looking good. We will update you further about it as and when we have firm orders.
Okay. So what I understood is that this will be mainly driven from addition of new customers and new verticals.
Essentially, yes.
Okay. But sir, any color if you can just broadly help with some understanding what are the new verticals which we are trying to explore?
We are looking, as I had said, of integrated services. So basically, other than auction services, we are looking upstream and downstream is what else we can do to add value to the customer. So we would be -- we would like to, in fact, talk about it when we roll out those rather than at this point of time.
Okay. So Q2 also may be impacted on the e-commerce vertical side because of the [indiscernible] we are paying to get this losses from Coal India, is my understanding correct?
That may be likely. We are looking at what are the ways we can do to alleviate that in the short term.
So whatever efforts we are doing in that direction, the full benefit can be expected only in the next year or maybe from Q3, Q4 onwards?
It should start happening. The revenue stream should start happening from new initiatives in Q3. I mean, things that we are working on at this point of time. In Q3, Q4 onwards, that should be significant.
When you say significant, it will be like a double digit, high double digit, low double digits?
I would not like to speculate on numbers, but yes.
Okay. And sir, also, if you can just give us some understanding regarding the scrap prices, how they have behaved over the last, let's say, 1 year or so? And any outlook, if you can share on this would be helpful.
[indiscernible] major indicators over the last year-on-year quarter, there would be probably a decrease in the prices of scrap to the extent of 6% to 8%. But by and large, I mean these are issues which fluctuate. Over the last quarter, there would probably be an increase. And then -- so these are cyclic in nature. There has been, over the last 3 years, varying between in a range of plus or minus 10%.
Okay. And any directional outlook can you share on the scrap prices?
It's not something that, again, this is largely market-driven in terms of availability and in terms of the demand. Naturally, with a lot of circularity for being and researched in all kinds of sectors. The requirement of scrap has gone up, and it will remain up because the amount of scrap that is available is definitely lower than what is required for the ferrous industries and as well as for just about any major industry which has inputs from scrap -- as input material, particularly in the ferrous industry.
So the demand is always going to be, at least for the foreseeable future as per industry projections is definitely more than the availability. This is of course, the long term picture.
This was the last question. I would now like to hand the conference over to the management for the closing remarks.
Right. I would like to thank all the stakeholders who have taken their time out and every time that you ask us a question, it also makes us introspect and rethink and also look at what we are doing and whether we are doing it. So that guidance is always a very welcome thing and I look forward to your guidance and I look forward to your inputs over the next quarters and the financial years. Thank you so much.
On behalf of Equirus Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
Thank you.
Thank you.