Avenuesai Ltd (NSE: INFIBEAM) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Vishal Mehta — Chairman and Managing Director
Vishwas Patel — Managing Director & Chief Executive Officer
Sunil Bhagat — Chief Financial Officer
Analysts:
Rajat Gupta — Analyst
Mohit Jain — Analyst
Darshil Pandya — Analyst
Pranav Mashruwala — Analyst
Deepesh Sancheti — Analyst
Dhwani Chanda — Analyst
Amish Kanani — Analyst
Presentation:
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Ladies and gentlemen. Good. And welcome to Avenue’s AI conference call. Please stay connected, the call will begin shortly. Ladies and gentlemen, you’ve been connected to Avenue’s AI conference call. Please stay connected, the call will begin shortly.
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Ladies and gentlemen, good day and welcome to Avenue’s AI Limited Q3FY26 earnings conference call hosted by Go India Advisors. 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. Should you need assistance during this conference call, please signal an operator by pressing star 100 on your touchdown phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajat Gupta from Goindia Advisors. Thank you. And over to Mr. Gupta.
Rajat Gupta — Analyst
Yeah. Thank you, Nirav. Good evening everyone and welcome to Avenue’s AI Limited earnings call to discuss the Q3 FY26 results. We have on the call with us today Mr. Vishal Mehta, Chairman Managing Director. Mr. Vishwaj Patel, Managing Director and Chief Executive Officer and Mr. Sunil Bhagat, Chief Financial Officer. Also joining us on the call today is Mr. B. Ravi who is advising Avenue’s AI 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 and must be therefore viewed in conjunction with the risk that the company faces.
I now request 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 and A.
Rajat Gupta — Analyst
Thank you.
Rajat Gupta — Analyst
And over to you, sir.
Vishal Mehta — Chairman and Managing Director
Thank you, Rajat.
Vishal Mehta — Chairman and Managing Director
Good afternoon everyone and thank you for joining us today.
Vishal Mehta — Chairman and Managing Director
I’d like to cover three important themes. First, our quarterly performance and how we.
Vishal Mehta — Chairman and Managing Director
Think through growth and profitability.
Vishal Mehta — Chairman and Managing Director
Second, I will explain the strategic structural evolution of Avenue AI into an AI.
Vishal Mehta — Chairman and Managing Director
Native transaction infrastructure platform.
Vishal Mehta — Chairman and Managing Director
And by the shift materially expands our.
Vishal Mehta — Chairman and Managing Director
Long term growth opportunity.
Vishal Mehta — Chairman and Managing Director
And third, I’d like to outline however integrated ecosystem which spans across Rediff, Rediff 1cc, Avenue and Phonetic AI. How they all work together as a compounding flywheel and what investors should expect from us over the next two years. Let me begin. This quarter represents a genuine inflection point for the company. Not just because of strong financial performance, but because the architecture that we have been building over the past several years is now operating at a unified scalable system. We delivered one of our strongest quarters to date with sustained growth in payment volumes, expanded profitability and accelerating platform integration.
But more importantly, the strategic pillars we committed to scale, regulatory depth and AI integration as well as our ecosystem design are now converging into a visible competitive advantage. During the quarter we completed our corporate.
Vishal Mehta — Chairman and Managing Director
Rebranding to Avenues AI Ltd. This is not a cosmetic change, it’s a structural evolution.
Vishal Mehta — Chairman and Managing Director
We are no longer a payment gateway company. We are building an AI native transaction infrastructure platform which is full stack, regulated.
Vishal Mehta — Chairman and Managing Director
Data rich and compounding.
Vishal Mehta — Chairman and Managing Director
As you all know, artificial intelligence is no longer an overlay for any system. For us, it is embedded across our routing, fraud detection, risk management, reconciliation, orchestration.
Vishal Mehta — Chairman and Managing Director
Customer engagement and decision automation.
Vishal Mehta — Chairman and Managing Director
The Avenue’s AI identity represents what we have already become. An intelligence driven financial infrastructure company anchored by CC Avenue and increasingly relevant in global markets. I want to share how we see our self reinforcing flywheel. Avenue AI operates as a closed loop ecosystem where consumers will generate intent, businesses will transact and operate. AI orchestrates the decision payments, monetize every interaction and data will compound into an advantage for us. Every transaction makes the system smarter and every data point improves automation. Every improvement strengthens our retention. And this is just not a linear revenue model. This is a learning system.
At the center of this flywheel sits Rediff 1 and CC Avenue, the operating system of our ecosystem. Let me talk about our integrated architecture here. On the consumer side, Rediff integrates identity, intent, engagement and increasingly financial participation. With a very large registered user base, UPI entry. Through a financial wellness positioning and an evolving AI native content layer, Rediff is becoming a meaningful consumer gateway for us. On the business side, REDIF1 becomes the convergence layer, the AI native back office for SMEs, enterprises and institutions. It integrates communication, workflows, compliances and operational intelligence into a single environment.
At the monetization core sits CC Avenue, the economic engine of our system. Its role is evolving from payment gateway to an AI optimized financial execution layer combining compliance, scale, orchestration and intelligence and powering. All of this is phonetic AI, the invisible orchestrator. In our system we think of Phrenetic not just as a standalone AI company. It is the brains of our ecosystem. It converts every data into an action. Whether to approve, reject, whether to route or retry, whether to predict or prevent or whether to notify. It deploys agentic workflows across payments, operations, risk and compliance and customer communication.
The outcome is somewhat measurable which is lower customer acquisition cost, higher processing, improved approval rates, reduced operational friction and over.
Vishal Mehta — Chairman and Managing Director
Time structural margin expansion.
Vishal Mehta — Chairman and Managing Director
I want to touch upon how the system compounds over time. Consider a small business operating on RedF1. It acquires customers using Redif it runs operations on Rediff 1, it accepts payments via CC Avenue. It uses chronologic agents to optimize pricing, reduce payment failures and automate reconciliation. As that business grows, payment volumes increase, as volume increases, our data intelligence improves. And as intelligence improves, automation increases. And we believe as automation increases, margins also expand, the switching cost move beyond just contractual dependency and they become operationally existential. This we believe is the power of integration. Finally, we see a clear two year structural outcome.
Consumer scale expanding via Rediff business lock in depending and deepening through REDIF1 predictable monetization compounding through CC Avenue and margin expansion over time through AI. This is not an incremental feature growth, this is a platform level operating leverage and we don’t want to build a quarterly story. It’s a compounding story. We believe very few companies operate simultaneously across consumers, merchants, regulated payment infrastructure and AI driven orchestration and even fewer still have them integrated into a closed loop learning architecture. And that is the opportunity in front of us. And this quarter for the first time we are seeing the flywheel move as one system.
I will now hand over the call to Vishwas for the operating details.
Vishal Mehta — Chairman and Managing Director
Vishwas, over to you.
Vishwas Patel — Managing Director & Chief Executive Officer
Thank you Visal. Good afternoon everyone. This quarter has been an execution driven quarter for our payments and platform businesses. While the strategic direction has been clearly articulated earlier, the focus over the last few months has been on converting that strategy into operating scale, regulatory readiness and monetizable infrastructure. Let me walk you through the key business developments at the core. CC Avenue continues to scale steadily across merchant segments supported by strong demand from large enterprises, utilities, telecom, travel, hospitality, etc. We are seeing higher share of credit card and large ticket transactions, increased participation from enterprise and institutional merchants, consistent onboarding across SMEs and Cooperative Banking networks.
As discussed earlier, we are concisely prioritizing volume led growth and absolute profitability over headline take rates. This approach is already delivering strong stronger cash flows and operating leverage even in a competitive pricing environment. This quarter was a particularly important from a regulatory capability perspective. We received our in principle RBI license for issuing prepaid payment instruments enabling us to launch wallet stored value products and prepaid solutions in the near future under the CCI ecosystem. We secured the IFSCA approval at Gibcity which will allow us to participate directly in cross border payments, escrow services and international merchant acquiring.
We also received the RBI authorization for offline payment aggregation, extending a presence across physical merchant locations through pause based networks. Importantly, most of these approvals are close to monetization and not long gestation initiatives Our international payment business continue to gain traction in the UAE and Saudi Arabia. The transaction volumes remain strong supported by enterprise clients and platform integrations. In Oman, we are now working with multiple leading banks, expanding our role as a technology and payment infrastructure partner. Gibbs City will provide us with a strategic base for US denominated settlements and cross border flows which we expect to scale meaningfully over the coming quarters.
We remain confident that the international markets will contribute a growing share of net payment revenue over the medium term. A key focus this quarter was operated operationalization our AI led payment architecture. With the launch of CC Avenue Commerce AI and PayCentral AI, we are enabling autonomous autonomous transaction initiated by verified AI agents and compliance ready auditable payment execution. This is not positioned as a consumer feature rollout but as a foundational infrastructure for enterprises, platforms and financial institutions that are preparing for AI native workflows. We believe that the architecture will evolve gradually but has the potential to boost a structural revenue stream over time alongside our traditional payment processing.
On the consumer side, redipay will continue to progress through regulatory and technical readiness. Our approach here is deliberately phased. UPI and wallet capabilities will coexist. Focus is on financial wellness, low cost distribution and brand lend engagement. We are avoiding hybrid acquisition strategies seen elsewhere in the ecosystem. The advantage we have in our existing user reach and integrated payment infrastructure which allows us to scale responsibly. To summarize, this quarter reflects a strong execution in our core payment business, the completion of a broad defensible regulatory stack, the measured progress in AI driven commerce and consumer platforms and a continued discipline around scale, profitability and risk management.
ABHIL Avenue platform continues to gain ground particularly in semi urban and rural markets. We processed millions of utilities, mobile recharges and bill payment transactions this quarter with agent led adoption driving deeper financial inclusion. In parallel, Res Avenue is leveraging our AI based tools to help hotels implement smart pricing and optimize occupancy rates. This quarter a Rez Avenue platform enabled hotel room bookings of 7,68,107 room nights at an average of 8,534 room nights a day, crossing over 6,050 million for our 3,500 plus hotel properties. This not only strengthens our position in the hospitality sector, but also demonstrates how AI is beginning to create tangible value across our merchant ecosystem.
Early pilots in fraud detection, risk scoring and dynamic pricing are demonstrating how AI can improve merchant efficiency, reduce costs and unlock incremental revenues. We remain focused on building trusted, compliant and intelligent payment infrastructure at scale while selectively investing in platforms that extend a Long term growth Runway with this. Now I invite a CFO, Mr. Sunil Bhagat to take you through the financial performance for this quarter. Over to you, Sunil bhai.
Sunil Bhagat — Chief Financial Officer
Thank you Viswasar. Good afternoon to everyone on the call. This quarter reflects consistent execution across our core payments business supported by improving scale, stable operating costs and continued discipline on capital allocation. Our consolidated gross revenue for the quarter stood at 2,381 crore, a growth of 122% year over year driven primarily by higher payment volumes, a stronger contribution from enterprise merchants and continuous expansion across domestic and international markets. The consolidated net revenue stood at 149 crore, a growth of 6% year over year reflecting steady monetization. Despite a competitive pricing environment and a higher mix of large ticket transactions, our focus remains on absolute profitability and cash generation rather than headline take rate metrics.
Adjusted EBITDA for the quarter came in at rupees 98 crore, an absolute growth of 25% year over year reflecting improved operating leverages as volumes scaled up. The EBITDA as a percentage of net revenue also jumped from 56% to 66%.
Sunil Bhagat — Chief Financial Officer
On year over year basis.
Sunil Bhagat — Chief Financial Officer
Our adjusted PET stood at rupees 86 crore, a growth of 59% year over year supported by cost control, stable credit cost and higher contribution from value added services. Our pat margin has also jumped from 39% to 58%. Even as we continue to invest in technology, regulatory readiness and platform development, our EBITDA and PAT margins remain healthy demonstrating the resilience of our underlying business model. As discussed earlier, the quarter saw a higher share of credit card and enterprise laid volumes which typically carry lower take rates but significantly higher absolute contribution. Our strategy is very clear, that is Prioritize volume led customer acquisition and operating cost.
We believe this approach creates a more durable earnings profile, particularly as scale continues to build across merchant and institutional segments. We continue to maintain a strong balance sheet with healthy cash flows from operations and low leverage. This financial flexibility allows us to fund investments in AI and platform infrastructure and selectively invest in growth initiatives such as Rediff without stressing returns on or liquidity. Our capital allocation remains measured and returns driven. We have revised our full year guidance for financial year 26 as mentioned in slide number 17, the upward revision in FY26 guidance reflects a materially improved business outlook and stronger than anticipated operating momentum.
Based on current trends in the transaction volumes, enterprise onboarding and international expansion. We remain confident in meeting and potentially exceeding our stated financial objectives while continuing to invest prudently in long term growth engines to conclude this quarter demonstrate that scale and profitability are growing together. Margins remain resilient despite mixed changes and our balance sheet strength positions us well for the next phase of growth. We remain focused on execution, efficiency and reinforcing the financial foundations of the business as we build for the future. With this, we’ll now open the floor for questions.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone wishes to ask the question may press Star and one on Data Stone telephone. If you wish to remove yourself from the question queue, you may press Star and do participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question chosen. Participants, you may press star N1 to ask a question. First question is from the line of Mohit Jain from Dr. Chow Chief and sir, please go. Go ahead.
Mohit Jain
Hi team, thank you for taking my question. So my first question is on Pay Central’s opportunity. So sir, I tried to, you know, size Pay Central’s opportunity by looking at India’s retail digital payment. There is somewhere around 900 lakh crore. But I try to narrow it down to you know, PG addressable segments like cars, UTI net banking, B2B vendor, etc. Which gives me an HMP sizable market of around 50 lakh crore. But within infi beam’s own 8 to 10 lakh crore TPV I’m estimating 60% or 50% of automatable. Of it being automatable and assuming just a 5% adoption rate, I’m getting a figure of like 30 to 40,000 crore in terms of market size of pay central TB media.
So is this the right way to think about pay centers, addressable market and adoption? Potentially. Over to you sir.
Mohit Jain
Thanks.
Vishal Mehta
Basically this is Vishal, I’ll take this question. So you’re right, India is the largest real time payment market and you know the next value layer is intelligence on top of the real. So what traditional aggregator would do is somewhat route transaction, settle payments and manage reconciliations. But this AI payment agent which is.
Vishal Mehta
Pay Central, it cuts, it cuts across.
Vishal Mehta
All different payment aggregators so integrates within the MCPs of all different payment aggregators and not just CC avenue. So it auto routes transactions for success.
Vishal Mehta
Probability, it predicts the fraud, it disputes, it optimizes all the checkout flows and it negotiates routing and security settlement logic.
Vishal Mehta
And automates all this merchant reconciliation and collections.
Vishal Mehta
So theoretically the way to think about it is this payment is actually moving.
Vishal Mehta
To a decision infrastructure decision layer.
Vishal Mehta
So in some ways it becomes like an operating system for all money flows and it’s just not a pipe. Now with that said, the way we.
Vishal Mehta
Think about it internally is that you.
Vishal Mehta
Know, I mean through UPI alone imagine.
Vishal Mehta
The number of transactions that India processes, maybe 300 lakh crores, whatever that number is. And, and there’s a lot more through other mechanism. And you know, I mean in some.
Vishal Mehta
Ways that intelligence layer will command a few bits of that flow, which is enormous. So I mean theoretically what we have seen is that the global pattern in this is, you know, somewhere, you know, this AI agents monetization, which is the pay central piece is somewhat, you know.
Vishal Mehta
That share of that bips that you would perhaps generate through this particular intelligence layers.
Vishal Mehta
And for that to work and the TAM to play out you need to.
Vishal Mehta
Have open Rails, which UPI does, which is completely interoperable and API driven.
Vishal Mehta
You need to have massive scale with.
Vishal Mehta
You know, some margins because that is what will force this innovation to come through.
Vishal Mehta
And then this whole merchant digitization wave.
Vishal Mehta
Which already has started, its usually playing out.
Vishal Mehta
So in our thesis where pay central sits is, you know, merchants don’t manage.
Vishal Mehta
Payments, agents manage money flows end to end.
Vishal Mehta
And whoever owns this layer will control the merchant financial workflow, their whole credit insights, the transaction intelligence and the ecosystem control. And that is a far bigger price.
Vishal Mehta
Than a gateway margin.
Vishal Mehta
And so for us it is somewhat, it’s competing to become that intelligence layer and of course that payment agents have.
Vishal Mehta
To be adapted across.
Vishal Mehta
We believe it’s only a matter of time. The adoption in the AI wave is significantly picking up and that’s what we’d.
Vishal Mehta
Like to play out.
Vishal Mehta
But to your point, I think the, that you’re talking about just on the CC Avenue ecosystem that we think about is also pretty significant. The other good thing, just so that you know, is that when you use agents traditionally you will take a few minutes to close a transaction. From intent to closure using agents, you can do it in seconds. So theoretically when you think about closing a transaction you will have to look at the product, look at the checkout, figure out how you essentially make that payment and then the payment routing comes.
Vishal Mehta
Back and then the confirmation comes through.
Vishal Mehta
And generally what you would see is that and most companies, they optimize on how many less clicks would you need to make as a human to be able to close a transaction. As an agent you can do it in a few seconds. It’s far more sophisticated and much more controlled.
Vishal Mehta
And the determinism also is very, very.
Vishal Mehta
Large in that and a lot of.
Vishal Mehta
Protocols are being set out to be able to handle such a thing. So yeah, I think to your point, I think the tech is very large.
Vishal Mehta
But it will also be a function.
Vishal Mehta
Of adoption by many of the, many of the merchants and we believe that consumer personal agents are anywhere coming up.
Vishal Mehta
So I think transferring that agent to agent protocol and using Pay central as.
Vishal Mehta
A payment agent becomes very fertile if you come to think of it.
Mohit Jain
Thanks for the detailed answer, sir. Just to follow up on this. So I understand that it’s not just a pay central, it’s not just about, you know, the congestion, but it’s about controlling the entire merchant financial workflow which you just mentioned again, so I know it is initial stage, but I just want to understand how do we, you know, monetize it? Is it possible for you to tell the blended take rate which we can get from this opportunity itself or it’s very initial stage and it’s very hard to tell this?
Vishal Mehta
No, it’s not hard to tell. I will tell you generally payment gateway as a business is not going to go away. You still require the regulatory approvals and.
Vishal Mehta
So on and so forth to come in.
Vishal Mehta
But when you actually give it to.
Vishal Mehta
An agent, agent will also start earning bips on transactions.
Vishal Mehta
So theoretically for someone who is whose.
Vishal Mehta
Payment, I mean, I think, you know.
Vishal Mehta
One can imagine that very low single.
Vishal Mehta
Digit bips across all the transaction volume is, is what the opportunity holds out to become. And we believe that that’s significant if.
Vishal Mehta
You come to think of it. So it’ll just add up into the.
Vishal Mehta
Margins and the bips.
Mohit Jain
Okay, just to clarify this low single digits or whatever it will be, it’s a add on to the earlier BIP suites which we were collecting.
Vishal Mehta
That is correct, absolutely.
Mohit Jain
Thank you. That answers my question. Thanks for the detailed one sir. All the best.
operator
Thank you. Next question is from Darshul Pandya from Pinterest Capital. Please go ahead.
Darshil Pandya
Hi, can you hear me?
Vishal Mehta
Hello?
operator
Yes sir, go ahead.
Darshil Pandya
Yeah, so I just wanted to understand one thing.
Darshil Pandya
With the offline pay rise is now in place.
Darshil Pandya
Like you know, you cover both online and fiscal payment flows.
Darshil Pandya
So should we view offline as a meaningful accelerator to your AI or you know, through this higher transaction density richer.
Vishal Mehta
Merchant level database will see something better.
Vishal Mehta
So the question is that is offline.
Vishal Mehta
Going to help your AI strategy?
Vishal Mehta
Can you, can you kindly repeat the question?
Darshil Pandya
Yeah, yeah, yeah, yeah.
Vishal Mehta
So I think, you know, yeah, I mean we have the online PA license.
Vishal Mehta
And now we also have the offline PA license and I mean, I don’t want to use the word you Know, just a pipe, because theoretically offline payments is just a pipe that, you know, most offline merchants still have that basic pipe of QR scan payment done, you know, less intelligence in pricing, routing, credit. Even if you come to think of it, all these collections and automations and cash off flow optimization, all of that is somewhat, you know, the missing layer. And so I mean when where the agent comes in in the offline payments is that rather than just the merchant receiving money, the agent can actually handle the context of the transaction, which means.
Vishal Mehta
That it can decide what option to.
Vishal Mehta
Use as a payment routing. It can maximize the success rate, detect fraud, identify all the unusual transaction sizes, personalize the transaction by triggering certain workflows, and somewhat automate collections as well.
Vishal Mehta
So we think that, I mean if you come to think of it, India.
Vishal Mehta
Is more than 60 million plus small merchants, their digital QR and you know, one can create a massive opportunity for a system that sits between the merchant and the payment rail.
Vishal Mehta
And you can learn from every offline.
Vishal Mehta
Transaction and improve the future decision automatically. That’s the opportunity.
Vishal Mehta
So we think that if you come to think of this offline payment market, I mean you can think of any.
Vishal Mehta
Influence transaction by the agent times the value which is unlocked is the opportunity somewhere.
Vishal Mehta
And that’s far bigger than just the.
Vishal Mehta
Share of just the payment fees. So we think that this whole AI.
Vishal Mehta
Payment agent in some ways turns every.
Vishal Mehta
Offline payment transaction into a decision engine.
Vishal Mehta
Effectively becoming somewhat a merchant financial operating.
Vishal Mehta
System rather than just a pipe that moves money.
Vishal Mehta
Does this answer your question?
Vishal Mehta
It does, it does.
operator
Thank you. Next question is from the line of Pranav Mashruwala from Dalat Capital. Please go ahead.
Pranav Mashruwala
Hello? Yeah, hi, Am I audible?
operator
Yes, sir, go ahead.
Pranav Mashruwala
Yes, yeah, hi, thank you for the opportunity. One question was regarding REDF1. So how many merchants have we onboarded on REDF1 shifted to that platform and how is the activity in terms of active transaction and adoption? So some color on that would be great.
Vishal Mehta
Sure. So I mean of course, you know.
Vishal Mehta
We’Ve publicly disclosed that, you know, where Rediffone is, the whole productivity suite of all these enterprise platforms. And they combine communication, commerce, business productivity software suites. And in some ways, you know, we target sovereignty, you know, by, you know, in some ways local data hosting advantages and air gapping it out so that you don’t have to use, you know, any cloud system, if you come to think of it. And so the strategic performance that we think is what you talk about, the install base is that there are more than 20,000 plus merchants already on the redefined system.
And you know that, you know the number of users of that is, magnitude of that number, much, much larger. And so we think that yeah, I mean it’s growing fairly well for us. While we’re not diverse the exact numbers but the way to think of REDF once performance is not just as a standalone, you know, therapy. It is essentially just a foundational identity and a productivity layer in our ecosystem. So the strength lies in activating all this existing enterprises and consumer base and deepening the engagement and enabling the entire ecosystem with payments and AI services.
And so I mean for us redefine.
Vishal Mehta
Is less about the short term revenue.
Vishal Mehta
And more about building the structural control layer that somewhat underpins of a long term monetization strategy, if that makes sense.
Pranav Mashruwala
Sure, sure. So of course we have like almost a 10 million plus merchant days and most of, I’m sure most of them are mid to small scale as well. So specifically we. How much you know, would be the typical timeline that you might be looking at in terms of onboarding? More larger number of customers and what kind of opportunity are you looking at in terms of onboarding?
Vishal Mehta
We think a reasonable number to go.
Vishal Mehta
After for the next 12 to 18 months is at least, you know, high single digit to double digit percentage of our base. And that’s how we look at the opportunity so far. So we believe that given the touch points and given that they trust us with so many of their other transactions, I think that’s a fair estimate to go after. But yeah, it would be cool to have a million merchants using redfund.
Pranav Mashruwala
Definitely just a few. If I may, what’s left to the guidance upgrade? Is there some one off revenue or something that we are expecting in a segment?
Vishal Mehta
No, I think we have already reached.
Vishal Mehta
Our, you know, I mean, you know.
Vishal Mehta
That we’ve for us since payments becomes.
Vishal Mehta
The intelligence layer, an intelligence driven area.
Vishal Mehta
We think that we’ve deliberately made investments.
Vishal Mehta
In scale and data density. So I mean payments are increasingly, you know, in some ways intelligent service and maximizing transaction flow. So if you look at our performance we’ve reached the guidance that we had given for the last, for this year in FY26. So the upgrade is really a combination of our capacity to actually monetize and somewhat we have prioritized revenue growth and also the depth in our ecosystem. So we are positioning the platform to generally significantly, you know, give, you know, better, you know, value. And so it’s. We don’t see this as a, as a one off.
We think that, you know, that’s how we potentially look like. And it somewhat reflects in terms of if you look at the last three quarters and our performance and if you look at the extrapolation of what it means for this quarter, you perhaps come down to our guidance numbers.
Pranav Mashruwala
Just last one on mine we usually used to share transaction processing value for various of our platforms just on the CC avenues. Tpvp.
Vishal Mehta
Yeah, if you look at the slide number 15 you would see that the value.
operator
Thank you. Thank you. Next question is from line of Dipesh Sancheti from Manya Finance. Please go ahead.
Deepesh Sancheti
Hi, am I audible?
operator
Yes sir, go ahead.
Deepesh Sancheti
Okay, you mentioned AI reduced payment failures by 9% in Q3. How much of this improvement is structural and embedded versus a model specific gain that could plateau.
Deepesh Sancheti
Go ahead.
Deepesh Sancheti
So basically AI is intelligent routing. So when we get a particular failure from a particular bank, right? And then then we have the ability to route it to multiple other banks that we are working at in the back end. So intelligent AI based system that we have implemented with gorges on the success rate going down to as. As back as just the last five minutes which calculates the best success rates. It can be intelligently routed through this thing. And this is not across just one or two options, but this is across 200 plus options that is there, right.
And even it’s a different cars that we have with eight different banks and different systems. So this kind of, this kind of, this thing really helps in boosting success rates also not only on the success rate, a lot of transactions were also being dropped because of the earlier negative databases and frauds and dropship locations and many other things. Now, now with AI we have been able to do a very dynamic and real kind of a thing where we have been able to you know, drop certain transactions that we see a fraud emerging in real time so that it does not go only for the real transaction.
The successes automatically gets improved when these guys are trying to multiple different modes and using different other fraud fraudulent numbers and cards to stop it. So these all all helped in you know, boosting real transactions and other things.
Vishal Mehta
To answer your question, you know, I’ll.
Vishal Mehta
Tell you structurally a lot of gains have already been accounted for in the system. For example, all these bankrupt times and all of that that’s already there and.
Vishal Mehta
I’m sure that it’s improving by the day.
Vishal Mehta
So my expectation is that you know, a lot of what you would see going forward is really this model gains that come through through all this. You know, the whole retry logics and the routings that Vishwas talked about and all this, you know, how do you handle all this timeouts and you know, how do you essentially improve your somewhat scoring algorithms? And so I think my expectation is we haven’t quantified. It’s a good question. We haven’t quantified that yet because we would always assume that, you know, structural gains are not going to be the largest contributing factor given that, you know, India is some of the finest payment rails out there.
So and those are also, I mean whatever that structural gain would happen, they’re somewhat slow to appear, but it’s very hard to attribute. It’s a good question.
Deepesh Sancheti
So we won’t be able to tell what is the direct EBITDA or a net take impact of this reduction?
Vishal Mehta
No, we can structure. The question was that are you seeing this? What I understood your question to be is that are you able to, you know, get a better success rate based on structural changes or the model changes? Yes. And what I, what I was communicating was that yes, there is a, there is an improvement. We can compute the ebitda, but to.
Vishal Mehta
Quantify how much of that success rate.
Vishal Mehta
Improvement is from structural changes versus model changes is not an exercise we have undertaken. Okay, so what I mean by that is that, I mean did that come.
Vishal Mehta
Because we have a better bank uptime or you know, some enhancements that maybe the payment raise has gone through or.
Vishal Mehta
You know, some latency issues in the network that have been identified and cleaned up or whether it was a better authentication flow for the client.
Vishal Mehta
So those are somewhat more structural, but we think it’s somewhat model driven.
Vishal Mehta
That’s what I meant because what Vishwa said is right, which is we’ve, we’ve configured our framework to include, you know, with all the optimizations that we’ve put in that it’s much smarter routing and retry logics and all this timeout handling and other capabilities that improve and all the fraud scoring improvements that we’ve made that would have contributed to the largest portion of that improvement in success rate. That’s what we have, we’ve thought, you know, attributed to that improvement.
Deepesh Sancheti
You state that switching costs become existential, not contractual. What percentage of revenue today comes from customers where payment compliance and workflows are all embedded inside read of one, making switching operational infeasible?
Vishal Mehta
You know, I mean come to think of it, there is a lot of.
Vishal Mehta
Reader fund has many productivity suites and.
Vishal Mehta
If you come to think of it.
Vishal Mehta
Once you offer more than one service, the switching cost somewhat exponentially goes higher. And the moment you are handling a lot More data and data patterns. And then if you are also figuring out how to, in some ways that cost of actually moving all that data and being able to serve becomes slightly higher. So once you have a flywheel framework where you are able to offer to a particular client more than one service, we think that with somewhat, and especially when you in the world of AI where you know, data becomes the mode, and I’m sure one can argue synthetic data can also be produced, but we think data is the more.
And if you, if we’ve been able to utilize that data and offer those services to that merchant, the switching cost exponentially increases because it won’t do everything that, you know, any other system, it may be very good, but it won’t be able to provide the same level of efficiency that you know, a system, you know, that utilizes data and provide it provides all the AI prompts be able to, to offer to you with all the learnings. Great.
Deepesh Sancheti
Okay, I’ll fall back line for the next questions. Thank you.
operator
Thank you. Next question is from line of Chanda Maltese Financial Partners. Please go, go ahead.
Dhwani Chanda
Hi, am I audible?
operator
Bunny, you’re sounding distant. Can you speak little louder and closer please?
Dhwani Chanda
Hello, am I audible now?
operator
Yes, go ahead.
Dhwani Chanda
Yeah, hi. So you’ve added multiple, multiple layers like agentic payments, offline, pa, PPIs, cross borders, UPI and AI orchestration. So how do you prevent organization and product complexity from diluting focus before the flywheel economics fully kick in? Hello.
Vishal Mehta
Yeah, so the question is that, of course the two brands that we have right now is CC Avenue and Rediff. And you know, the quote for us is payments. So I mean, if the question is that are you focusing on too many.
Vishal Mehta
Areas?
Vishal Mehta
I think these are all related areas. And that somewhat completes our flywheel, the one that we have set out to architect. So we think the focus will continue being that. And we have, you know, orchestration layer using a lot of AI frameworks that can somewhat compound that opportunity for us, we believe. But yeah, the things, these are nomenclatures. But at the core it’s, you know, in some ways productivity suites and payments, and that will always continue being our focus.
Dhwani Chanda
Okay, so there are no set frameworks to prevent the complexity from diluting the focus?
Vishal Mehta
No, we, I mean, we think that.
Vishal Mehta
All of these are somewhat naturally interweaved with each other. And you know, I think that in some ways it’s convenience. So I mean, the focus for us is actually to make the ecosystem flywheel work. And these are important components of that.
Dhwani Chanda
All right, and my second question is what internal Card rails exist on the ROI.
Vishal Mehta
In terms of our investments.
Dhwani Chanda
Yeah.
Vishal Mehta
So you know that we’ve been appropriately.
Vishal Mehta
Conservative all the way from the beginning and we forward invest and we want to know what that investment will end up looking like for us. And so I think, you know, we’ll continue with the same philosophy, which is how do we make sure that, you know, what we are spending for that ROI is measured and managed and we are able to drive it.
Vishal Mehta
But see, our core principle, if you ask us, is that, I mean, our.
Vishal Mehta
Guardrails is not about stopping investments.
Vishal Mehta
We just want to make sure that whatever we spend will help us in.
Vishal Mehta
Terms of advantage or some platform advantage, if not today, tomorrow.
Vishal Mehta
So our guardrails for ROI is not short term thinking.
Vishal Mehta
We want to be an AI first payments business. We want to, you know, evaluate, you know, what happens in the next 12.
Vishal Mehta
Months because a lot of things are.
Vishal Mehta
Changing and we want to track what is the margin on a transaction and how do we much like the success rate and you know, this floor, you know, the loss reductions and time reductions. And I mean, if you don’t, we.
Vishal Mehta
Won’T take up an initiative which won’t.
Vishal Mehta
Improve our unit economics, if that makes sense. And that’s like the.
Vishal Mehta
Very short term.
Vishal Mehta
Thought process because a lot of things are changing.
Vishal Mehta
But from a long term perspective, we.
Vishal Mehta
Have to think about merchant stickiness. Pretty much what we talked about in terms of how do we essentially get the switching cost rather than contractual to make it slightly more existential and how do we use data as a moat, which is how do we ensure that, you know, you are somewhat, you know, reducing the amount of effort.
Vishal Mehta
And then the long term ROI thinking is really about where do we see.
Vishal Mehta
The nonlinear scale, how do we ensure that we are bringing intelligence? Because AI is really intelligence and if you don’t have that monetization, it won’t work. So for us, you know, I mean that future monetization is really the strategic ROI test for us. And you know, we want to make sure that the ecosystem pull should always increase for us, which means that every new feature, everything that we do should increase the dependency of the merchant or the customer or increase the engagement that they have with us. And that’s been our philosophy of thinking through roi.
I hope this answers your question.
Dhwani Chanda
Okay, thank you so much.
operator
Thank you. Next question is from the line of Amish Kanani from Novise Investment Managers. Please go ahead.
Amish Kanani
Hi sir. Congress had a good quarter on profitability terms. So this quarter, you know, we have seen quite a bit of interesting gross revenue Growth versus a very muted net revenue growth. And you know, the net take rate is, you know, kind of halved from 11 months to six months. And I understand you have been saying last few quarters that we are chasing absolute profitability and not the NPR, but you know, net revenue growth of 6% interestingly in this quarter has, you know, driven our EBITDA by 25% and you know, profitability at 60%. So the question is one, sir, if I win, simply, you know, difference the net revenue, you know, it’s grown by only 8 to 9 crores versus EBITDA growing at 20 crores.
So one, you can explain, you know, how this quarter is panned out in terms of operating leverage and even our EBITDA is actually grown much more than, you know, the revenue and absolute terms. So if you can give us some sense of, you know, how is it that, you know, we could extract more profitability at EBITDA level more than even net revenue growth. So if you can explain that because it definitely in this quarter, you know, focusing on absolute profitability is, you know, burnout. So know what kind of expense management that you’ve done or you know, is there any one off that was there last quarter, which is not this quarter, stuff like that.
So can I explain that will be helpful. And in that context, sir, you know, I pardon me for, you know, my knowledge of payment system not being, you know, I wanted to understand if and when this UPI payment starts to, you know, become chargeable, does it help us or it, you know, kind of affects us at a structural level. If you can give us some sense of, you know, UTI UP payment being not charged as of now, there are lots of noise will become chargeable at some stage and some payment, you know, providers are saying, you know, you can’t keep on subsidizing these infrastructure.
So can give us some sense of our business model versus you know, this change if at all that happens, that’ll be really helpful. Thanks.
Vishal Mehta
Sure.
Vishal Mehta
Vishwas, you want to take the UPI.
Vishal Mehta
Part and then I’ll tell Sunil and I’ll talk about the integrity and EBITDA piece. Yeah.
Vishwas Patel
So if and when UPI becomes chargeable is going to be beneficial to all the players, including us. Right now MBR is at zero right now for upi. Right. So the whole focus area is on all the other options that we have, other 199 options that we have to get the margins and to increase business on that one. But yes, of course when UPI becomes chargeable, so even our offline and online both can contribute significant margin if and where if the MDR ever comes in. So I as a chair at PCI also have been working with the Finance Ministry and other things and hopefully we are hopeful that some kind of MDR should come in, at least for large margins.
And as well as we are hoping that even the money that the Finance Ministry gives out every year to supplement all this UPI transaction also grows significantly. So that can be an additional one. Apart from that. Vishal.
Vishal Mehta
Sure.
Vishal Mehta
So to your point, two things.
Vishal Mehta
One is net take rate has decreased, but you’re saying that EBITDA as a percentage in the slide, it shows up to be a larger number as a percentage. So if I understand your question, why is that particular? I mean.
Amish Kanani
Not grown as much, but EBITDA has grown much more. And that explains our.
Vishal Mehta
Yeah.
Vishal Mehta
So the way to think about. So for us, see, listen, as far.
Vishal Mehta
As the net take rate is concerned, absolute terms, you’re right, we’ve actually the net take rate has gone down, but that’s a deliberate investment in scale and data density for us because payments are increasingly a gateway to higher value financial intelligence service. That’s the way we want to architect the company. And maximizing all these transaction flows today.
Vishal Mehta
Will strengthen what we look like in.
Vishal Mehta
The long term monetization. And so by prioritizing revenue growth, that and some of the ecosystem depth in terms of usage, we think that positioning the platform to generate significantly higher lifetime value per merchant over time will be the right metrics for us to live with.
Vishal Mehta
And so, I mean, it’s less a.
Vishal Mehta
Position of our competitiveness in the industry and our efficiency and more about a strategic decision on getting to that scale in data density.
Vishal Mehta
Now, if you look at the EBITDA numbers, EBITDA is basically percentage of net revenue.
Vishal Mehta
And so as net revenue is increased, you know, from, you know, say about 131, 40 crores to 148 crores, that eight and a half crores. The EBITDA percentage is a percentage of net revenue. And so certain expenses of course, have been more efficient.
Vishal Mehta
You know that we have redeployed quite.
Vishal Mehta
A bit in terms of how we want to scale and build out this company.
Vishal Mehta
It does not apply to us. It will apply for every company.
Vishal Mehta
There will be hiring freeze on many of the potential areas that can be automated using agents, a lot of manual tasks, reconciliations, onboarding. You would.
Vishal Mehta
There will be and we believe that.
Vishal Mehta
There is a significant shift happening even today because you know, you would the kind of workforce that you would require in A first framework is very different than what you would require in the past. And so you will see a significant change in terms of just the workforce mix. And while some of the large companies you’ve been, you’ve been hearing lately in the news that there is a change, we also have a significant opportunity to upgrade and change the kind of opportunities. So the position that we think about is that anything which is manual, which is task driven, where you just have to keep on doing the same thing over and over again, all those activities will be taken over by task agents.
And we’re deploying that across all of our companies. Second is the orchestration piece where you would want to, once that task has been defined and identified and you need to actually create workflows, there will be orchestration agents. I think that also is somewhat completely automated going forward.
Vishal Mehta
The real trick over here is this.
Vishal Mehta
Decision agents that will perhaps drive decisions.
Vishal Mehta
And you will see that over a period of time you will see many.
Vishal Mehta
Companies become super efficient and leaner.
Vishal Mehta
So we think that that’s actually somewhat.
Vishal Mehta
A margin expansion opportunity.
Vishal Mehta
But rather than thinking of it as.
Vishal Mehta
Reducing the workforce and we would rather essentially upgrade the entire workforce and make sure that there’s a natural transition to where we are versus where we would want to think of being. So you’d see some of that going on in terms of the overall size and scale of the opportunity. But yeah, I mean, you know, I think that, you know, from a take.
Vishal Mehta
Rate perspective, yeah, it’s since it’s a.
Vishal Mehta
Percentage of the, of the net revenue, that’s why you see the percentages go in that direction, if that makes sense.
Amish Kanani
Sure. And sir, about upgrading the guidance, Sorry, if we do a required run rate for fourth quarter from, you know, the nine month to take the midpoint of the revised guidance fourth quarter, you know, we are, we’re quite conservative here. So the question, one, I understand what is the best one, but even if I take a midpoint of, you know, our guidance and you know, subtract the 3, 3/4, then, you know, you know, the run rate for even EBITDA and Pat is not even, you know, matching the second quarter, which is, you know, so the question is one, are we conservative here and should we, you know, optimistically at least assume that, you know, we should be hopefully on the, on the higher side of the guidance or is there some seasonality which, you know, we have to keep in mind while we model our position?
Vishal Mehta
Yeah, I think midpoint of that guidance.
Vishal Mehta
Range would of course be achievable in our opinion. And we have been appropriately conservative. We would like to. If you’re doing. And if you find that we are doing, you know, better and larger, which is reasonable to also assume we’d be investing more in branding, marketing and some of the other activities. So it’s reasonable to assume that we’ll end up somewhere in the midpoint. Yeah.
operator
Thank you. Next question is from the land of Karen Mehta from Umkara Capital Private Limited. Please go ahead. May I request you to unmute your line and proceed with your question, please? Can you hear me? The line for the participant drop. Ladies and gentlemen, due to time constraint, that will be the last question. And now hand the conference over to the management for closing comments.
Vishal Mehta
Thank you all for joining our third quarter earnings call and we look forward to keeping in touch and, you know, looking forward to, you know, building out a terrific, you know, strategy and a moat going forward using a lot of AI frameworks. So we will keep in touch and keep you updated. Thank you.
operator
Thank you very much on behalf of Goindia Advisors. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. Thank you.
Vishal Mehta
Thank you.