Anja Soderstrom: Hi, and thank you for taking my questions. So, you said 72 new customers in the quarter. How much time does it take for them to build up and become a significant contributor to our top line?
Dhruv Shringi: See, Anja, these are customers who’ve been signed over the nine-month period. But the vast majority of this only started happening towards the May kind of timeframe, May-June kind of timeframe. So, typically, you look at a 90-day to 120-day implementation cycle for a large customer, and then another 30 to 60 days for them to ramp up volume. So, you would see the bulk of the effect of these new signings playing out in the current quarters. So, starting from January, you’ll start seeing these numbers come through.
Anja Soderstrom: Okay, thank you. And you noted you expect — you sort of guided for the fourth quarter it’s going to be pretty strong. How should we think about that building up in the next year? Is there anything exceptionally happening in the fourth quarter that’s driving that or —
Dhruv Shringi: No, I don’t think there’s anything exceptional. It’s just that there is the underlying demand. We continue to see strong demand playing out on both B2C and corporate clients. So these new customers that we’re talking about, as they get implemented, their numbers continue to bake in and there will be a waterfall effect of that happening. And likewise, we are seeing strong resurgence happening on the B2C side as well. So, today we are seeing both cylinders firing strongly on the corporate side and on the B2C side. And we expect this trend to continue.
Anja Soderstrom: Okay, thank you. And in terms of the expansions in Dubai and Africa, how meaningful are those for you?
Dhruv Shringi: As of now, there obviously, this is just a start of the process. We think over the — it will take a bit of time for them to become meaningful contributors. But we are quite excited about these market opportunities. The dynamics when we studied these markets are very similar to where India was seven, eight years ago in terms of adoption of technology. However, COVID has now made it almost imperative for organizations to adopt technology at a much faster pace. So, we are very excited about these markets. It might take a bit of time for them to become meaningful contributors, but in the long run, I think this can be a very interesting and very highly accretive business for us, because the operating margins out here as a pure fast play are extremely high.
Anja Soderstrom: Okay, thank you. That was all for me.
Dhruv Shringi: Sure. Thank you.
Operator: Thank you. Our next question comes from Lisa Thompson of Zacks Investment Research. Lisa, your line is now open. Please go ahead.
Lisa Thompson: Thank you. Good morning. So, you showed excellent revenue growth this quarter. But also expenses were up, so that the losses kind of increased. Is there anything in the quarter that was, say, exceptional or how do you expect expenses to trend versus revenues? I didn’t get a chance to go through in huge detail but I did notice the interest expense was up a lot and I assume that goes away when you do a capital cash raise. Talk a little bit about that?
Dhruv Shringi: Sure. So, the interest expense also had a bit of one-off in it for the new facilities that we’ve taken. The upfront administrative fee for all these facilities would have got a charge to the P&L in the December quarter. So, there will be some of that one-off effect which will be there, which won’t be there going forward, because these facilities will then be, in a reckoning nature. So, that’s one aspect of it. The other in terms of marketing costs, given that seasonally, this is typically the highest quarter for personal travel, there was a bit of incremental marketing cost which was there and we did that consciously also because we thought it was important to just get the brand out there from next year’s perspective and to build out some sustainable direct traffic for us. So, that’s a slight one-off which is there but otherwise we should see as we go into the subsequent quarters, profitability also growing in line with revenue growth.
Lisa Thompson: Great, that helps a lot. And does the strong hotel business kind of affect product mix? Is that a lower margin business?
Dhruv Shringi: So, hotels is a higher margin business for sure and as we move forward, we expect this to keep improving our product mix going forward. This will be a relatively slower burn because the SKU at this point from a revenue perspective is still heavily in favor of air but we expect hotels to continue to scale up nicely like we are seeing in the last four or five quarters. So, today, close to about 20% of our revenue comes from hotels, and about another 14 odd percent comes from other services and the remaining from air. So, we expect the mix to continue to, I think hold at this level with just a gradual improvement happening in favor of hotels. And the reason this is happening in India, Lisa is because unlike more mature markets, the aviation industry in India is growing at double-digits.
We spoke about the kind of capacity expansion that we are seeing on the part of the airlines. We spoke about the new peaks being reached by domestic air traffic. So, air in India is also growing at a very brisk pace. So, it’s not just the hotel part like you would see in more developed parts of the world. In India, it’s actually all boats rising at this point of time.
Lisa Thompson: Great. Thank you. That’s all my questions.
Dhruv Shringi: Sure. Thank you.
Operator: Thank you. Our next question comes from Jeff Van Rhee from Craig-Hallum. Jeff, your line is now open. Please go ahead.
Jeff Van Rhee: Great. Thanks for taking my questions. A couple for me; one, Dhruv, if I look back at the pre-COVID period and let’s take maybe the March ’19 quarter, and I look specifically at air and hotel and I compare now what you would assume you’ll do in a March quarter, as I think most of the levels you’re quoting now are kind of back to pre-COVID levels. Is that the right way to think about it? When I look at that March ’19 quarter, I mean, if I use that as a reference, why should or shouldn’t hotels and air be higher than those numbers as a baseline reference?
Dhruv Shringi: So, as we go forward, Jeff, we should start seeing numbers begin to grow from that baseline. We are today getting to that stage where we should be crossing those baseline numbers. The big difference also which will be there will be in the profitability that in that quarter versus our current quarter, our operating profit margins would be significantly different. Sorry, Manish you are saying something?
Manish Hemrajani: Yes, also Jeff, you should be looking at the INR number, not the USD number, because currency has moved unfavorably in that direction.
