Thank you. Good morning, everyone, and thank you for joining Shiprocket's first shareholder earnings call.

Excited to be kicking off this milestone call for our company. As an agenda, given it's our first call, I'll quickly go through the business model, spend some time on that for a few minutes, and then hand over to Tanmay for doing the financial highlight section before we get into Q&A.

I think to begin, I'd like to quickly explain what Shiprocket is. Shiprocket is an e-commerce enablement platform that allows small businesses, independent retailers, SMEs selling outside of marketplaces directly to end consumers.

It's designed for sellers who sell through social media, conversational commerce, through their own websites, powering their own digital marketing, and as they do this, they need the infrastructure to be able to power shipping, payments, and marketing effectively. Shiprocket becomes that digital infrastructure for them, and is India's largest e-commerce enabler today by revenue.

Shiprocket is becoming the one-stop shop for SMEs to be able to run their business end-to-end and be able to digitize. Just to give an idea of our scale, as of FY 2026, we powered over ₹32,000 crores in GMV, 20 crores in transactions, right, and we served about 15 crore consumers.

This in a way representative of the off-marketplace sales, largely through D2C channels for various lakhs of sellers in the country to Shiprocket. We do this without owning any of the assets because that's the business model.

Before getting into how we do this, I think what's important is to look at the way we look at the market. We see that today India has about 8% retail penetration, which is compared to US and China fairly low.

India is at the beginning of its digitization in Tier 2 and 3 cities, where half of India's e-commerce today already is Tier 2-plus cities. Shiprocket has a majority of their GMV coming from Tier 2 and 3 cities.

There is a lot of growth happening in that section. When you look at the entrepreneurs and the MSMEs in India, there's about 6 crore MSMEs.

Even if we look at the non-kirana section of this, still that's lots of small businesses that need to be digitized, right? I think Shiprocket is trying to build that model in such a way where we're able to do that for the coming years by creating a platform where it is built like a network of rails.

We connect with over 250 partners across payment gateways, courier companies, warehousing partners, ERP and accounting companies, and basically everything that the merchant needs to be able to run their business. We power everything from discovery all the way through delivery.

Work with over 42 courier partners to be able to provide a wide variety of use cases around hyperlocal and documents and cross-border, etc., etc. By being a completely asset-light platform, we are able to go deep into owning the data and the consumer behavior, the carrier behavior, the seller behavior.

We are able to power checkout and transactions, are able to preserve money as well as cash-on-delivery money, and hence we're sitting in the money flow. Because we are the owner of the transactions, to speak, we become the trust maker between our partners and our merchants.

That's sort of the way the platform is built. This allows us to continuously innovate, right, continuously build more offerings as the market evolves and as consumers evolve as well.

Just to quickly explain how the platform is built. It's built like a modular system, right, where everything from catalog management to payments management, fraud management, warehousing, inventory management, all of that stuff is built very similar to how India's leading marketplaces build them.

The difference is that we don't sell it as software, and we distribute the operating system to our merchants for them to be able to use it freely. Then the platform is built where we charge the merchants on consumption.

As and when they send the shipments or as and when they make a checkout, they pay us. Our incentives are completely aligned with the merchants' incentives as well.

Quickly, we'll just explain our business in two segments the way we economically look at the business, right? We have our Core shipping business where we integrate with over 250 partners and 42 couriers to be able to enable orchestration of shipping across the country, right?

We have various value-added services which make the transaction not only better for the merchant, but also margin accretive for our business as well. Obviously, this is all powered with intelligence from over 70 million 700 million transactions that we have powered so far till date.

Core has been profitable, right, for quite some time now, and we saw that it's through an operating leverage from 6% in EBITDA about 3 years ago to about 12% in FY 2026. The business there is scaling, continues to add merchants, continues to add new transactions.

As over the years, we started figuring out merchants' problems across the stack, we found that merchants had issues with faster delivery. We built the omnichannel business a few years ago, which is basically allowing merchants to do appointment-based deliveries into, let's say, quick commerce outfits.

It's allowing merchants to be able to do hyperlocal deliveries as well from their retail stores. We also kind of allowed merchants to frictionlessly sell cross-border through integrations into global marketplaces like Etsy and Amazon and eBay, allowing merchants, let's say, in a Tier 2 city easily to be able to, without putting their inventory, go in the US and sell into foreign B2C channels, right?

Finally, as we kind of built the data engine, we also built a Checkout and MarTech platform where we make shopping possible for tens of thousands of websites, right, safely by creating a login and a checkout experience where consumers can use it in a very easy way. This whole stack together is our Emerging business and largely is the same transaction which is originating from Core, and then we're able to monetize it across the different various margin pools over time.

This is the design of the business, right? Our Emerging business obviously has grown at a much faster pace, right, almost 3 times that of shipping, and obviously as we get to numbers, we'll quickly see how it behaved this quarter.

Last financial, it grew about 60 65% as a segment. Just quickly want to touch upon sort of how some of our acquisitions in the past has played out, right?

We acquired WMS systems, right? We acquired the entire sort of PTL and cargo business, right?

That was acquired as a technology capability in 2022. We merged our number two competitor, Pickrr, in 2023, which brought us the same talent as well as our checkout business.

I think the company in the past has been acquisitive and we've been able to integrate successfully into our business and are delivering results across Core as well as Emerging, right? Finally, generally speaking, right, Shiprocket is working across a very diverse set of merchants, right?

Today, if you think about all the logos on the screen, there's many use cases and many brands that we might recognize as offline brands as well as online brands. For every brand that you see here, there's another 100 that are working with Shiprocket, trying to build their business, scale their business.

Merchants, there's millions, millions of people in social media who are trying to use content and conversational commerce to feed their business, start their business, and then scale their business. Sometimes they are offline shops, sometimes they are complete homepreneurs.

Many of these businesses graduate to then do 50 50, 100 orders kind of a month, and at that point, they start getting into running their own website where they are on many platforms in India, like Shopify, WooCommerce, and so on. From there, as they scale, merchants start to become more multichannel, sometimes they sell across marketplaces, quick commerce outfits, and so on.

Merchants also want to go cross-border at a certain point. There's also retail, sort of multi-store retailers who are also using the platform to be able to do quick commerce and faster commerce from their retail points.

I think it spans a variety of use cases. The point is that the way our platform is designed is that on one side, we plug into various suppliers, whether it's logistics or payments or anything, right?

On the other hand, we have customers who require digitization and are able to serve a variety of use cases. As India digitizes in the coming years, and as MSMEs are kind of what the next generation comes in and they want to use the next-generation tools to power their own business, that is what Shiprocket is going to go after.

We will stand for the merchants. We will represent their need in the market, and we'll continuously innovate on solving it for size.

Very excited, and with that, I'd like to hand over to Tanmay, who will go through the highlights for the first quarter of FY 2027.

Thank you, Saahil. Good morning, everyone.

Let me take you through the quarter. I will do this in three parts: first, the platform numbers; then, Core and Emerging; and then, overall what we created and shipped this quarter.

Our transactions grew 36% and GMV 31% this quarter. Against an FY 2026 revenue growth of 24%, we grew revenue at nearly 34% this quarter.

Transactions up 36, revenue 34, both moving together, which is a healthy mix. Overall merchants were up 14% and average revenue, which is ARPU, was up 18%.

Essentially if you see, this is a very, very interesting metric, because the way we grow our business is essentially by adding, retaining, and growing merchants. The revenue from new merchants additions as well as the revenue of the merchant itself growing because the platform is monetized variably, and then overall cross-sell from Core to Emerging is what drives this entire growth overall for the business.

This is an interesting metric and this is something that drives overall growth for the business. Merchants up 14%, ARPU up 18%, giving us overall 34% revenue growth.

Adjusted EBITDA, although on a very small base, frankly, grew 9 times to 8.9 million crore. The other thing I will highlight is overall trailing 12 months metrics, which is 216 million transactions process.

Saahil spoke about the FY 2026 numbers being highly. I will highlight these three key numbers which are on TTM basis for everybody to get like-to-like how we're moving.

Overall GMV for the last 12 months was ₹34,600-odd crores. Then the merchant count on a TTM basis was 2,24,000-plus.

Our performance improved across key metrics this quarter. Revenue from operations was ₹592 crores, up 34%.

Core was ₹411 crores, up 22%, and Emerging was ₹182 crores, up 70%. Now Emerging share itself in the business owing to the higher growth has moved from 24% last year to 30% in this quarter.

It is growing in significance. This growth has come simultaneously with expansion in contribution margin and EBITDA for both the segments.

Core adjusted EBITDA for the quarter was ₹52.7 crores, margin was 12.8%, and it was 50 bps better than last year same quarter. Emerging adjusted EBITDA moved from -38% to -24%, roughly 13.8 bps improvement in a 12-month span.

Now the contribution margin with this revenue growth went up 43% YoY and went up 10% sequentially. This is happened with Emerging contribution margin itself improving and that has led to the overall contribution margin growing at a faster rate than revenue.

Like I mentioned before, the Emerging has grown with significant bps in contribution margin as well as in EBITDA, and we have a detailed breakout subsequently, which I will talk about. In our case, adjusted EBITDA is essentially cash EBITDA.

It is adjusted largely for ESOP cost and for the Ind AS 116 rent treatment. This is essentially cash coming into bank.

That number has grown to ₹8.9 crores, although on a very small base like I said earlier. As far as the unit economics is concerned, what I would point out is that in our case every order is incremental to the bottom line.

Last year, we made almost 22 paise of adjusted EBITDA per transaction. This quarter, we are making ₹1.5 per transaction on EBITDA, right?

You can see this continuing to improve by quarter and by year. Now adjusted EBITDA improved by 79 million and PAT improved by 43 million.

The delta is primarily increase in share-based payments which had happened a couple of quarters back reflecting in this quarter. Let me come to Core.

The key lever I will point out for you is that for Core, our transactions grew 31%. Now many of our large D2C merchants performed better this quarter compared to last quarter and thereby giving us a large footprint in the mix.

We're seeing stronger retention and growth there. That, along with some rate compression on the input side that we've been getting from our partners, is what you're seeing manifest in these numbers.

Emerging revenue is ₹182 crore, up 70% YoY and 14% up sequentially. Omnichannel, it has three businesses, and omnichannel is up 92%.

This is the largest part of Emerging. This is our quick commerce, cargo, and omnichannel fulfillment business.

It continues to grow fueled by quick commerce and PTL. We work with long tails here.

Now cross-border was down marginally. Now we work with long tail here in cross-border, and global volatility has hit our merchant confidence.

We are focused right now on higher margin and profitable customers. With stabilization of macro, right now the focus continues to be on profitability and on this cross-border piece of Emerging.

The MarTech business, this is the youngest business in Emerging. Now this base is small, frankly, I will say, but it is growing very rapidly.

It is at a slightly better margin, and there is a lot of potential here as I talk through some of the newer offerings we have. I'll talk about continued innovation that we're doing on this front.

How is overall growth getting driven? Essentially, there is a wider base that is buying more of the stack.

Our cross-sell on a 2,24,000 merchant base has grown 150 bps. Last year, percentage of Core merchants who were buying Emerging was 7.3%.

Now it is 8.8%. Some of this is same merchants buying more of the stack, and some of it is Emerging becoming an entry point in its own right.

Merchants who come to us first through Emerging and then use Core. This is also a very interesting dynamic that we're seeing play over time.

One merchant buying two products and the same merchant buying four are both counted once when I talk of the overall cross-sell mix. The shift you're seeing understates what is actually happening inside the base.

Merchants served via Emerging business itself has climbed from 30,000 last year to 48,000 this year same quarter. Now to come to overall segment performance, Q1 FY '26 versus Q1 FY '27, here's a full bridge, Core and Emerging, and from the revenue down to loss before tax.

The cost between contribution margin and adjusted EBITDA is almost 17.9% of the revenue this quarter versus 18% last year. In Core, it has improved from 8.7 to 8.4, and in Emerging, it has moved from 47% to 39%.

The key other number I'd like to highlight is that overall after adjusted EBITDA, as you could see, the key number which is between the adjusted EBITDA and PAT is that of share-based payment expense. This number is a non-cash number which is marginally grown between last year same quarter to this, and overall loss before tax has improved from ₹18 crore negative to ₹13.7 crore negative now.

Alongside the numbers, let me show you what we built this quarter. The problem at checkout, a shopper is shown literally multiple UPI options, multiple wallets and a card form, and every extra choice is a chance to abandon.

This is what QuickPay does. It remembers the shopper's own preferred UPI app, whatever it is, and it surfaces that only once in one tab.

It also surfaces the discount and the net saving upfront at the moment when he's taking the decision. Essentially, conversion is a function of removing cognitive load.

We take that decision away, and while we give that choice, and therefore what is the outcome for the merchant from here is that the merchant gets higher prepaid share and a higher checkout conversion. This higher prepaid mix reduces cash-on-delivery handling and the RTO cost, and therefore this is margin accretive and not just top-line improvement, but a margin accretive for the merchant.

This is one addition in the checkout space. We added Steal Deal.

Essentially, this sits on the cart page at the moment just before payment, and three things it does. It recommends the complementary product personalized to the shopper.

It creates urgency with a limited time offer, and it also kind of the intent is to pull down the cart abandonment, and it gamifies the basket. Essentially, to say things like, "Add ₹99 more and shipping is free," and so on, right?

The outcome it drives for the merchant is that they can get higher average order value and higher attach rate per order. Essentially this monetizes the traffic the merchant has already paid for to acquire.

There's no incremental acquisition to him. This makes it easy upsell at the checkout bucket.

Third innovation that we launched is an AI assistant which answers the shopper and essentially cuts the merchant support load. Now it basically at pre-order, it converts a browsing customer into a buyer.

Intent is to answer product questions, recommend the right product, and it can initiate checkout right from inside the chat. On post-order, it can handle things like, "Where is my order?," returns, cancellations, and so on.

The key differentiator is that, see, older chatbots were rule-based. Somebody had to sit and configure every rule, etc., etc.

Here, the merchant gives us a URL, the system reads the site, builds its own knowledge base, and goes live rapidly. It handles end consumers' queries and it keeps learning.

That's this third launch that we did. Fourthly, talking about ads itself, which has seen significant product enhancement.

Now talking about how the problem-solving for the small merchant, the barrier for a small merchant was never ad budget, right? It is the creative, find a designer, find an agency.

How can we get 2-week turnaround, because they tend to work with smaller agencies and so on. This AI Ads produces ad creatives in minutes.

It gives you multiple formats out of the box. It can give you static banners for every placement, it can give them editable templates that team can change, it can create shorts from product images, and it can give you 360 spin views of the product, and so on.

The differentiator versus a generic AI tool is essentially the context. Shiprocket can see brand's own ads performance through our own connected ad account, and we can see the category-level performance overall.

Therefore the intent is that what it drives for them is, one, it makes it easier for them to do all of this, although also personalized. A headphone ad versus a face cream ad need to have very, very different creative [hooks?]

, and the system knows without being told what to do. The model keeps improving off thousands of creatives generated across the network, and this has been launched in beta.

On omnichannel, essentially let me first explain what the challenge for a D2C brand is. For a D2C brand selling on quick commerce, the hardest thing is stock staying ready and getting the truck, getting a delivery slot at the dark store or the warehouse.

If they're smaller. The larger businesses can do it, but for them, there's a lot of work that's happening in emails, spreadsheets, and WhatsApp, etc.

Our system is integrated with quick commerce platforms. The dark store places an order, we are notified automatically, a truck is assigned for pickup, the delivery slot is booked, and the goods reach the dark store.

It is essentially that offering here where effectively we aggregate purchase orders across many D2C brands into slots and give the brand visibility of what is coming and where the truck is. This enables brands to ride on the overall quick commerce growth story.

As in our DNA, you would continue seeing every quarter continued innovations and additions, because that's how our business is. Now overall to summarize, therefore, for our business, the transactions are growing, the transactions are growing the fastest, revenues growing with them, our contribution margin is growing faster than revenue, and the adjusted EBITDA per transaction has grown from 22 paise to ₹1.5 like I said.

That's the summary on the financial numbers. Now we are happy to take questions.

Hi, thank you for the opportunity. This is Sachin Salgaonkar from BofA Securities.

Saahil, Tanmay, Shrey, congrats on a great set of numbers. I have a couple of questions.

First question on the Core business. We're seeing a good growth on 22% YoY, and Tanmay, as you indicated, contribution margin growth and EBITDA margin growth is something better than the revenue growth.

Is this a trend which will continue where ideally we should expect growth in similar range? A related part of the question was on margins.

Looks like your EBITDA margin is largely stabilizing. Is a 12.5% to 13% one could look and consider more like a steady state EBITDA margin for this business?

Let me pause here, and then I'll take the second question.

Thank you, Sachin. This is Saahil.

Just to give you a quick perspective on both the questions, right? I think for Core business, obviously we saw a higher transaction growth this quarter, compared to the period last year, compared to revenue, and contribution margin grew better than revenue this quarter.

From a growth perspective and a modeling perspective, see, contribution is ultimately made up of a mix of our enterprise versus long-tail customers, as well as a mix of what kind of shipment, float, zone, etc., come into it, right? Then there is obviously some operating leverage there in terms of our people.

I think CM has improved a little bit, right, over this revenue growth, and we expect it to maintain around that range as it has in the last trajectory. From a EBITDA perspective, again the business, if you look at it over a 3-year trajectory, you'll find that adjusted EBITDA has gone from 6% to 12%, and we continue to obviously invest behind growth and scale in this business.

Quickly as we're seeing there's opportunities that are coming up, and over a larger period of time, obviously you can model how the leverage kicks in because of the design of the business where essentially every transaction that happens in Core is margin accretive to the bottom line after overheads are removed, right? The rate of growth of overheads you can model from historical data.

I think over a period of time, you'll get an answer of where it can go purely because of the design of the business.

Thanks. Very clear.

Second question is on the Emerging business. When we look at the three sub-components of business, be it MarTech, omnichannel, cross-border, how should one think about the contribution to EBITDA margin from these business?

Logically, MarTech has better margins as compared to others. The question out here is, should we see a material improvement in margins going ahead as MarTech goes through an inflection point and sees good growth?

Any timeframe we could think when this could be close to EBITDA breakeven? Thank you.

Sachin, won't be able to give you a timeframe in terms of guidance, but I think the MarTech business is higher margin, yes, and it's growing at a very rapid clip. Of course, caveat is the base is small, but still we're seeing a lot of good kind of adoption and lots of merchants and lots of new product innovation happening there.

Definitely it's a driver for the improvement in contribution margin. If you look at the CM percentage for Emerging, it's gone from about 9% or 10% last year to about 15% 15% this year, and while adjusted EBITDA went from -30 35%, 38% to about 24%, 25%.

From a leverage perspective, you can see that growth is a real lever that continues to drive all of the metrics, and I think overall obviously the segment grew about 70%, and omnichannel grew 90%, MarTech grew at a fast clip. Omnichannel obviously is a pretty large part of Emerging business.

I think as the business grows, right, again same playbook as Core, similar answer, I guess, where you can look at how costs right after contribution are growing and then look at how contribution margin is growing in absolute terms as well in Emerging. That will give you a good sense to it.

You would like to add anything, Tanmay?

Sure. Let me explain what goes inside a contribution and what goes between contribution and adjusted EBITDA for a minute, right?

Contribution margin essentially has what is goes in as direct cost. It also has some elements around the investments, I would say in OPEX, that are happening around CAM and they are happening around other elements like performance marketing, etc., right?

Everything that is relating to making the overall revenue is coming in as cost there. Clearly, you'd notice that in 12 months' time, this has improved by almost 6 bps.

That's the trajectory. While the adjusted EBITDA, which is after contribution margin, essentially we have overheads, which has got the G&A cost of the head office, and just for everyone on the call, we are close to about 1,500-odd people organization.

A large part of that investment is going in Emerging, and more so in product and tech. There is not only an operating leverage happening in the contribution margin per se, there is the two levers there.

One is the mix shift towards MarTech, because MarTech is growing faster, and number two is that there is operating leverage. Contribution margin improved in 12 months by 6 bps from 9.3 to 15.3, but adjusted EBITDA has actually moved by 13.8 bps from -38 to 24.

You could see operating leverage on both counts, and you could see the trajectory essentially is what I would point out through numbers.

Great. Thank you, Saahil and Tanmay, and all the best.

Thank you, Sachin.

Thank you for the opportunity. Hi, I'm Della.

I work at Axis Capital. Congrats on a great set of numbers.

I had a few questions. I see that the customer acquisition cost for the Core business, the CAC, that seems to have moved up both year-on-year and YoY, year-on-year and QoQ.

It was around ₹3,100 in last year same quarter versus ₹2,800 last quarter versus ₹3,600 roughly this quarter. Could you help understand how that works and why it has moved up?

Sure, Della. Thank you for the question.

Great question. I think just to first quickly explain how we acquire our customers, we run digital marketing on various mediums, right?

We run sort of YouTube marketing, Google marketing. We have a lot of organic content, events, and so on.

We acquire our merchants through them landing on our apps and our website and they sign up, they go through a process where they have KYC, quickly put money into a wallet, and start shipping. This is the model.

Then obviously we've got inside sales people who help them during the onboarding process to be able to acquire into customers. This is where the CAC sits, right?

We obviously try various new ways to reach out to newer set of customers, to reactivate existing customers. This CAC, I think the key thing to understand is while the number may have fluctuated a little bit, the breakeven is what we focus on, because the CAC at a ₹3,000-odd number typically breaks even with margin from the customers in very short span of time.

I think we can assume that to be within a range, right? I don't expect the CAC to trend into a ever-increasing number, so that's not sort of the direction, right?

It's a set of experiments, we try different things over a period of time, and there will be some fluctuation there. I think that's the way to think about the CAC, because it's been held up over many, many years and we know the components and we know what we're trying when.

That's my answer to this one.

Got it. It's more experimental than seasonal.

Is that the way to think?

It's not seasonal.

Okay. Cool.

My second question is on MarTech specifically. How many power merchants today are using MarTech, or how should we think about the penetration of MarTech into the Core GMV?

We don't segmentally kind of break that out, Della, but what I can tell you is that the way any of our Emerging businesses are built and MarTech is no different, is where we find the kind of foot-in-the-door product, which in this case was checkout, pick the middle of the funnel where we get power users, and then we start working with them. Over time, as we learn the business and we learn the automation, we learn the problem statements, we productize them, productize our process as well, productize our adoption as well, and then it goes across the stack, right?

It's a healthy mix across the stack, whether it's our top merchants or power merchants or even the long tail. It's true for most of our Emerging products, right?

It's not sort of concentrated across one segment over the other.

Got it. My third question is on the Core business.

It seems that the third-party logistic partners have also gotten focused on the D2C and the SMB segment. What are we seeing on ground in terms of traction, any competition, any updates on threat from the 3PLs in the D2C space?

Della, I think just if you think about our business model, right, our business model is to connect with leading 3PL, right, who run the best networks in India. Everything from India Post to the best set of courier companies, hyperlocal, air, surface, forward, reverse, special logistics, we do everything, right, because we don't actually own the assets.

We integrate into our partners. For us, that along with the whole stack to power their marketing, power their ads, power their checkout, use shipping data to power better checkout, use checkout data to power better last mile, and create a single data lake and a single platform for smaller merchants, right, that's the business model.

A lot of these merchants that are right now selling into 20 crore transactions last year into Tier 2 and 3 cities from metros and from Tier 2 are enabled on the Shiprocket platform, because it's a specific need that they have where they want to work with a single vendor who can kind of manage all of this through a platform, but still give them the best-in-class kind of services from the market, which is where our 250-plus partners come in. That is under that construct, if you think about our business, right, if we powered ₹32,000 crores in GMV last year, overwhelming majority of that is the D2C channel, right, because that's what we stand for.

We've built the business around that. That is the fastest growing part of the market, right, as per reports.

With couriers wanting to do that, they can. It's obviously the fast-growing market and everybody will want to participate there.

Ultimately, I think that the context and the data that allows us to drive outcomes for our merchants comes from the fact that we have designed this platform completely tailored to their needs. Obviously there are several sub-segments of merchants, several use cases, several workflows that over the years have gotten built, which continuously allow the merchant to succeed.

On the ground perspective, I think we continue to focus on our business, find new pockets of problems to be solved, and continuously solve them and deliver growth, right? We focus on that.

Hi, team. Avnish this side from JM Financial.

Thanks for the opportunity. My first question is with respect to power merchants.

I see ARPU is up about 25%, which looks very strong, but the number of power merchants is actually slightly lower on the year-on-year basis. How should we reconcile these two?

Is the ARPU increase purely coming from existing merchants spending more, or there is a cohort mix effect as some smaller power merchants fall behind the threshold?

Sure. There're two numbers that I would point to you to.

Then I will explain how we've seen this happen. Our overall merchant count on a TTM basis has now become 2,24,000.

That number is growing. Now as far as power ARPU and power number count is concerned, yes, power ARPU growth has been stronger.

What we've seen is that a lot of our top merchants are growing much more strongly, and that's a function of how the market has behaved, which is I guess, fairly strong in terms of our larger merchant base growing their own business rapidly. What we have simultaneously done is that we have focused on overall expansion.

Now the way we've seen our business work is that and this has been the trend for last several years, is that our overall merchant base tends to act as a funnel, and then we've seen that merchants who succeed and continue to grow get retained and they grow into becoming power merchants. While from a overall macro perspective we are seeing the larger merchants growing faster, what we've focused on, Avnish, is that we are increasing the funnel, and we've doubled down on that part of the business as well.

We see that over a longer period of time, can't say now, is that as the base expands, you should see that results, but not obviously what happens tactically over next couple of quarters, etc., will be the function of macros. That's the action we're taking here as well.

Understood. My second question is with respect to seasonality.

Just wanted to get a sense on whole year basis. Is there something like Q1 is better, Q2 is better, Q3 is better, or something like that, or some quarter is seen as expenditure-heavy quarter?

Just on that lines, yeah.

Avnish, this is Saahil. There is one seasonality baked into the business, right, every year where essentially because we are predominantly working with folks selling outside of marketplaces on their direct channels, what ends up happening is when Q3, the season whatever for e-commerce generally hits, right, essentially a lot of our merchants pull out of marketing and redirect inventory to the marketplaces, the bigger ones.

Q3 tends to be not the best quarter for our company, unlike the rest of the general e-commerce trend. That's the only thing I wanted to point out.

Other than that, there isn't any other seasonality baked effects in our business as such.

Understood. Thank you.

Those were my questions. All the best.

Thank you.

Hi. Thanks for the opportunity.

I'm Kunal from Banyan Tree Advisors. I have a couple of questions.

One was on the first principles on the Core business, we understand that as an aggregator platform, we help both the D2C companies and on the merchant and other side the supplier, which is the large logistic company, to pull the logistics demand. Was curious to understand once a large D2C company scales up and they are doing a very large volumes, have we ever seen a case where they've directly moved on to work with the logistics partners and we've lost them as a customer?

That is question number one. Related question to this is what would be the realization differential between, say, our largest customer, say a brand like, say, Mamaearth, which is the largest D2C company in India, and say the smaller long tail of customers?

Will the realization and margins on these two cohorts of the customers would be very, very different, if you can directionally help us understand that? The second question was on we understand on the Core business, we are the largest player and there's definitely a right to win.

In this new areas where we've entered, which is, say, the fulfillment or cargo fulfillment, and then say MarTech and the Checkout, there are different competitors that already exist. The problem has been perhaps solved by some.

I understand, because they are not end-to-end logistics players, the problem is half solved. From a merchant point of view, what is our right to win or value proposition that makes them switch the service provider that they are already using, if you can help us understand that?

Is it easier for us to convert an existing customer, or is it easier for us to sell it to a new merchant because the new merchant is not working with anyone, you can kind of give them the entire stack? These are the two questions.

Thank you, Kunal, for the question. Two parts to your first question, right?

First, how do merchants graduate on the platform? I think, look, the platform is designed to have pricing based on volumes, right, because obviously we have contracts with our partners where we get discounts with volumes, right, and pricing with volumes, and we are able to model various things together.

As an aggregator, one thing we are able to do is use multiple contracts with across 42 courier partners to cherry-pick sort of the right quality and the right kind of SLAs for each shipment that goes through the Shiprocket system using years and years of over 70 crore shipment data, right? We are able to understand we have a predictive model, in fact, that allows us to be able to route.

That is the real value that the shipping platform brings to the table where suppose there's spillover demand and certain things are choked. Even no matter how large a brand is, that information and that instant routing or that layer to be able to route across different partners becomes more valuable as the brands become larger.

When the brands are smaller, the enablement itself becomes a value proposition to say, "Okay, I actually don't have contracts or the ability to get contracts, I'm going to start with a Shiprocket app maybe, and then basically use my recommendation engine." Through that Instagram kind of audience all the way to, let's say, somebody like a large customer, right, the value prop continues to be that of allowing them to be able to access various partners, use the data and intelligence around recommendations, reduce RTOs, for example, as we use our data across the stack.

Obviously pricing is a function of volume on the platform, and that automatically leads to different yields at different segments. It's built in a self-growth way where merchants as they grow, they are able to buy more services, but they might be paying slightly lower for the shipping rate, because that is how the market works.

The market works on volume versus pricing, we're not any different from what the customer expects in the market. I hope that answers your first question.

To your second question, yeah, I think while there are providers doing solutions for single point, I do think that the data scale makes a huge difference here, because for us with over a decade of data on consumer behavior, we've got 15 crore consumers we've served. There's about 30 crore online shoppers.

We see about 93% of our checkout getting address-filled automatically. We're able to fraud score on RTOs across consumer and address data.

All of that, it leads to outcomes for the merchant when it's all tied together, because having a independent vertical software versus having a stack which is connected and integrated and sharing the data across the stack is what drives outcomes, right? For example, for our merchants itself, we are able to distribute them into checkout, into ads, and into omnichannel PTL from the Core business itself.

To your other point, where do we add customers directly there versus here? Obviously, on the Core base, there's a natural expansion, right?

We've seen the cross-sell rate grow there every year and continue to grow. We also see merchants depending on their lifecycle where they are, right?

For example, somebody may be using a direct courier, right, but right now their marketing problem needs to get solved, right? They may actually go for the marketing solution to begin with, and then over time it creates an opportunity pool for shipping to be sold as well.

As a company, just as a first principle, right, we think of enabling orders, right? That's what we're doing eventually.

Where we're saying we want to enable merchant orders and then be able to power more and more margin pools on the same order irrespective of what their entry point is. That should be the mental framework to think about the business over a period of time.

I hope that answers most of your questions, Kunal.

Thanks. Just one follow-up on the MarTech side.

If you can help us understand the potential market size there and our right to win. When we help them convert, is it only limited to their own website, or we help them contextualize ads on other social media platforms like Instagram, Facebook, etc.?

If you can go deeper into MarTech as a opportunity from a longer-term perspective, it would be very helpful, because what we understand is the profitability on MarTech would be much different than our Core business, which kind of comes like the realization come down with the scale, right? In this, is it also true to assume that the large part of the MarTech revenues are direct flow-through to your profits?

If you can help us understand that. Thanks.

Sure, just to quickly get that. I think MarTech, we are enabling first a checkout transaction and a conversion suite on the platform, right?

Tanmay showed some examples of how we continuously add features and innovations there to keep driving up the conversion rate for the customer. One part is to help them get more orders from the customers or visitors that they generate.

The newest part there is for us to help them drive more traffic and better traffic, better ROAS on their ads, right, which is through platforms like Instagram and Facebook and WhatsApp. We use our commerce data, right, behavior data to be able to pick and choose.

For example, not tying delivery data to marketing leads to poor RTO outcomes, because if it's not the same platform and how a large part of India is still cash on delivery, which then has RTO, and if that information is not making its way back to the marketing targeting, it doesn't work, right? We bring that kind of delivered ROAS kind of model to the table where we're saying, "Look, we can help you look at your net return on ad spend, manage RTO in the middle, and then also help you generate creatives which are grounded in purchase data."

Unlike sort of the ad platforms, Shiprocket sits on actual purchase data, right? We have catalogs, we have consumer, we have inventory, we know how many times they bought, whether it stayed, and so on.

We are able to model what kind of things get sold where, and that also goes back into creating the ads on that side. Again, this is a new business.

The only reason I'm sharing some details there is because it's exciting, and I think it is a way for us to help the merchant create more upside in their own business, right? It's worth going after and doubling down.

Hi Saahil and team, congrats to you guys for the listing. Just a small clarificatory question if I've got the understanding right.

I think your TTM shipments that you guys have mentioned in the PPT is around 216 million, and if I just calculated TTM revenue from the Core business, it's around 15,600. Your average realization per shipment comes to about ₹72.

If I just put the same logic in FY '24, '25, '26, this was around 96, 89, 84, which has come down to 72 right now. How should I read this, if I've got the understanding right?

Yeah. This is Tanmay.

Number that you're referring to is overall transactions, not necessarily the Core one. Now overall transactions, the way we measure is we measure transactions which are unique orders, whether they are shipments or they could be a checkout transaction.

If there are two offerings going through a one particular transaction, they are counted as one. This is that total count that you're seeing as growing almost by 36% over years.

Now therefore overall realization that you'd see, which is yes, would come down, is also partly happening, because you're referring to overall numbers, happening because of the mix shift between overall Core and Emerging. The Emerging business has got now overall 30% contribution to our business versus 24% last year.

That has got the MarTech stack, which is growing rapidly, and that's causing this. Now other number that I would point out to is overall how do you see the margins growing for the overall business, and that overall on a percentage basis has been improving, and that is something that, as our business model, we've been tracking and working on.

Okay. Are you guys calling out the number of shipments in the Core business itself, only purely on the Core business side?

Do we have that info available?

We're not calling that out particularly. Just for your overall understanding of how this has moved, overall Core, and that's the number that I did share when I was talking about Core, we are gaining good traction there.

The Core volumes per se, without talking specifically about the number, transactions for Core have grown by 31%, while the revenue has grown at 22%. Like I mentioned there when I was speaking about this, is that this is happening because of two things.

Number one, our margins are growing. Essentially what's happening is there's an input cost compression that we are passing on, right, and that's a dynamic that's happening in the market.

Number two, the fact that our larger merchants are growing faster has contributed to the mix shift within it, because like I had mentioned, there is a gradation in terms of overall revenue per transaction in Core.

Fair point. Maybe just to understand it better, let's say your Core business has your domestic shipping element and you have certain value adds like delivery boost, your early CODs, if I've got the understanding right, those are also clubbed under your Core business.

What would be the element of these other value-added optionalities that we give with domestic shipping platform? Just to segregate, the Core within the Core, what is the domestic shipping platform that is contribution, and a little bit more value-added services that you guys are providing within the Core?

Shreyans,

this is Saahil. Since we don't disclose the breakup, but I'll tell you sort of the way to think about it, right?

How these value-added things came about were merchant problem-backwards, right? Whether we built sort of insuring their goods in transit or helping them with early cash on delivery or helping them with conversion, NPS measurement on their tracking page, a bunch of things that we can do for them to drive results.

I think as every year or every quarter goes by, we find more problems, right? Now we can choose to build them into the platform or we can choose to monetize them, right?

That's a function of a little bit of how we think it will help the merchant, because right now the focus of the company is to continuously add transactions, right, and not necessarily expand every drop of margin at this point, because the transaction is far more valuable, because to think about it, of the ₹30,000 crores in GMV last year, roughly 25% to 30% goes into marketing, right? Think of it this way.

Hence getting a transaction into the company and then monetizing it across the stack is a motion, right? Hence, while there are several value-added things we are building and can build, how we monetize it, do we monetize it is a function of what we want to do at that time, right, depending on how the overall business is running.

Okay. Fair.

Good luck.

Thank you, Shreyans.

Thank you, Shreyans.

Thank you everybody for joining today, and we look forward to delivering on sort of all of our plans, and thank you for joining us today. Look forward to seeing you next quarter.