Digispice Technologies Ltd (NSE: DIGISPICE) Q3 2026 Earnings Call dated Feb. 19, 2026
Corporate Participants:
Dilip Modi — Chairman
Sunil Kapoor — Whole Time Director & Chief Financial Officer – Spice Money Limited
Aastha Garg — Head Investor Relations – Spice Money Limited
Analysts:
Hashika Mutreja — Analyst
Presentation:
Hashika Mutreja — Analyst
Good afternoon everyone. A warm welcome to you all and thank you for joining us today for the Q3 and 9 month FY26 earnings webinar of DG Spice Technologies Limited. We are pleased to have with us today Mr. Dilip Modi, the Chairman of DG Spice Technologies Limited Mr. Sunil Kapoor, the whole time Director and Chief Financial Officer of Spice Money Limited. Ms. Asagar, Head of Investor Relations, Spice Money Limited. We will start the session with the management providing an overview of the operational and the financial performance for the quarter and nine months ended FY26 post which we will have an interactive Q and A session. Before we begin, I would like to draw your attention to the fact that certain statements made during this call may be forward looking in nature. These statements are subjected to risk and and uncertainty that could cause actual results to differ materially. A statement in this regard has also been included in the result presentation sent to you earlier.
With that I would now like to invite Mr. Dilip Modi to commence the presentation. Thank you. And over to you sir.
Dilip Modi — Chairman
Thank you, Ashika. Good afternoon everyone. Thank you for taking out the time to join us today. You know, we at Spice Money are continuing our journey of building a strong trusted financial services platform for Bharat. You know, we are all committed to the goal of, you know, driving digital led financial inclusion. And at Spice Money we have been working quarter on quarter to make sure that we continue down this path. Today we are here to present to you how we have done in quarter three of this financial year and in the Q and A. I would love to, we would all love to talk to you guys about any, any, any points you may have about where we are heading as a business, what is it that we are looking forward to and what continues to drive us on a daily basis.
So let me start with the presentation by talking about the Spice Bharat stack which is what we are building, you know, for at Spice Money. So effectively, if I look at the three elements of the Bharat stack that we are building, you know, one is the agent platform, second is the consumer platform and third is the lending platform. So effectively today as an agent platform, this is our core business. We are one of the leading agent platforms in small towns. We are now reaching over 2.6 lakh small towns with over 1.6 million agents who use our app to deliver basic banking and financial services to over 170 million customers in small towns and villages of India.
In terms of transactions on basic banking, the Aadhaar enabled payment system, which is, which, which is people using Aadhaar to withdraw and deposit cash and do funds transfer. We are the number one player. We have close quarter three at close to 18.64% market share in the office segment and we continue to consolidate our market share in this segment going forward. There are lots of new products we are looking to launch for our agents to deliver in their communities. In the gff we had spoken about launching the UPI cash point. So today if you look at customers at large, when they go to their ATMs to withdraw cash, they really use Card.
In our case customers are using Card plus Aadhaar. Now towards the close of this quarter four we are looking to enable customers to be able to withdraw cash using UPI as we know that UPI is scaling up very fast. As a country we are now significantly penetrated on UPI users and therefore we are looking at our agent network doubling up as a UPI cashpoint network where customers with UPI apps can now come and withdraw cash at our agent points using upi. So UPI is going to be a big layer that’s going to get added on onto our ATS and this will be an accretive business, you know, when it comes to cash withdrawal because now more and more customers are coming in with smartphones with UPI apps.
Our goal at Spice Money is to make sure that we build a full stack financial services distribution play for small merchants and consumers in Bharat. And we will talk you through in terms of how far we have reached that in terms of just overall business. I would say that, you know, we have now reached a stage from a P and L point of view where we, we have, we are a steady platform. You know, we are beginning to see operating leverage kick in. If you look at our indirect costs, we’ve managed to hold them year on year, quarter on quarter while we try to grow on gross margin which is our net income.
So if you really look at it, for the nine months this financial year we’ve delivered close to 20 crores profit compared to 4 crores for the nine months previous year. So effectively this is all a function of operating leverage that’s begun to kick in and we’re hoping that as we add more products to our agent network, we’ll be able to further strengthen on our operating leverage to drive profitable growth. In terms of new engines, lending and Spice Pay are two new engines on the lending business. We are beginning to see good traction as we consolidate our market share in aps.
We are seeing more agents transact and we are able to now enable lending to these Agents and we’ve seen those lending numbers grow. So we work here as a loan service provider with an FLDG model. We’ve seen the business here also scale so effectively you’ll go through the numbers what we did in the whole of last financial year, you know, we’ve done in a single quarter or close to in a single quarter in quarter three. So again the lending business is growing and we’ll talk more about that. What’s wise pay? You know, as I mentioned here, we have over 170 million customers who transact on our platform every month.
One of the things that we are looking at is to bring them on to upi. So today with Spice pay we have the ability to give them a UPI account with a UPI ID and they can use this account to put in cash using our agent network and then transact with their UPI id. So the whole idea is to bring customers with a new UPI account to be able to do transactions. Now more and more people are looking do digital transactions and therefore our goal is to use, you know, our, our PPI account to be able to enable new to UPI users to come on board.
So overall, you know, the agency business, the lending business and the consumer business, we are continuing to grow and our goal is to build a full stack financial services play for small towns, merchants and consumers. Moving on to the next page, if I was to talk about some of the key highlights. Quarter three has been a muted quarter for us in terms of GDP growth. This is really on the back of the fact that we saw huge subsidy flows in the first half of the year. And therefore, you know, just on a relative comparison, quarter on quarter, we see a dip in GDP because of the, because of the nature of the subsidy flows in terms of seasonality.
Also in terms of our collections business, you know there’s been a whole restructuring of MFI and NBSCs where there’s been a consolidation of books and therefore slow down in lending. And that is reflected in our, in our collections pie. So that is more I would say the nature of seasonality, the APS business and the, the way they get NBSC industries consolidating. So that’s not reflected in our quarter on quarter numbers. The second highlight is of course the labor code has cut it. So that’s had an impact on our P L. You know, we’ll show you the impact credit like I spoke about, you know what we did on the FLDG model all of last year we’ve done in a single quarter.
Close, close to that in a single quarter. So now the credit business has begun to grow both in terms of dispersals as well as gross margins. And we are trying to make sure that we can contain our credit losses here. So this is an embedded credit business linked to our transactions on our platform. So we are able to contain on risk here and whenever we report gross margins it’s net of the risk. And therefore we believe that, you know, amongst the two new engines of credit and Spice pay credit has already begun to move in a direction towards profitability.
And then overall I spoke about operating leverage. We are focusing on ensuring that month on month, quarter on quarter, we continue to focus on operational efficiency, whether it’s in terms of cost optimization, margin improvement, in terms of product mix, you know, and making sure that we build an efficiency in all our metrics. So this is something that we will continue to chase just in terms of innovation and growth. You know, we are now with this agent platform, we have the pipes and the idea is to distribute more products to the pipes. So we continue to look at launching new products.
We have entered the insurance category with two new products around shop insurance and mobile screen protection. Most of our adhikaris run shops and you know, being able to give them cover for the business they run is something that we are excited about and we are now building more products for insurance in the pipeline. Given the nature of the market we are in, people you know, are looking for credit cards. It’s an aspirational product. So but given the nature of our market, rather than give unsecured cards, we are working with partners to give secured cards. We again see a big opportunity in this space and we’re looking to scale it.
And then savings continues to be a big area we are focused on. We’re very excited with some new partnerships that we are looking to stitch in the savings space. And given the rural nature of our business, we are also looking at agri commerce as one area to be able to drive income for our agents. So overall innovation, execution and looking at our customer base and looking at what all products we can build for them continues to be our focus to drive sustainable long term growth. Now just looking at some key metrics on the next slide, you know, if you look at, you know, each of the rows on the top like I spoke about 1.6 million agents so close to 16.4 lakh now registered agents on our Spice money platform, over 2.55 lakh small towns covered on a monthly basis we serve close to 27 million customers.
Like we have thousand member Team, majority of whom also on the ground just in terms of numbers on a year on year basis we’ve seen growth in almost all the key product metrics except for collections which is the cash management service business where we’ve degrown and I explained you as to what is the reason in terms of what’s happening in the MFI and NBFC industry. So this is something that you know we seeing some short term pressures and maybe they continue for a quarter or two till we are able to you know, look at enhancing our product suite around digital collections and doing more for our partners.
Otherwise if you look at AEPs, you know, BBPs, CASA, which is our current account saving account product and more importantly the float balance associated with the products as well as our credit distribution metrics, almost all of them have grown year on year, you know and all of this data is available to you online. You could please consume it in your own time. If you look at the financial indicators our focus is gross margin. So we continue to focus on growing gross margin a quarter on quarter and year on year and that’s what drives underlying profitability and growth.
We are a zero net business so our focus is to stay asset light, build our ROIs through ensuring that we can drive more operating leverage in our business. And overall we are excited with the future because we see that know if India has to grow, you know, into a multi trillion dollar economy, you know these small town economies have to deliver and we are building the underlying financial bedrock in terms of you know, last mile banking infrastructure layup between product manufacturers and small businesses. And therefore we can provide for access and unit economics to financial institutions to serve small businesses as well as small businesses being able to access financial products in a far more economical way using the agent network that we have on the ground.
So I look forward to the Q and A that we have later. And I’ll hand over now to Sunil to walk us through the numbers. Over to you Sunil.
Sunil Kapoor — Whole Time Director & Chief Financial Officer – Spice Money Limited
Thanks. So on the number side, whether we can have it blown up. Yeah, so on the number side as we see that our this quarter number has a degrowth of 4% on the customer GTV and consequently our revenue is also down but we are, we are able to maintain the gross margin almost at the same level, only 1% down. We have already called out that this was a muted quarter but we able to hold our gross margin and if you see on the indirect cost what has also called out that we are keeping the operating efficiency in check always and from if we compare it from the previous year also that’s we have the same cost, operating cost and whatever the gross margin improvement in the last nine months compared to the previous nine months that is flowing straight to EBITDA and on the EBIT side also consequently from the EBITDA side that’s we are able to kind of hold the EBIT margins a little bit down but hopefully in the next quarters quarter we will catch up on the gross margin and data also and will be able to post the growth instead.
And if we see on the YTD numbers that’s YTD numbers the bat is almost 21 crores against 4 crores in the previous year 9 months and there is a considerable growth and improvement and that’s primarily due to the what the gross margin and holding the cost at the same level. And if you see on the pad discontinued business there’s a slight one time additional expenses come in but that’s keep on kind of we are trying to contain it and not more than 1.5 crores a year kind of will be hit for the pad discontinued business but we are working on that.
Hopefully in the next year first half we will be able to take this discontinued business to zero level so it doesn’t impact our PNDL and fact. There is also one point with respect to the labor code impact which has come as an exceptional items which we have shown is as a net of tax purposes because it scripts a deferred taxation asset on the provisional amounts on the gratuity and leave engagement and consequently the profit pact. After all national gain and loss is 2.44 roads for this quarter and 16.5 for the nine months all put together.
So this is all about numbers. I’m handing over this this PPT to be run to my A so she can take us through the other product metrics and numbers.
Aastha Garg — Head Investor Relations – Spice Money Limited
Thank you Sunil Sir. Good afternoon everyone. I’ll be covering some of the key business updates for this quarter. So starting with the agent base we are continuously working to expand on our agent base across India. Our focus here remains on deepening our presence region by region and to ensure that we are trying to build optimal SMA density across regions so that we are present in every market that we are we are operating in. This will allow us to effectively deliver last mile services to our customers and also improve accessibility for them across Bharat, Dilip sir and Sunil sir have already fairly covered about how our GMs and GTBs have fared this quarter.
Moving to the next slide Meral, looking at these in detail we can see that the GTBs and GMs are fairly muted as compared to the previous quarter. But if we see the year on year numbers we have seen the APS GTVs almost grow 13.2% as compared to the same quarter last year and even though the CMS volumes have not grown but we’ve been able to hold our gross margins on the CMS side also which has led to our overall gross margin growth as compared to the last year same quarter and the new buckets also we see that have almost doubled as compared to what we were doing in the last year same quarter.
So overall we see there’s been improvement in our gross margins as compared to what we were doing last year though this quarter is fairly muted considering seasonality that Dilipsar already talked about. But let’s discuss on the product wise matrix in the slides ahead. Let’s move to the next slide. So talking about APS where we enable cash withdrawal for our customers across India we have been continuously consolidating and growing our market share as we have already highlighted in the earlier quarters as well Cash deposit and UPI cash withdrawal are the next big opportunities for us in this space.
If we see in APIs the lips are already mentioned are market share is now touching 18.64% in this quarter so there’s growth there. And as well as if we see that almost 400 crores we are touching on the cash deposit GTVs also. So on that front also we are seeing growth on top of the APS business. The next big product that we build is the collections product. So moving to the next slide. So in collections we already talked about that the industry has seen fairly competitive pricing pressures here so we are working in a fairly competitive industry and we are trying to hold our margins and to grow overall in this margin competitive industry we are trying to strengthen our supply side by bringing in more lenders.
So there’s growth in our lender segment and then we are wanting to build a good product suite with our partnerships that we are working with so that we can serve them well and grow in this space. Talking about the digital collection side which is the BBPS product, let’s move to the next slide here. Also we are seeing a continuous growth though the growth is slow. We can see our GDVs improving both quarter on quarter as well as year on year. And if we see the repeat engagement based on our platform also that’s also fairly growing every quarter.
So that makes us believe that there’s opportunity in this segment as more and more digitization happens, the GTVs in this space will also grow. Coming to the financial product distribution where we started our journey with casa, let’s move to the next slide. So on CASA also we have now touched opening close to 15 lakh plus accounts across India where almost 260 crores of float balances are lying and we have almost 35,000 plus SMAs who have opened more than 5 lakh 5 accounts till date. So we can say that there are healthy balances that are being maintained in these accounts an average of almost 2,000.
So that’s a good growth that we’ve seen on this product. And the next thing that we are focusing here is basically growing on the basis of cross sell and upsell. So now I come to discussing about the more important updates on the size of credit that have happened in this quarter. So Dilip sir already mentioned that this is the business that we’ve been building where we are building our own lending model based on transaction data using a shared risk fldg structure. So this model is the foundation of our long term plan for responsible and scalable lending that we want to do for Bharat.
Our focus here has been on two scalable engines. One is the transaction led lending for our own SMA base and the other is MSME Business loans. The efforts that have that we have been doing in the last one year now have started showing traction. And if we see the numbers in NY25 where we did a GDV of almost 20.5 crores in this quarter alone we have delivered disbursements of almost 19.2 crores. So we can fairly say that we have successfully validated this model for our own SMA base. Now what’s the next step here is that we have to focus on the on the agents beyond our SMA base to grow this product.
On the power loan side which is the MSME business loans, we have already launched it in this quarter with our partnership in partnership with Muthooth Fincorp and we will be actively working to scale this further in the coming quarters. Now talking about the other big growth engine for future which is a financial product distribution. Let’s move to the next slide. So talking about this if we see on the top under financial product distribution we are currently distributing loans including gold as well as other credit products for our partner lenders. Our focus has been on strengthening the supply side in this product by bringing in more lenders as well as diversifying the product suite available for distribution.
So we’ve seen a fair buildup of this business in the last couple of years. And if we see the numbers on the loan disbursement, we can see that we have grown almost 2.6x year on year on the value of disbursements against a volume growth of almost 2.1x year on year. So while there has been some decline that we can see numbers this quarter as compared to the previous quarter, this was primarily due to some realignment that happened with one of the major lenders that we do business with beyond credit distribution. We’ve also started selling FDBACK credit cards in partnership with Z.
So we have sold close to 25,000, 2500 cards till date with an active estimate of almost 10,000 on this product, which is a tail date number on insurance side also, which was one of the key products that we were working to get on our platform. We can say that we launched this product in Q2 on a couple of categories and till date we have sold almost 10,000 policies so far. So the next big thing that will be working on this product side will at least enabling four to five more categories of products in both secured credit as well as insurance side.
I will say that we started the financial product distribution journey by opening CASA accounts and then we built up loan distribution on top of that. And now we’ve entered the insurance space as well. The next big opportunity for us in this space lies on the sides of savings and investments and we’ll be actively working, actively working to launch them next. Now I think I will hand over to the ref sir to for the closing remarks.
Dilip Modi — Chairman
Thank you Vasta. Thank you. Can we move to the next slide please? So you know, I have two slides to close effectively on this slide. I just want to bring out to all of you that our commitment is to drive deep penetration of formal financial services in Bharat. You know, out the 1.4 billion people in our country, nearly a billion people live in small towns in rural Bharat and we want to be able to serve them when it comes to formal financial services. As I said, we are already a leading, you know, AEPS led ATM network for Bharat where we have close to 18.5% market share.
Our commitment is to deepen this further and build Bharat’s largest assisted ATM network. Just to give you a sense of numbers, ATM industry as a whole talk about about 2.2 lakh ATM machines. Networks like ours have onboarded nearly 20 lakh, you know, human ATM points across small towns and villages of which we have about 16 lakh. So for us the whole goal is to, you Know, deepen because when you talk about ATM networks to build confidence and trust in customers, which is a cash first economy, the ability to move cash in and out of bank accounts actually gives them confidence to keep their money in the bank account.
So effectively for us, the withdrawal and deposit nature of the network allows us to not only enable them to pull money out when they need it with the garbage, but also be able to deposit cash. We have to grow UPI penetration in the country. We have to make it easy for people to put money into their bank account. And today with APS seeding and we are looking forward to more and more banks coming into this, we can actually enable a very large penetration of network, easy convenience for consumers to be able to put money into their account and do upi.
So we are committed to building on the ATM side, collections. Again, we are an economy where lots of loans are given to small merchants and consumers in Bharat. But the main challenge is around collections. How do we make sure that the deep ATM network that we are building in Bharat also doubles up and serves as one of the largest rural cash collection networks for Bharat. And I think this is also something that we are already on this journey. We have both the bilateral relationships with our enterprise partners and we are excited about the BBPS platform as well.
And we are committed to growing this. So it’s not just ATM but also collections and then finally just on the network. Our goal to build a deep financial distribution grid for Bharat. Can you just go back to the previous slide please? Yeah. So our goal is, you know, like Asta mentioned around credit, savings, investment, insurance, making sure that we can build capability and capacity of our agents for them to be able to do more for their communities. So this last mile access network is a huge opportunity for us to work with our ecosystem partners to actually bring formal financial products, reduce cost of credit, drive penetration of insurance, savings and investments into deep Bharat, into deep rural India, into small towns.
That’s something we’re excited about. On our own products. We are focusing on credit and ppi. You know, we see our prepaid instrument as a great opportunity to put a very easy to use UPI account in the hands of our consumers and be able to do more with that account. Right. We want to make it easy for them to move cash into accounts and to be able to transact using the account. So it is very easy to use app on their basic smartphone. So this is something that we have committed to. They’re going to bring the next 100 plus million UPI users onto UPI.
And as far as lending is concerned, we already well on our journey where we build proprietary models for our own agents and we want to build on that for merchants sitting around the agents. So if you look at it, we’ve got the agency business that we are scaling, we have operating leverage and on the back of this we are building our two core businesses around spending savings, investments on the digital side and lending as well. So all of these are coming together for us to you know, build a very strong spice, a very strong financial services stack for Bharat and let me close with our ecosystem partnerships on the next slide.
You know we do this because of the blessings of the regulator, you know and you know we have the requisite licenses which allow us to do what we do. We have partnerships with leading banks, partnerships with leading lenders and partnerships with leading NBFCs and MFIs where we are looking to provide services to them when it comes to opening accounts, driving origination, driving collections, also supporting them on risk and underwriting. And like ASA said, we vented insurance, the huge category we need to solve for it. We need to drive micro insurance products into Bharat and we will make sure that we can work with our business partners to leverage our network to be able to deliver it in a cost effectively.
So with that I thank you for giving us time and I’ll hand it back to Harshika for the Q and A. Thank you.
Questions and Answers:
Hashika Mutreja
Thank you so much Dilip Sir. We will now open the floor for Q and A session. Participants who wish to ask a question are requested to use the raise hand feature to ask the question. Alternatively, you may share your questions in the chat box and we will take them up during the session. We would just request all the participants to kindly introduce themselves before stating by stating their name and their organization before asking the question. Thank you. We’ll take the first question from Mr. Gulshan Singh. Just wanted to start with the quarter. Overall GTV was a bit soft sequentially.
Should we think of this as largely normalization after elevated AEPs subsidized last quarter or are you seeing some underlining slow down as well?
Dilip Modi
Thank you. Thank you Gulshan for your question. I would say that, you know, definitely H1 this year we saw significant subsidy flows even more than what we expected. So I would say that, you know, we would want to factor in the seasonality or the fact that there was a significant shoot up in subsidies and therefore on a relative basis there’s a dip in gtv. I think the underlying slowdown bullshit is more related to the lending book of MFIs and NBFCs. I think as they’ve been consolidating on their NPAs and making sure that, you know, they’re able to consolidate and restructure their books, we’ve seen a bit of slowdown in lending.
We hope that, you know, that will come back as the books become lighter in terms of bad debt. And I think directionally our goal is to deepen our density, which means increase the reach of our SMAs per household. We continue to strengthen on our product suite, which means that we want to drive more transactions through our agent base. So we are hoping that a combination of multiple things can help us to continue to grow on transactions and revenue. So I would say that it’s a combination of multiple factors, but I think we know better as we move forward in the next few quarters.
Hashika Mutreja
Thank you sir. I hope that answers your question. We have the next question from Agarwal Family Office. Gross margin percentage on revenue improved to 47% this quarter. Is this sustainable or partly driven by lower low margin CMS volumes? And where do you see steady state gross margins setting settling over the next two to three years?
Dilip Modi
You want to just talk about the drivers of the growth in gross margin and then of course next two to three years we’ll take separately.
Aastha Garg
Yeah, so. So on the first part of the question where we’re talking about gross margin improvement to almost 47 this quarter. So obviously one thing that is mentioned here in the question itself, that the CMS volumes dropping, which is a low margin business which you which is looking like as if the margins are coming from the low margin CMS volumes going away. While that’s not the actual case in cms, the CMS that is decreased for us is basically on the side of one major client that we’re working with where the margins were in itself very low.
So when the volumes with that one client has decreased, our overall CMS margins have grown up. So that’s in turn helped us grow our overall margins on the CMS side. On API side also I think we are pretty good on the margins. With our continuous subscription packs being in place, we are able to provide values to the adhikaris for the transactions that they’re doing on our platform. Hence they’re increasing the number of transactions they do with us. And hence we are growing both on our market share side consolidating the business and the margins are also in place.
So if we talk about why the gross margins have in turn grown so much in this quarter, that’s fairly because of the operational efficiencies that we’ve been, we’ve been working on, especially on the sides of the drag cost. We have a lot of charges that we have to pay to banks or other third parties to do this business. And we have been optimizing on that and that has led to this improvement in our gross margins. If we say that what this could look like as a trend in the upcoming quarters, also we could say that this would somewhere look like somewhere between 44 to 45% on average for a quarter.
Dilip Modi
Yeah. Hashika, should I, should we continue with the questions in the chat?
Hashika Mutreja
Yes. The next question is from Rahul Kumar. With UPI cash withdrawals and AEPS cash deposits evolving, do you see assisted models becoming more infrastructure, like utilize utilities over time?
Dilip Modi
Absolutely, Rahul, I think, absolutely. Because, you know, when I said industry, we are talking about growth of upi, as I mentioned, you know, this is literally building out an infrastructure at the last mile because at the end of the day, to do upi, to be able to do digital, you have to have a transacting bank account. And to be having a transacting bank account, you have to make it easy for people to put money into the bank account. Now, you know, when you talk about things like AEPS cash deposit, almost now almost all accounts are seeded with Aadhaar Biometrics across all small towns and rural.
And this is a great opportunity, in fact, not just in small towns, but in big towns as well, where it’s easy for people to move cash, you know, and I think what we have observed in all our experience in building this platform over the last few years is that, you know, this ease of putting money, you know, into and withdrawing an account, we’ve seen situations where people have had to travel a distance to withdraw cash. And the reason they withdraw all the money and spend the money, spend the money in cash is because it’s not easy for them to, you know, go back and deposit and then again withdraw.
So if you make it convenient, you know, for them to do it, I think it becomes a great enabling infrastructure for digital financial inclusion. UPI cash withdrawal, I think, again is an infrastructure layer. At the end of the day, people need small money, sometimes in cash for spending purposes. If it comes easy for them, you know, to be able to withdraw that money at UPI cash points that players like us will enable across Bharat. I, I think it becomes, you know, they’re able to move forward with their lives much easier. And so I think very clearly these are becoming like last mile.
We see ourselves as effectively a last mile banking infrastructure connecting financial providers with small businesses and consumers.
Hashika Mutreja
Thank you sir. We’ll take the next question from Navdeep Mehta. Goals and other loan volumes is down. Can we see improvement in coming quarters? And the second question by him is can we see overall revenue increasing in Q4?
Dilip Modi
Yeah, I think credit distribution is something that we have definitely seen a big need for. There are lots of financial providers who want to distribute credit. When you look at secured credit distribution, that’s what we are focusing on. Unsecured credit is more linked to our FLDG model where it’s more embedded credit to our agents and going forward to merchants. But when you look at secured credit distribution, definitely it’s an area which people are interested in and want to work with us to grow. I think we are trying to get our kind of model in place in terms of how to work with partners and how to scale this business.
So I would say, Navdeep, that maybe you need to give us a quarter or two more in terms of putting in place the right product infrastructure where we have lots of lenders at one end and borrowers at the other in a bit of a kind of open API kind of stack. We are in the process of building that out. We have a lot of learnings because when it comes to secured credit, we have to work closely with the branches of the lenders. And so how do we build that into the journeys and into the stack for our adhikaris to work with is something that we are working on.
So I think we are seeing this as something that we think could scale up more in H2 or financial year 2027. I think the next couple of months will go more in terms of, you know, building the stack for financial product distribution. Right. What we have really been able to get our hands around in the last two years is around embedded credit for our own agents. And that’s how you see the numbers scale. But in terms of pure credit distribution, I think it’s about getting the product, the open API stack and the supply side in place.
And I think H2 next year is where we can hopefully see that number scale.
Hashika Mutreja
Thank you, sir. The next question is a follow up from Gulshan saying indirect costs seem fairly stable despite increments. Is this the steady cost base now or should we expect reinvestment as growth accelerates?
Dilip Modi
We are calling out the new engine separately. Sunil can throw more light on it, but we are, whenever we are looking at new investments, we’re calling it out separately. Maybe we can continue to add to it but definitely our goal is to build a leading financial services stack across the board. We are literally unbundling various aspects of the bank and making sure we can deliver it at population scale. So for us looking at new areas like now we’re beginning to look at lending, savings, investment, insurance. I think we’ll continue to invest in these areas but I think from a PNL perspective we are calling it out separately.
Sunil, you want to add to that?
Sunil Kapoor
Yeah. So we are investing in the new engines and building up the capabilities and capacity both in terms of new products distribution and if you see our numbers also, that’s new engines. What we were investing or incurring as an investment, almost 11 crores we have done in last financial year on these, these new engines which has now come down to kind of 1 crore a quarter. So from that perspective we keep on investing and whatever we have built then we take out for other initiatives. So from that perspective we are investing also but we are very conscious about that.
We have, we should have a operating efficiency in every department or activities what we do.
Hashika Mutreja
Thank you sir. The next question is from Shreya Patel. Insurance and saving products are being pushed heavily in rural markets. Are consumers generally adopting these or is adoption still tell agent Reven
Dilip Modi
Shrey. You know we believe that you know, both will continue to grow. I think when it comes to products like insurance and savings we believe that you know, agents definitely have a role to play. We still believe that not just in small towns, even in big towns, you know, agents continue to play a role given the complexity of the products helping to handhold you what we call wealth managers when it comes to investments. You know, so directionally I think, you know, just improving understanding what is an ft? How do you think about gold savings? How do you look at this? We believe that you know, there is a trust factor that exists, you know, when it comes to working with people in your communities.
We’ve seen how the microfinance sector has grown on the back of that. Of course now there are structural changes happening to that sector. But I think when it comes to being able to build awareness, handhold people through complex financial products, I think agents have a significant role to play. What we are trying to do is make sure that we can enable an agency model which is significantly tech led and very attractive on unit economics so that we can drive more and more products through our agent network.
Hashika Mutreja
Thank you sir. There’s a follow up question by Rahul Kumar. Do you think the assisted fintech model becomes more relevant and resilient during periods of liquidity tightening compared to phases of abundant liquidity.
Dilip Modi
So Rahul, I’m just trying to put my head around this question where you’re basically saying that you know the kind of model we have which is an assisted model, right. During times when you know there’s a liquidity tightening, right. When there’s less liquidity in the market then do they become more resilient? I think for us Raul, what we’ve seen is that you know, definitely our agents started off as being cash out points, became cash collection points and now are also enabling distribution of financial products. But at large I think you know we believe that both for cash and non cash products, you know, this network, this model continues to have relevance and, and we believe that especially when we think about banking beyond payments the need to you know, have you know, agents who can play the role of what bank branches play on the ground is a huge opportunity.
So you know, so I think you know my sense is that the model continues to be relevant at all points. But maybe Sunil, you want to attempt an answer to this question.
Sunil Kapoor
I think that with the assisted fintech model, I think because your question is with respect to assisted fintech model and liquidity standpoint of you. I don’t think that liquidity means for our business is more on the kind of maybe the subsidy side of it. But other than that I don’t think that liquidity will be tightening of the liquidity will be impacting us only with respect to the credit side. And as the liquidity gets tightening that’s keep on on the basis of the cycle and credit distribution may have their own cycle also. And I think that’s a part of the business from the perspective of credit where liquidity tightening or liquidity ease help grow or have a pause also.
So that’s a cyclical. I will see it only with respect to credit.
Hashika Mutreja
Thank you. I hope that answers your question. We have another question from Rahul Kumar. If you look at the broader industry over the next three to five years, what do you think becomes the dominant profit pool? Payments, collections, lending or financial distribution?
Dilip Modi
I think Rahul definitely lending is a, is a big part of the profit pool going forward. You know, that clearly is a standout. You know, payments continue to be under stress when it payments and collections when it comes to margins. So there’s more about throughput that we tend to drive. So if I say it’s lending followed by financial distribution followed by payments and collections from a profit pool perspective. Right. However for us payments and collections continues to be the focus. Because when you’re building a business of the nature that we are, you know, you need the throughput, you need the data to drive, you know, the higher profit pool products.
So that has to continue to be the underlying layer to enable us to build more products to drive profitability.
Hashika Mutreja
Thank you, sir. Participants who wish to ask a question are requested to use the raise hand feature. Or you can alternatively share your questions in the chat box. Since there are no further questions, I would pass it on to Dilip sir to give his concluding remarks.
Dilip Modi
Well, you know, I would once again like to thank everyone for this opportunity. You know, when I look at things quarter on quarter, it can perhaps sometimes hides the overall direction in which we are moving. You know, we are building this business for the next 25, 30, 40, 50 years. We’re building a kind of an infrastructure which will enable, you know, penetration of formal financial services for small businesses and consumers, you know, living in small towns. I think the technology tailwinds are all there. When we think about even the AI revolution that’s happening, we believe that it will serve people at large, it’ll serve, it’ll have a population scale kind of a use case.
We at Spice are also committed to, you know, kind of writing this revolution of AI to be able to do more for, you know, more. And I think, you know, financial services as a sector is going to be deeply impacted and this will all be in the positive direction. We know that India has this legacy of leapfrogging technology. We know that, you know, how mobile phones grew vis a vis fixed line phones, how mobile Internet grew vis a vis fixed line Internet. And we know how banking influenced by digitization will grow compared to traditional banking.
And we have Spice Money are committed to driving a digital banking revolution in Bharat. So with that, I thank you very much for your interest. You can continue to reach out to us. Our team is always available to answer any questions for us. It’s, it’s really about, you know, growing this space of, you know, stakeholders who are excited about serving small merchants and consumers in, in Bharat. And we’d be more than happy to, you know, engage with, with, with anyone who has interest to want to participate in this journey. Thank you so much and I look forward to our next call.
Thank you.
Hashika Mutreja
Thank you, Dilip sir. Thank you everyone for joining us today for the Q3 and N month FY26 earnings call of DG Spice Technologies Limited. We truly appreciate your time and participation. If you have any further questions, please feel free to reach out to us at the email IDs provided in the investor presentation. We look forward to your continued engagement and to interacting with you again next quarter. Thank you once again and have a pleasant evening.
Dilip Modi
Thank you.