Ladies and gentlemen, good day and welcome to the Network People Services Technologies Limited Q4 FY 2025 earnings conference call hosted by Kirin Advisors Private Limited. As a reminder, all participant lines will remain in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star, then zero on your touchstone telephone. Please note that this conference is being recorded. I would now like to hand the call over to Mr. Harshil Gamsiani from Kirin Advisors Private Limited for his opening remarks. Thank you, and over to you
Thank you. On behalf of Kirin Advisors, I would like to extend a warm welcome to everyone joining us for the Network People Services Technologies Limited Q4 FY 2025 conference call. We are pleased to have us with esteemed Kirin Management, Mr. Deepak Thakur, Chairman and Managing Director; Mr. Ashish Aggarwal, Joint Managing Director; Ms. Savita Vashist, Executive Director. The call is scheduled for 40 minutes-50 minutes to ensure that everyone has the opportunity to participate. We kindly request that each participant limit their questions to two, as this will help the management address as many queries as possible within the time frame. If you are unable to address any questions during the call, please feel free to reach out to us at info@Kirinadvisors.com. We would be happy to coordinate with the management team and others for further discussions. We appreciate your understanding and cooperation. We look forward to an engaging and productive call.
I hand over the call to Mr. Deepak Thakur. Over to you.
Yes, hi. Thank you so much. Very good evening, everyone. First of all, let me congratulate for the breakneck progress quarter on quarter your organization is going through. The decision at management level, guidance from board, efforts from NPST, shareholder expectations, and adoption of several key practices have helped us rebuild the growth parameter of the organization after what we saw in Q3. We have closed the financial year positively with the upward trend. I remember either there is a win or there's a fundamental learning. This year we went through both. It was not an easy journey, but by the closure of the year, I can say that we are well prepared for the coming financial year. After our Q3 impact, we decided to double down on our efforts to strengthen our core values and also reestablish the growth curve.
Like I said, it has taken time, but we know we have picked up at the right direction. There are four commitments we had with the investors, and I think last three, four months we have been able to conclude that. One, we got listed on main board, both NSC and BSC. Second, we declared dividend, which is 20% on the face value. Third, we have set up new subsidiary to focus on the international deals. Fourth, I think it is related to this where people kept on asking us, "When are you going to a global market?" We have cracked the multi-million dollar contract in Africa to build a digital payment infrastructure. I believe these are a few things which we have been working for a very long time, and it has paid the result.
In continuation to our efforts in scaling the business, we have increased our footprint in allied services and new segments. Like I said last time, our organization's entire focus is going to be data stream and diversification so that the fundamental core of the business is reestablished and we do not go back to the impact we had in Q3. Also, there were a lot of suggestions which came from the investors last time. Went to host the call and giving the business analysis straight with the numbers. I believe we have given as much information as possible. It helps you understand your organization better. Our quarterly growth has been about a 24% QOQ jump over the last Q3 result, whereas when it comes to yearly growth, it is almost about 36% in FY 2025 against FY 2024.
If you look at the numbers straight away, I would say that in last financial year, it was INR 130 crore in revenue. It has gone up to about INR 180 crore, which is almost about 39%-40% odd growth. EBITDA margin, on the other hand, has gone from 35% to about 37%. The net profit, again, has not shrunk. In fact, it has gone up from 20% to about 25%. Earning per share, we have given as against 13.85, it is about 23.27, which is about a 20%-68% jump. That is about the number. There is a question about the talent pool in the organization. We thought we will take it straight. Last year, there were about 20% additions in our talent pool, and this year, the estimated upward trend is going to be about 30%-odd percent incremental talent along with the AI implementation.
There were improved efforts in restructuring due to the Q3 results. While we were doing that, there were a lot of efforts around all the other areas of business. We have really grown well in terms of offline payments. We got multiple TSP wins. We declared about AI-based risk engine last quarter, and today we have three orders already even before launching it. When it comes to global deal, that's something which happened yesterday, and I'm glad that we have called today to share this with you. TPaaS upgrade has taken time for the payment platform to pick up, but in the short term, we have been able to sign multiple banks and about 15 payment aggregators in the platform.
When it comes to technology partner business, I can say that today, in about the last four or five months or with all the efforts from my sales team, we got 16 orders worth over INR 100 crore in the next four to five years. One of the largest deals being Central Bank of India, which is majorly because we ensured that we pivot into more areas of business, and offline payment was one, which is about INR 70 crore orders in the next five years. Of these 16 orders, five orders have SaaS-based revenue, which means if the market grows, it has a direct impact on our business and the growth trend straight away is visible. We have shared the growth trend for the payment platform for this year as well as up to the year 2029-2030 so that you can visibly see what exactly we are targeting.
For all the new businesses which I mentioned, our P&L will start showing the numbers by the first half-yearly Excel in FY 2026. When it comes to payment platform, like I said, we signed 15+ aggregators and large merchants. This Excel will give us a GMV peak, which we did last year, coming in the first half-yearly Excel. When it comes to new revenue stream, like I already mentioned, RIDP, which is our risk engine over AI, our offline payment business, they have already added revenue to us. When it comes to international foray, we have already got global deals, which is about setting up a digital payment infrastructure in one of the economies in Africa. That is what we are doing. When it comes to small and medium-sized banks, we decided to build our own hosted solution so that we can target this side of the business as well.
I'm glad to say that we got most of the products certified and are tapped to go live in the market. It's much faster than what we had earlier. Along with this, when it comes to new products, obviously, this helps us build new funnels. Internet banking interoperability, which was declared in last April by RBI, we are already one of the POC vendors in the country. At the same time, when it comes to BBPS corporate payments, which is again a new initiative, we are one of the POC vendors. ONDC on the buyer side of the business, we have already picked up that. Interesting thing here is we decided to conclude this in quarter one Excel so that we get three quarters entirely to add a funnel and incremental business revenue. That's all from my side.
I think there are numbers already available, and whatever maximum we can do as part of analysis, we have done that. Let's take up calls around whatever questions investors have. I think that will be good.
Thank you.
Yes.
Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Rupesh Tathiya from Shree Rama Managers . Please go ahead.
Thank you. Thank you for the opportunity, sir, and the conversation for turning around in Q4. I have two questions, basically. First question, sir, is can you give Q4 revenue, can you split it into transaction-based and then the rest? That is one. Can you also give some color on how much of this revenue is from industry or applications where MDR is charged?
Rupesh, last quarter, most of the revenue is from TSP domain. I think transaction-based revenue realization will happen in Q1, majorly because the way our policies have been restructured, it is going to happen in Q1, the entire billing. Mostly, 90% is from the TSP domain. MDR, there is no MDR. Like I said, UPI does not have MDR. What we do essentially is we provide tech staff to banks and to payment aggregators. On that, we get paid for the services we provide. It is not the MDR revenue. It is against the technology. If there is a reconciliation model being used, there is a per transaction some payslip that we get paid. If at all there is an entire infrastructure that we are sharing for you to transit, then there is certain revenue share.
What essentially we do is, as a technology service provider, we translate the entire tech cost into a small OpEx-based cost for you, and then you pay me on the transition model. That's the.
I understand the SaaS model, sir. My question is, I mean, in the value chain, somebody has to charge MDR, right? And then we'll get a share of that. And credit card on UPI, there are some categories where MDR can be charged.
Yeah, absolutely.
My question is, next year, let's say transaction-based revenue you get, what percentage of that will be where the end transaction is where the MDR will be charged?
Other than your account-based transaction, the rest all has interchange income. MDR is charged to the merchant. There is an interchange income that goes to the bank. By virtue of being a technology partner in this domain, there is a percentage share of that interchange income which the bank pays. I'll just give you an example of one of the NCMC prepaid business that we recently structured, wherein there is a 50-odd basis points for the NCMC travel, when you travel in a metro or somewhere. There is a cost of 50 basis points, 0.50%. Now, the MDR interchange in this case can be about, I do not want to share my number, but let's say somewhere around 50%-60% approximately which the bank will pay me.
Here, what I do for the bank, right from the technology to the acquisition cost to the entire solution domain and the entire reconciliation, everything is taken care of by us. Against that, the bank will pay me a certain interchange share. That is how it will work. When it comes to credit card on UPI, there will be a similar story. It is about 0.70% and above. There, again, there is a revenue share. When it comes to credit line, it has not picked up, so I do not want to share about it, but the number is somewhere between 0.70%-1.2%. When it comes to normal transactions, there we get paid for the reconciliation and the overall services that we share with the customer.
Coming back to the second part of the question, we see that we'll be taking our GMV like we did last year in this half-yearly result. We see that we anticipate our payment platform to be going back to the same 70-odd % revenue share this financial year, coming from 65%-70% odd from this particular business.
The GMV composition next year you are seeing, it will be similar in terms of where you can charge this interchange, where you will get this interchange. I mean, I do not know what was the, let's say your GMV was INR 100 in, let's say, FY 2024, and let's say out of 30, I mean, I am just making up some number. Out of 30 of that is where you were eligible to get an interchange. That proportion will remain same in FY 2026 or that composition of GMV will change?
The composition will remain same, but the ticket size will go down. The proportion will remain the same.
What are you charging per transaction?
Yeah. Let's say if your reconciliation cost is INR 0.05 , I may get INR 0.05 or I may get about INR 0.04. The volume will increase. That is majorly because of the increase in volume happening in the market. As and when the volume increases, this is the impact which happens. I'll just give you an example with one service. We signed a deal with INR 0.05 , then we signed a deal with INR 0.04 also. That's how it will go.
Will the realization go down compared to FY 2024?
No. The volume will increase massively.
Per transaction realization. I understand the number of transactions will go up.
Yes.
Okay. And then the final question is UPI incentive. Last year, I think it was INR 1,400 crore-INR 1,500 crore, and this year's budget, financial year 2026 budget is, it has even gone down further to INR 500 crore. I think what basically government now is saying is the industry now is mature. We do not want to sort of handhold you. You guys figure out how to make money with such large volume. I mean, how do you read it into this and which categories do you, I mean, at least my expectation now is that the MDR will come in some categories, at least large merchants, retailers like that. What is your view on MDR being charged in UPI transaction in FY 2026 or FY 2027?
See, I take a lot of positive from this. There is always a backup to such kind of decisions whenever it happens. In the sense, it's easy to understand that if India's digital growth has been due to this instrument, which contributes 82% as of today to the entire digital volume in the country, then this instrument will definitely have a backup if the mighty incentives have gone down. The very first thing, where is the mighty incentive now applicable? It is applicable on small-sized businesses, which is fair, and that is where we should be looking at. Second, when it comes to the contribution coming from the credit card in UPI ecosystem, that is ramping up. It has an MDR already. That's where the revenue will start increasing.
Third, there are a lot of new players in the market beyond PhonePe, Google Pay who are into this business, and they are doing virtual credit card-only model. This, again, increases a tremendous potential around the MDR to be generated from the new instruments in it. Third, like you rightly said, you have to figure out. We being early in this stage, I would not say that there was, I do not think there was anyone else to start getting into this segment than us from the technology domain. What we analyzed was there is a huge potential in the risk-based modeling, which is required to safeguard the payment ecosystem. For that, we started building the risk engine way too early. The results, even before we launch it, we had three orders in place. This is nothing but an output of how the maturity comes in the system.
There will be more and more models coming up, and there will be more and more opportunities. Yes, MDR will hit the business, I mean, upward. That will come as and when the instruments start adding value to the system.
Maybe just one clarification. Some of these things you are saying, right, credit card and some of these things, this is basically already existing customers or existing merchants who are used to paying MDR, right?
Yes.
Credit card people are already, merchants are already paying MDR.
No, no, no.
The issue is in UPI, just a second. Sorry. The issue in UPI is there is a lot of new people we got to do digital payments through UPI, and these people are not used to paying MDR. How will that transition work? I just want to separate the two.
Two things. One, it is not just the existing users, but it is also the new cards issued in the market, and that is ramping up way fast. Second, and it is virtual-only process, okay? You will see that complete shift in FY 2026. That has an impact. Secondly, when you say, what was the second one? The MDR contribution, right?
Because 90% of UPI people who are using UPI, they have never paid MDR in their life. How do you make transition them to start paying MDR?
I gave an example. I'm not, again, going back to MDR. I'm going back to interchange, which is a component of MDR. I'll just give you an example. Again, don't quote me for the number. I'm just giving you an idea how it works, okay? Let's say approximately the interchange is sitting at 0.90%-1% for a credit-based transaction. In the UPI-based transaction, the same interchange will not be 0.0%-1%. It can be one-third or lesser than that. UPI will still be the most preferred instrument because you are paying one-third of the entire interchange that is payable in the ecosystem. One. Secondly, there is a very clear demarcation of small, medium, large merchants, okay? Wherever there is a small and medium merchant, the call can be taken by the ecosystem.
Wherever there are large merchants, if you go to a mall or you go to a shop where you are spending about INR 5,000, INR 10,000, and you are still using QR code payment, I think 82% is UPI. In that case, the merchant does not have a problem. The problem is where you are transacting for INR 100. You are transacting for maybe INR 500, and the expectation is that you pay 1% over it as a cost. Now, when you segregate the ecosystem and you understand where there is a paying capacity, and again, what you are paying is one-third of the actual cost, then UPI is the most preferred option. Let's see how it goes. Yes, this is a very positive move in the industry. I am just trying to give you an understanding of the ecosystem.
Yeah. Thank you. Thank you for a very elaborate answer, Deepak, and I'll come back in the queue.
Thanks.
Thank you. The next question comes from the line of Akshay from AK Investment. Please go ahead.
Hello. Congratulations, sir, for the good panel around in Q4. My first question is, yeah, in financial performance, is the board behind us? If yes, then how much revenue growth are we expecting in FY 2026 based on all the visibilities and all the things and new products we have talked about? It's not for the full year, but at least for the half one of this financial year.
I would say that Q3 was worse. It's behind us now. We have taken time. I mean, again, if you really ask me, the kind of effort which has gone into it, we really want to see the cumulative impact of all the effort which has gone, which I'm seeing coming up very soon. We have businesses coming from offline, which we did not have around Q2, Q3 coming in. We have revenue models in SaaS-based in risk engine coming in Q3, Q4. We have payments coming in dollars now in quarters here onwards. All of this will contribute to the growth. I would still like to, I don't know, I would still like to avoid the number right now because we would like to still stay put with the growth number that we have already pushed from Q3 to Q4.
One thing I can say is that there will be a quarterly growth like the way we did it last year. That is the trend that we will be currently committing right now. As and when we go ahead, the numbers will only multiply.
Sure, sir. And sir, currently, how many total banking clients do we have in our ecosystems? And how many are live and how many are yet to live? Like we had talked about the Central Bank of India. So is it our new customer or is it already onboarded before?
No. Central Bank of India is a completely new customer. We probably ordered somewhere at the end of Q4, if I'm not wrong. We have done a turnaround within about less than 30 days to make them go live in phase one so that we see these SaaS-based numbers coming in from Central Bank of India from Q1 itself. That's about Central Bank of India. It has gone live, okay? The execution is still going on. We see the impact coming in quarter on quarter as and when the number of merchants grew in the model. To your first question, we have more than 22+ banks and payment prepaid instruments as CPI holders right now. Both are regulated entities in various models. We have added nothing less than seven or eight, or I think six or seven clients in a short time.
When it comes to payment platform, we had just one. We are now in three. When it comes to aggregators, these are all like 15 or aggregators now signed for the deal. Yeah.
Okay. My last question is on the South Africa deal. If you can put some color on that as to what type of service do we provide. You said that it is a multi-million dollar deal. The revenue from the same will start accruing from this quarter or when? Can you put some light on that?
It is not South Africa. It is in Africa. We cannot disclose the country as per certain agreements. The execution has already started this quarter. We are expecting this is going to be a seven-eight month execution period. The revenue will start hitting from Q1 itself because there are milestone-based payments. This is about a six-plus-seven-year contract for us. What is a bigger advantage for us is this is the first of its technology in Africa, which we believe will be a big jump for us in the entire African continent. This is a multi-year contract now.
Right, sir. Right. Sure, sir. Sir, small suggestion from my side is that if this type of large deal happens in our company, then you can share these details to all the investors so that we can get a better idea about it. That was from my side. All the best for the FY 2026, and thank you so much for answering my question.
Thank you so much, Akshay. I would like to share something here. There was a slight discussion around because we signed it. Although we started earlier, we got it in our hand, the signed document we got it in our hand yesterday. As per certain policy guidelines, it was supposed to go today. We decided to, there are a lot of things happening together. I left it to my team to make a decision around it. Yes, your point is taken. We'll do it the way you're expecting.
Sure, sir. Thank you so much.
Yes.
Thank you. We take the next question from the line of Abhishek Sharma, an investor. Please go ahead.
Hello.
Yeah, Abhishek.
My question is, could you please explain how the AI machine learning power tech solution performed in Q4 in terms of client traction, use cases, and monetization potential?
Abhishek, like I said, in Q4, we declared that we have completed our testing, and we have trained the module with about 640 million data. To bring this up, we have taken about one and a half, two years of effort because any AI engine needs a lot of accuracy and confidence to predict. We are not in a model wherein we are writing a rule engine. If it breaches, and then it gives the result. We are in a system. What we have built is it predicts anything beyond the rule also. For that, it took about one and a half, two years. Last quarter, we decided to finally do the POC. This quarter, we have actually got the output. We have already so existing customers readily go. It solves their regulatory problem in such a way that most of them have.
Said, "Yes, and we have three already in our hand." What it does is it evaluates the entire merchant information. It picks up the information from the market, and then it also picks up the transaction nature and behavior. Based on that, it tells you where exactly the challenge can be, what is the trust score on a particular transaction, and what is the trust score on a particular merchant, which you can start taking decisions. We have further gone to a level wherein it can predict the liability amount a bank can spit on for a particular merchant, if at all not addressed on time. That is the evolution the system is going through. That is why even though we have this in our hand, pre-orders, we decided that there will be a massive launch in Q2 odds, and then we will see numbers coming in from Q3, Q4.
Okay. So my next question is, what progress was made in Q4 on the pilot projects such as BBPS, which and credit line on UPI?
Credit on UPI, there is not much progress because it's taking its own, the industry is taking its own time. As and when it progresses, we'll work on it. When it comes to BBPS, we have additional order writing. We have got two new orders from the customers. At the same time, it has added a very strong funnel to the company. Further, we have also gone into the BBPS corporate payment model, which is a separate engine altogether. We have also added BBPS agent institute model, which further allows us to get into the new segment. That's from the product side and the business side.
Okay, sir. Thank you, sir. That's it from my side.
Thank you.
Thank you. The next question comes from the line of Harish Kumar Gupta from Nirmal Bang Securities Private Limited. Please go ahead.
[Foreign language]
Yes, sir. Yes, sir. I'll explain that. [Foreign language] I think the call happened somewhere in the month of February, mid-February [Foreign language] we have just addressed it. We have got the approval in somewhere end of January, [Foreign language] revamp [Foreign language] Next quarter, we are going to pick it up, which was the quarter that we were sitting on.
[Foreign language] gap [Foreign language] , but like I said [Foreign language] time [Foreign language] rebuild [Foreign language] , model change [Foreign language] Parallelly, [Foreign language] areas [Foreign language] add [Foreign language] revenue so that nothing gets we have a consistent growth in the organization, which was missing in Q3. [Foreign language] same revenue [Foreign language] Q2 [Foreign language] anticipate [Foreign language] still you are looking at that 50% odd growth in financial year? I said, we are sitting here right now in mid-February, and I feel that our expiration is there, but it is very difficult due to the time which is left right now.
[Foreign language] Like I said, it is all the fundamental value that we are pushing it, but [Foreign language] time [Foreign language I never said there would be a one-month revenue impact. [Foreign language] milestones [Foreign language] numbers [Foreign language].
Okay. Okay. Thank you. [Foreign language] base revenue [Foreign language] quarter [Foreign language] , INR 28 crore [Foreign language] are you confident [Foreign language] 10% quarter on quarter growth [Foreign language] continue [Foreign language] ?
Sir, [Foreign language] I think the only dip which happened in Q3, [Foreign language] quarter [Foreign language] 10% 10% [Foreign language] .
[Foreign language] quarter on quarter [Foreign language] exceptional growth [Foreign language] time।
[Foreign language] quarter [Foreign language] 20% growth [Foreign language] 15% [Foreign language] , but you know again I said that don't put numbers in my mouth [Foreign language] multiple revenue stream add [Foreign language] So we will definitely give you good results. Don't worry, sir.
Okay. Thank you, sir. Thank you.
Thank you. The next question comes from the line of Vinod Chandra Agarwal, an investor. Please go ahead.
Thank you for the opportunity, sir. I have the first question is like, what is the total number of employees we have?
I think about 330, maybe 335, [Foreign language].
Okay. The second question is about I would like to understand about this market size, estimated market size for each of the products which you have presented. I believe that is only the Indian market size, or is it the global market size you have presented?
Are you referring to my presentation which I shared today?
Yes, yes. The last quarter and this quarter as well. For example, let's say if I take RegTech, which is a Risk Intelligence platform, right? We have a $2 billion market size. Is it an Indian market size like $2 billion?
Indian, Indian.
Okay. And in that.
That's our calculation of the product. RegTech is a much larger ecosystem, okay? [Foreign language] innovations [Foreign language] , and there will be people who will be building their modules. We have already built certain modules, which according to our calculation, like what kind of revenue we are expecting, what is the total transaction volume in the country, and where exactly it can cater? This is the module that we have developed right now. There is a $2 billion market size. Now, it can be as in when the module multiplies and the market evolves, it can go beyond that also. There will be more and more innovations, new initiatives add on. There will be new regulatory compliances that will come into picture. As and when that happens, the market size can only increase. It will not decrease.
Okay, okay. In that, my additional question is like, I see the segments which caters with risk and intelligence platform, that is banks, PAs, and regulators, that I can understand, but I do not understand like what is the merchant? Is it the merchant also requires risk intelligence? Because generally, merchants is something who pays the MDR or some charges to the banks, right? Do they require the risk intelligence platform?
Assume that there are utility companies. Assume there are companies who are doing more than two, two, three payment aggregators taken together. That is the transaction volume they do. There are companies who face the payment challenges day in and out. Impact [Foreign language] companies. There is always a potential there. Merchant [Foreign language] ? There will be certain categories. Let's say there may be hospitals, there may be hospitality industry, where there can be fraud chargebacks. There are a lot of businesses which have gone complete online. There is no offline nature at all. For such businesses, how do you justify that goods were delivered or the payment transactions were made on time? The response was done on time.
There is no fraud like [Foreign language] goods and services [Foreign language] chargeback [Foreign language] raise [Foreign language] . What are you going to do in that case? There are a lot of impacts there. Our focus right now is banking ecosystem and aggregators and PPIs. These are all regulated entities. This will pivot into the merchant problem understanding, which is the next step.
Okay, okay. Understood. One more question about last quarter, like you presented that we have also won the contract for the Middle East, some technology services, right? If you can just give some more insight, like what kind of a contract is it, like something.
Service-based contract? No, no, no. Service-based contract. Ideally, what happens is when you want to enter a new market, like what we did in Africa for the last one and a half years, we have been consistently nurturing this particular account. Wait for a quarter more, we'll share more information. What happens is your nature of product and the solution that you have built in India may not be accepted or may not be feasible to be sold exactly as is in those markets. [Foreign language] geography [Foreign language] , regulation [Foreign language] , and we are building a solution for the regulated ecosystem. In that case, we are supposed to venture into certain service-based model and then start building the product stack and then get into IPR. service-based business [Foreign language] we started building the stack, and then it will evolve.
Okay. So work is already started, is that you are saying?
Yeah, yeah.
Okay, okay. Just last one question is about like generally, like right now we claim like 7%-8% of the transactions of the UPI transactions, that is what our market share we have, right? In a similar way, do we expect like in all the categories, we will have a similar kind of a market share, or is it something we expect lower or higher kind of that market share in all of these products?
When I say 7%-8% market share, that means that's the total transaction we are processing in our technology partner domain. It is not related to the payment platform, which I just discussed with the first call. That's a different size altogether. As and when we grow that size, for sure, that means we are increasing the contract value, and we are increasing the contract with the number of banks. That's why today, whatever I have shared, I have shared that we decided to get into a hosted solution so that we cater to more and more banks in the system. Like BBPS, we have launched. We want it to go on a hosted model as well. Why just UPI? That's how we study the overall requirements. Second, like I said, if there is a first four, the market share has to be higher.
If you're a late entrant, then market share will be lesser. We anticipate that RegTech will give us larger market share in its segment. I'm not expecting a huge number, but yes, it will not be like 7% odd because UPI, we were very late entrant. We were almost five years after our large competitors who are in market as an organization. We went there after five years. There will be a market share benchmarking for every product that we go. Wherever we get a first entry, wherever we have some better understanding, our share will be larger.
Okay. One last question is about this market size. When we say $2 billion, right, annual market size, is it like only for our type of service provider, right? Not for the entire ecosystem?
Yes, for our type of service provider.
Okay. So basically, we are saying like this $2 billion, that is annually, and if we just even say, let's say, 5%-7% market share, it turns out in a good amount of revenue.
Yeah, that's visibly.
Okay. Thank you. Thank you. That's all from my side, and good luck for the future quarter.
Yeah, thank you.
Thank you. We take the next question from the line of Yash from CD Integrated Services Limited. Please go ahead.
Hello sir. I'm from Shanbhag Asset Management. I was continuously tracking your company. So my question is, will our YoY growth in H1 in terms of number will be grown as we have seen in the last two quarters? There is a massive decline in YoY.
Yeah, YOY growth you will see now this year.
From my own work, you can see.
You are referring to quarterly number year over year?
Yes, sir. Like in Q1, the growth was INR 58 crore. Are we projecting that we will beat that estimate, or do we need to see sequentially?
I can definitely look at a higher number coming in from Q1, Q2. To be honest, if you benchmark it with the—no, not exactly. If you benchmark it with the highest number ever achieved by the company in those two quarters, I believe that the role is definitely going there only. That is the direction. But score view, [Foreign language] numbers [Foreign language] .
Okay, sir.
There will be a growth, but score [Foreign language] calculate [Foreign language] .
H1 number? Like if you can give some value.
I committed there is a quarter on quarter growth, and let us see how it looks.
Sorry?
I said I committed quarter on quarter growth to you. I committed quarter on quarter growth also, half-yearly growth also. Benchmarking it with certain numbers is something that let the result, as and when the result. We can do that.
Okay.
Thank you.
Thank you. The next question comes from the line of Ashish Soni from Family Office. Please go ahead.
This talent pool grows 30%. So where exactly will this be deployed? Is it for product development, or is it for the Africa project, or where exactly? Can you throw some light on that?
We have a major requirement around the tech and the product domain because if you see what we have shared, there are four new product launches that we are doing in Q1 itself. We are going global. For us to execute so many—and then there are six wins. For us to execute, there is a need for the tech and the product team. I feel that about 60% odd, 60%-65%, or maybe more will be the tech and product domain. I think about 30% odd of that, maybe 10%-15% will be around sales. As and when we expand a new product and new territory, there needs to be more and more domain experts to sell the solution. There will be sales, and the rest will be the operations and the other areas.
Regarding this Africa project, is it only—do we expect, or are we in negotiation or discussion for other geographies, some similar projects, or is it like one-off? What's your sense based on the win?
We are in discussion with multiple partners because we decided to go with the partner model, channel partner model. We want to play a specific role around OEM so that the IPR and those kind of quality ownership is with us. That is where we decided to focus on the solutions alone. We will not be focusing a lot around the service-based revenue, which is where the channel partner locally will help. On the product and the core tech side, we'll be playing the role. We have about three to four channel partners with whom we are working day in and out.
So this global expansion will be like this with partner-led and your own products? Do you think it will come?
Our own products.
One is like service-based to get an entry and then selling your product. Is that the strategy?
Yes. What happens is you, based on the product requirement of the local market, which, let's say, your product may be just about 40%-50% there. On the service-based model, you revise the entire platform. It takes time. Once that is done, the product treatment is identified. Then you are the product owner and the local channel partner is your service provider.
Okay. Just one request. In AGM, can you come up with your strategy roadmap for the next two, three years? At least what's your thought process? I know you are giving some, but at least annually, because I think you guided earlier, I think one or two quarters back, that you will try to give a yearly guidance sort of thing. If you can come with that by AGM, that will help all the investors.
Yeah. I will definitely note that. Let me work out on that.
Thank you. All the best.
Thank you so much.
Thank you. We take the next question from the line of Gopi, an investor. Please go ahead.
Hi. Congrats for the good set of numbers.
Thanks, Gopi.
I have one specific question around what happened in Q3. There is an event that happened and we lost revenue of Q3. That is clear for me from my API transaction side. That means in that Q3, whoever was depending on us for payments through this API flow, can I assume that they all got impacted? That is why they have shifted to some other player. Because when I compare Q4 of last year and Q4 of this year, there is still a lot of gap, right? INR 25 crores versus INR 25 crores . We did not regain that revenue. Is it because those customers moved to somebody else?
Let me tell you, there was a three-pronged strategy. One is, obviously, we took guidance from our board and all the guys that have been working with us. One is de-risking the entire existing model. See, our core is where the revenue comes in, and we believe that's a fundamentally very strong value proposition. That's why we have grown that well. De-risking for that, it was required to first reestablish the payment flows and the overall tech stack with the multiple banks. Now, see, it's a regulated segment, right? It cannot be overnight changed. Earlier, we did not know how long it will take. Later on, when we got to know, we got onto it. I do not think there were holidays at all. Whatever time we have taken, we have been able to reestablish that.
Not stopping there, it was important to diversify the allied services and the similar payment model. Like if you are in online business, then why are you not on offline? Let us do the offline as well. If you are in BBPS, then why are you not ONDC? If you are on payment stack, why are you not on RegTech? All that taken together, we have further diversified. If you see two slides, we committed that de-risking and diversification, whatever we have shared, we have been able to achieve that. Model-wise, we have built that. Third is, obviously, for a good number of time, investors have been asking us, "Why don't you go global?" I said, "There is a fitment. There are a lot of efforts which are required. Don't expect us to happen so quickly." It was all due respect.
Whatever efforts we did, we could not project that it will come early, and it has come. What happens in global market? Your margin is better. Your market expansion is larger. You have more area to work on. If at all there is any dip or any issue, then you have other businesses that you have built to ensure that that goes into building the stronger and larger revenue model the organization should have. That is the major way to handle that. That is what we have.
I have understood how we have solved it. That part is clear to me. I have understood how we are ensuring this does not repeat. I think just trying to visualize the stickiness of our product. When some issue happened in Q3, can I assume that the customers who were using us shifted to somewhere else? Because they need to do things, whether we are able to enable it or not.
Agreed.
They would have shifted to somewhere else. Can I assume that it takes time to bring them back?
Yeah, it does. That is the reason why our Q4 number otherwise would have been much larger. We have taken that time to be required. Otherwise, it was like one side is you have banks. Other side is you have to reestablish, retest, redo everything.
This pick-off, let's say last year, whichever quarter we had the peak, it's because of, let's say, I'm assuming majorly because of the huge transactions we have enabled through API. When we get these customers back, ideally, that peak should come back in this year, right?
Yeah, absolutely.
Got it. We do not want to commit the numbers on resuming.
Yes.
Got it.
See, it is all positive. It is going upward. What I have seen is that we really want to put those good numbers in place and bring it back. If I would have committed anything overly in Q4, then it would have had a, even after 20% growth, I do not think anyone would have taken it right. That is why there is a very strong process which has been built. I think you should focus on those kinds of fundamentals that the organization has. Probably earlier, no one was looking into it. Today, it is all there. It is right there. You can pick up from there, and it is easier to then anticipate whether we are taking the right decision.
Yes, yes. That is very clear. I'm also very excited from the product pipeline that I've seen. I think we have taken all the steps to ensure that the future is very bright, and we never have this situation. Thanks for that.
Thanks, thanks.
Thank you. The next question comes from the line of Nishant from Goldman Sachs. Please go ahead.
Yeah, hi. I just had one question which is already answered, basically regarding the guidance which you have not given. We will wait for Q1 and Q2 if we can get some guidance.
Sure, Nishant.
Yeah. Thank you.
Thanks.
Thank you. We take the next question from the line of Srinivasu from TIA. Please go ahead.
Hi, Deepak. Sorry, I have a great set of numbers.
Thank you.
My question is about BBPS, B2B. You said it is a fast-emerging space and targeting INR 2.4 billion market share. Could you share what is your go-to-market strategy? How many dealers or merchants are onboarded or internal? Similarly, you are sharing ONDC platform with another INR 10 billion market opportunity. How many merchants or banks are in discussion?
BBPS, B2B, I think we will be completing this in Q1 by 30th June, which I have mentioned in one of my slides. I see that this is absolutely new. Whatever offline market we have in India, that is the entire set of targets that we have. We intend to continue exploring the opportunity from the partners that we have. It may be our payment aggregators. It may be the cooperative banks, the CBS vendors, all those whom we have tied up. The funnel will come from these places. There will be revenue which will be generated based on the overall transactions, invoice processes, and the amount settled in the BBPS corporate payment. Second is, when it comes to ONDC, we have picked up the financial services segment, which has mutual fund, which has your insurance, and then we have personal loan as well.
Now, availability of financial services on this segment allows us to generate revenue and does a direct market entry. For this, for sure, we have a couple of banks where we are going aggressively. And then NBFCs, FinTech, these are all guys. I think I have mentioned that as well. These are all guys who will be direct customers. So yeah, that's the overall growth plan in the ONDC space. Because we are just focusing on buyer app, we do not want to right now jump into supplier. That's a little bit tedious. In the buyer app, because we are in this space wherein we have access to merchant ecosystem, this allows us easier entry.
Okay. My next question is about a technical question. How do you manage core banking integrations for the small banks or hosted model for these cooperative banks? Because most of these banks are having legacy systems without any APIs.
We have a middleware. I SO t o XML, which clearly, so your entire legacy is ISO , I guess. And then your new age digital payments work on XML. So we have our own IP, which has been built to ensure that such legacy system has no impact. It may be JSON, it may be any format. We can get the converter in place.
Something like SDK, right?
It's a middleware. Let's say you are communicating from a CBS to my system on an ISO. CBS has an ISO. Okay, let's say top three are Oracle, Infosys, and which is the third one, TCS, banks, PAGS, Flexcube, which is the Infosys one, I forgot that name, Finacle. Okay. Majorly, you have ISO-based message transmission from these guys because that's the model in which it was built. Now, your digital payments are on XML. Between CBS and my digital payments, there will reside a middleware. This middleware ensures that the communication between two systems is rightly exchanged. We have done integration with all these three names which I have mentioned. We have ready middleware. Tomorrow, if there is any bank which has either of these core banking solutions, we know what kind of processing needs to be done.
It is all because we have been in this space for quite a long time now.
Okay. Thank you.
Yep.
Thank you. We take the next question from the line of Hardik Gandhi from HPMG Shares & Securities Private Limited. Please go ahead.
Hello, sir. Am I audible?
Yeah, yeah. Tell me.
Yeah. I wanted to know, I'm really happy the change in tone from Q1 to Q4, and congratulations on the new product launch. For someone who does not have that backwards IP of the product, which you—
Who was breaking?
Can you hear me now?
Can you confirm? It's my network.
Yeah, I can hear you. Can you hear me, or is the voice breaking?
This is better.
Yeah. I was just saying that congratulations on the amazing product line and the change in tone from Q3 to Q4. I just wanted to know, for someone who does not understand your product that well, for me to gauge the factors which pivot your company towards a good direction and a bad one. I just wanted some guidance from you, on a layman basis, that what things do you want to happen and what things will be which you do not want to happen. Kind of a SWOT analysis, but opportunities and threats. That in case if going forward, we see some trend happening, we can directly relate to the company and the future performance. If that makes sense. Sorry.
How do I— So let me try to answer this. The very first thing, if there was a single line of trend, then we would have been in Q3. That is what we did in Q2, right? We do not want to be sitting on those kind of trends. What we tried to do is we tried to give more clarity to our investors. As in, what is the segment that we are targeting, and what is the size of that segment? It helps to understand whether that particular segment is growing or not. When you go ahead, you do your study, you will come to know that, "Oh, okay, what is that RBI is declaring in their vision for the next three years in payments?" That particular vision may carry certain digital payment goods. This is going on for a decade now.
We gave you an idea about what is the number, which is what is the trend that is going on in the market. Now, if I tell you about the online payments, you have the number. If I tell you that we are getting into offline payments, you'll easily get the number around that also. How many offline merchants have been digitized in this country? If I tell you about RegTech, I think that's a niche. You'll have to rely on the number that we have shared based on—
Provided, yeah.
You can look at the fraud which is increasing in India. Maybe that will give you an analysis. If the fraud has increased by twice, that means the market size has also increased by twice.
Correct. On the RegTech—sorry, sorry to cut you—but on the RegTech, is it more related to cybersecurity, or is it very much related to transaction fraud?
Transaction fraud.
Okay, okay. Just to understand more about the product line, given all the products we have, how difficult or easy would it be for someone to replicate that and to develop the relations which you have developed with the customers, given that there are so many new product launches and we've been in the market for some time?
The customers we have right now, I mean, there are customers who are with us for a decade now. I mean, there are customers recently joined us and then started with one product and multiplied with multiple products. I mean, we have more than two, three products per customer now. I would say that, yes, it is not very difficult to build the product. What is important is what value-added services or what kind of expertise you add to the solution. I mean, it is not about just building a processing engine or an API. It is about what makes sure that the API works and what makes sure that all the compliances and all the other areas are rightly taken care of. I would say that being an SME in this segment creates a lot of value-add, which allows us to visualize what is next. That is something that is enough to divulge.
It would be correct for me to assume that in future, you want to be one of few rather than one of many?
Yes. We would like to be the innovator, and we would like to be setting the trend.
Sorry, sorry to contradict on this part, that given that you want to be the innovator, do you think a lot of your money, time, and resources will go into innovating something which might end up just changing because of the regulatory change or rather than following something established? Sorry, just putting a—
Yeah. You should know this, that we just do not pick up any left, right. There has to be a need. There has to be a strong calling for it. RegTech was not something we just picked up. We got to know the kind of frauds happening. We have the data points. We know what is happening in the industry with our customers. There has to be a need to innovate something. We are not like suddenly we do something else. There was a discussion around internet banking interoperability somewhere in April when the ex-Governor of RBI, Mr. Shaktikanta Das, declared that this piece is missing. We decided to stay put on it. Whenever there is an opportunity, get into it. We ensured we invest into it because once that happens, it becomes a compliance requirement for any bank.
We invest in such pieces. Yes, the decision is purely based on the need, and we have the right guidance from the board coming in for what kind of R&D budget we should have and what kind of new product investment we should be doing.
Understood. Understood. Thank you for the elaborate answer. All the best for the future. Thank you so much.
Thank you.
Thank you. Ladies and gentlemen, with that, we conclude the question and answer session. I now hand the conference over to Mr. Harshil Gamsiani from Kirin Advisors Private Limited for closing comments.
Thank you, everyone, for joining the conference call of Network People Services Technologies Limited. If you have any queries, you can write us at info@kirinadvisors.com. Once more, thank you, management. Thank you, participants. Thank you, everyone.
Thank you. On behalf of Kirin Advisors Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.