Please note that this conference is being recorded. I now hand the conference over to Mr. Vijay Gupta from Go India Advisors. Thank you. Over to you.
Thank you, Anju. Good afternoon, everyone, welcome to Infibeam Avenues Limited earnings call to discuss the Q4 and FY 23 results. We have on the call with us today Mr. Vishal Mehta, Managing Director, Mr. Vishwas Patel, Executive Director, Mr. Sunil Bhagat, Chief Financial Officer, and Mr. Purvesh Parekh, Head, Investor Relations. Also joining us on the call today is Mr. B. Ravi, who's advising Infibeam on corporate and financial strategy as an independent consultant. We must remind you that the discussion on today's call may include certain forward-looking statements must be therefore viewed in conjunction with the risk that the company faces. I now request the MD, Mr. Vishal Mehta, to take us through the company's business outlook and financial highlights, subsequent to which we'll open the floor for Q&A. Thank you, over to you, sir.
Thank you, good evening to all of you, and a very warm welcome to the earnings call of Infibeam Avenues. I hope you have all had a chance to go through the presentation, which has been uploaded on the site of those exchanges. For Infibeam, FY 2023 has been a really iconic year. We've registered the best ever performance, with a total income for FY 2023 going beyond INR 2,000 crores for the first time in the history of the company. Our transaction processing volume reached INR 4.5 lakh crores, upwards of $50 billion during the year. If you compare year-over-year, the transaction processing volume has grown by 52%. We've added 3.5 million merchants during the year, approximately 9,500 merchants every day, taking the total merchant count to 9.2 billion.
It's been a very successful year, which has led to an increased business. The company's EBITDA for FY 2023 full year increased by 24% to INR 180 crores and like-to-like PAT was up by 21%, crossing more than an INR 100 crore mark for the first time. We are exceptionally delighted with the overall business performance. Our strategy of having a globally winning combination of digital payments and a software platform with a wide variety of different payment opts, options and mix has been very rewarding. Our philosophy of going after profitable revenue growth and our central focus on offering exceptionally robust technology to merchants and banks, have really helped the company scale to new heights, and we've achieved record milestones during the year.
The combination of payments and platform has aided us in gaining a very strategic advantage and a competitive advantage to stay ahead in the business compared to peers. You can refer to slide 14 in the presentation, which gives you slightly more details. We've invested across the payment ecosystem to offer comprehensive payment solutions to both merchants and the banks. We offer payment acquiring, payment issuance, remittance through Infibeam Avenues' CCAvenue, Go Payments and our investment in Fable Fintech.
These offerings comprehensively cover payment industry, allowing us to build a very strong business and technology partnerships. We've extended our payment platform to manage payment infrastructure for top banks in India as well as in our international markets. This leads to a very strong and long-term sustainable partnership with these banks, providing us with a very good pipeline of merchants and a much better option for pricing.
The same is evident from the growth of the merchant as well as the rise in the net take rate per transaction. We have pioneered many industry first in the payment business over the last 2 decades. The company has maintained a very frictionless relationship with both banking partners as well as the regulators and the merchants since inception. The company's robust bank-grade technology makes it merchant and banks' preferred payment partnership options. The company has also received 2 coveted license from RBI payments, one, which is the in-principle approval to operate as a payment aggregator in India, and the second one, which is a perpetual license to operate as a Bharat BillPay infrastructure unit.
This has helped us gain an e-edge in the digital payments industry by being able to gain market share in the utility space, where the company has made a lot of inroads in terms of gaining market share. It also signifies to merchants and bank partners of our robust, safe and secure payment platforms, thus gaining us continuous and consistent business. In fact, since the receipt of the license, the daily number of merchant registrations have significantly increased. Three banks have partnered with us to provide them the acquiring as well as the bill payment infrastructure. There is a lot more in the pipeline that we are working on. The company also has microservices, architecture and software frameworks that we build and that allows us to build highly scalable technology frameworks.
This has allowed the company to provide its e-commerce infrastructure to large merchants in both India as well as international markets. Along with that, the company also offers e-commerce suite for merchants to jumpstart their online journey, as well as host their data and offers a wide variety of value-added debt services all under one roof. Our aim to build a very long-term, scalable business centered around offering rich technology experience to merchants by simplifying their online business requirements, will lead to a superior business as well as shareholder value. With this, I hand over the call to Vishwas to give you updates on the payments business. Vishwas, over to you.
Thank you, Vishal. Good evening, everyone. In FY 2023, the payment industry continued its growth despite fears that the industry might see a slowdown. The payment industry grew by a massive 61% in FY 2023, higher than the 56% growth seen in FY 2022. The P2M, the person to merchant payment industry, size in FY 2023 is estimated by us at around INR 74 lakh crores or around $900 billion, which comprises of credit card, debit cards, PPIs, UPI, P2M payments, and net banking. Various research estimates the industry growth in the range of 20–30%
We have assumed a 25% annual growth rate for the next five years until FY 2028, bringing the industry size to around INR 235 lakh crores or approximately $3 trillion, generating a revenue opportunity of over INR 1 lakh crore from the current estimates of INR 44,000 crores for the FY 2023, a CAGR of approx 20% over the next five years. The digital ecosystem is expanding, the total addressable market continues to grow, refer to slide level with increasing digital revolution and the role of digital payments will be at the center. Increasing avenues aims to be the center of this revolution by providing payments across the board and be a preferred partner for the merchants and the banks.
zIncreasing avenues credits a substantial increase in total income to the tectonic shift occurring within the credit card com mission space. The payment industry is undergoing a significant transformation as it is being increasingly regulated. The implementation of government policies to oversee the payment sector and protect consumer right has undoubtedly played a crucial role in enhancing fair play in the payment space. Added to that the VC and PE-backed payment aggregators are witnessing transformation as they are confronting three formative challenges. Firstly, funding winter, secondly, VC and PE investors prioritizing profitability above growth, and thirdly, the company payment that CCAvenue, which has, you know, consistently avoided operating such heavy discount commission risk and thus maintain profitability since its inception. During the year, we scaled our payment business in India and international markets.
The India TPV increased 25% year-on-year, while international TPV doubled. In India, we experienced growth from the COVID-impacted profitable sectors like airlines, hospitality, entertainment, et cetera. We extensively worked with the banks to provide them a robust payment infrastructure with high SLAs to ensure seamless payment movement. We onboarded new banks. We worked for better pricing with our banks. We raised pricing for merchants for their premium products and services, as well as we invested in newer technology and expansion initiatives in India and international markets, like the launch of our mobile payment solution, the CCAvenue TapPay, that converts any smartphone into a point-of-sale terminal. The company's commitment to improve its unit economics, that is a net take-in payment business to double-digit in FY 2024 and beyond, it's now properly now starting to take shape.
All these initiatives that I mentioned earlier helped us improving our unit economics in payment business to 9 bps in Q4 2023, from 6.3 bps in Q4 of FY 2022, which is up 43% year-on-year. All these initiatives will help us in reaching our double-digit net take rate target by the end of FY 2024. Please note, our international net take rate is already in double digits, as contributed from international business and future will further aid our net take rate. We scale our express settlement business, that is lending to the merchants through our early settlement of payment funds. It will further increase to our net take rate per transaction. In India, we have a 9% market share of online credit and debit spends, and expect on credit spends as per RBI data.
Credit options, including credit card, BMI, BNPL, contribute 52% of the India TPV in Q4 and 46% of the, for the full year FY 2023. We are particularly excited with the growth shown in credit card spend in April and May 2023. Credit card spends in April 2023 increased 26% year-on-year. The total spend in April 2023 was highest compared to all the months of FY 2022, except March 2023. We analyzed RBI data until 22nd May, and we are expecting 30% year-on-year increase in the credit card spend. This can also be attributed to the rising number of credit cards, which has reached 8.7 crores in April from 7.5 crores in April 2022. Our online debit card market share is 7%, and we have estimated our net banking share at 3%.
Given the number of payment players, including the banks, we think the market share in credit and debit card is commendable, as it also allow us to earn good margins compared to UPI, which contributes only 7%-8% of our India TPV. We anticipate our payment income growth trajectory to continue going forward as we continue to invest in building superior technology solutions for merchants and banks, have a profitable balance of payment and industry mix within our TPV, build tie-ups with banks for providing them a payment infrastructure globally, continue to onboard new merchants, offline expansion through CCAvenue TapPay, the international expansion, and undertake such initiatives to create value for business and for the shareholders. I now hand over the call to our Chief Financial Officer, Sunil Bhagat, for his quick comments on the financial performance. Over to you, Sunil.
...Thank you, Vishwas, bye. Good evening to all of you. Throughout the year, we worked extensively to expand business activities through multiple business tie-ups to gain higher revenue share and improve operating performance to generate higher cash flows, which we can use for further business expansion. I'm pleased to state that in FY23, the company has registered the highest ever total income of INR 2,033 crore, an increase of 56% year-over-year. Sequentially, the total income went up by 81% to INR 674 crore, a very significant growth. Our annual transaction processing value was INR 450,000 crore, an increase of 52% year-over-year, and the quarterly transaction processing value was INR 150,000 crore, a growth of 61% year-over-year.
Our gross take rate increased to 120 basis points in quarter four, FY 2023, on the back of 52% contribution from credit card payment options. A high combination of profitable and high margin credit and debit options has led payment net take rate to improve 9 basis points in Q4, FY 2023. That is up 43% year-over-year. With several initiatives in place, we are confident to take it to double digits by the end of FY 2024. With this performance, we registered an EBITDA increase year-over-year of 45% to INR 180 crore, and profit after tax increase of 63% to INR 136 crore for FY 2023.
On the cost front, with 0 debt, we do not have large interest burden. The other expenses, be it employee costs or other administrative expenses, have been kept under control, resulting in the above mentioned numbers. This has resulted in ROE of 7% in FY 2023, compared to 6% in FY 2022, and ROCE of 10%, excluding goodwill. Buoyed by this performance, the board has recommended a full year dividend of 5%. As we step into FY 2024 and beyond, we will continue to pursue profitable growth. I now hand over the call to the operator to open the floor for Q&A. Thank you very much.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Rahul Bhangadia from Lucky Investment Managers. Please go ahead.
Thank you for taking my question, sir. Am I audible? Hello?
Yes, we are audible.
Yes, you are.
Okay. Okay. Sir, first question, is there a methodology change in the way the TPV has been calculated? Generally speaking, your take rates and your net revenue, they generally match out with the TPV. This time the TPV is almost INR 1.5 lakh crores, and you are saying the take rate is almost 9 basis points. The net revenue of INR 92 crores doesn't match that. Just trying to understand the math.
Rahul, this is Suresh here.
Yes, sir.
Rahul, our INR 1.5 lakh crore of TPV is a combination of what we do at GMV on the GeM platform, as well as what we process on the payments platform through the CCAvenue payments portal. Between the two, we've also mentioned in our presentation that roughly about INR 51,000 or INR 52,000 crore is the processing that we had done for the payments platform, and roughly about INR 80,000 crore comes from GeM. There are other platforms like BillAvenue and Go Payments, which are also our other business payment power platforms. Our payment platforms have done the 9 bps on this INR 51,000 crore of processing that we've done in the quarter.
How about GeM then?
GeM is on a per transaction basis, but we've also mentioned in the past that as the volumes keep increasing, there is a volume discount as well. Our MD had mentioned in the previous call that this year onwards, on the G2G transactions, there is no revenue for the MSP.
Okay. How do we model with GeM then, sir? While, you know, we talk about, you know, the volumes going up and we have touched about INR 83,000 crores in Q4 on GeM, how do we model the revenue on that particular line item?
Basically, we'll need to give you some indication on removal of G2G transactions, which are not remunerative. That's one. I think, you know, overall, if you look at the perspective, I think there is a slightly diminishing curve as you go through Q4, because in the beginning of the year, up to a certain threshold for the year, the numbers will stack up. Once you exceed a certain amount and the threshold, then the overall bits go down.
... what we can do is there are labs. Yeah, there are labs that are there, what we can do is we can give you some indications of those labs, that may be a good way to model it.
Yeah, that would be really helpful. That would be great.
Yeah, absolutely.
Okay. The second question I had before I go back to the queue was, I'm assuming, sir, this other income is purely all from the cash that we have on the balance sheet, whether it is interest or dividends or whatever it may be?
Other income is mainly cash. There is some mark to market and interest on certain securities held by the company.
Okay. Broadly, it is deriving from the cash, not operational at all. Nothing operational.
That's correct. That's right.
Okay. Okay. Thank you very much for answering.
Thank you. Next question comes from the line of Gaurav Sharma from HSBC Securities. Please go ahead. Mr. Sharma, please go ahead with your question. Mr. Sharma, if you have muted from your phone, please unmute yourself and go ahead.
Hello? Hello. Hello. Am I audible?
We can hear you. Yes, Gaurav.
Hello?
Yes, Gaurav, we can hear you.
Hi. Hi, sir. Thank you for giving me an opportunity. Two questions. We have seen that there is a slight decline in the share of platform revenues. Just wanted to understand, like, going forward, what will be the steady state of contribution from this segment? Also, if you can provide the steady state breakup of the payment contribution going forward for next 2-3 years. That is one. Second question is related to your tap-to-pay payment services. Just wanted to know, what are your expansion plans on this?
I understand that you have given the download targets of 1 million for FY 2024, but how it will be contribute to the revenues, and what will be the contribution against the various other services like QR pay, BillPay? What contribution it will have at least these services? These are my two questions.
Sure. If you look at slide seven, where we've actually given some indications on the growth revenue on a segmental basis. If you look at the platform revenues, of course, on a sequential basis, on an absolute basis, it has gone up. This is the revenues, and this is net revenue, typically. You know, whereas in payments, we do have a gross revenue as well as a net revenue. If you look at the sequential 22 versus 23, we have done about close to INR 170 crore, in terms of the platform. Is about, you know, which is more than what we've done absolutely in the FY 22, arena. That's one.
The second piece is that, as far as the platform framework and business is concerned, we believe that, you know, we'll see, you know, of course a improved absolute number this year compared to last year as well. There's about a 6%-10% increase from year-over-year. You know, we believe the platform has a lot more capability to be able to offer to more clients. We have built out quite a bit of service architecture this year and reengineered it to be able to offer to more clients. We believe that there will be some level of expansion that you would see this year compared to what you would have seen year-over-year from 2022-2023. That's the platform story.
I think, you know, as far as the payments question is concerned, payments, of course, because of the growth in the payments which we have seen, which is exponential, because sequentially we've seen more than a 50% jump. We believe that, you know, in percentage terms, the platform revenue will of course be lower. Because today also, if you look at the platform revenue, it's up 15% of the overall revenue, because it's net revenue versus growth, the one that you're comparing to. In payments, TapPay is going to be a very important part of what we will be offering to our clients. Currently, we still believe that we'll go after the 1 million order merchants that we would offer TapPay solution to.
you know, we think that in the next three to six months, you will start seeing certain merchants that you would be transacting with on a offline basis to utilizing the TapPay solution from us, which is CCAvenue TapPay. Of course, we've got plans aligned to be able to offer it to, you know, about 1 million merchants because that will give us a combination of online and offline. We've not segmented our numbers yet. We've not communicated how much we are generating out of TapPay, but we believe that once we get to a certain scale and size, we will provide more information on how much TapPay is providing to us.
To your question, 1 million merchants is definitely what we are targeting this year, and we hope that, you know, maybe in the next quarter or the quarter after, at least you would have transacted through merchants who use CCAvenue TapPay.
Understood, sir.
Yeah.
Thank you, sir. That was my question. Thanks a lot.
Thank you. Before we take the next question, a reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Mayur Liman from Profitmart Securities. Please go ahead.
Thank you for the opportunity and congratulations on a great set of numbers.
... I just want to ask, recently you have entered into the strategic partnership with PayPal for global payment acceptance. Can you provide more details in term of, how would this partnership help us scale our international business? What would it mean for our business growth out in those geographies?
Vishwas here. We have tied up with PayPal for allowing PayPal as a payment option in the markets of UAE and Saudi Arabia, where we are present. We dominate the UAE market, the payment options are limited to Mastercard, Visa, American Express, and some local net banking there. PayPal is an additional option where on every transaction we earn our revenues. As you understand, the MENA region, specifically UAE, there are a lot of foreigners or expats who live there, and they necessarily have PayPal accounts from their home countries there. This kind of tie-ups help us increase the bouquet of payment options that we can offer to the merchants and earn on every transaction that we can do.
We get the PayPal around 700 million, some wallets across the world that they have, to be able to pay to our UAE merchants. It's an additional payment option. Of course, transactions will scale. We don't report payment option-wide numbers, but it will count in our overall transaction growth in that region.
Yeah. Okay. The second one is the last. We just wanted to understand that in 6 months of launch, we have only onboarded 150,000 merchants. What make us confident that we will achieve the 1 million in financial year 2024? What are we doing to tap and onboard another 850,000 merchants incrementally?
Okay. Vishwas here. We have seen exponential growth across merchants in India, right? If you've seen, we have onboarded an average of more than 8,000 merchants every day, including these captive merchants and online merchants. This is particularly because RBI gave out licensing, we are considered the gold standard in payment gateway. Just like what HDFC Bank is in the banking sector, we have a premium on it. Secondly, most of the major PGs were not able to onboard online merchants, the load was so much that the focus again went into onboarding all these merchants. TapPay, you will see increased adoption in the coming months.
We already have feet on ground through our subsidiary company, GoPayment, and through that, we are going to able to scale it to 1 million merchants. I think the numbers will come. As of now, if you see, there are already 2.5 lakh app downloads of TapPay in the market. It's growing significantly. We're pretty confident in the next two or three quarters, we'll achieve the 1 million merchant numbers.
To add to what Vishwas said, we've also opened up our SDK, which is the software development kit. In other words, you can use whatever payment options that you want, but that will only happen through us. That also requires a huge set of licenses and approvals from card payment networks, which I think, you know, we are one of the only ones who have it in the country. If you open up the SDK, you don't have to replace the payment gateway. Our, of course, first initial part would be to offer it as a bundled solution with our payments, and then we'll also have an option to open up the SDK, so that any merchant can enable Tap onto any of the devices that they already have.
Okay. Thank you for the answer. Sir, just, you have already achieved the 4.5 lakh crore in FY 2023. How do you see the FY 2024 TPV movement and take rates? Also, how confident are you to get the GeM renewed, given the latest development, as that will also define the TPVs in coming years?
Sure. As far as our growth is concerned, we are still seeing very strong growth in April and May of this year. Year-over-year, we are looking at more than a 40% growth, 40-50%. I think so far, the business looks strong. Of course, we'll keep on updating you in terms of how that traverses. Yeah, we expect that we're targeting a growth of about 40% year-over-year this year. That's one. As far as the GeM renewal is concerned, we made certain voluntary disclosures. We are currently not an MSP. We are part of a consortium in GeM.
This is of a national procurement portal and importance, we are not a main service provider currently. We are a consortium partner, we bring our expertise on software components and in specific, the whole e-marketplace framework for the GEM implementation. The implementation was for a period of 5 years. It can be further extended to 2 more years. From the go live, we have it until December 2023. That engagement will continue and can be extended for 2 more years. The new GEM RFP, which you are referring to, that has come out, you know, that RFP gives 18 months for someone to develop a completely new framework from scratch, from the time of award.
We expect that even if the new RFP is out there, it will take 24 months for a new framework to be established. That gives us enough reason to believe that, you know, up to December 2025, that we will have a lot of work to be done for GeM. That's the first part. The second part is that while we have provided that in our clarification in terms of the status of the bid to become an MSP, because in the past GeM implementation, we were not an MSP. We were a partner vendor. Similarly, in the new GeM RFP, we had applied for being a MSP, which we have disclosed as part of our voluntary clarification that we are not in that race.
We will pursue the opportunity to continue being a provider to the new MSP, or we will look at the options of responding back to GeM in terms of being able to qualify us to become an MSP. At this time, we don't have more information to provide to you. In a nutshell, we believe that, for the next foreseeable, you know, couple of years, we will have a role to play in GeM.
Okay.
No matter what the outcome is.
Yes, sir. Thank you, sir, for the answers. That was very good. Best of luck, sir, for your business. Thank you so much, sir.
Thank you. The next question comes from the line of Tanay Jain from Deal Wealth Capital. Please go ahead.
Thank you for the opportunity. Over the next 2 years, what is the improvement that we are penciling or aiming in the net earning for transaction from 9 basis points that we've exited in Q4? Can it be made or IP say by FY 25 end?
We've publicly communicated that we will look for a double digit by end of 2024. You know, I think the payment industry, like Vishal had mentioned, you know, prior to Q&A, it's going through transitions. Established companies and funded players, they're looking for profitable growth now, which has always been the DNA of our company since the inception. Because of that, I think that's one dimension of why take rates are improving. Second dimension of our take rate improvement will be cap table, because we believe that offline transactions, where card is present, has a different take rate compared to online transactions, given the risk profile is different. A combination of those two, we believe will have a good impact in terms of how take rates will improve.
We've seen, you know, quite a bit of progress. While competition has been extremely heavy, and funded players would want to take up business even at a discount, we've always maintained our position that we will take profitable business and grow. If you continue that path, we may be able to achieve what we were talking about much earlier than that. I appreciate. To add to what Vishal said, the international processing, like in UAE, we are doing in excess of around 10 billion AED. That's already in double digits. International business will also continue to grow, which is already a double-digit take rate.
On a blended basis, at nine basis point, if you're exiting Q4, double digit is around the corner. I was looking if we have an aspirational number, say, two years down the line. FY 2024, I've already understood, given our investments in infrastructure and all the partnerships, I'm sure we would have some more visibility for FY 2025. I was therefore looking. Do we have a range at least?
See, in international, we will do 15-18 bits, easy. I think that, you know, we believe that, you know, because of the funding arbitrage, where India is, you know, somewhat discounted by many of the players which is coming to rationality, that would be a good aspirational number to go with.
Thanks. With regards to the government trust on, let's say, the RuPay cards and how the MDR dynamics are, how do you foresee the growth of RuPay cards and possibly lower revenue from that versus other merchants like Visa, Mastercard, so on, so forth? As a market and as a player, how are we understanding this?
Okay. From RuPay credit card perspective, RuPay credit card has the same MDR or the earnings that is there from a Mastercard and a Visa credit card. Right? That is sorted, and that's where the government focus is. As far as RuPay debit card and UPI is concerned, today, both are under zero MDR regime, right? The government is now paying the MDR on behalf of the merchant. There is earnings that will come in for processing UPI and RuPay debit card. If you have seen, other players already now, booking that, payment that is coming from the government. Till today, we have not claimed those, but we'll be claiming in the coming quarters, the MDR that the government incentivized to process RuPay debit card and UPI.
... Okay, the framework from government side is pretty clear for us to claim. There is no ambiguity in that front, you are saying?
There's no ambiguity. Government has sanctioned INR 2,400 crores for this financial year as incentive for processing UPI and RuPay debit cards.
Okay. That gives quite some clarity. With regards to international business, while you have given a range, I just wanted to understand what more partnerships like PayPal are we looking at in other geographies, whether it is Australia or MENA or US for that matter? You have indicated in your roadmap that more geographies are being actively considered. Other than our direct presence, what other kind of major partnerships would we be working on?
There are already-
Yeah, go ahead.
Yeah. Okay. Yeah, every country has its own sets of domestic payment options and international payment options. Right now, when we are going into Saudi Arabia, Mada is a payment network there, which works for all the local debit options, so that partnership is already in place. We're working on the last bit of certification. Similarly, Australia has its unique lots of local domestic network players as well as DNPA players like Affirm and others. The local partnership in each market will continue. Like in India, we work with almost 200 plus payment options. That includes almost 100 net banking options, credit card, debit cards, all kinds of wallets of Paytm, Metro Payments Bank, to lots of pay now, buy now, pay later, like Simpl and many others. Those partnerships will continue.
For us, we are the intermediary. The more options we offer to our merchants for them to offer to their customers to pay, we make money on every transaction.
To add to this, what Vishal said, an aspirational partnership would be something like an Apple in international territories.
Thank you. Before we take the next question, a reminder to all the participants, please press star and One to ask a question. Next question comes from the line of Meet Shah from Anubhuti Advisors. Please go ahead.
Yeah, thanks for the opportunity. First question is in terms of gross revenue from platforms. If I look at YOY growth, it's only 6%. The revenue has grown from INR 160 crores to INR 169 crores, while our GeM TPV has almost doubled from INR 1 lakh to INR 200,000 crores. What is the bridge to this? I understand that majority of the gross revenue from platform business is via GeM portal.
Correct. Two things. One is that there is some G2G contracts, government-to-government contracts, and those government-to-government contracts, they are not remunerative to the provider. That is one. Second is that there is slab wise, you know, diminishing curve. What that means is that as you process more, the revenues will not be the same. You know, what we'll do is we'll look into actually share that information with you as well, you know, so that it gives some more clarity in terms of how this can be modeled.
Okay. Out of INR 2 lakh crore, how much will be from G2G contracts?
I will double-check if the client provides the specifics, but we'll find out a way to communicate that information in some way which is compliant with the client, you know, disclosures.
Okay. Okay, okay. One thing, in some previous question, one of the management members had said 40% YOY growth in FY 2024. I missed that part. What was that amount?
In May and June of this year, we have seen a 40% quarter over the same quarter last year, we have seen more than 40% growth. We continue to track it, but we are seeing good traction with 40% growth in revenues and transactions.
Okay. Okay. In so far.
The same quarter last year. Correct.
Okay. Okay. Okay, thanks. Thanks.
Thank you. The next question comes from the line of Pranay Jain from Deal Belt. Please go ahead.
Thank you for the opportunity again. I got dropped off. I just wanted to understand on the domestic front also, what really could be the...
This is the operator. We have lost the line of Mr. Pranay. Next in line is Mr. Ayushi, Ayushi from an Individual Investor. Please go ahead.
Hi. Basically, I had two questions first. You said that the GeM license, there is a possibility that it gets extended to two more years. Right now, we haven't really complied with the qualification according to the e-requirement side. If the GeM license gets extended for two more years with similar terms, and the engagement is extended till December 2025, sir, after that point, the major contributor to the platforms business will cease to exist for the company. You did mention that they will probably be as a service provider, I wanted to understand in what capacity and what kind of hit will the company's profitability take once the GeM license expires? Sir, currently the platform business contributes INR 169 crores of revenue and INR 76 crores of profit.
How much of this contribution is by GeM, and how much is contributed by uncertain and other platforms? I know that you said that you probably wouldn't share the bifurcation right now, there'll be need for more as investors, because it is a very good contributor to our profitability, and without that, we are less uncertain.
Sure. you know, the reference that you made to in terms of our wallet, like, clarification a bit, was about us being part of us being an MSP, which is the main service provider. to my clarification on the earlier question, today also in our current GeM contract, we are not an MSP. we aspirationally wanted to apply in terms of being an MSP, which is where you are saying the public procurement portal says what it does. we have, of course, you know, reached out to the client for clarification on the same.
Having said that does not preclude us from being part of a partner consortium, which means that we will look at the opportunities that are available for us post 25, whatever the decision may be, in terms of participation in GeM. The second part of your question is that, what would be the impact post 25? The thing is that, you know, the framework that we've also started building upon, is extremely robust. In other words, we have many other clients who have approached us in the past as well, to be able to take our services. Depending upon what the outcome is, we don't believe there will be a significant change in terms of the opportunities available to us, with or without GeM. We will crack it.
We will communicate what we are going to do in terms of participation. I think there are many international clients, given the scalability of the platform, the service orientation of the framework and the opportunity to open up API, so that you can build out in the way you would want. We see that there could be significant opportunities, perhaps some of them even more remunerative in certain cases than what we have right now. We will evaluate our options and keep you updated. We don't expect, you know, a sudden change in terms of how we get compensated, in terms of our platform business, you know, with or without, you know, the world.
We have certain options that we have thought through in place, and we will be changing and updating clients and communicating as and when required.
Oh, okay. Just like a follow-up on that, basically, can we take the capabilities that we've developed for GeM to other countries and other clients? Is that possible?
Of course, you know, it would be a different framework, not the GeM framework. To answer your question, I mean, can we actually build out complete microservices architecture framework and give it to some other country? Absolutely, yes.
Do you think that there's a little opportunity in the MENA markets that you are currently exploring a lot?
I won't go specific, but we see an opportunity both on countries and clients, large conglomerates.
All right. Sir, basically, the PTB guidance is 7.5 lakh crores by FY 2025. Will that change considering that we have, like, you know, GeM, that is, like, diminishing revenue from GeM, as you mentioned?
Currently, we don't see that changing. We think that, you know, we, the opportunities in front of us in both international markets are significantly large, so we'll pursue them. We don't see that, you know, numbers changing as of today.
Okay, sir. Sir, my second question is regarding a news article that was published in The Economic Times about basically, uncertain and International Business may offer, like, around 25% of its equity stake, and will be probably raising $25 million-$50 million. I wanted to confirm the validity of this piece of news. Along with that, I wanted to understand, like, what do you think about the valuation? Because, like, if you're raising around, say, $25 million-$50 million, that is, like, around 2,000 or 260, like, INR 410 crores, approximately. If you think that is a fair value for the subsidiary, and, like, what will be, you know, if you could shed some light on valuations as well as, like, plans for future?
See, our international business, in specific, our UAE business, has grown significantly. We, we are number two in that region. We process more than AED 10 billion on an annualized basis across more than 6,000-7,000 clients. Of course, we believe that with the TapPay solution also opening up internationally, we can add tens of thousands of merchants in that region. Of course, that is a separate entity, they can answer some of the questions much better. What I can tell you is that they would be looking at, you know, growth opportunities from time to time, even investment opportunities from time to time. I think, you know, that's how much we can talk about at the moment.
Okay. Just the last question I had. Last time I had asked a question to Mr. Mushaq about the patents that we had filed regarding tap-on-phone for e-commerce payments. At that time, you had mentioned that you did not have an update on the applications that we had made. I wanted to inquire if you have an update as of now, because it's been, like, a complete quarter.
Yes, Vishwas here. We are talking about the payment for the Tap Pay thing, right?
Tap Pay is a tap on phone for a particular person e-commerce transaction, not tap on like the Tap Pay is for like merchants, right? Like where you're at that particular shop or kiosk or like basically as a replacement for the POS machine. I think the patents was filed for paying on a customer's, a customer can pay on their own phone for e-commerce transactions. You can correct me if I'm wrong, but this is as per my understanding.
Yes. I think I have to confirm with my business, but I think the patents for the requisite mode that we were talking about had been filed, but it stands for confirmation. I right now don't have insights, but our legal team were filing patents around six, seven months back. I don't have the exact status of that application at the moment.
All right.
Yeah.
Okay, thank you so much for the answer to my questions. I'll get back on to you.
Thank you.
Thank you. Next question comes from the line of Krishna, an individual investor. Please go ahead. Krishna?
Hello.
Please go ahead with the question.
Yeah, it has been answered. Thank you.
Thank you. Next question comes from the line of Chandan Singh, an individual investor. Please go ahead.
Yeah, hello. Can you hear me, please? Hello, can you hear me?
Yes, we can.
Okay. I just wanted to know, sir, that though we have been talking about a lot in terms of percentage and transactions and money being made and into various geographies we are expanding. As an investor, I do not see that it is getting, I mean, transformed into share and stock price driving in the market. Do you think there is any reason associated to it? Do you think there's any perception which has been built over the past, and that's the reason it's not really signing up well?
See, I think, you know, what we do is, we control the inputs into what we do. In other words, we control the business, and we control what we, what we drive in terms of our goals and numbers. Of course, I think, you know, we can of course, talk very fluently about those specifics. As far as the market and the market dynamics are concerned, you know, in the past, we were the opening batsmen. We did not have peers. Now there are peers, you know, Paytm being one of them, as a fintech company. As more fintech companies come in, there'll be more understanding of the market and understanding of the business.
That understanding the business and the scalability will perhaps create more understanding within the community in terms of how to think through such companies. I think that, you know, if you look at, you know, how fintech has done overall, you know, I think that, you know, looking at the private markets versus how public markets are traded, we definitely think that there is a big gap, you know, how private companies get valued compared to publicly traded companies. Having said that, you know, and we think that we will continue focusing on execution, and that execution focus will lead to, you know, shareholder value. I think we don't find a specific one particular reason.
We think that as long as we can keep on executing, you must have looked at our performance for last year. For the first time, I think for a company of the size and scale that we operate, you know, getting to total income of INR 2,000 crores is a big achievement, we believe. You know, even this quarter, we are seeing strong numbers. We've seen more than 40% growth quarter-over-quarter compared to last year. So far, I think, you know, we see the year being strong with our focus on international markets, because international is a single-digit percentage of our overall number. We think that the international can have the potential to be at least 25%-30% of, you know, the overall transaction processing volumes. We think that we'll continue focusing on that.
With TapPay being a very large opportunity to be able to reach out in the physical world, you know, we think that 2023, 2024 is a year where you would want to walk into a shop, and you would see CCAvenue TapPay as one of the payment options. I think if we are able to achieve those specifics, we believe that, you know, we deserve the investors through execution and, that, you know, the value will also show up.
I got it, sir, but I just personally feel that increase is some kind of attention is not paid in this area. This is not really into progress. I definitely believe that you're putting a lot of hard work on execution, but we also need to monitor what is really happening in the external world. There is a nice. I can see that there are many companies which I see post a lot of information to certain websites, and they keep on coming as updates, which really helps the share value grow in a better way. I think some of your marketing teams to concentrate in this area as well.
Otherwise, finally, down the line, if it keeps dwindling down, you will not be able to raise a lot of money from public, if required.
Sure, it's good feedback. We'll take that. Thanks, appreciate it.
Yeah. Thank you. Thank you. Next question comes from the line ofAyushi and Individual Investor. Please go ahead.
Yeah, sir. Basically, my follow-up question was that, as you have given guidance earlier, I want you to understand what are your projections, based on profitability, volume of transactions, and that is for the different segments that we have, looking at FY 25 and FY 26.
Ayushi, what we've done so far is that, you know, we're tracking a 40% growth in the first 2 months of this year. In maybe in the first quarter, we'll be having more information to share with you. I think, you know, we would definitely look for a 40% improvement year-over-year across our metrics for this year.
40% in each metric?
The metrics that we talk about is typically, revenues EBITDA. We believe that if we are able to track to that number, then I think, you know, we will be able to. Of course, at the end of the quarter, we'll have much more, much better guidance for the full year. We'll keep you updated, but yeah, we'll be looking at a 40% growth year-over-year.
Okay. Sir, can you throw some light on the OpEx increase that we had, a INR 600 crore increase in OpEx? What exactly did we use it for? Currently, as you mentioned, that some of our competitors, such as Razorpay, are not onboarding new merchants. I wanted to understand what we're doing about customer stickiness. Sir, I wanted an update from you about the NUE license that we had applied for. Has there been no update from your end about what happened to that consortium? Are we reapplying? I think there was some news about RBI not continuing with the NUE applications at all because they didn't receive any good quality applications.
What is the status about NUE specifically, and where do we stand as a company? Are we looking at other consortiums, or how do we go about it? Please throw some light on the NUE part specifically.
Okay. Yeah, yeah. From the NUE perspective, officially, none of the players have heard anything from RBI. They have not communicated. There were seven or eight consortiums who put up the application, and these are some of the best, not only India, but from global scale, right? Everybody from Reliance to Tatas to even international big tech, and everybody has participated and put in a lot of effort. Of those seven or eight applications, till now, RBI has not officially communicated anything, nor called anybody for any presentation or anything else. one or two comments by one, some of the RBI officers is what we hear from the press. Unless, and until, at least we are heard by RBI or something, then we can comment on the NUE application that is there, right?
I believe NUE is a very progressive step by RBI, and a lot of players have put in a lot of effort to build a network which is like a Visa and Mastercard, right? Can do, can help India gain that global domination. That's part of the NUE update that I can give at this juncture.
Sir, you basically are saying that the information that mentions on the press release is not to be relied on as of now, because there is no official communication?
As I said, we have officially submitted with a lot of paperwork and a whole lot of effort put over a couple of months, with the four consortium partners that we have announced, that is Reliance Industries, Facebook and Google, and we have applied officially to RBI. Seven other consortiums were there. Till now on that application, neither have we been called for any hearing nor any response from RBI on that application till now. Once we formally hear, we'll definitely communicate to you what is happening.
Okay, sir. Sir, and the reason behind why GeM wasn't considered, basically our application as per for the MSP position in the new GeM RFP, why we weren't considered? Some news articles mentioned that we didn't have a particular CNN in my as far as any certification for IT projects. Is that the reason, or can you throw some more light on why we weren't selected? Is there any, is there any incompetencies on our end?
I think, you know, there were a lot of pre-qualification criterias to being an MSP, and that is being a main service provider. You can be a partner and a vendor, but there was significant number of criterias for companies to be able to become an MSP. As part of being an MSP, there are certain specific requirements that had to be met. I think, you know, short of actually going and saying that we've submitted our positioning, you know, today also we were not an MSP in the current consortium. Aspirationally, we wanted to look at, you know, potentially being an MSP, and that is a clarification that we have issued on a voluntary basis to all.
We've made the representation, so we don't have too much to share beyond that at the moment, Ayushi.
Sir, I actually wanted to congratulate you on the fact that all the guidances that you've been giving so far have been accurate and have been met with the results that you just posted. Sir, I wanted to know your profit guidance for the next year.
Ayushi, I think that, we will be able to provide, you know, much better guidance in the first quarter of this year. We believe that a 40% growth on revenues and, you know, perhaps even in certain cases, EBITDA is possible for this year, which is what we target. The exact guidance we'll provide after the first quarter.
Okay, sir. I look forward to that. Thank you.
Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments.
Thank you everyone for joining our annual call, and we look forward to having all of you participate in our first quarter. Thank you.
Thank you. On behalf of Go India Advisors, that concludes this conference. Thank you for joining us. You may now disconnect your lines.