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MSTC Ltd
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Ladies and gentlemen, good day, and welcome to MSTC Limited Q4 FY '23 Earnings Conference Call, hosted by Equirus Securities. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Ansh Manek from Equirus Securities. Thank you, and over to you, sir.
Thank you. Hello, everyone. On behalf of Equirus Securities, I welcome you all to the Q4 FY '23 earnings conference call of MSTC Limited. From the management, we have with us today, Mr. Surinder Kumar Gupta, Chairman and Managing Director; Ms. Bhanu Kumar, Director of Commercial; 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 can open the line for question and answers.
I now hand over call to Mr. Surinder Kumar Gupta. Over to you sir.
Yes. Good morning, everyone. Our financial results are out in yesterday's board meeting and I'm very happy to share the company's results with you, with all our investor community. We have achieved our main -- couple of main highlights. As far as the total volume of business is concerned, we have a growth of around 120% against 1 lakh 36,000 crores. We have achieved the total retail E-commerce business of more than INR 3 lakh crores in financial year '22, '23. As far as our revenues from E-commerce is concerned, it's a growth of around 18.66% from INR 294 crores to INR 348 crores.
There is decent growth in the profit also, profit before tax, PBT has increased from INR 240 crores to INR 313 crores, that's a rise of more than 42%. Profit after tax has increased from INR 200 crores to INR 239 crores, that said, growth of around 19%, more than 19%. And 1 good thing that should be really according to all of you, and of course, it is reassuring for management also, we had -- we have promised that the provisioning changes will be the -- we have done all the provisioning and now to the history.
So last year, we had done a provision of around INR 38.54 crores . And this year, it is minus INR 25 crores. So basically, some of it, we have got debt, so that is a very good sign for the company and for the future results also for the company, that is why our profit before tax and profit after tax in consolidated terms also has risen quite handsomely.
We have done various flagship projects in last financial year. Some of it, we have been always sharing with you during our quarterly interactions, some of which like spectrum options we have already shared with you. Apart from the mines auction, we have done a large number of mines auction this time. So total mine auction and the current last financial year was 86 coal mine blocks have been successfully allocated and 94 major mineral blocks have been sold through our quota.
Another thing of interest to all our investors will be that this ELV policy has gained a lot of traction, and more than 17 states have already announced their policies about -- as far as the ELV [ contamination ] and the ELVs are in place. And more have nominated MSTC are launching a portal for disposal of all central and state government ELVs all these vehicles have been sold now on MSTC portal, where we are earning service charges.
Apart from that, the RVSF, all the RVSF, including RVSF of MSTC joint venture company, MMRPL, so they are also getting the vehicles through this route. Last year, we sold around more than 2,000 vehicles, central state government vehicle, this year again, this speed has picked up at the end of first quarter, we'll be able to give you a very handsome figure for the sale of government vehicles.
So this is all in brief, I wanted to hand you before I hand over to our Director for Commercial then Director of Finance, will give you slightly more detailed analysis of the financing. Madam?
Yes. Good afternoon to everybody. As [indiscernible has already highlighted, the volume this year has been phenomenal, and when they contributed to this volume has been the coal block allocation that has been done through our portal that has contributed significantly to the volume apart from the spectrum and other mineral blocks.
Apart from that, the major highlights of the performance has been that we have sold a lot of power plants redundant power plants or state utilities and [ BBC ] that has actually given the volumes as well as good earnings for the company. These power plant belong to [ BBC ] [indiscernible] largely [indiscernible] power generation and the total volume from the plant sale is about INR 1,100 crores.
Then the coal that is sold through our portal, it was sold in 2 different models. One is called the linkage model, where is it sold to some specified sector of users and other to the open public at large. So this certified linkage auction as we call, that also had a significant increase in volume, and it was sold to the team of about INR 4,400 crores in the last year. Then we have signed agreements with some private sector, big entities for sale of their iron ore [indiscernible] that's what we had done last year also. So now more and more private sector entities are also reporting their [indiscernible] in our portal and the transparency and features built into that.
And for the first time, we are -- we have called some intangible assets like technology transfer and trademarks. And this we have done for some six CSPs' like Bharat [indiscernible] compressors and [ Cote ] India Limited, so this again holds a lot of potential for us in the future. We have also subsequently faced some small aircraft for the Airport Authority of India. And we have associated with certain small software companies and going forward, this holds a large potential for our new solutions for various clients.
One of the works that we have done, which I would like to highlight here is a billing software that we had done earlier that now we have enlarged its scope to include having a GPS system integration with the existing software that our clients had and access monitoring and for prevention are also built into that. We are also in the process of adopting some new technologies, probably in the future -- in the near future that we also pay good dividends.
Now as far as financial highlights are concerned, I would hand over to Mr. Subrata Sarkar, our director finance.
Good afternoon to everybody. So the snapshots are already there, and we have also seen the results, so let me repeat like this year, the [indiscernible] revenue has stand-alone [indiscernible] down at least. But I would like to emphasize like let us go [indiscernible] , which has increased because this year, we have done away with the sale purchase [indiscernible] So EBITDA -- has EBITDA is little bit down.
And for PBT has also gone up, it has gone up to something [ INR 20 crores to INR 23 crores]. So profit after tax has also gone up from [indiscernible]. And EPS has also actually has gone up from [indiscernible] there.
In the segmental part, if you can see that e-commerce is the biggest segment, and it has contributed INR 348 crores and the revenue indirectly and INR 115 [somewhere] from the marketing. So total expenses in INR 45 and profit before taxes of course, INR 313.47 and after tax is [indiscernible].[Net growth of 19.58%][indiscernible]in case of tax. And PBT is INR 42.46 [indiscernible].And in the consolidated results also, again, the revenue already has consolidated [indiscernible]. But of course, in a [indiscernible] has increased. And EBITDA [indiscernible] the profit before tax has also gone up from INR 232 to INR 379 wise on year-on 41% and profit after tax is INR 341.95 as compare to INR 199.09,rise of 21.5% .Of course, EPS is also up.
So if you go by the [indiscernible] need to explain that our revenue for operation is a bit lower. But if you go to the net revenue, we are seen to have increased a bit and [indiscernible] as well as in the consolidated basis also. [indiscernible] by [indiscernible] employing expenses, limited expenses. And we'll start [indiscernible] as [indiscernible] already highlight. [indiscernible] So that's all from our side and hand over to you.
Should we open up for questions?
Yes. Yes, please.
[Operator Instructions] The first question is from the line of [ Prakash ] [indiscernible] individual analyst.
Good afternoon to everybody. I would like to know who centers will open in different parts of the country as portals so that we can get maximum number of vehicles or scrappage. And what will be the provision for realization of scrap steel and rubber and other important material from the components? Apart from the commission of 2.5%, what will the sharing basis of other realization and components of the vehicle? So -- and how many centers will open in the year?
Yes. Right now, we have -- already last year, 3 more centers we have opened. 3 more centers we have opened. Out of this, 1 at Guwahati has already got the approval. As far as the Karnataka, Bangalore is concerned, it is under advanced stage of approval. Then the third center in Fatehgarh ,Punjab [indiscernible] some time, but we have already -- on an setting up the center, that may take a couple of more months, so 3 more centers of total 9 centers as of now. And we are planning to have a couple of more centers in the current financial year.
The second part of is whatever the material that will derive from the dismantling of the vehicle, there are basically 2 parts. One is the scrap and secondary spares. So scrap is sold in the open auctions in the open market. And the spares, again, we have a portal, where the Spares are sold and spares whatever we sale or revenue figure for MMRPL sales are a good percentage of that. So that is basically 2 grow classification, scrap as well as these spares that we sell from these vehicles.
Well, how many vehicles we plan to scrap in the year? Can you give some rough idea, possible idea from Karnataka, [ I mean 8 lakh vehicles ], Karnataka only. So could you give us some idea as to what is the process of disposal? And quarter-after-quarter, how many centers will open in India at Pune and other places, how many centers we wish to open? Goa, [indiscernible] I've seen in the presentation, so how many more centers will open? So that we will be [indiscernible] to experience process of scrapping and more and more vehicles will come right.
You see we are planning to open multiple centers. I cannot give you the figure. I mean what i will say.
Can you give some idea, some color on that? actually some color on number of things we will open? say 30,40,50[indiscernible]
No, no, no. We are basically planning to set up the center in almost all major states. So that could be around 25 centers in a couple of years, right? But would it depend upon how much vehicles we are able to source. Right now, the people are not coming forward to sell their vehicles to RVSF because of the price difference with RVSF can offer and which is normal [ KabariVala ] can offer. For that, one i mean-- to [indiscernible] gap, there is 1 very positive development. [ CPG ] has issued the guidelines for this scrapping and processing of ELVs. So 1 major difference for this price was the engine. Unorganized players used to recycle that engine and sell it as a quite handsome price. So that we have now back so that engine no longer be recycled. So that has to be a whole has to be bought into that. So that will give us some push.
And as we get more vehicles, we are open to basically more number of centers. So basically, we are watching the stations. Another aspect of this policy is not only RVSF center. Second is ATS( automatic testing centers )with testing stations that have to come to the state, where the public will go testing the vehicle as per the policy let down by the various states, commercial vehicle and passenger vehicles.
So unless the ATS are in place, the vehicles will not come to RVSF. So this is, again, going to take a year or so before sufficient number of ATS are in place and we get the vehicles a large number. So as and when the vehicle comes, we are ready to set up more and more centers. And we are in a couple of years [indiscernible] 25 centers covering pan India. I hope I answered your question. Definite number cannot be given at this stage.
What about.
Sorry to interrupt Mr. [indiscernible], may we request that you return to the question queue for the participants waiting for [indiscernible]. The next question is from the line of Pritesh Chheda from Lucky Investment Managers.
Sir, can you share the progress in the e-sales -- scrap sales basically in FY '23, what would be the growth there? And what is it as now as a proportion of your e-commerce revenue?
Okay. [indiscernible]
In the year [2022-2023], the scrap plays a major role in the e-commerce revenue, which was more than 50% as against slightly less than 50% in the last couple of years. The volume from scrap total e-commerce was about INR 288.60 crores, out of which about INR 158 crores was from scrap alone.
What will be the growth Y-o-Y?
See, e-commerce overall growth we are expecting and what we have witnessed in the last couple of years.
No, no. My question is of INR 158 crores was the scrap sales number in FY '23, right?
Yes.
Out of what is that growth, INR 158 crores versus what number?
No, that cannot any number as such. The thing is the scrap it arrives, and it is linked to the tariff market as much. It depends on the steel prices, it depends on -- what is the -- how?
I understand that I'm asking INR 158 crores in FY '23, what was the same number in FY '22?
[indiscernible] last year, it was INR 135 crores. [indiscernible]. That's a growth around 25%.
Yes, that was [indiscernible] plant sales. So that doesn't happen every year.
Yes. You have moved your numbers from, let's say, the e-com business has now moved from INR 290 crores in FY '22 to about [INR 330-340 crores] now in FY '23, INR 348 crores. What is the growth now do you expect on this number?
Yes, it's very difficult to give a basic -- the future projections, but as the things stand, a lot of government sector, private sector is laying emphasis. And with the Government of India policy cleaner policy, a lot of scrap is coming to us. So whatever growth momentum has been there for the last couple of years, we are hoping to maintain that. So we are working hard to maintain that.
My second question is when you look at the balance sheet, there is increase in the other -- and there is an increase in the cash. Can you explain what is this? And second, if I have to understand your balance sheet, what actually will be the net cash in your balance sheet? Will you have net cash? And what will be that number?
Yes. Can you hear me?
Yes, yes.
So it's really simple. First answer your second question that is very relevant is [indiscernible] think what [indiscernible] net cash. So look at our balance sheet, our tangible network is coming out to around INR 420 crores. So you can [indiscernible] less certain receivables. So is around INR 400 crores, you can say that we have a tangible network, and that is our own cash that we can see. [ Very precisely in account in terms ]what we can say as [indiscernible]
And coming back to your first question, like there are some certain temporary into outflow in our business. So that is where indeed happening so that the cash and tax [indiscernible] has also increased as well as that like other financial [indiscernible also increased. But what you rightly pointed out, that is our net cash, it is around INR 400 crores. [indiscernible]
Then what is the progress on the private customer side, if you recall ours.
Sorry to interrupt, Mr. Chheda, may we request that you return to the question queue. There are participants waiting for their turn. The next question is from the line of Dixit Doshi from Whitestone Financial Advisors.
My first question is related to the end-of-life vehicle business, which we started this quarter. So you mentioned that in the previous call, you mentioned that the end-of-life vehicle of only the government part would be around 15 lakh and we have sold around 2,100 this year. And I think the deadline was March 31 -- I mean, next year. So do you expect that a significant part of that 15 lakh can come up in FY '24? And related to that is you also mentioned that till 31st March, that portal will be on a fixed fee. And from first April, it will be on a percentage basis. So just to confirm that.
Yes, that's right. I mean, 31st March, the number of vehicles were because it was just the beginning of the policy. So as I've already given you the figure, around 2,000 vehicles were sold in the last financial year. I mean these are the government [indiscernible] talking about, right? As far as the -- I mean, 1 part of it is 15 lakh government vehicle. So it's very difficult to estimate vehicles, the count of vehicles.
So we are getting so many figures, so we are not [indiscernible] any guess. But now what the traction we are getting from most of the departments, most of the state government are now in touch with us, either they have offered us vehicles, or they are in the process of offering vehicles.
So I can give you a very rough figure. Around 10,000 vehicles are already there in pipeline, which are under a 4-year under auction, right? So this is gaining more and more traction. And we are hopeful that this year, a good part of the government vehicles will come to our portal. It will have 2 benefits are. So it will earn us a service charge .And [indiscernible] are also a partner. So they will also get the much-desired raw material.
Okay. And so just to mention, so let's say, we have sold 2,100 vehicles last year, what would be the rough per vehicle sale price?
Very difficult to say, its such a unique mix from 2-wheeler,and defense vehicles [indiscernible] very heavy vehicles,4-wheeler,3-wheeler.So all kinds of vehicles are there.so a very.
A broad range would also be fine.
Could be around INR 30,000, INR 40,000.
Okay. And right now, this regulation is only for the government vehicles. The private vehicle they have not mandated. They can do on their own, but they are not having any deadline.
As I explained, you see there are 2 parts of it. There are 2 parts I explained it, but for private also, the government has laid down that after so many years, you will have to get it tested before it gets registered with RTO , right? So far that 1 mandatory requirement is automatic testing center, so those testing centers are still being set up by various states by various private entrepreneurs.
So that is slightly taking more time as compared to the cutting up of RVSF. So once that system gets into place, it is going along [indiscernible] RVSF. It has taken a couple of years. ATS is now getting traction. Governments are also setting up under JV or PPP work, private investors are also setting ATS center.
So once the ATS centers are in place for four-year private vehicles, after passing the life , which has been mandated, will go to 8 years and [indiscernible] phase then it will automatically come to RVSF. So basically, that will be the turning point when private vehicles will actually start coming to RVSF. This is 1 thing. Second thing is we have opened our portal also for selling the private vehicles in our same quarter, even a personalized IRV( individual person ) who have got a single vehicle, we can post this vehicle detail, and RVSF will contact him. We'll pass on the information to RVSF. They were contacting for buying that vehicle. So that facility also we have given for the general public, and we are [indiscernible] this policy.
Okay. And my second.
Sorry to interrupt to Mr. Doshi.
Okay. And all investors also can [indiscernible] this risk quality. [indiscernible]. So that is what appealed from our side to all of you.
The next question is from the line of Keshav Garg from Counter Cyclical PMS. Sorry to interrupt Mr. Garg. Sir, your audio is not clear. Can you use the handset mode while speaking?
Sure, madam. On 20th of April, a news item appeared that all India e-auction platform will go live on May and within 3 months, all the transactions will -- all the auctions will move to -- move there from MSTC and [ engention ] Also on 20th April, 2023 Economic Times, news article came that public sector banks have are launching their own e-auction app. We sell approximately 5 lakh reality assets, which are currently being sold through MSTC. So I hope you are at least aware of these developments. And sir, what is your comments on the same?
First question is regarding [indiscernible] .This announcement, we are very much aware. In fact, they are [indiscernible] the existing bidders to register on their focus. But thereafter, there was a new policy, which was -- it's called the [ New Agnostic Policy for ] Wholesale. That actually is meant for not meeting the customers to any particular [indiscernible].
That is more of an agnostic policy where any bidder can take material from anywhere. So after that, there was a lot of customization that we had to bring in the portal. So whatever work was done by [indiscernible] with [ NIC ] for wholesale that had to be abandoned and fresh [ development ] had to take place.
Now this is [ going to say ] as we understand from the input that we are getting from [indiscernible] and other sources, is it going to take some time? So for this year, we are hopeful that [indiscernible] will continue. And as far as the [ NPA ] option for the [ nationalized ] banks is concerned, [indiscernible] focus. We are aware that [ PSB ] alliance has floated a tender and they are in this process. But what the message actually is coming out is that they are going to have a new system Actually, all these nationalized banks already have a total called [indiscernible] , where all the NPAs are first listed, all details, all branches, they are all [indiscernible] and map to that. What we are offering is only an extension of that for the bidding process.
Now the new portal that we [indiscernible] are planning to develop is to replace the old [indiscernible] portal. A whole new portal itself, which will be having these activities also included in that. As far as bidding is concerned, nothing has mentioned regarding this activity in the [indiscernible] So at least for this year, we are hopeful that [indiscernible] also with us.
Going forward, this is definitely going to take quite some time because this total has been mandated by the Department of Financial Services and for getting that kind of credibility and for certification and on [indiscernible] take some time. So in such time, [indiscernible] to offer the services.
And our [indiscernible] here, we are always -- I mean, wherever in such development is taking place, we are always in touch with the principle for that -- and in new development that takes place and [ STC ] is a part of it. So that is our continuous endeavor in that direction. Yes, please.
Sir, I hope, sir, that this trend does not [indiscernible] and accelerate because since scrap is an ongoing thing, then each big customer can eventually come out with their own portal, and I don't know where MSTC will be [ less]. But I think at least for this year, we are fine. And sir, my second question is that sir, our e-commerce revenues went up by 19% year-on-year from INR 294 crores to around INR 349 crores last year.
But sir, if you look at consolidated cash flow statement, then the operating profit before working capital changes is [ INR 279 crores versus INR 271 crores ] last year. So which means an easily growth of less than 3% in our operating cash flow, if we take out all the one-off income. So what are your comments on the [ same ]?
One, when you're looking at that...
Sorry to interrupt, sir, your audio is not sounding clear. Can you [indiscernible] .
Right now, it is clear?
Slightly better.
Yes. Now it is [indiscernible]
Please proceed.
Yes. So when you are comparing that you are taking the figures from that segmental reporting, correct.
No. I am talking about consolidated cash flow statement, which is the next page from your consolidated balance sheet.
There are 2 things. One is a stand-alone performance, what is the consolidated. Okay. Consolidated comprising of our subsidiary, [indiscernible] also. So when we look at both in that way, the operating profit has gone up by very [indiscernible] percentage. We cannot compare -- I mean it's a group as a whole, [indiscernible] company. So if you [indiscernible] so in the stand-alone part, I'll say, we have improved that, of course, not [indiscernible] . So that there is a growth. [indiscernible] So consolidated, of course, [indiscernible] that much of growth as compared to MSTC. So overall view, it has gone down. That's the point.
Sir, basically, our... .
Sorry to interrupt, Mr. Garg. May we request that you return to the question queue [indiscernible] The next question that is from the line of [ Viraj Mahadevia, ] an individual investor.
I noticed that there's so much working capital release in the current financial year and the consolidated cash flows, generating an operating cash flow of INR 886 crores. Is this sustainable? And what has happened with other financial liabilities going up so much? They spike from INR 787 crores to INR 1,350 crores .
So just now before I was talking to you, I answered another question also. Like you see, these are some phenomena's are very temporary in nature, but sure, if you go by the [ equity position ], our still stand-alone basis, our actual cash [indiscernible] network is around [ INR 200-plus crores ]. So that is the cash that we have our own [indiscernible] , sometimes temporary part is there. That's why our cash and cash equivalent terms [ of debt increase ] temporarily closed during the [indiscernible] of our business. So that is not that like a permanent procedure. [indiscernible] future is our own cash, so that is around INR 400 crores to INR 500 crores. That's the position, but you can continue to [indiscernible] on that part.
Right. So I see INR 1,500 crores of net cash on books of INR 1,500 crores of cash, including bank balance on books with a market cap of [indiscernible] INR 200 crores, and you made [ FD investments ] of about INR 600 crores in financial year '23. Why is it the company considering doing a buyback or paying out higher dividends with such kind of cash flow, especially when you're generating INR 200-odd crores of free cash flow every year?
Look, that's [indiscernible] answer. So right now, this year also. [indiscernible] we had almost distributed dividend 50% of our [indiscernible]
That's under INR 100 crores, right?
Yes, [indiscernible] So that's [ the 50% ] almost we have already distributed. And balance, of course, is there, and we are looking for certain growth prospects. So of course, that much of cash should remain with the company, so that is the point, like -- and when you're looking at the [indiscernible] position, there is 2 companies involved there. One is [indiscernible]. MSTC is having cash, as I told you, around [indiscernible] on cash. Likewise, [indiscernible] got the [indiscernible] cash flow requirement because it is looking at [indiscernible] the steel plants of capital. So if [indiscernible] So we are planning, we are having certain amount of cash that we are planning to have some certain growth. So that requiring certain cash [indiscernible] That we will appreciate.
Right. Okay. I mean it doesn't sound like you need to maintain such a large cash balance, but the point accepted.
The next question is from the line of [ Vivek Ganguly from Nine Rivers Capital. ]
We are new to the company. So with your permission, I would like to ask a couple of basic questions. So in marketing, for the year '23, would it be fair to assume that these are purely the INR 115-odd crores of revenue that you booked is purely service income and there is no purchase and sales of any transaction that has gone through your books?
Yes, yes. This is completely only service income .
Okay. And the service income is, again, on a percentage basis of a GBT or is it on a fixed fee basis?
[indiscernible]. The marketing that we are taking like that is comparable or that segmental revenue for [indiscernible] certain write-backs and et cetera. So we charge in the marketing on a 6% basis on the amount of [indiscernible]
Noted. And 1 request, if you look at the e-commerce revenue, it looks like everything, whatever you all book flows down straight to the bottom line, while in the case of others, there are unallocated expenses and so on and so forth. So going forward, if you can do the revenue booking and the expense allocation better, it will be helpful from the investors' perspective.
Just let me answer you. So going forward that we start of [indiscernible] we may allocate that amount expenses, real estate [indiscernible] depending upon the government of the accounting standard, [indiscernible]
The next question is from the line of [indiscernible] an individual investor.
Regarding your -- this [ assertional ] disinvestment, what is the progress you have made or at least this financial year, you are hopeful that it will be done.
You see [indiscernible] driving that process. So they are taking all the calls after doing all the due diligence. And we cannot, as such, give a time line for when it will be done. But I will just inform you that this deeply taking whatever necessary action is required for the [indiscernible] so no time line can be given as at this point of time.
But [indiscernible] to say. I mean the plant visits and all those things are there in the newspaper or reporting that prospective buyers are visiting the plants last quarter, there was in the news.
Yes. We have also -- so the process is ongoing. The process is ongoing, some part has been completed. Some part is yet to be done. So [indiscernible] taking care of all those things.
My second question is regarding this [indiscernible] vehicle. So what is the margin number of calculation? Is it percentage basis of the value or [ fixed per ] vehicle, which is accruing to the [indiscernible]
This is on concentrate basis. And we have started charging from first of April, whatever [indiscernible] we are doing from first of April. On that, there is some percentage basis [indiscernible]
What about e-commerce margins because they have been stagnating for many years. I mean we are unable to scale the e-commerce business because other private enterprises are growing 50% to 40%, and we are growing in low [indiscernible] high teens only.
No, no, that's not -- last year, we grew our e-commerce income by around 30%. This year also is a growth of around [indiscernible] handsome growth for any standard. And despite the downtime downward [indiscernible] scrap price and iron ore price [indiscernible] and coal prices also were a bit down.
And volumes actually, if you see, we are probably transacting the highest volume in the country, [indiscernible]
The next question is from the line of Harshit Jain from RAH Investments and Advisory.
My first question would be regarding the Hyderabad [ floods ] which are coming for sales, and you guys are targeting Hyderabad especially telling, -- any plans to [indiscernible] to some other cities like New Delhi, [ NCR ], Bangalore, and what kind of margins do we enjoy?
Can you repeat your question? [indiscernible] clear .
Yes. My question is regarding Hyderabad [ Telangana ] plots are coming to our portal, and we have been selling that. And firstly, I want to know that what kind of margins are we enjoying on this? And secondly, any plans to fall into some other states like Punjab, Delhi NCR, Mumbai?
Yes. Actually, we are in touch with many of the development authorities for sale of [indiscernible] and everything. But what happens is in many states, they have the government portals and the mandate that these transactions should happen through that portal. However, we are still trying to expand this line and as far as the revenue that you were talking about, it is on a fixed basis, we used on for [ event base ]. So as [indiscernible] when we have an event, we [indiscernible] some event charges.
So what kind of margin, is it 1% or 2%, 3%?
No, it is no percentage at all. Sometimes we may be transacting just about INR 100 crores, and we get, say, [indiscernible] and whether they transact INR 100 crores or INR 1,000 crores or [ INR 15,000 crores ], we get only that from. So it's not linked to the volumes [indiscernible] some revenue. So it's either way.
Sure. And my second question would be regarding on the scrappage front. So whatever government [indiscernible] , it has to come [indiscernible]
Yes, yes. [indiscernible]
So 27 lakh vehicles would come to our portal, and we will be charging 3% on every vehicle. Whatever [indiscernible] is sold to RVSF, right?
Yes, yes, will be [indiscernible] 3%, but we are not sure of how many will come to us as the [indiscernible] Are mandated. So -- but the count is not still very clear. There are a few figures looking around. So this is because [indiscernible] process is not automated online data with both of these states, so the discrepancy in the [indiscernible] but whatever government vehicle will be sold, that will be on our mandated mandatory to be sold on our [indiscernible] .
Okay. And just like previously, you mentioned that almost 10,000 vehicles are in pipeline to be scrapped. So can we expect a good revenue for Q1 onwards from this front? .
Definitely.
The next question is from the line of Vikash Kasturi from Focus Capital.
Sir. Am I audible?
Yes.
Yes. Thank you. So first of all, thank you, sir, and madam for adding more details to your presentation. This was a request last time, and thank you for taking attend. I have 1 more request to you. If you could just, please present the numbers in crores and not lakh, it could just make it more readable .
[indiscernible]
That's a request. I have 1 question on the balance sheet. On the consolidated balance sheet, we said that our provisions have gone down in the P&L. But when you look at the consolidated balance sheet, the provision has actually gone up from INR 62 crores to about INR 70 crores. So what am I missing here, sir?
Yes, you see there are [ 2 different figures. ] When we talk about the provision what we do in the P&L, it is on the trade [indiscernible] , we lay the provision, okay? And the provisions that we are making at the balance sheet, we have the provisions of the expenses, so like we go up because certain benefit expenses, such [indiscernible] that has to be added on a constant basis because it is a combination of MSTC and [indiscernible] and those are different dynamics.
So like that is a different aspect that I want to tell. So that's the point. It's kind of [indiscernible] balance sheet. The provision that we are seeing the provisions of the main expenses.
Okay, sir. One second, very quick question, sir. the 110% bank guarantee that we get, so I'm assuming that does not go through the books of MSTC?
No, it doesn't. Only the service revenue .
The next question is from the line of Pritesh Chheda from Lucky Investment Managers.
Yes, I wanted to check on the progress of the private customers on your portal. Some years back, you had given to the exchange your tie-ups with Reliance and [indiscernible] and all the -- and given out some numbers. So what is the progress now of these customers on your portal?
Yes. Actually, the number of private sector clients is increasing from day-to-day, [indiscernible] transacting a little less volume. But as far as [indiscernible] are concerned, the volume of scrap rate is also quite good through our [indiscernible] They are our main customers as far as [indiscernible] is concerned. Now for iron ore also, we have [indiscernible].
So they are also -- they are selling their iron ore through our portal, so the number of products that we are selling for the private sector is also going up. Apart from these, then we also have a lot of [indiscernible] goods by the customers of the [indiscernible] All over India, we are selling material for them, so that also gives some good volume for us.
So private is what portion of your e-commerce revenue contribution?
We are not maintaining basically figures like that as of now. So [indiscernible] a suggestion and see whether we can have our accounting where we can have that kind of [indiscernible]
But any guess that you want to share? Is it 5%, 10%, 2%?
Not a very major comps, definitely .
And my second question is...
Sorry to interrupt, Mr. Chheda, may we request that you .
I mean, just a follow-up, ma'am.
Sir, there are participants waiting for the turn. Thank you. The next question is from the line of Dixit Doshi from Whitestone Financial Advisory .
My first question is regarding this trade receivable [ PC ] on a standalone balance sheet, it is around INR 333 crores. Can you just break it up between the e-commerce and the marketing?
Yes. So likely, I'm giving you that breakup, like we [indiscernible] so our e-commerce is around [ INR 50 crores -- ] around INR 50 crores. The balance is in our [indiscernible] model, and all of [indiscernible] because [indiscernible] consistently decreased value [indiscernible] Now we are at [indiscernible] . So [indiscernible] the marketplace, it is [ secured ], and we [indiscernible]
And in terms of marketing business, so a couple of years back, we were thinking that it will completely go out of the balance sheet. But now I think what we are doing is we are continuing with the 110% guarantee back business. So this we will continue to do? Or is there any plan that we will completely exit the marketing business?
We definitely would like to continue and expand this [indiscernible] is still possible because that's completely secure. We are quite sure of the receivables. So definitely, we would like to continue and maybe expand it to the extent possible.
Okay. Okay. So it will continue at, let's say, currently, whatever run rate we are having, it will continue at that rate?
No. As of now, in fact, we are doing very miniscule volumes, so we would like to expand this.
The next question is from the line of Sanjay [ Ike ], an individual investor.
What will be the revenue growth for the next 3 to 5 years for MSTC in a percentage wise?
We cannot give a magically figure like that. We are definitely targeting for very high growth, but the growth depends upon so many factors. I mean some of the factors may not be intrinsic to us. It may be some external factors. So we -- what we can assure everybody is that we are expecting and working for the healthy growth. That's all-diplomatic answer only we can be -- we cannot give a define figure as of now.
To [indiscernible] that particular agriculture portals, JV [ KT ] and all, is there any new developments on that?
No. Actually, this is actually more like a knowledge management total loans, so we keep updating the data from time to time, and we are maintaining the portal. The transaction can happen and the ecosystem is not mature enough to have transactions on that as of now.
[ Postal department for ] delivering the particular goods and all that?
Yes. We did that, but somehow, it's not really taking off in a big way. I mean, there are a lot of ground level issues, and we don't see it happening in the near future also because the entire ecosystem, it's not just about picking up from somewhere and delivering somewhere. You need to have proper packaging, you need to have picking up on the [ farm ] there, you need to have assay facilities, testing facilities. So these are not there as of now. So this is going to take quite some time for the ecosystem to be developed.
[indiscernible] supplement what Madam [indiscernible] Basically, MSTC presences in B2B market. So it's basically B2C business. So our focus is on the maintaining the quarter and as far as the end customers are concerned, so that is basically -- our reach is not basically -- the [ organization ] that way is not very large to reach the [indiscernible] and [indiscernible] customers, like the [indiscernible] and all will be at a very distant places in [indiscernible]. So that's why it's not basically getting that kind of question. But I hope with this government, [ ODC ] and all that model could be -- we are able to write that [indiscernible] and do some business. We will get in touch with that. We see for that, [indiscernible] have some traction on that.
The next question is from the line of [indiscernible] from [ Arham Capital. ]
I just had 1 clarification doubt. Earlier you mentioned that the cash balance is close to INR 400 crores, but if I'm looking at the balance sheet stand-alone, it is cash [ plus bank balances ]2 is a lot higher than that. Can you explain what am I missing here, if I'm reading something incorrectly here.
Yes, yes, yes. Some interpretation, there are [ like ] which is our own cash, which is [indiscernible] capital [indiscernible] . So our own cash, if you go by our tangible network, our own cash, our own -- owned cash [indiscernible] cash in the stand-alone balance sheet, which is around [ INR 400 plus our ] [indiscernible] that are temporary nature because of our nature of the business and cash is driven in transit. In our [indiscernible], there is an equivalent amount of liability.
You see like in the financial [indiscernible] also gone up as the cash and cash equivalent and the other bank that is all gone. So that is the clarification. [indiscernible] is our own time-driven network that we can tell that it is our own cash, and that is a floating cash that keeps on moving up and down in that [indiscernible] business.
The next question is from the line of Keshav Garg from Counter Cyclical PMS.
Sir, you mentioned that we had done actions were INR 3 lakh crores last year, and our income in e-commerce of INR 349 crores. So which means that we are basically getting 0.01% of the auction proceeds, but despite that our customers are meeting their own dedicated portal, so that can only imply that I don't think they are much interested in saving that 0.1%, but mostly that they are not satisfied with our portal. So what are your comments about this?
Actually, [indiscernible] I would like to put across that INR 3 lakh crores worth of goods were transacted through our portal. But I also said that majority of it is the [indiscernible] blocks and the [indiscernible] that added to the volume. So here, we are getting on a per-event basis for block basis. So if you actually analyze the e-commerce revenue section wise, we have got about INR 8 crores from the [ coal ] business, iron ore is about INR 37 crores, scrap is about INR 168 crores, [indiscernible] is about INR 70 crores and so on. [indiscernible] , of course, is always insignificant.
So the revenue is actually coming from [indiscernible] sale where we are in rural position in the country, and most of the clients that we have has not shown any information to move away from our portal even in the near future. As far as the natural resources are concerned from the Government of India side, again, we are the chosen service provider. There will be some movements here and there as far as [ Coal India ] or somebody, but then we are hoping new clients on a daily basis. So that is going to take care of the loss of revenue from people who go away from our portal and that is [indiscernible] far between. It is not a phenomenon that everybody is going away from us.
So most of the business, especially in the [indiscernible] is still with us and with new private sector clients coming up in a big way to us. Definitely, we have approved our [indiscernible] in the market, and that is why they are coming to us. At least, we are not -- I mean, seeing any loss of business, especially in the [indiscernible] business in the near future. So that is [indiscernible]
Ladies and gentlemen, that was the last question. I now hand the conference over to the management for the closing comments.
You see 1 concern of everybody, I'll conclude with [indiscernible] that in every business, you lose a few customers to gain more customers. So it is always a continuous change and [indiscernible] . And as far as the MSTC is concerned, its [ bouquet ] of services is quite large. The [ book of ] customers are quite large. So -- and we -- most of the principals, the departments have full faith in the [indiscernible] capability and the value [indiscernible] brings. So even if some person charges very less percentage, but they insist with MSTC because we gave a very good price, very fair competition.
And [indiscernible] , procedure of the security, safety, transparency are unparalleled, and we are meeting all norms of government [indiscernible] so that is why the customers are having the full debt in MSTC capability. Of course, some business might come, some business might go. But we are maintaining a decent growth in e-commerce after the marketing business is more or less apart from [ 110% business ]. So our sole focus is on e-commerce, and we are constantly upgrading ourselves. Our team, our resources, our portals so that the customers get much better experience. So that is our continuous process that we are continuing.
So with this, I will say that as far as the investors are concerned, I can assure from MSTC management that I hope the investors have been suitably rewarded with the increase in share prices with this and some dividends that the company is paying to the investors and those who had [indiscernible] MSTC, they have raised rich dividend. And I believe that we are all working hard. With that insurance, I can say that MSTC strength is intact. And of course, it is bound to grow.
With that, I will conclude. Thank you. Thank you, everyone.
Thank you, members of the management team. Ladies and gentlemen, on behalf of Equirus Securities, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.