Ladies and gentlemen, good day, and welcome to the Q4 FY 2026 earnings conference call of RNFI Services Limited. From the management, we have today Mr. Simran Singh, Founder and Chief Strategy Officer, Mr. Krishna Daga, CEO, Mr. Nimesh Khandelwal, CFO, Mr. Mohit Chauhan, Company Secretary, and Mr. Deepankar Aggarwal, Executive Director. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Krishna Daga, CEO, for opening remarks.
Thank you, and over to you, sir.
Thank you, Michelle. Good morning, everyone. Thank you for joining us today. On behalf of the management team, I would like to welcome all our shareholders, investors, analysts, and stakeholders to RNFI Services Limited earnings call FY 2026. FY 2026 has been a year of resilience, strategic execution, foundation building for the next phase of growth. Despite significant regulatory changes impacting the certain legacy businesses, we have been successfully delivered strong profitable growth, expanded our product portfolio, strengthened our operating capabilities, and continued to diversify our revenue streams. For FY 2026, RNFI reported a PAT of approximately INR 32.5 crores, representing healthy growth of around 62% over FY 2025. We believe this strong outcome considering the regulatory changes witnessed during the year, particularly in the DMT ecosystem and in context of the overall industry growth trends.
It is also important to recognize that this performance was delivered while simultaneously making significant investments in building the future growth capabilities, primarily during the second half of the year. In businesses, such as our investments in distribution expansion, sales teams, collections, infrastructure, telemarketing operations, merchant acquisitions, and organizational capacity are largely expensed through a profit and loss account rather than are capitalized on the balance sheet. As a result, these investments have immediate impact on the reported profitability, even though the benefits are expected to accrue over the multiple years. During the second half of the year, we identified several attractive growth opportunities across insurance distribution, delinquent loan collection, and cash management services. When opportunities of this nature emerge, management believes it is important to invest decisively and build the capacity ahead of demand rather than optimize solely for short-term profitability.
While such investments can temporarily impact the earnings, they create a foundation for significant larger revenue opportunities, stronger market positioning, and enhanced earning potential in the future. Many of these investments we are making today, we intend to position RNFI for the next phase of scale rather than merely support current operations. At the same time, we would like to assure our investors that all investments are being undertaken with a disciplined approach to the capital allocation. We remain focused on balancing long-term growth opportunities with near-term profitability, cash flows, and return on capital. Our objective is not only growth at any cost, but sustainable and profitable growth that creates a long-term shareholder value. Now, before discussing our outlook for FY 2027, I would also like to address the question that some of our investors may have regarding the company's operating cash flow and working capital position.
One of the outcomes of our strategic shift towards newer growth businesses is gradual increase in working capital intensity. This is deliberate consequence of building a larger and a higher margin and higher return business verticals. As our business mix evolves, we expect working capital requirements to increase alongside our growth, supported by strong profitability and superior returns on capital. There are two factors that explain the movement in working capital during the FY 2026. First, our insurance distribution, delinquent loan collection, and cash management services scaled significantly during the year. These businesses collectively required incremental working capital deployment to support the transaction growth, client acquisition, incremental working capital partner onboarding, and service expansion. As these businesses continue to scale higher, working capital investment is normal and expected a path of supporting growth.
Second, the regulatory change in the DMT business reduced the working capital benefits that historically existed within that segment, resulting in additional working capital impact during the year. Importantly, while these newer businesses are relatively more working capital intensive, they also operate at substantially higher margins and generate significant superior returns on capital compared to company's historical average. As a result, higher working capital intensity is more than the offset by a stronger profitability and superior capital efficiency. As a matter of financial prudence, we expense these capital building investments through the profit and loss account as they are incurred. Historically, investment of these natures have been generated payback within a relatively short period, typically between 6- 12 months. Looking ahead to our FY 2027, management remains confident about the company's growth trajectory.
Based on our current business visibility, strategic initiatives, and execution plans, we expect a profitability growth in the range of approximately 40%-45% year-on-year, subject to market conditions and regulatory developments. Importantly, we expect to continue incurring expansion-related expenses during the first half of FY 2027 as we continue investing in the growth capacity. Despite these near-term investments, we remain confident in delivering the profitability growth outlined above. The key growth drivers will be in our insurance distribution, delinquent loan collection, CMS, and other emerging businesses for FY 2027. We expect insurance distribution and delinquent loan collection to continue growing significantly faster than the broader market, supported by expanded distribution capabilities, deeper client relationships, and investment made during the FY 2026. PaySprint continues to scale rapidly and it has delivered approximately 100% year-on-year growth over the period.
We believe PaySprint remains in the early stages of its growth journey and it's expected to become an increasingly meaningful contributor to the group revenue and profitability. Within our distribution business, we have initiated substantial investments in the field force expansion, merchant acquisition. While these investments will take to mature, we expect their contribution to become increasingly visible during the second half of FY 2027, with a stronger impact expected in the fourth quarter. Thank you, everyone. Now I will ask our founder, Mr. Simran Singh, to take the presentation and then we can take the questions.
Good afternoon, everybody. Let me take you through the presentation. This is obligatory disclosure. Next. Forward-looking statement. We've got a 2.4 lakh site merchant touchpoints right now, catering to 130 partners. Out of this, 95 BFSI partners offering 26 products and generating a ARPU of INR 1,108 per site PM. ARPU of traditional is more than INR 1,200 right now. Adding Payworld, this has got it to INR 1,108. We tend to increase this. In the short term, we tend to increase the base. When the base increases, the ARPU is low, the average ARPU would be less. As the base becomes old, the ARPU would increase massively. We have the three core things. The distribution, which has an extensive reach to Bharat, presence in rural and semi-urban markets too, stronger and trusted retail network. The main distribution and the fintech, the technology capability, which is very reliable.
We're putting a lot of AI into it to reduce the cost at the support functionality end is completely RNFI. It's transactions processing through the platform and other products processing through the platform, which make a stronger economics because the expense remains the same basically and keep riding the products. Next. This is again the ecosystem for people who are new into the system. We've explained it previously also. The central lane, the left site is the sites, which like more the sites, more the number of products, better earnings for the site, better earnings for us. Superior LTV, CAC is very better. These are connected by tech, which is the Relipay platform, the RNFI platform, which is deeply integrated to the partners.
Because of the scalability, it reduces the cost for the partner, making them money and making us money, and getting more and more products from them. As I say, always more the site, more the number of products, more the partners, higher the throughput, higher the LTV, higher the CAC. Exponential growth. This was our phase 1, 2006. We just concentrated on the payments as a service provider. Phase 2, we expanded, added more and more products. We started building the P&L. Now is the phase of monetization. The balance sheet builder. We're getting more and more products. We're working with a very large private sector bank, acting as a partner for CASA loans and deposits for them. This should really catalyze balance sheet outcome for partners. We're signing another private limited, a bigger private bank there again.
This should be a very big product in the future, basically, for monetization. We got a deep distribution ownership. Technology is in-house. Regulatory trust and compliance. We got a few licenses in the group. We offer multiple products and network effects, basically. The service provider, profitable balance sheet builders, exponential growth, because these all will work in tandem this year and the next few years, basically. Mind you have to understand, for us, we need to invest in the future to grow, which hits the P&L immediately, as Krishna also told. We have to be outcome. We have to balance the profitability in view of the future. There are certain products which require immediate investment because they're very big. Like a new product has just come, which is UPI cash withdrawal. Still in very nascent stages, but it requires investments immediately.
That's going to be a very massive product in our vision. Next, please. Operating leverage is our main leverage because the cost stays there and we keep on riding the products. Capacity building, major investment upfront is the distribution which hits the balance sheet, and then revenue flows at a near zero marginal product with more and more products. We're putting more and more products like insurance, CMS, delinquent loan collection, which are massively better than the ROC which we are doing right now, basically. You'll see a very different ROC very soon. Our Relipay network. No, Relipay. Its revenue more than 0.1%. Low concentration. Presently everywhere, which is our railroad to get more and more products over the base. Our product granularity. We're pushing this for the first time.
We've not done this before, but we would like to know. The BC business, even though it's a cash cow right now, it's making money for us. The EMI collection business is also making for us. We have still put this as a red ocean, and we're making money from the red ocean, putting into the blue ocean, and making money on these products, getting these products also to make money. I like to bring certain thing, no single product contributes more than 8% of our PBT. As you know, it's a regulatory business and few regulators ask us. If a product dynamic changes also, it should not hit us as for long-term, it should be of for a very short-term. Competitive moat is our in-house technology, integrated tech and robust API platform, faster integrations. We've been doing this for 10 years now.
Products, highest product with the SHGs. Once the distribution established, it's very low cost to distribute more and more products, and the superior LTV to CAC piece. What went wrong in FY 2026? We've always told you what went wrong. Decline in DMT transaction volume this year, but I guess from now it's phased out. It should not be a lot of very low impact in this year. Our PMP PP at DMT, due to RBI revised draft guidelines, we shut down, but it affected us in the short term. That's the reason it does around INR 4 crore of our bottom line, but compared to 2024, 2025, but it should not make much of a difference this year. It's phased out. New opportunity. New RBI BC BU guidelines are coming, which should increase our CMS business.
Our UPI cash withdrawal, I just told you, it's an amazing product, just launched in the nascent stages. We've just launched it. We were the first ones to launch it in the market with Jio Payments Bank. For now, in whatever the share of the market is, we are holding a considerable share and looking to grow and grow. AEPS has a INR 25,000 crore market per month, of which we roughly hold around 4.5%-5%. This product should be much more than that, and we intend to hold a much bigger market share because we've entered it right from the start. AD2 license has come in. AD2 license guidelines have been changed by RBI just two or three weeks back, where it lets us appoint Forex correspondents. They are looking to do away with the new FFMC licenses, new FFMCs would work under AD2.
This perfectly suits our network. We should be able to roll out the FX correspondents according to the new guidelines. Mind you, presently, the scenario of FX business is not so good, but it won't happen for a long time, so we'll build up in this for this time. Another beautiful thing happening is they've allowed a INR 25 lakh limit per transaction for SME for import and export payments also, which was never there earlier for foreign trade transactions. Loan referral, I told you, with a very big bank. We're looking to grow this product. We're investing into this product for now, but the future of this product is looking very good. Insurance business, we expanded massively, and it should expand more massively this year. We got a mutual fund registration done, ARN.
The idea is to launch a savings product for the first cohort is just for our SIHs to be able to push their savings on a daily basis or a weekly basis into mutual funds. We will be launching this product around the third quarter or second quarter or the third quarter. The integration has started. These are the management comments which you could read. We've given a guideline of growth of 40%-45%. We are very confident to achieve it. If there is any material change, we'll surely update you and be transparent as much as possible. These are things which you all would know much better than me. The gross profit, EBITDA, PAT. You can push to the next slide. I guess this is all numbers which I have explained previously also. We could begin with the questions everybody has, please.
Thank you very much.
Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, please click on the Q&A tab on the panel and click on Raise Hand button. The operator will announce your name when it is your turn to ask questions. Please accept the prompt on your screen and unmute your microphone. Turn on your video while proceeding with your questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Deepak Poddar from Sapphire Capital. Please go ahead. Sir, please turn on your video as well while asking your questions. Thank you. Mr. Poddar, I have unmuted your line. Please proceed.
Yeah, I'm audible?
Yeah, sir. You're audible, sir.
Yes, you are.
Yeah. There's some problem on my video, so I won't be able to turn it on. Apologies for that. Also, regarding my questions, so just wanted to understand, first up in terms of volumes.
Mr. Poddar, your audio is low, sir.
Your audio is very low.
Can you come closer to your mic and speak?
Yeah. Now it's better?
Yes, sir. Please proceed.
Okay. Just wanted to understand first, sir, in terms of your volumes, I mean, the impact that we are seeing in DMT volumes and the DMT business. By when do you expect this volume to normalize?
Volume, sir, we were able to get your question, please.
Yes, sir, your audio is not clear. Please bring your mic closer to your mouthpiece.
Yes, I think it's close. I mean, yeah.
Okay.
I was just trying to understand that volume normalization, by when do you expect volumes to get normalized? Yeah. Which impacted our FY 2026 business year.
It didn't impact, sir. The volume didn't impact, sir. It's basically we reinvested the money made, which has given us zero profitability in the last few months, basically, because to build up for the future, sir. As I explained, sir, most of the money we invested hits the P&L. It does not hit the balance sheet, sir, as Krishna also told you. We will keep investing, we'll keep growing, and as said, we'll balance the profitability and growing for the future, sir.
Only except the DMT business, there was no other.
We are not assessing anything here.
De-growth in there.
De-growth, sir. DMT business has panned out, sir, and we're already over that phase, sir. It does not affect us anymore, sir. Yes, sir.
Okay. Ideally, you are transferring your business from low margin to high margin business, right?
Yes, sir.
Yes, sir. DMT was basically, sir, another answer I have to explain also, sir. A few of the investors had a question regarding the top line not growing. The DMT business was a very high revenue and a very low margin business, sir. It has typically affected the top line by INR 60 crore, sir, and we've grown by INR 13 crore. We've covered INR 73 crore worth of business. Our site is massively very good. The DMT was a high volume business, but didn't affect the bottom line. It did affect the top line. We've still been able to cover up with the high margin products like delinquent loan collections, CMS, and insurance, and PaySprint also, sir.
Okay, understood. For this year, this impact is done. This year, we'll see also the top-line growth? I mean, the profitability you already mentioned, right?
Definitely, sir
Growth also will be?
Definitely, sir. Sir, we've always been this thing, sir, you can track the top line, but track us more on the bottom line, sir. Top line is a bit erratic in our business. Basically, if a subsidy comes, the top line will be very good for the quarter, and if the subsidy has not come, the top line would be hit. The bottom line, you can always track. Top line also, it will grow this year for sure, sir.
Understood. Just one last thing from my side. In terms of your balance sheet and whatever investment you are doing, any amount that is sitting in your balance sheet as a capitalized amount?
Sir, capitalized is only the tech portion.
Tech portion.
Which we are capitalizing very less, sir.
Right.
That is also tech portion, we're capitalizing only for the new projects. The old projects, we have old systems, the development is happening, like the UPI cash withdrawal system was on the old system, only with development. We are not capitalizing that, sir, and we are expensing it out, sir. It's majorly all expenses of growth are being expensed out other than tech, just for the very new projects, sir. That's it, sir.
How much would that be? Any amount you can share?
To capitalize it, sir?
Sir, it's approximately INR 12 crore.
Approximately INR 12 crore.
INR 10 crore-INR 12 crore.
For the full INR 10 crore-INR 12 crore for the full group, sir.
Full group.
Mind you.
Okay. Potentially.
New projects like mutual fund development happening, loan sourcing portal happening.
Yes, sir.
PaySprint has launched two more portals. Forex portal, FXC, is coming. Only that portion is being capitalized. Basically, as the system goes, the capitalization is dropping year-on-year, sir.
Okay. Understood. In terms of your high margin business, you mentioned insurance, CMS. What are the other names you mentioned? I just wanted to know what are the high margin businesses.
Insurance, delinquent loan collection business. PaySprint is a good high margin business.
Okay.
CMS is a good margin business. These are the four businesses we are right now concentrating on, sir.
Okay. Sure. I think that's very helpful, sir. I would like to wish you all the very best. That's it from me.
Thank you.
Thank you.
Thank you. Participants who wishes to ask questions may please click on the Raise Hand button. We'll take the next question from Harsh Mulchandani from Toro Wealth Managers LLP. Please go ahead. Mr. Mulchandani, I have unmuted your line. Please proceed with your question, sir.
Yes. Thank you. Am I audible?
Yeah, you're audible.
Yes.
Yes. Congratulations, team, for good set of numbers. Wanted to understand that, post the AD2 license, how do we expect the forex business to transition? Can we expect the green shoots to be visible in this year, or it would take longer for the business to transition to using the new license which you've got?
Harsh, basically, we are also very looking forward to that business. As you know, it's a Gulf War scenario, the business is very down. We really don't want to invest other than building up the technology right now. Once this ends out, we'll invest in the branch network. We expect the offshoot to come this year, basically. A few developments would be required according to the new guidelines which have come. Most of our system is ready. We'd already prepared the system looking at the draft guidelines. We think, depending on what happens in the world, we should be able to see the offshoots this year for sure.
Got it. My second question was, you mentioned that some of the expenses are routed through P&L. Any tentative amount that you are recording as part of your budgeting exercise so that we have an understanding that there are some one-off expenses which are gone in the P&L?
Every time we expand. Suppose for the UPI cash withdrawal product right now, we would be hiring manpower. We are expanding the insurance business also. For the short term, the manpower will hit my P&L immediately, but the income would start coming in the seventh, eighth month. That is the difference. We planned around INR 30 crore investment this year into the same. Around that. Depending on how the market goes. Yes.
For delinquent and insurance, it is the set of sector costs which we incur. There again, the hiring happens as the expansion keeps going.
Mind you, we wouldn't surely in the near future divulge you the return on capital employed for these verticals, and you'll be massively surprised as to what we're doing. Right now, we would like to keep it under wraps due to competition. Yes, please.
Got it. Fine. I'll come back in the queue for my other questions. Thank you.
Okay.
Thank you. The next question is from Keshav Toshniwal from [Sansela] Capital. Please go ahead.
Am I audible?
Yes.
Yes.
Yeah. I wanted to ask the role of the CEO, Mr. Daga. He was appointed, right? What is his exact role?
After Krishna coming into the picture, he's looking after the day-to-day operations. I look after the business, and I look more into new ventures and distribution majorly, sir, right now.
Okay.
Yes.
Day-to-day. Okay. What is the qualification, right, of Krishna?
Krishna will let you know.
I am myself a chartered accountant and company secretary, I'm having experience in fintech business itself.
We had told in one of our earlier calls. We know how to market, we know how to distribute, we know how to build products, but our weakness has been finance because we've been techies. Hence, we thought it's better to solidify, first getting Nimesh as the CFO, and then getting Krishna as the CEO, because we wanted it to be more like a professional finance-driven company and not a marketing-driven, sales-driven company balance sheet. Yes, sir.
Okay. Can you provide the roadmap for next two, three years? How you're looking to pan this company and what trajectory the numbers going to be like next two, three years?
So trajectory for next year.
The license stuff and from the subsidy, the numbers should come in, right?
Yes, the numbers have already started coming in from the subsidies. We've already given you a guideline for this year. Okay, sir. I would be able to give you a guideline towards the close of next year for the next year, but we tend to keep growing and maintaining our pace.
Okay. Thank you.
All the subsidiaries now have started making good money, and they are on a stage to make very good money like the parent company is doing. To be honest, if we'll not be bothered about the growth for the next year, the number last year would have been a far, far better number. We don't want to stop there. We want to keep growing, and keep growing is not being capitalized. Keep growing is hitting the P&L balance sheet. We'll always have to balance the profitability for our stakeholders and the business expansion for the future. We request everybody to not look at us on a quarter-on-quarter and look at us on whole on a year basis and a two-year, three-year CAGR basis. Like the UPI cash withdrawal product, if it kicks in, it's going to be a massive product for the future.
For the massive future, we have to invest a bit temporarily. We're not investing anything, thinking that the return would come in three years or four years, as Krishna said. We're investing so that the return starts coming in eight, nine, 12 months, and we start recouping the money also. That is what he's doing. Whatever investment we are doing is not, again, something which we're spending massively. It's just to build up the capacity and nothing more, sir. Once the capacity is built up, new product launch becomes a very easy affair without much expenses. We're still in a very nascent stage, and we're just waiting for both the flywheels to work together and take us where we intend to be, sir.
Okay. Thank you. All the best.
Thank you, sir.
Thank you. Anyone who wishes to ask questions may click on the Q&A tab on the panel and click on Raise Hand button. A reminder to all the participants that you may please click on the Raise Hand button to ask questions at this time. Participants who wishes to ask questions may please click on the Raise Hand button to ask questions. We'll take the next question from the line of Harsh Mulchandani from Toro Wealth Managers LLP. Please go ahead.
Yes. Thank you for the opportunity again. Team, just one, two questions more. Since we are building on the tech site, are we looking at any ways with the advent of AI to optimize our costs? We've been reading on social media that the cost benefits which everyone was expecting initially isn't too much. Just want to understand your site, whether you are getting any benefit from AI or it's not significant in terms of saving costs or manpower.
Yeah, it would help largely. Right now, building up cost of the AI is going into it. It will surely help us a lot. It might reduce the cost or other ways, with the same cost and the support, we'll be able to double and triple the business there basically. It will surely help. To the question you asked, it will help massively. On the next one or two quarter, we'll also do a demo of what we have built to be able to reduce our manpower capability in the office and the support system. To answer to your question, yes, surely. It will either, in the same manpower, we'll be able to do a lot more work, or we'll be able to reduce manpower to do the same amount of work. Yes, sir.
Got it. Okay. Just last one question is around the newer products. Like you mentioned, your focus will be on CMS and mutual fund, et cetera.
See, mutual fund is very much in the nascent stage. Okay, sir? The insurance distribution, delinquent loan distribution business, CMS, and PaySprint are our drivers for the next two quarters. By the time the new products will be ready, UPI cash withdrawal would be in swing, and then we start concentrating on those products, making money from those products as well, sir.
Got it. With respect to UPI cash withdrawal, how would the business model be? It would be a percentage of whatever cash withdrawals you would facilitate?
Yeah. It's a commission which the bank gets on an interchange, and a major portion of that flows through us, and we pay from that portion to the agent.
Got it. This, in a way, it would be a extension of your CMS business because you would be handling the cash, and that is why you.
No, it's not the extension of the CMS business. It would be an extension of our AEPS business with a much more market base.
Okay.
For an AEPS business, a scanner is required. For this, no instrument is required. They could just start that business without any investment.
Okay. Thank you.
Thank you. Participants who wishes to ask questions may please click on the Raise Hand button. Ladies and gentlemen, as there are no further questions, I now hand the conference over to Mr. Krishna Daga for closing comments. Thank you, and over to you, sir.
Give me the chance to close out the.
Thank you everyone for joining us today. As we stated in our opening remarks, as well as during the presentation, that we are committed to all our shareholders. We believe that same trust is entrusted for the coming few years as well, and we'll be definitely able to unlock their shareholders value by showing much higher profits and growth in the company. Now I'll ask Mr. Simran Singh also to contribute on the closing remarks.
Thank you very much for all the support you've given us over the last one year, one and a half year. This has been our first full year after the IPO. We've really worked hard over the last year to reach this figure. A few of us would be expecting more from us. We're really proud that expectation could be more from us. We'll work more hard, try to fulfill your expectations. One small request, please don't judge us on a month on base, on a quarter base because of the business we are in. Sometimes if somebody goes and study the UPI cash withdrawal product, they'll understand that we should invest massively into that and grow the network. We won't do that. We'll balance the profitability as the growth for the future also.
Rest assured, and like I always end the call, whatever happens, we'll be transparent to you. Please trust us, and thank you very much. Thanks a lot.
Thank you.
Thank you.
Thank you, members of the management. On behalf of RNFI Services Limited, that concludes this conference. We thank you for joining us, and you may exit the meeting now. Thank you