MSTC Ltd

NSE:MSTCLTD

Earnings Call Transcript 2023-Q3

[Operator]

Ladies and gentlemen, good day, and welcome to the MSTC Limited Third Quarter FY '23 Earnings Conference Call hosted by Equirus Securities. [Operator Instructions]. Please note that this conference is being recorded.

I will now hand the conference over to Anish [indiscernible] from Equirus Securities. Please go ahead, sir.

[Unknown Attendee]

Thank you. Hello, everyone. On behalf of Equirus Securities, I welcome you all to Q3 FY '23 Earnings Conference Call of MSTC Limited. From the management, we have with us today, Mr. Surinder Kumar Gupta, Chairman and MD; Mr. Subrata Sarkar, Director of Finance; and Mr. Ajay Kumar Rai, Chief Compliance Officer. We will begin the call with opening remarks from the management, and then we can open the line for the question and answer.

I'll hand over the call to Mr. Surinder Kumar Gupta. Over to you, sir.

[Surinder Gupta, executive]

Yes, good morning, everybody, all our investors who are present in the investor call. Your company is doing very good, and the performance -- overall performance for 3 quarters for current financial year is better than the last financial year. Our total revenues have grown from INR 185 crores to INR 202 crores. I'm talking about the stand-alone basis. And our profit also before tax has increased from INR 142 crores to INR 206 crores.

In e-commerce, the company is increasing its footprint and trying to add in more customers. One very good development that has taken place, which will benefit MSTC in 2 ways is about the recycling sector. The Government of India has issued a notification that all vehicles, whether the central government, state government, panchayat, or public sector units, vehicles which are older than 15 years will be compulsorily deregistered and those vehicles will be sold on MSTC portal only. So this will give us a good market for the MSTC for sale of EMV.

Apart from that, our joint venture company, MMRPL, which was working below capacity because of the nonavailability of end-of-life vehicles, those units will get sufficient feedstock for processing. So I'm sure this development will benefit MSTC directly in their e-commerce revenues, as well as it will benefit our joint venture company, MMRPL, to have more vehicles and not only breakeven, but even on profits in the next financial year. So this is one very positive development for us. Another thing that investor communities always interested to know about the FSNL.

So I want to inform all that this investment process, which is carried -- being carried out by DIPAM is progressing well. And depending upon -- I mean, now it is basically has this very definite level, a number of meetings have been held, and DIPAM is very -- I mean DIPAM wants to close this deal as soon as possible. So it could be in next quarter or next to next quarter, you will need -- I mean you will get some news on that front. We are not still sure about the timelines and the total process is being steered by DIPAM, and we are giving them all the support that is required.

So with this, I'll hand over to our Director of Finance who will tell you more about the financial figures. Thank you.

[Subrata Sarkar, executive]

So good afternoon to everybody. And that as you -- as our CMD has briefed it was a very robust 9 months performance. So going by that volume path during 9 months 2023, company crossed a volume in the e-commerce at [1,602.6 billion] in terms of value of goods transacted through its marketing and e-commerce vertical, which is 52.16% increase over the value of goods during the same period in '21, '22.

So far, consolidated revenue of the group is concerned, it is INR 646.79 crores during 9 months '22/'23 vis-a-vis revenue of INR 699.48 lakhs in 9 months '21/'22, the same trajectory. But the PBT, PBT is INR 218 crores as compared to INR 167.63 crores after last corresponding period, increased by 30%. And PAT, it is INR 165 crores as compared to INR 103 crores increased by around 60%. So it is a robust growth in the group as well also as well as in the stand-alone driven mainly by our e-commerce growth.

Now coming back to stand-alone financials, as you can see that this total revenue, although it has shown a dip from INR 409 crores to INR 367 crores, but that EBITDA [indiscernible] earning has gone up from INR 169.79 crores to INR 289 crores. And profit before tax has grown from INR 142.51 crores to INR 206 crores and profit after tax PAT has grown from INR 88 crores to INR 163 crores and EPS from INR 12.61 to upwards INR 23.18 and the cash profit INR 113.49 crores to INR 245.48 crores. So it is a growth of around 50% -- to 50% plus.

If we go by the segment-wise, we can see that the e-commerce revenue has grown by 19% from INR 205 crores to INR 244.85 crores. And marketing revenue has shown a dip from INR 185 crores to INR 97 crores. So with this, the profit after tax has grown from INR 88.7 crores to INR 153.17 crores. Now that consolidated group-wide, group-wide revenue almost driven on the flatter trajectory, a dip of around 7% from INR 699.48 crores to INR 646.79 crores and EBITDA, the quantum jump from INR 210.99 crores to INR 314 crores. And provisions write-off et cetera taken care of the profit before tax has gone from INR 167.63 crores. to INR 218.09 crores.

Profit after tax INR 103 crores to INR 165 crores. So accordingly, the group earnings per share has grown from INR 14.65 per share to INR 23.44 per share that is a jump of around 60%. And so far PL is concerned, you can see that the total revenue has although has gone down in a stand-alone basis and in the consolidated basis. But our profit before tax on a stand-alone basis, is up from INR 142 crores to INR 186.70 crores, 45.05% and PAT from INR 88.74 crores to INR 163.17 crores. In the group, on the consolidated basis, PBT has grown from INR 167.63 crores to INR 218.09 crores, up by 30%. And PAT INR 103.15 crores to INR 165 crores, up by around 60%.

So that is all from our side. Now we hand it over to you for your feedback.

[Unknown Attendee]

Hello. Now we can go for questions-and-answer session.

[Operator]

[Operator Instructions] The first question we have is from Nikhil Chandak from JM Family Office.

[Nikhil Chandak, analyst]

My question was if you could share more details -- granular details on the scrappage business, what exactly is the business plan, you really know the company is investing roughly INR 1.5 crore is what I read from the press release to the JV. Is that amount sufficient to get up for the opportunity, which is coming up in scrappage over the next few years? Like how many centers you have to -- how many centers do you target to go to the competitive intensity? What is the EBITDA you make of scrapped vehicles? I think if you can share some more granular details about this leg of the business, that will be very useful.

[Surinder Gupta, executive]

Right now, we have 6 plants in operation. And a few more plants are coming that will be -- we are targeting for operations in the current financial year. What was actually this INR 1.4 crores that we are basically investing more, so that will be basically whatever was the authorized share capital that will be fully subscribed, that is one reason. And as far as our company and MMRPL is concerned, they have funds at their command because we have invested INR 30 crores each. So they have already funds so that there is no constrain as far as the capacity addition is concerned. Basically, we were very cautious in expansion because the number of vehicles were now coming from the public as well as the government also.

And now government has realized that with this sort of incentives and new policy initiatives government has taken to see, the new policy was announced in September '21, right? Since this is a basically state subject -- RTO is a state subject. States were taking some time in understanding the implications of this policy. And there were certain incentives and this is for -- in terms of reduced road tax concessions. So what has happened is that states were initially not coming for -- I mean, they were not so ready to come out with their own policy notifications to give effect to these guidelines in their states. Center has been very clear on this, that this is a basically benefit which will accrete to states in terms of more vehicles will be registered in the states.

Apart from that, center announced a grant of INR 2,000 crores, total grant of INR 2,000 crores with the state size, some states getting INR 300 crores, some states getting INR 50 crores. That kind of -- all these states were categorized based on their sizes. So the center laid down the guidance that if you do these 3 things then this grant will be released. So there were 3 main points in that. One was that you issue your policy notification so that you can license the [indiscernible]. Second was you allow the road tax concession and waiver of the pending dues. And third was you take the decision about the scrapping of worn-out vehicles.

So with that, states -- now 16 states, 16 or 17 states have already announced the policy guideline. Number of states have announced the road tax concessions, 6 states have announced as on day that they will basically issued -- they have issued notification for government vehicles scrapping beyond 15 years through RVSF only. So now the states are coming in a very big way for implementation of policy in their states. So with this in mind, we are open to basically -- I mean, we will be always looking for the opportunity to open more plants.

Apart from that, because the vehicles were not coming from those who -- basically we're setting up the plant on a very frugal budget. I mean, we are not spending too much because we were getting certain losses from the JV because we are not getting the adequate number of vehicles. So we are working below the capacity. So now we hope with these developments we'll be starting getting worn-out vehicles. And as we see -- and our period for setting up a new plant is not very large. So it's 3 to 4 months. So as and when we see some traction up, we'll be adding more plants. Apart from that, when it is not only the plant, we have had the collection centers also. So near a plant in 200, 300 kilometers range, we have basically tied up for the collection centers, where the vehicles are collected. And when there was sufficient load is there, they are transported to these facilities.

So wherever collection centers are there, and we see that there are record number of vehicles because -- so that gives a good data point to set up a plant there only. So by the end of the financial year, we'll have total 8 or 9 plants. And in next year, depending upon how the total things go, we can open many more plants and we are very open to infuse further equity also. So there is no ambiguity on that.

[Nikhil Chandak, analyst]

Sir, how much CapEx per plant do you need to put in for 1 scrappage plant?

[Surinder Gupta, executive]

I'm not -- basically that figures cannot be given because every plant will need a different kind of facility, depending upon the number of vehicles we are getting. A plant may have a INR 70 crore, INR 80 crore CapEx also. A plant may be with a very less CapEx also. So that's not the issue. What we'll see is as and when things become clear, we are ready to infuse more funds into the company.

[Nikhil Chandak, analyst]

And sir, last question is, if you could even broadly share the revenue metrics or the P&L metrics for, say, if 1 car is scrapped at your facility, what is the revenue you earn out of that, just the act of scrapping? And what is the margin you really make on that? I'm leaving aside the sale of scrap. Just the scrappage, -- what revenue do you make and what margins do you make on scrapping, say, 1 car, for example?

[Surinder Gupta, executive]

It's a I mean very, very -- not a very straightforward answer I can give you. It depends upon the kind of vehicle I get. Plus if I get a vehicle in good conditions and I'm able to sell certain spares also, right? It's not that you make all the things and that's not the purpose of any policy. You can always reuse certain spare parts. And whatever is not usable, that has to be basically recycled. So there are 2-way purpose of that. So it is a -- I mean a vehicle may give a 30% return, a vehicle may give me a 10% return. I mean very definite figure, it is very difficult. And one of kind give me even return of 50% also. So there is no basically definite -- I mean, on the average, it's a good business. So on the average, if we get the sufficient capacity -- it's a very good business proposition. That is what I can...

[Nikhil Chandak, analyst]

Based on the cars you would have scrapped so far, I'm just looking for an average number, like what is the average revenue per car scrapped you make, for example?

[Surinder Gupta, executive]

It's not possible to say, I mean, definitely this because -- I mean, you see there are a number of fixed costs, the labor cost that we [apply] whether we process the 40 cars in a month or you process 400 cars so that will be distributed over the basically, Similarly, my lease rent, my security charges, all these charges will be adding up to the vehicles I process, isn't it? So the more vehicle size we get, the more profit we are getting. So it is very difficult to say a number -- definite number on each vehicle or even an average figure on each vehicle. That has reached some capacity of, let say, 50, 60, 70 for them then we'll be able to say something with certainty.

[Operator]

The next question is from Vikas Kasturi from Focus Capital.

[Vikas Kasturi, analyst]

So I had a couple of questions. The first one is does our e-commerce business have a realistic chance of touching the INR 300 crore mark this year, sir?

[Subrata Sarkar, executive]

I think we are at about INR 240 crores, INR 250 crores, so would be likely to touch INR 300 crores or go beyond this financial year sir. Another question, sir?

[Vikas Kasturi, analyst]

Yes, so the other question is on Slide 5 of the presentation. Under e-commerce, there is other income within e-commerce, on Slide 5 of the investor presentation. So could you please shed more light on what is this?

[Subrata Sarkar, executive]

Yes. So first of all, I must answer you, like you have rightly pointed out it is INR 245 crores this time. So like it all depends upon what happens. So we have seen in the past also, like in the year, if you can recall in the year 2020, everything was very fine. All of a sudden in the month of March, which came and everything was fine. So it all depends upon the -- if the circumstances remain as it is. So of course, that because all figures have changed, right from the IPO in the last 3 years, we have keep on saying -- keeping on saying like it is e-commerce-related growth and it is e-commerce and it has happened. E-commerce has grown by leaps and bounds. Okay, so it all happens. If the circumstances remains positive. So I think we'll be able to end up in a very positive results so far when we meet new people after the final results of '21, '22.

Regarding your second question, so we -- as an e-commerce operator, sometimes some -- we derive some indirect revenue also like other fees, et cetera, et cetera. I think this is all about like that only. I think it is just -- it is not directly because of the service charge, some other revenue fees, et cetera. So it is all about like that only.

[Vikas Kasturi, analyst]

Sure. Thank you, sir. I would just like to also place my request before the management. Sir, my humble request is that right now, the investor presentation is more or less the same as what you have in your quarterly filings. It's pretty much the same numbers presented in our presentation form. And I am sure myself and a lot of other investors would like to know more about the nature of the business.

So for example, what are the growth drivers in each of the lines of business. So in the case of -- so for example, the previous speaker, he asked the questions about the scrapping and I had made similar notes. These are the kind of things that we would like to know more about, say, the scrapping business. In the e-commerce business, we would like to know what are the growth drivers, what are the different kind of options that we conduct, the number of options that we conduct. So we would like to know more details about the business. And the more you tell us, the more we would be educated. So my request to you is to please make the presentation more detailed and more granular. And so that I will place it before you, sir. Thank you.

[Surinder Gupta, executive]

We understand your concern. We'll see how we can address your concerns in the next presentation.

[Operator]

[Operator Instruction The next question we have is from Dixit Doshi from Whitestone Financial Advisors.

[Dixit Doshi, analyst]

Sir, my first question is about this first in your -- opening remarks, you mentioned about the notification that all the old 15-year old vehicles will be sold on MSTC platform of all the PSUs and government vehicle. So this above 15 years will be sold on your platform or it will be scrapped?

[Surinder Gupta, executive]

Please repeat your questions. Sold on platform or?

[Dixit Doshi, analyst]

Or it will be scrapped. All 15-year old vehicle will be scrapped or it will be sold in, let's say, in market on our platform.

[Surinder Gupta, executive]

Both Mr. Doshi, all will be scrapped and it will be sold on our platform. And 1 more thing, it will be sold to only RVSF. So the people who are authorized to process these vehicles under the central notification. So it will be sold to only those people. So there will be compulsion scrap, they will be sold through our portal and those will be sold to only RVSF.

[Dixit Doshi, analyst]

Okay. So basically, let's say, if our JV with Mahindra wants to scrap the vehicle, they will also participate on our platform's auction, and they can win there and scrap.

[Surinder Gupta, executive]

Exactly.

[Dixit Doshi, analyst]

Okay, understood. And is there any rough estimate that how many vehicles would be there right now above 15-year-old only the state government, government and PSU?

[Surinder Gupta, executive]

Yes, what the government figures, we are getting is around 15 -- we are getting the estimate of around 15 lakh vehicles from both.

[Dixit Doshi, analyst]

And this option, this will be like let's say with whatever we'll be selling, it will be on a percentage of fee of the value or it will be like a coal auction where we get some fixed fee for making the portal?

[Surinder Gupta, executive]

It will be a percentage. What we have said is that up to March we'll not charge any percentage, we'll be charging zero, so that is a factor that is a impetus. But beyond mark, we'll charge 3% on the whatever the value of transaction. This information is available on our website also.

[Dixit Doshi, analyst]

Okay. So 3% of value from 1st April like let's say from FY '24 onwards.

[Surinder Gupta, executive]

Yes.

[Dixit Doshi, analyst]

Okay, that's very helpful. My second question is you mentioned that our Mahindra JV is operating at a very low capacity utilization. So can you just broadly say at what capacity utilization it would be currently?

[Surinder Gupta, executive]

You see our plants have come into operation at different points of time, right? So these figures, we'll be able to perhaps share during the investor -- next investor con call. But I mean that competition becomes slightly complex. It will be in a different part, the current plants. So that figure ready and we don't have, but we'll try to address this in next call.

[Dixit Doshi, analyst]

And if you try to address that, then together, if you can broadly, let's say, when you post the March numbers, if you will be able to do, let's say, revenue of the JV and the number of vehicles sold -- scrapped for the FY '23 that will also be helpful if you can get those numbers also in the next con call.

[Surinder Gupta, executive]

We'll see how best we can give you more information on that.

[Dixit Doshi, analyst]

Okay. Now coming to our e-commerce business. So this quarter, the revenue has seen some drop from year-on-year also and in the quarter-on-quarter also. So is it fair to assume that this entire drop is predominantly due to the reduction in the scrap prices? Or is there a decrease in the revenue from any other business also?

[Surinder Gupta, executive]

You see, there are 2 things in that. And you are rightly said, one is the slight decrease in -- slight dip in scrap prices because there we get the percentage as our services charge. So definitely it is the price of commodity decrease, it might have no decrease. That is one factor. Second factor is in every quarter, there is some gain, which is like say, if I sell power plant, and if I sell a power plant for INR 300 crores. So that INR 7 crores, INR 8 crores revenues might be -- could be added there in my revenues of that quarter. So in the last corresponding quarter last year, there were a few plants sale which gave me good revenue last year, which were not there in this quarter, I was expecting in next quarter. So it's not basically something that the people have gone out of us, and they are not doing the auctions. So it's largely robust, but these are some -- I mean, I'll take a slightly exception because it's a normal market basically normal market scenario. Nothing unusual about this slide downward.

[Operator]

[Operator Instructions] The next question we have is from [indiscernible].

[Unknown Analyst]

Sir, just wanted to understand that we have been constantly mentioning that the provisions in marketing division are behind us. But sir, if you see for the 9 months, then again, the provision has gone up year-on-year. So from around INR 26 crores last year 9 months to INR 80 crores in first 9 months of this financial year. So going forward, sir, how confident are you that will -- this is the last of the provisioning losses that we are seeing? And also is there any scope of a write-back in future?

[Subrata Sarkar, executive]

Yes. So this is basically, let me clear you very -- clearly everything. It is a figure of provisions plus write-off. So this is INR 80 crores. This is nothing, but it is appearing on both side. If you see the other income, you see it has gone up steeply you see. So we have got let me be clear, it is only INR 95 lakhs of provisions have been made during this 9 months period, only INR 95 lakhs. Balance is the both sides because we are writing off certain old provisions. So it is because of that. We have -- it is appearing on the income as well as on the expenses side, number one. Number two, it is so far write-back is concerned. So this year, we have already written back around INR 4.5 crores and INR 5 crores, although very near term but there we have written back. So we hope that in the next results also, we'll be able to tell you something positive about this. But again, I repeat this year, the provision is only INR 95 lakhs [indiscernible] is concerned.

[Surinder Gupta, executive]

And I will add to it. You can be rest assured that there is no further provisioning in as far as the marketing is concerned, we have provided for everything, right? And this INR 95 lakhs is about -- for the e-commerce only. That's a very near term for a figure of around INR 250 crores to INR 235 crores, so INR 95 lakh is a very near term as far as the provision for e-commerce is concerned. So marketing provisions are behind us as of now.

[Dixit Doshi, analyst]

Sir, also, sir, as far as this vehicle scrappage is concerned, sir, so you mentioned that the old government vehicles will be scrapped through your portal, and only the qualified bidders can bid in that and our JV with M&M is also one such party. So who are the other prominent people, sir, is Tata Steel also participating? Or they also have that kind of business? Are they present in the scrappage business? And sir, who are the other competitors in the same business?

[Surinder Gupta, executive]

You see, the RVSF are coming up and basically, it's a very, very vibrant market, and states are basically giving permissions for setting up the plant. I mean, approvals for setting up of the plant, the complete information about this is available on the website that how many RVSF are there. So any RVSF who is approved by more I mean who is approved by the state government, that information is available on the [indiscernible] portal, and they are eligible to apply to us and get registered online registration and how far that RVSF help.

So -- I mean, as of now, the players are not very large, but I'm sure with the policy the state governments are initiating, more people will come. Right now, the competition is not that good. I'm not sure about the name of parties that because individual departments will be [indiscernible] that will -- I mean, we'll never -- we -- in fact, we have such never in management tend to know who are the people. So that my e-commerce operation, which is basically a separate thing, and my JV is a separate thing. We don't basically gather that kind of data although it may be available with my system, but that's not really required by me.

[Dixit Doshi, analyst]

And sir, lastly, if you could just tell us something about the litigation with Standard Chartered, that where are we currently and how much money we have already deposited. And in the worst-case scenario, if we lose the litigation, then how much more money do we need to provide.

[Subrata Sarkar, executive]

Sir, let me answer you one by one. First of all, as we have seen through our declaration in the stock exchange and our financial results, a note has been given, so our appeal has been restored by Honorable Bombay High Court and it is now lined with [RAP]. So it will be the outcome of the appeal, of course, will decide the fate of this, number one. Number two, we have already deposited INR 90 crores with the [RAP] as a precondition to this appeal. Number three. So we do not [record] any further maturity at this moment, the condition has been there. And so far provisioning is concerned, so total amount that has been demanded by the Standard Chartered to this order has already been provided for in books of accounts. So nothing about the profitability. And so far litigation is concerned, it is subsidies. So it will all depend in the future, what happens afterwards.

[Operator]

The next question we have is from Harshit Jain from RAH Investment.

[Harshit Jain, analyst]

My first question would be regarding that in this particular quarter, we had a dip of around 9% in our e-commerce segment. One is the lowest scrappage price. But the other thing that in this quarter, we have sold Hyderabad plants for about INR 500 crores and even the Hyderabad plants for INR 600 crores. So may I know the specific reason that why there was a dip in this current quarter on e-commerce segment?

[Surinder Gupta, executive]

Hyderabad plants... yes, let me.

[Harshit Jain, analyst]

Hyderabad plants.

[Surinder Gupta, executive]

You see what happens, it is a mixed bag of everything. So one single plant or one single big event cannot boost up like big revenue. If it comes up a lot like beehive structure, a lot of activities, a lot of the e-commerce is people here is all about like the revenues are in parcels. So it will be a combination of all the parcels that we suffer in field. And whatever dip is there, it is very not that significant. As already explained by our CMD in the earlier question -- answered to earlier questions also. It is a common phenomena, which keeps on fluctuating during quarter-to-quarter. And it all happens at the end of the year, we hope. And you see the 9-month figures, 9 months, we are already ahead of last year. So that is the trend, and we hope that we will be able to match at least last year's figure. So 1 single that we want to decide one single event or a couple of events does not mean that much actually. It is a combination of a lot of things, sir. And we always -- we'll appreciate the fact. So that's the point.

[Harshit Jain, analyst]

And as for the past record -- track record of last 3 years, our Q4 is predominantly very heavy, and considering the scrap prices have recovered, iron ore prices, we covered almost 35% from the lower end from 3 months. So can we expect a massive Q4 in terms of iron ore sales?

[Surinder Gupta, executive]

Yes. Again, I'm telling you, you see there are 2 things. One, like the price of the thing. So again, the person who wants to sell -- and you know that already, it was announced that iron ore is now not under the Supreme Court. It is now open, okay? So people are having thinking of a lot of opportunities. So if at all, all the sales that used to happen to us, comes to us. Of course, there will be a good revenue out of that. So again, it is a matter to watch and see. Let us hope for the best, but we have to watch and see what happens next in the month of February or March. February is now ongoing and March. March is, of course, as we said is a good month, but let us see what happens. If some unusual thing does not happen, so it will be of course a bold and robust thing that will happen.

[Operator]

[Operator Instructions] The next question we have is from [Rajol Shah] an individual investor.

[Unknown Shareholder]

My question was on the similar lines to the previous one. Just any guidance going forward for the next financial year in terms of revenue and margins for the business on a consolidated level, it would be nice.

[Subrata Sarkar, executive]

Yes, yes, you see, first of all, what we are keep on telling like for the couple of years, of course, the focus is on the e-commerce. And what we are trying to do is like to expand our horizons in the different fields of the e-commerce. So we will be mainly so far, if anything does not go unusual will be mainly guided by this e-commerce and driven by the e-commerce related revenue for the next financial year, number one. Number two, if it all depends -- these are ifs and buts because you know we are basically a service provider. If the industry does well, we have to -- we follow the path. So it is all about that how the industry behaves and everything goes in the market. So accordingly, we do the -- our results go ups and downs like that only. So but it is the -- focus will be for the e-commerce-related revenue only so far current I mean, projections are conferred

[Surinder Gupta, executive]

I'll add to that, that -- I mean, apart from that, we are basically diversing also in e-commerce. Previously, scrap used to be -- I mean, major sectors. Now scrap gives 50% revenue and 50% are coming from other commodities. So we are spreading our basket. And we are looking for more and more commodities. We are looking for more and more sectors where our e-commerce can be expanded. So if there is some downward cycle in 1 particular commodity. So we are sure that was the time with or without much of hiccups. It may be some downfall here and there. But overall, the growth trajectory, and we are working with such a focus that our growth remains intact.

[Operator]

Next question we have is from [Yashwant Desai] an individual investor.

[Unknown Shareholder]

Sir, I have a question regarding the GBN portal. Just want to know, as far as competition is concerned, the government has kind of passed the circular asking most of the government departments to auction their scrapped vehicle, property land, et cetera, through the GBN portal. So how do you see this as -- do you see that a big competition to you?

[Surinder Gupta, executive]

As of now, a very few people are using GeM portal and our services are far superior to the GeM portal. They just use portal services, and we are doing the complete end to end and basically sale operation target for the many products. So our subsidiaries are far superior than GeM. And some people who are going to them, they are coming back to us because they are now kind -- getting the kind of rates for their products there. So we are sure that we will be able to -- we are working hard to tide over this as far as the sale part is concerned.

[Unknown Shareholder]

So what if tomorrow the government mandates that all government departments have to do their auctions only through GeM?

[Surinder Gupta, executive]

You see, I mean we cannot speculate on what government orders will be there. So as of now, we don't see any possibility of that kind into that because that will decrease the -- I mean, they will not be able to sell their products on the market rate by using GeM. And many of the people don't have the organization to do all these kinds of work. So definitely. And another thing is that -- our business is not only government, I mean, central government departments. Our business is many PSUs, whoever business is with state governments, our business is with many private houses, and not only scrap so many kind of things.

So I don't see really that the kind of effect on our portal, even if something is mandated. Although I don't think it is a possibility as of now. I don't see. We don't know what government does it -- but as of now, we are not seeing any visibility of that. But we have not heard anything on that.

[Operator]

Next question is from Sunil Shah from [indiscernible].

[Unknown Analyst]

Sir, I have 1 very basic question. I just wanted to understand the business model. Sir, when you say e-auction that we do, sir, how is our revenue model? So is it like in stock broking, when a broker executes a trade, he gets the commission on the value of the trade. So is that when we earn our revenue, is it connected to the value of the auction that is one -- or is it like somebody brings in marriage hall where you get fixed rate irrespective of the type of event it happens, you get a fixed rent on the hall which you give. So for us, which is the revenue model? Is it like the broken line, which is connected to the value of the auction, which happens, or is it like a fixed revenue which we earn when we provide our platform for auction? Could you please help me understand this better?

[Subrata Sarkar, executive]

Yes. Sir, thank you very much. Your question is full of with the answer only. You have explained the answer in a very good manner that we have to tell you because it is a mixed bag of what we have sold. It's a mixed bag of our revenue model. One is the value base when we did the auction in better percentage of value. And another event that we do the event, we get up our event-based charges. Speaking of the volume traded to that particular event, whether the auction is successful or not, we get our service charges. So like it is just a mixed bag of everything. So it depends upon the situation and depends upon the client, and the person who wants what type of revenue model. It's both the revenue model that is invoked in our e-commerce business segment,

[Unknown Analyst]

First, when you say about scrapping of vehicles, I believe there it is going to be 3% of the value of the vehicle, which is scrapped, is it percentage linked. Is that correct understanding?

[Subrata Sarkar, executive]

Yes, actually, our CMD sir -- in a previous question, he was saying, like up to March, it is available in the public domain. Up to March, there will be no service charges. Just to promote this kind of environmental friendly thing and other like just portal like the things which has been done. And from the [indiscernible] onward that is FY '23, '24, the service charge that we mentioned, that will be applicable on the scrapping of the vehicle which is being auctioned through our portal to RVSF means certain restricted population.

[Operator]

[Operator Instructions] The next question is follow-up from Dixit Doshi.

[Dixit Doshi, analyst]

Two more questions. Firstly, if you see our other income was almost INR 20 crores this quarter. And in this, if I go to the segment revenue of the stand-alone numbers, then there is some INR 5 crores in the marketing revenue, INR 8 crores in others and maybe, let's say, INR 7 crores would be in e-commerce. So how -- can you mention about the nature of this other income, INR 20 crores?

[Surinder Gupta, executive]

Yes, we just now told about the e-commerce nature. Apart from getting our service charges, we derived certain fees, other fees also, some fees and et cetera, et cetera. So that is -- that is booked in the other income from -- this e-commerce business. And certain so far, as other is concerned, we have got the dividend from our subsidiary that is there in the miscellaneous. And in the marketing, we derive certain interest out of that amount overdue amount that is there in the marketing that is part of the thing. So that is broadly the nature. It covers a lot of mixing these items also. And of course, certain interest amount also is there in the other income also. That is there in the part of that business that is we derive.

[Dixit Doshi, analyst]

Okay. And my last question is on the -- in the last couple of years, we did partnership with, let's say, Reliance, L&T, Bharti Airtel and many more in the private sector. But I think the volumes have not picked up. So what are the difficulties we are facing and, let's say, out of the current total revenue of e-commerce, how much would be from the private sector?

[Surinder Gupta, executive]

We don't maintain just kind of data that how much comprises government. You see, I mean, scrap is one thing which continuously be rising is from the principles be rising unless I mean that depends upon their business operations. So whatever the volumes are arising, they will give it to us only. That is what only we can assure. So what is there basically generation, we are not very sure about that.

[Dixit Doshi, analyst]

Okay, and if I could ask just 1 more question, in terms of the e-auction of the properties held by the banks through their NPAs, how is this traction there? I mean, are we getting the volumes there also?

[Surinder Gupta, executive]

Yes. There, we are getting good volumes. I mean and now the success rate has also increased.

[Dixit Doshi, analyst]

And it's on the value right? percentage?

[Surinder Gupta, executive]

No, there we don't get in terms of percentage. There we get the number. I mean the revenue per property sold. So that's the kind of model. And I think that is a quite good amount of properties now we are selling there. I don't have the figure, but the amount of properties sold are sufficiently good could give us a robust revenue on that.

[Operator]

The next question is a follow-up from Keshav Garg, CCIPL.

[Keshav Garg, analyst]

Sir, I wanted to understand that, sir, sometime back last year, there was a new item that the public sector banks are making their own portal for the auction of these properties instead of using MSTC. And also Coal India was also planning in-house scrap disposal portal so have you seen any movement on any of these funds? And has our business from Coal India or from public sector bank decreased?

[Surinder Gupta, executive]

First thing about the public sector banks, there is no progress on that. And we are selling their properties as usual, and there is no news on that front. As far as Coal India is concerned, we are doing the robust business with Coal India and Coal India has recently got a new portal developed from us. So Coal India, there is a basically policy change by the government as far as the coal auctions is concerned. And as per the new policy, we have already developed a portal for Coal India. So Coal India doing the auctions from their own portal, we don't think a real possibility in a very near term.

[Keshav Garg, analyst]

Great sir, also, sir, what is the net cash that you are having on our books as of now? Sir, what is the net cash on our books?

[Subrata Sarkar, executive]

I could not get your question...

[Keshav Garg, analyst]

Sir, what is the cash balance that we are holding.

[Subrata Sarkar, executive]

Please wait for a certain time. 30th of September, we have already declared our balance sheet and everything. So please just wait for a couple of months. We will be ready with all the balances and all these things. But I can assure you, like with that provisioning things are gone and we are realizing almost a very good data -- so it will be a good position so far, our earnings comes there, they are converted into cash in a very good ratio, right? So that much we can say, sir. Please wait for a month when our March figures will be ready, and we'll be ready with these, nothing to hide from you, sir. You have that every right to get these figures.

[Operator]

The next question we have is from Harshit Jain from RAH Investments.

[Harshit Jain, analyst]

Considering our last quarter balance sheet as on September 30, we were holding around cash balance of around INR 1,000 crores. So any plans to distribute the same via special dividend or through buyback or through a bonus option or to something else because that is took out on our book.

[Surinder Gupta, executive]

We have already given a good dividend, sir, we will appreciate that 63% dividend -- so we are already on the level of last year already. So we are always thinking so far shareholders are concerned to appreciate their values as well as to make them those who have we've been aligned to [indiscernible] we are thinking. We are not sitting on the balance. We utilize this part on those. We have certain liabilities that have to be also met. So that is the answer. That will brings [indiscernible] not directly on the asset part, sir.

[Harshit Jain, analyst]

Sure. And my last question would be regarding the scrappers front. As Mr. Surinder Kumar-ji mentioned that we would be having almost 8 to 9 plants by end of this financial year. So from Q1 FY '24 onwards, can we expect 100% capacity utilization of all the plants?

[Surinder Gupta, executive]

Very, very difficult to give so definite figure but you see there are 2 parts of it and let us understand it. One is the government vehicles. And then the second is the private vehicle. So the private vehicles also have to come in a big number so that the capacity is fully utilized. But what I can say whatever vehicles, we describe the seriousness of the government will have the sufficient record so that will not only break even. We earn some property if we get a 100%, definitely we'll never like to reach that we reach 100% -- before we reach 100% we will expand the capacity. So it is our intention to always be above the market so that we are not lacking in the capacity and we [indiscernible] So that is what our total strategy has been there. And we want to encash on the first mover advantage. We want to maintain that advantage so that we are ahead of our competitors whenever they come up with their plans. So we want to have the footprint, which covers both parts of the country. That is what our strategy is.

[Harshit Jain, analyst]

Okay. And my last suggestion would be 1 very good thing started by you not on stock exchange side, but on Twitter side that you provided a monthly update on January front. So can we do it on a regular basis, a monthly update on stock exchange update?

[Surinder Gupta, executive]

Okay. Well note the suggestion, we'll note the suggestion.

[Harshit Jain, analyst]

Yes, because investors would come to know that what exactly our company is doing, what is the growth road map.

[Surinder Gupta, executive]

Okay. Well, we'll see more in detail and we'll try to address the interest shown to you, we'll incorporate its suitability.

[Operator]

The last question we have is from [indiscernible].

[Unknown Analyst]

This question is again regarding the scrappage policy. You mentioned that central government vehicles have to be sold through the MSTC portal through RVSF. Does this also hold true for state government vehicles?

[Surinder Gupta, executive]

Yes, this holds good for state government vehicles. This hold good for all the public sector vehicles, this hold good for even the vehicles up to Panchayat level. So all where the government has ownership, so all those vehicles are included in the estimate of this [indiscernible].

[Unknown Analyst]

Okay. And all of these have to be auctioned only through the MSTC portal?

[Surinder Gupta, executive]

Yes, yes.

[Unknown Analyst]

And sir, 1 last question. What is the current capacity for dismantling that MMRPL has over the 6 centers put together?

[Surinder Gupta, executive]

I think this is information something which normally we don't make it public because we are not -- I mean, just -- it's basically business confidentiality, basically [indiscernible] so that the competition concerned so that business information normally we are not divulging. So please excuse us for this.

[Operator]

Thank you, sir. Ladies and gentlemen, that concludes our question-and-answer session. I will now hand over back to management for any closing remarks. Please go ahead, sir.

[Surinder Gupta, executive]

So before I hand over to our Director of Financial to sum up, I can only say that the e-commerce market is a very promising market, and we are sure that we will be able to achieve good results and we'll be able to fulfill the aspirations of our investor community. Second thing is the kind of emphasis that government has put on the circular economy because of the G20 Summit, so we are seeing more traction in the scrappage policy. So having the first-mover advantage in the vehicles scrappage, so definitely, our company will be beneficiary in the total government scheme for that.

Subrata, do you want to add something?

[Subrata Sarkar, executive]

Yes, just going by our CMD sir's closing remarks, so it will be an e-commerce-driven growth in the coming quarter. And of course, we will keep on support [indiscernible] concerned, so we will keep it at the bare minimum. Thank you very much for your cooperation and continuous support to the company that you have made. Thank you again.

[Operator]

Thank you, gentlemen. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. You may now disconnect your lines.