Digispice Technologies Ltd (DIGISPICE) Q3 FY23 Earnings Concall Transcript

Digispice Technologies Ltd (NSE:DIGISPICE) Q3 FY23 Earnings Concall dated Jan. 31, 2023.

Corporate Participants:

Dilip Modi — Chairman

Rajneesh Arora — Co-Founder, Chief Product & Strategy Officer, Spice Money Limited

Sanjeev Nand Kumar — Co-Founder, Executive Director & Chief Executive Officer, Spice Money Limited

Sunil Kapoor — Chief Financial Officer & Whole Time Director, Spice Money Limited

Analysts:

Navdeep Mehta — — Analyst

Praveen Sharma — Sharma Wealth Advisors — Analyst

Analyst — — Analyst

Aniket Redkar — — Analyst

Heena Parekh — — Analyst

Presentation:

Operator

Good afternoon, everyone. A warm welcome to the DiGiSPICE Technologies Limited Q3 and Nine Month FY ’23 Earnings Zoom Seminar. We have with us Mr. Dilip Modi, Chairman, DiGiSPICE Technologies; Mr. Sanjeev Kumar, Co-Founder, Executive Director and CEO of Spice Money Limited; Mr. Rajneesh Arora, Co-Founder and Chief Product and Strategy Officer, Spice Money; Mr. Sunil Kapoor, Whole Time Director and CFO, Spice Money.

Before we begin, I would like to state that some of the statements made in today’s discussion may be forward-looking in nature. The actual results may vary as they are dependent on several external factors. A statement in this regard has been included in the results presentation sent to you earlier. We will commence the call with the management taking you through the operational and financial performance of the of the period under review, following which we will have an interactive Q&A session.

I would now like to invite Mr. Dilip Modi to commence the presentation. Over to you, Dilip.

Dilip Modi — Chairman

Thank you, Shiv. Good afternoon, everyone. Thank you for joining us on the quarter three earnings call. It’s a pleasure to reconnect with all of you and I hope that today’s call will help you gain more insight and depth about what we are doing at DiGiSPICE and we get this opportunity to provide any clarifications or answer any questions that you might have. So let me start by sharing with you what all sits in DiGiSPICE Technologies. As you’re well aware, we report two segment revenues, one is a rural technology segment and the other is a digital technology segment.

As you’ve been seeing over the quarters, the financial technology segment is actually contributing a significant part to the revenues, consolidated revenues of DiGiSPICE. As of this quarter three of this financial year, it’s now close to 95% of the consolidated revenues of DiGiSPICE accrued from the Financial Technologies business. And therefore the Digital Technologies business, which is the B2B business, has now become closer to 5%. So we have always been talking more around the Spice Money, which is the FinTech business of the company because this is where we see the major growth going forward.

As far as the B2B segment is concerned, as you will see in the presentation, we have invested in that business, but this has been a legacy business where we’ve been working with telcos in the region. This is a business that we’ve been doing for a long period of time. And as the telcos have migrated to becoming more data and OTT-led businesses, we’ve been trying to invest in new platforms. But there’s been a lag between revenues and costs. And if you see the consolidated financials, while this contributes 5% of the revenues. It still contributes close to 20% of our consolidated costs. So this is a segment that we are going to be looking at, at the board level because this is a segment that’s actually creating a drag on the profitability of the overall DiGiSPICE Technologies consolidated report.

So we will come back to you with respect to our strategic view on this segment, but really what we want to focus with you is, is the main growth engine of DiGiSPICE Technologies, which has our rural fintech business, Spice Money. Before I hand over to my colleagues, I would like to make a couple of points here. As you’re aware, the rural ecosystem is a big focus area for both the government as well as public and private sector in terms of driving the GDP growth of our country, both in terms of infrastructure and consumption-led growth.

When we are talking about building a $5 trillion economy, almost everyone’s talking about the role that rural India will play in this GDP growth objective that we all have as a country. Today at Spice Money we’ve built very clearly one of the largest mobile-based ATM banking networks in deep rural India. You will see the numbers, but it is very clear that we’ve extended our reach to villages in deep rural. And the platform today, Spice Money, both mobile and web are used by young digital entrepreneurs living in those villages. So effectively, we are now being used by a lot of young digital entrepreneurs who are effectively driving digitization of rural India.

So this is a big trend on the back of which Spice Money is riding. Now what further excites us is that there is a huge investment that’s happening in the digital public goods infrastructure both in partnership with government as well as public goods being built in a private spirit. Whether we look at ONDC, OCEN, Account Aggregator, many other industries, we see a lot of work happening on digital public goods. We all know about UPI. UPI has still not reached Bharat and this is something that we are very excited about. How do we take these open platforms and leverage them to solve for lack of access of services in rural India?

You will hear about that in the presentation. Finally, we are very excited because we believe that we have the starting point — where we can solve for many issues starting with delivery of formal banking and financial services. So one of the things that we’ve been sharing with you is how we do not want to restrict ourselves to just being an APS-led ATM banking platform in rural India, but move on to a much larger opportunity where we can leverage digital platforms to drive access to financial and digital services in deep rural. We will in today’s presentation give you an update on where we are in each of those legs on moving to a larger opportunity.

And finally, because we are excited about this large opportunity that’s opening up in rural India and how tech-led platforms are going to drive growth in rural India, we’re going to be investing behind them. So I would encourage all of you to look at us more from the point of view of the investments we are making, which mostly flow through our P&L because it’s mainly in manpower and teams. We’re going to talk about today a breakup of how our investments are flowing through the P&L, but more importantly, look at us from the lens of how we are driving overall GTV and income and margin growth.

We will continue to invest because we believe that there is a window in which we can build large platforms that can drive and solve for the problem of lack of access in rural India for banking and financial services. Very excited about this and would be more than happy to — answer any questions that you might have. I’d like to pass on to my colleagues starting with Rajneesh, who’s going to walk you through — specifics around the rural ecosystem and some of the digital public goods infrastructure that’s getting built out there. And then we’ll go into further details.

Over to you, Rajneesh.

Rajneesh Arora — Co-Founder, Chief Product & Strategy Officer, Spice Money Limited

Thanks Dilip. Can we blow up the slide please? Thank you. So, what we are doing currently is, I mean fundamentally as price when we are solving the problem of access and currently making financial services accessible to the Indian rural citizens. Some of the highlight numbers as of now we have 1,200,000 plus Adhikaris, these digital young entrepreneurs in rural India who are working on Spice Money platform. We do transactions worth INR161,000 crores in terms of the GTV. So gross transaction value is INR161,000 crores on an annualized basis annualized on the nine months of the current financial year.

And on our E-hook product called AePS, we have a leading 17.1% market share, which we have been growing over the last few years. In terms of our coverage, we are present in deep rural. Our focus is we are a rural FinTech and our focus is blocks or small towns and villages. So we are present in almost all the blocks of the country which is 6,450 blocks or small towns and 226,000 villages out of the total 600,000 villages in the country. And in terms of pincodes, we are present in most of the — pincodes of the country. So this is our current coverage. And we are achieving deep penetration at a village and block level.

Next slide, please? So as the Dilip spoke about — the critical growth, I mean the key growth in GDP for India to become a $5 trillion economy everyone is looking at rural, right? So whether it is the government or the private sector, we are all aware that the opportunity really sits in rural. Looking at some numbers today, about 46% of India’s national income is coming from rural economy. And over the last almost a decade now, the rural economy growth has been surpassing urban economy growth. So basically it is — rural has already been driving growth of Indian GDP and going forward, the contribution of rural economy is only going to grow.

Rural contributes about 68% of the total workforce of the country, so at about 35 crore people is what rural India employs today. And in terms of Internet penetration, again the entire growth of Indian Internet penetration is now coming from rural. The growth rate — the number of subscribers now Internet users in rural are now 20% more than urban India. Also the key building blocks as infrastructure for rural India, which has enabled progress in the Financial Services segment is the JAM Trinity, Jan Dhan Aadhaar and Mobile.

So Jan Dhan is a bank account, is a basic Savings Bank account which is now available to 46 crores — most of them being within semi-urban and rural areas. Aadhaar, almost every citizen of the country has Aadhaar, and most of these Aadhaar is now linked to the bank account. And we now have 75 crore smartphone users in India and this growth is also being driven in rural. So I think these are the key building blocks along with the digital public goods infrastructure that Dilip spoke about and we’ll talk about that which is enabling players like us to build products and services and enable them to reach every nook and corner of the country.

So it’s a tech inclusive framework which we are riding on and leveraging the rural opportunity. Next please. So why are we — I mean, so our core belief is that one is that there is an opportunity in rural India. The other key question to answer is that how — what is the key to solving that opportunity in rural, right? And our key belief is that because urban and rural are very different markets, not just different in terms of economics but diverse in terms of the way rural India lives, thinks, shops, everything. The key to solving those problem statements or accessing that opportunity is also different.

So let’s look at some of the key characteristics that are very different between urban and rural markets. So if you look at merchants, in urban, we find merchants or retailers being very specialized in one category. The moment you go to small towns it goes — it becomes multi-category and the moment you go rural, I think it’s like every rural merchant is doing multiple — it is not just products, but products and services and not just single service but multiple services. So a rural merchant is actively looking for more than opportunities to grow his business and serve the customers.

In terms of the relationships specifically between a merchant and a consumer, if you talk about in urban, these relationships are led by transactions. In rural, these are led by communities so over the generations the retailers in the same community, the customers in the same community. As a result of these relationships, the trust that any brand drives in urban market is largely through advertising. And in rural, it is almost entirely through word of mouth, right? So if somebody has benefited from a particular product or service, that is more likely to make other people use the same product or service compared to any kind of advertising, so the brand and the trust is largely built by word of mouth.

Ticket sizes, we are all aware because of propensity to pay — there is a demand for larger ticket size. In rural we’ve seen in — in the case of FMCG industry that reducing the ticket sizes or making the product sachet size has led to significant growth. The same is true even for financial services, right? The need for example for an insurance product or a savings product or a credit product in rural, in terms of ticket size is much smaller and therefore the way this opportunity has to be chased also becomes very different, right? So to make a smaller ticket size viable, the business model has to become very different.

As a result of all this — and also for example, assistance, right, so we do see a majority of the rural population does seek assistance. And this is not just because while there’s an element of literacy, which is now improving at a fast pace, but there is also an element of because people trust and they consult others, right? So there is an element of influence that people are able to make — within rural markets compared to urban markets where largely the decision is — more like do-it-yourself in terms of the activity but also the decision-making.

So as a result of this — what rural needs is a very grounds up approach and a multi-pronged ground up approach in terms of product, in terms of user experience and also in terms of business model, right? So in rural a community-led business model is far more likely to succeed compared to a direct business model and that is what we’ve seen in case of Spice Money also — our success has been largely attributed to the local digital entrepreneurs, the youth of rural enabling digital services for consumers within rural.

Next slide, please? So again as Dilip spoke about the various — public good infrastructure that is getting laid in the country and I think India is one of the unique countries where a large public and open infrastructure is getting created on which private sector can build products and services. We are very excited about not only the current stacks that are available, but all the emerging digital stacks that are coming up. So if you talk about ONDC, Open Network for Digital Commerce, ONDC is a great opportunity enabling democratization of commerce.

So no longer will e-commerce be restricted to few large organizations who can invest billions of dollars upfront. By virtue of it being open and by virtue of unbundling the various services, right, so whether it is a — as a platform, e-commerce had to bring in sellers, buyers, set up the logistic infrastructure themselves like as one entity. In case of ONDC, they’ve really unbundled all of these pieces so somebody could bring in sellers, somebody could bring in buyers and somebody could play a logistics role. Specifically in context of rural we see a huge opportunity in creating business models riding on ONDC to leverage the — uncracked, I would say uncracked e-commerce opportunity within rural.

Coming to OCEN, which is Open Credit Enablement Network so what ONDC is doing in commerce, OCEN, is going to do in credit. At a very basic level it is going to bring borrowers or loan service providers on one hand and lenders on the other hand and bringing them on one common API-based platform in order to extend the credit products — relevant credit products to borrowers. So again, this is early stage in terms of its rollout but in terms of the design and the thought, we are very excited about the fact that this can do wonders in terms of taking — enabling access of credit to rural citizens and rural businesses and we want to participate in that.

Account Aggregator, again, this is going to help leverage power of data. So at a very basic level based on customer consent, the data that the customer holds in the form of for example, bank accounts, insurance policies, pension details, etc, all of this is going to become available at a click of a button based on user consent, enabling alternate data-based underwriting for the lenders. So again, this along with OCEN will significantly help delivering credit and democratizing credit. And then there are new areas around, for example creation of Udyam Aadhaar, which significantly — so basically Udyam Aadhaar starts to create a unique identity for MSME.

So like there is an Aadhaar for citizens, there is an Udyam Aadhaar for MSMEs and based on that one identity the ability to get all the government benefits and all the data related to the MSME. So that’s the thought process. There’s another digital health ID that is being created for all the Indian citizens. So I think the point is that our intent of using the digital infrastructure to enable all of these services to rural India — all of these infrastructure comes like a core building block and we are working closely with most of these emerging digital stacks to also see that how do they become very, very relevant for rural upfront?

Next slide? Yeah. Sanjeev, may I request you to take it forward from here?

Sanjeev Nand Kumar — Co-Founder, Executive Director & Chief Executive Officer, Spice Money Limited

Thank you Rajneesh. Good afternoon, everyone and thank you so much for joining in. And what I’ll do is over the next few slides, I am going to talk about what our business model is. It might be a repetitive for a few of you who would have attended the previous quarter results. But I would want to continue to talk about it since it just reconfirms that we continue to stand on the operating model that we’ve been talking about and we continue to build it. We’ll also touch upon a few of the [Indecipherable] metrics and our growth on the larger opportunity that we are seeing in rural India.

So it’s essentially, if I were to marry the last few slides of talking about rural India, talking about the digital stacks that are now built and how we are now, what we’re trying to do is we’re trying to democratize those services in rural India using those digital stacks, eventually what is it that we are building? We’re building a super app for Bharat. What does this mean? It very simply means that if you were to talk of a rural consumer and I would put down what his use cases, what is his needs? It’s about banking, payments, financial services, digital services, a lot of those pieces, these are the services that he needs.

And if I can build all of those services onto a platform and if you can build a network of entrepreneurs at each block and village level then why does a rural consumer have to step out of the village? Now something like this in my opinion was not possible earlier and reason was technology. Today, given the stacks and technology today this is a possibility? So in this slide, if you notice five of these boxes, five of these big services are already live. The latest one is the government services, G2C services one which has gone live last quarter. The remaining four are work in progress at different stages and over the next few quarters we will have them also live, which does complete the [Indecipherable] offering all of the services to rural consumers.

Next slide, please. I’m extending that slide of saying we’re building a super app for Bharat. What does it mean? It means that there is this entrepreneur in rural India whom we called Spice Money Adhikari. He’s a merchant. He is now digitally on-boarded with us. He is using our app. And through that app, he is providing services to consumers who walk up to him to avail the services. For example, there’s a customer who wants to withdraw money. He does not have to go to a bank, branch which is about 25 kilometers from his village. He comes to the Spice Money Adhikari at his village. Does his biometric authentication, gives his Aadhar, mobile number and withdraws money.

He wants to buy a ticket. He does that. He wants to transfer money. He wants to pay bills. He wants to even — sorry, pay for his EMIs, all of the services that I mentioned in the last slide now is available at the doorstep at a village. So on one side we are marrying suppliers, product manufacturers, service partners. And on the — and in the middle is the Spice Money entrepreneur and on the right side is the consumers who are walking up to him to avail these services. Now if you look at it at core, what makes this model unique? It is a win-win for everyone.

For the product manufacturers and service partners which could — who could not access rural India all this while, now there’s an opportunity for them to access at a very, very reduced cost. In the center is the Spice Money entrepreneur who now has found a new source of earning. And like we spoke about 70% of our network is below the age of 30, which is this — the youth of rural India who is adopting this faster than others, right, and hence this entrepreneurship that is being created in rural India. And third is for rural consumers who now do not have to walk 25 kilometres away from the village. They get the access of all of these services at the doorstep at the village through assistance.

Next slide, please? We had mentioned — spoken about it last time. I want to give an update on this. If we continue to — the basic problem statement of solving for access in rural India, like I said last time, while we started with building the largest ATM banking network, we are moving to a larger opportunity. That is not the only opportunity that we were — we were keen on. We want to build a larger opportunity of — in rural India. And I want to give an update on this today. But first — and the journey that we had said was building the — we built the largest ATM banking network. Today we are a network covering 2.26 lakh villages and we are a leader in the [Indecipherable] AePS market share of over 17%.

The second business line that we moved on some time back now, there’s been about six quarters now is to build a deep cash collection network. Today we’ve on-boarded over 60 plus rural focused enterprises, sorry, primary MFIs. And we’re also doing bill collection for over 100 billers because we are also [Indecipherable]. The third business line over this is building a largest banking and financial services platform. We have started — we’ve been doing some pilot on using data and transaction data on our platform to provide alternate underwriting and using that to do lending for our Adhikari network.

Moving beyond financial services on to digital services; we’ve now — we’re doing a pilot with on ONDC, on the ONDC network. And the idea is can we build a platform to enable e-commerce in rural India. Now this will be on in two dimensions. One will be for the merchants, so Adhikari as a merchant who can buy goods and services that he needs today to sell; and second, he can also do assisted commerce for the consumers in rural India. Apart from that, we’ve also partnered with UMANG towards delivering government services to rural citizen. This is the service that went live in the last quarter.

And eventually we also believe that rural will, even the consumers in rural will go digital faster. By when is a matter of anyone’s guess, but there is this youth of rural who is adopting digital faster. And for that segment we’re also building first of its kind rural focused for the youth a digital payments app. This is a larger opportunity, it’s very important for us to visualize that Spice Money is just not an ATM banking network. It started with an ATM banking network. It built the largest ATM banking network. It started to leverage other business line and products and services, very adjacent was the cash collection. We’ve had some good success in it. We continue to build that. And now we’re building a banking and financial services business model over that. And then apart from that there is digital services and then also a digital consumer offering for the rural youth.

Next slide, please? Few of the key operating metrics. Firstly, we are like we said before, we are 1,200,000 Spice Money Adhikari, over 2.26 lakh villages, about 33% growth over last year. Our gross transaction value is about INR24,000 crore, again a 13% growth over last year and 2% growth over last quarter. Our service fee revenue at INR99 crore this quarter, 10% of growth over last year, 1% over last quarter. AePS market share, we are over 17% now. We were 16.4% ending March 2022. Next slide, please? On few of the business — few of the services, AePS which has been a flagship product, we’ve grown at 12% vis-a-vis last year, but has been pretty flat in terms of quarter-on-quarter growth.

This is primary and I had spoken about it in last quarter results also. This is where primarily because in the last three quarters, the [Indecipherable] AePS market has not grown. It is pretty much static or actually de-grown a bit. But we continue to hold our market share and hence our business. The quantum business has been at the same level as last quarter. mATM has also seen a bit of decline than last year. This has been primarily few [Indecipherable] few of the restrictions that few of the banks have put. I don’t — there’s no alarming reason here. I think these are pretty much genuine practices being done by banks to prevent any kind of misuse on the cards and I think that will be a regular practice.

However, we definitely see a — we’ll continue to build this business as the mATM and both AePs has two devices, biometric and the card device continue to help the cash out business opportunity. Bill payment which is BBPS, again it’s a very, very interesting opportunity for us. It’s been going very well, so we will — in this part EMI section is what I want to call out here for a minute, which is what is missing significant growth. INR31 crore business of last — of Q3 last year, sorry FY ’22 is now INR391 crore, been a significant growth. Even for a quarter-to-quarter basis, there has been significant growth in EMI collection and overall bill payment.

And particularly calling out EMI collection because this is something we’ve noticed as a very, very important use cases and its working very well in rural India and we continue to see a super success on our network in this business and we will continue to build this. Third; next slide, please, sorry. CMS is — this is again collection, cash collection network, again a business that we have seen very, very promising growth. This is a business that actually started last year, scaled pretty well and this year again we continue to build this business.

We say — last year, we’ve seen a 40% growth on a quarter basis, sorry, from quarter FY — yeah, sorry, on a Y-o-Y basis 40% growth and 90% on a quarter growth. Recharge again has been pretty — has not seen any incremental growth this quarter. Don’t see any other reason for it. I think it’s just a cyclical business. There are cycles. We have seen this business go down and come back again on a quarterly basis. Nothing alarming here. Travel is another business we’ve grown last year. We’ve done some — we see some promising business opportunity going forward. Again, we’ll see on this. We’ve seen some cycles of this business, but we are seeing this business coming back and I am very confident that this business is going to grow again.

Next slide. Yeah. I am going to request Sunil now to take us through the financial highlights. Sunil, over to you please. Sunil, you’re on mute.

Sunil Kapoor — Chief Financial Officer & Whole Time Director, Spice Money Limited

Thanks, Sanjeev. Good evening. Okay, this is — these slides contains the Spice Money financial highlights and first time covering with respect to the quarter three financials last quarters which is the customer GTV for the quarter three has grown by 2% from INR24,421 crores to INR24,913 crores. And revenue, the service fees — fee revenue which we are focusing has grown by 1%. And thus the gross margin has improved by 4%, which is Service GM to service fee revenue, which has improved from 35% to 36% in this quarter.

And if we see that indirect cost is kind of static, the same the last quarter and thus the ABITA from negative INR50 lakhs to positive INR6 lakhs. If I cover that 9 months progress, that’s 9 months in this financial year versus the last financial year, we have grown in customer GTV by 27%. And in line with that, revenue has grown by — service fee revenue has grown by 25%. And gross margin — better gross margin growth with 38%. And indirect cost, if we see that what we have invested in last 9 months, that’s almost INR48 crores increase in the indirect cost, which is 71% over the last 9 months of the previous financial year.

I will take you through that — those indirect costs where we have kind of invested in the business and segments or the functions. Can we move to the next slide, please? So here is the 9 months — this financial year versus the last financial year 9 months. We have almost invested INR48 crores in this indirect cost, which consist of primarily 81% coming — invested in employees and related cost and rest in — rest 19% is in call center and technology and infra cost and marketing and promotions and other [Indecipherable]. So primarily that’s INR48 crores, INR39 crores has gone into the employees and related cost, which is on the right hand side of this PPT, the pie chart where we can see that this INR39 crores have been invested into — basically 93% of this INR39 crores have been invested into sales and distribution, product and technology and leadership team.

To strengthen these functions and activities to take on other opportunities or other activities which we have planned for the future so this is an investment goes into these areas to give an idea about where we are investing to strengthen the company as a whole. So that’s it about this PPT. Can we move to the next slide, please? This slide contains the consolidated financial summary, which contains the FinTech segment which is the Spice Money which I have covered in the previous slide and the other segments primarily consist of DiGiSPICE platform business.

So if we see that quarter three financial year that’s — the revenue and gross margin is pretty flat and indirect cost has moved up little bit due to some forex losses and forex translation reserve that has created this INR3 crores indirect cost primarily. So we are — at EBITDA level, we are negative for INR8 crores, from previous quarter it was INR6 crores.

And in 9 months if we see there is a swing of INR13 crores negative from a positive one. But that’s — we have explained for the FinTech segment that there is a — we have invested in the indirect cost with respect to the strengthening of the leadership team and sales and distribution. That’s the reason of it. The impact of these investment maybe in the coming future. And other segment as Dilip sir has mentioned in his opening remarks that we are figuring out how to kind of take a strategic call on this segment. And Spice Money revenue, we have kind of contributing for overall basis 94% in this quarter. So that’s all from my side.

Thanks and back to Shiv.

Questions and Answers:

Operator

Thanks Sunil. That brings us to close of the DiGiSPICE management opening comments. We will now start the Q&A session. [Operator Instructions] I will start the Q&A session. Anyone who wants to ask questions, Navdeep Mehta [Phonetic] could ask your question please.

Navdeep Mehta — — Analyst

Yeah, good evening all of you. Actually I’m an individual investor and I am holding DiGiSPICE shares from last three, four years and I’m reviewing financial results every quarter. So my question is digital revenue is going down quarter-on-quarter and what is happening on Korero front?

Dilip Modi — Chairman

Navdeep, hi. Can you hear me?

Navdeep Mehta — — Analyst

Yeah, yeah, I can hear you, Dilip.

Dilip Modi — Chairman

Yes. So Navdeep, yes, so last two years, Navdeep, ever since COVID happened March ’20 — historically Navdeep at DiGiSPICE, we’ve had the enterprise SMS business where we’ve been working with large enterprises to deliver SMS based services, which has been a business that we’ve been doing for 10 years. And we had large banks, in fact the largest Bank of India also as customers that we were working with. When we saw that what is the opportunity, Navdeep to convert this into a new business opportunity we came across this opportunity to convert it into a communication platform as a service business and that’s when we imagined about Korero.

But what we’ve seen Navdeep — as we’ve tried to reach out, so we invested a year and a half in terms of building out and building other channels whether it was voice, WhatsApp and other channel integrated into the platform. One assumption was that we will be able to penetrate a lot of customers using multi-channel strategy, not just SMS but multi-channel and that’s what we branded as Korero, Navdeep. What we are seeing in a B2B sale cycle however that especially during COVID, a lot of customers, large customers they fell in two categories.

One was the RFP business and the non-RFP business and the RFP business, a lot of the large telcos themselves jumped into the business and really quoted very aggressive pricing, which was just economically unattractive for non-telco players. So because of that it became very difficult to compete on the RFP side and we had a lot of RFP business sitting there which we were trying to move to Korero. And on the private side, Navdeep, we’ve been working to invest in sales organization, in product build-out and all that and we’ve seen a very hyper competitive environment there.

So while we continue to drive it and teams are vested in it, like I said, nearly 20% of our consolidated cost at DiGiSPICE continue to be in the B2B segment, while it only contributes 5% of the revenues, I’m finding that there is a big lag between cost and revenues. And that is what now we are very closely observing at the board level in terms of looking at the funnel of business we are getting for Korero and really seeing the investments that will need and what is the viability of building out of a profitable business in the short-term, Navdeep.

So to that extent we will be looking at options. It is having a lag on our P&L in the short term, but we continue to engage with both our existing customers and new customers. But Navdeep this is taking time and that’s why, I mentioned upfront that we’re going to be evaluating what are our options because we do not want the P&L to drag because of this delay in revenues linked to cost and investment. So I’m going to come back and talk to you further about this in the coming quarters. Hello, Navdeep are you there?

Operator

I think already you have answered this question. So I think — next question is from Praveen Sharma [Phonetic].

Praveen Sharma — Sharma Wealth Advisors — Analyst

Yeah, hello. Am I audible? Hello?

Operator

Yes, you are, please.

Praveen Sharma — Sharma Wealth Advisors — Analyst

Yeah, yeah, okay. So I am Praveen Sharma and I am from Sharma Wealth Advisors [Phonetic]. So I just had two questions. I just wanted to understand what is the typical customer transaction cycle with an Adhikari? How long does it take to execute the transaction? And by when does the Adhikari receive the payout? So that is question one. The second question that I had is the indirect costs have been rising every quarter. So could you probably elaborate where are these investments being made and when are we expecting to see the operating leverages in this business? Thank you. That is it from my side.

Operator

Rajneesh, you want to take the first part and maybe Sunil could do the?

Rajneesh Arora — Co-Founder, Chief Product & Strategy Officer, Spice Money Limited

Sure. So I think in terms of the time it takes for the customer to transact at the Adhikari point so I think the biggest time that it takes is for AePS where the customer has to give his Aadhaar number, give his bank name and then, authenticate, put a fingerprint. But that takes like under one minute, okay? And most of the other transactions are pretty much very, I mean talking about the total time, right, the actual transaction time on the system is everything is in like milliseconds, okay?

And for AePS at best at one or two seconds. So that’s the time it takes. It’s not — I mean it’s not an area of concern or worry and we’ve been able to kind of minimize — I mean build the user journey in a manner in which kind of minimizes the entire time it takes to the transaction to complete. Sorry, what was the other part of the same question you had around customer transaction?

Operator

Yeah, how much time does it take for the Adhikari to get his money?

Rajneesh Arora — Co-Founder, Chief Product & Strategy Officer, Spice Money Limited

Okay, so the commission to the Adhikari in most of the products we pay instant commission to the Adhikari. So the moment that transaction is through, the commission is credited to his wallet.

Operator

Sunil, you want to pick up on the indirect cost and the [Indecipherable]?

Sunil Kapoor — Chief Financial Officer & Whole Time Director, Spice Money Limited

Yeah. So as I mentioned in the presentation also that’s in the last 9 months kind of we have invested INR48 crores worth of — for strengthening the organization at different levels, which will yield in the coming future. Having said that we will continue to invest further where we have kind of identified the opportunities as you have seen on the — that Super App that’s the wheel we have shown. So we will continue to invest on that. But having said that whatever invested that will be start yielding in the coming quarters but investment will continue to — till what we have envisaged for in next two to three years.

Praveen Sharma — Sharma Wealth Advisors — Analyst

Okay. That answers my question. Thank you so much.

Operator

The next question is for the chat box, Rishu Dhawan. What is the breakup of depreciation which is legacy system versus Spice Money? It’s around INR6 crores in the latest PNR statement. Do we see the depreciation continue to grow at the same pace as we continue to invest in technology or do we have any specific asset or amount that needs to be depreciated overall?

Sunil Kapoor — Chief Financial Officer & Whole Time Director, Spice Money Limited

So we can kind of because we invest in the devices to be placed with the Adhikaris. So that’s a — that’s — we are capitalizing kind of a for a period of one year. Due to that that’s depreciation is you are foreseeing on the higher side. But having said that, this will not be to the tune at the or to the level at which we are as of now. So in the coming quarters it will be lesser depreciation for the financials quarter-on-quarter.

Operator

Okay. Rishu, does that answer your question your question? You’re on the chat, so I think I’ll just wait for your response. In the meanwhile, we go to Saurabh Gupta. Next question from Saurabh Gupta [Phonetic]. Please ask your question. Unmute yourself. Thanks.

Analyst — — Analyst

Yeah, hi, thank you for the opportunity. Am I audible?

Operator

Yes, sir.

Analyst — — Analyst

Yes. So I have one question with regards to the industry. So AePS industry has been quite stagnant in the past few quarters and companies like Fino Payments has already reported a slow growth for — from this segment. And in our case the reported number show a similar trend. So is this expected to continue for the next financial year as well?

Dilip Modi — Chairman

Sanjeev, you want to just pick that?

Sanjeev Nand Kumar — Co-Founder, Executive Director & Chief Executive Officer, Spice Money Limited

Sure. So Saurabh, I’ll be very — I don’t think it will be fair for me to predict if it is going to continue. I don’t think there are any signs like this. But yes, for the last two quarters, it’s been static and de-growth from the first quarter of this year but very difficult to say right now, Saurabh. I don’t think historically and as per all other reports that we are — we have, we believe that this business should grow and will grow. I don’t want to comment on what percentage of growth it will see, but directly [Phonetic] this is a business that should continue to grow over the next few years.

Rajneesh Arora — Co-Founder, Chief Product & Strategy Officer, Spice Money Limited

[Indecipherable] Sanjeev.

Sanjeev Nand Kumar — Co-Founder, Executive Director & Chief Executive Officer, Spice Money Limited

Yeah, yeah, Rajneesh please.

Rajneesh Arora — Co-Founder, Chief Product & Strategy Officer, Spice Money Limited

So AePs today, the numbers that you see is coming out of cash withdrawal product. But AePs as a platform also enables cash deposit. This is something which the product is ready, but is yet to be rolled out in terms of all the banks, right? So the banks of the customers still have to kind of roll it out. That part, I mean the cash deposit as part of AePs we see as a huge opportunity which can take — I mean which can grow the AePs industry significantly just that — whenever such things go live that generally do take a bit more time than anticipated because a number of banks like 100 plus banks have to go live on that. But in the next few quarters, we do expect that to start playing a role in the growth of AePs industry.

Operator

Right, Rajneesh, thanks. We’ll take a follow-up question from Rishu Dhawan [Phonetic]. Maybe there is one — some questions there. Rishu Dhawan, please ask your question.

Analyst — — Analyst

Alright, thank you. Yeah, so my question is more around the road to profitability as a DiGiSPICE, yes, like Mr. Modi said in the beginning that partially we can address it maybe by having off or restructuring whatever the legacy DiGiSPICE business, but even at the Spice Money level if I see the latest P&L statement we are in [Indecipherable] when I see the segment wise result DiGiSPICE, the Spice Money is not at the breakeven level, it’s still in the red.

So what is our plan in terms of road to profitability that, okay, AePs overall is kind of stagnating from the last couple of quarters. Yes, like Sanjeev said maybe over couple of years it will continue to grow. However, do we have a plan in place to move towards generating profits overall because, see, I’ll be honest, yes, fairly good metrics like the management is saying that the GTV is increasing. The values [Phonetic] are increasing, the other metrics which are — is a part of — the management fees and value of the company they are performing well.

But however if I see it from the investors’ perspective, my key metrics is are we generating profits, are we EPS positive, what is the PE multiple, what is the cash flow? So from that perspective I don’t see things are improving. I have been in okay, I’m an individual investor and have been into this company for more than a year now looking at the promising industry or the FinTech but I see — I want to hear from you Mr. Modi what is our plan in terms of — what will drive profits ultimately and when do we will see the profits generating?

Dilip Modi — Chairman

Yeah. No, thank you, thank you, Rishu. I was waiting to come in and answer your question. First of all, thank you for believing in us and being a shareholder for the last one year. I would say Rishu, what’s happening in rural India with the penetration of smartphone, Internet and all these open stacks Rishu, we are at the start of or we are at the brink of something really big that’s going to happen in rural India Rishu.

If you looked at some time back — in urban India and we spoke about, if I take it long back, right, about growth of e-commerce, growth of UPI, we couldn’t have imagined, right, that omni consumers would be ordering online or how many consumers would be — instantly paying money using mobile phones, right? I think rural India is going to go through a similar revolution. Rishu, that’s what excites us because what is happening today is where roads are not reached, mobile phones and smartphones have reached and now with all these open stacks there is an opportunity.

So all the players want to access rural India. The problem has been that of economic viability, right? How do you access rural India? What we’ve managed to do with AePs is a hook product, Rishu, because when the government came into power 2014, they decided to open bank account for every citizen of India. So INR40 Jan Dhan accounts opened up, right? But there wasn’t that last mile banking infrastructure. What AePs has done is created a hook for a small merchant or an entrepreneur in a deep village in rural India to onboard themselves and start offering a basic product of giving people access to their own money.

And that is why we have seen the AePs industry really grow over the last several years and there is going to be lots more products coming on it like Rajneesh said, cash deposit, right? So Rishu, what’s going to happen is that right now if you look at our AePs numbers, it’s just around cash withdrawn, but the same network is going to double up to — enable cash deposit. So when we talk about operating leverage, the same infrastructure, the same Adhikari, the same app, the same support system, right, and the consumers are now going to be able to do cash deposit as well as cash withdrawal. So what we’ve been doing over the last three years especially, Rishu [Phonetic], is we’ve been focusing on layering more and more use cases. Collections, it’s a big use case, right? The same adhikari now in the village itself can serve as a collection point for both the agent of the MFI as well as the end customer who’s a borrower of an MFI coming and depositing cash and this has huge economic benefits for the enterprise. And therefore, there is an opportunity to share in that value chain for us as a platform. And then when we get into full banking and financial services, right, whether it’s account opening, whether it’s credit, whether it’s insurance.

So Rishu, this is a journey and we have two options. One option is we stay as an ATM network, right? We do not invest in infrastructure on the ground, technology capability, data mining, data science, product management, leadership, right, which can enable us to build new centers of excellence, right, around collections, around banking, around financial services, around insurance, around commerce, right? We can just stay where we are, which is just an ATM banking network and deliver on profitable growth, right? But like you yourself or the earlier speaker said that we’ve seen a slowdown on the APS cash withdrawal, right?

We think cash deposit will come and make up for that, right? But what’s the larger opportunity? The larger opportunity is that if we invest in the infrastructure on the ground, right? After some point of time, the number of things we can do using both the people and the technology infrastructure, the impact of that will flow to the bottom line, right? But that’s going to need that focus and investment in infrastructure over the next two to three years, right, because having gotten there early, it will be really a missed opportunity if we don’t consolidate our position in the market. And if we can consolidate tomorrow, whether it is UPI for Bharat, whether it’s commerce for Bharat, whether many other things for Bharat, we have the early mover advantage to ride on that, Rishu.

So I can only say this that as a promoter, as an investor myself, I’m taking a long-term view on this business because I do believe that businesses like this need a longer-term perspective. If you see the way we are — we have been investing in this business, Rishu, it’s all bootstrap, right. It’s all money is being generated. We are cash flow positive, right? So all money is being generated from within the business, again re-invested in the business. We are not raising equity or debt. We are a zero debt company, right?

So we are not going down that path of raising crazy capital and just investing it to acquire consumers. We are really trying to build through viable business models, but there will be a lag between investment and return. We do want to believe invest in a very bank grade compliant infrastructure that will require investment. That will require people on the ground, right? And we want to make those investments because then large banks, large NBFCs will trust us with their products on the ground, Rishu. So it really depends on the lens you are wearing, is there a short mid long term lens. But I do believe that we have an opportunity to really build long-term value here, Rishu, and that’s how — that’s the lens through which we are the board and at the management level looking at this business. Are you there? Sorry, rishu.

Operator

Yes. I think there is — I’ll take the — one more question from Rishu, but I’ll take that subsequent to some more people who are there in the queue from Navdeep Mehta. Is there any plan to start lending business or will you continue as an aggregator? Is there any plan to demerge Spice Money business any time? Any fund raising plans? I think you already answered that, but the other questions — the would you like to start the lending business or will you continue as an aggregator? And is there any plan to demerge Spice Money any time?

Dilip Modi — Chairman

So I think on the lending business in the update we have shared that we have already started with doing alternate database underwriting to our own adhikaris. So they are the first point of call for us to participate in the lending value chain and this is like end-to-end digital from origination to underwriting to collections. So to that extent, we are participating in the lending value chain. Whether we would end up moving into our own balance sheet based lending and all that, Navadeep, is that what you’re seeking in terms of a question, I think it’s a journey, right? I think all I can say is that we are closest to the consumers in rural and therefore, we want to solve for that problem in terms of putting risk capital to work, right? But are we there yet? No, right? Will we get there? I think we will attempt to get there because there is a problem of capital in rural.

People are looking for credit, people are looking for formal capital, people are looking for reduced cost of interest. Can we solve it using digital? We truly believe we can. So we’ve started with the adhikaris. We want to lend to them. We want to enable them. We want to learn through that. And then from there, how do we move towards balance sheet? That’s a journey we will go. Is there any plan to demerge Spice Money business? No, there is no formal plan as of now that we’ve considered at the Board. If you see, Spice Money now predominantly contributes the significant part of DiGiSPICE business. In fact, de facto, I would say that Spice Money and DiGiSPICE are very closely now mapping each other in terms of Spice Money numbers and consolidated numbers.

We have to take a view on the other segment business and believe me, we will take this view earlier than later. Any fund raising plans for Spice Money? Guys as you know, we are all firm believers that internal accruals are the best way to raise — to invest. We are generating capital and we’ve been reinvesting that money. Will be raise funds? Yes. As we roll out these experiments and these pilots and we realize that there is a need for us to require significant capital upfront to chase some of these opportunities that we’ve piloted and we found a product market fit, we may consider coming back and looking at fund raising options. But right now, we are working with our own capital to do these pilots to figure out which ones to chase from a small point of view and therefore what kind of capital we need to provide for it to be able to get the best output from what we are chasing. I hope Navdeep that answer your question. Otherwise, we can further clarify.

Operator

Yes. Hi. Next question on the chat box once again, Saurabh Gupta. The growth in adhikari has been flagged for this quarter. What number are we expecting to close this quarter?

Dilip Modi — Chairman

Saurabh, I — Sanjeev, you want to talk about that. I think we don’t give guidance on closure, but Sanjeev you want to talk about…

Sanjeev Nand Kumar — Co-Founder, Executive Director & Chief Executive Officer, Spice Money Limited

I think the point is — I don’t want to get into a number, but I think directionally, the point is the network has grown to our sites, which is significantly large. And I think now the opportunities can we go deeper and in a designed format rather than just spreading a number, I think that is the way we are taking in terms of lets say wage coverage. We are at 2.26 lakh villages, can we make this more? Answer is yes and I think that is the way we will approach other than taking a numeric goal. I think the way we are progressing is a far more in a design-led format of growing this network.

Operator

Okay. Thanks, Sanjeev. The next question is from Rishu Dhawan. A follow-up question. What are the margins in CMS and EMI collections? Rajneesh.

Rajneesh Arora — Co-Founder, Chief Product & Strategy Officer, Spice Money Limited

So I think in terms of the percentage on GTB or the bps, I think CMS business is more around I think around 8 to 10 bps. And the BBS loan repayment business is more around 10 to 13 bps. So that’s the range.

Sanjeev Nand Kumar — Co-Founder, Executive Director & Chief Executive Officer, Spice Money Limited

You are on mute Shiv.

Operator

The next question is from Aniket Redkar. Aniket, please introduce yourself and ask your question. Aniket seems to be passive.

Aniket Redkar — — Analyst

Good evening, everyone.

Operator

Aniket, yes, please.

Aniket Redkar — — Analyst

Hello.

Operator

Yes, please ask a question.

Aniket Redkar — — Analyst

So I have two questions based on the ONDC. So currently what is the status of the ONDC platform? So I think it was expected to launch in the January. So is it live right now? And if yes, then what is the feedback from the users?

Dilip Modi — Chairman

Sanjeev?

Sanjeev Nand Kumar — Co-Founder, Executive Director & Chief Executive Officer, Spice Money Limited

Yeah. I will answer that. So Aniket ONDC is live. I mean, ONDC is live. Obviously, it is going through a — it’s a phase wise launch plan in a city-wise manner. We are live as a buyer app on ONDC. We started with Bangalore. I think there is some business that we’ve done there. We want to extend this to a larger network depending on how the sellers will get onboarded. But this is — we very excited about the opportunity like we spoke about. It’s a very, very important — it’s a very important stack and network for enabling local commerce, local merchants in rural India come on a platform, on a digital platform to buy and sell goods to a larger, this and hence, I think that is something we’re very excited about. So we’ve been watching this space. We’re working very closely with industry and I we will continue to build this.

Aniket Redkar — — Analyst

And sir, how will the business model for ONDC work? And what will be the revenue that we can expect from this ONDC?

Sanjeev Nand Kumar — Co-Founder, Executive Director & Chief Executive Officer, Spice Money Limited

So ONDC is a gateway. I don’t think — so I think we’ll clarify, ONGC, what is [Indecipherable] it is unbundled e-commerce and is providing a gateway. The role that we are choosing to play is both as a buyer app and a seller. And again, it’s very early days right now. We are piloting few of these opportunity that we are seeing. The revenue share however is about the way we are doing today in Spice Money, it is transaction based, right? So every good that will get sold will have a transaction income, a percentage of that is what we will earn.

Aniket Redkar — — Analyst

Okay, Sir, this is from my side. Thank you. Thank you so much.

Operator

Thank you, Aniket.

Dilip Modi — Chairman

Shiv, you’re on mute.

Operator

Yeah, on mute. Sorry about that. I think all the questions are done. I think we have done with the call for today. And Dilip over to you for closing remarks.

Dilip Modi — Chairman

I just see a hand raise from Heena.

Operator

Yeah. There is hand raised, Heena Parekh. Heena, please ask your question.

Heena Parekh — — Analyst

Hello. Yeah, sir, I had a few questions. So I wanted to know what is the status on the other services that we are planning to launch, like insurance, e-commerce or any other. And by when are we planning to go fully live with all the services? And what kind of traction are we expecting to see from these services?

Dilip Modi — Chairman

So Heena, maybe I can give it a shot and Sanjeev, you can add do it. Basically, Heena, each of those services, Heena, that you mentioned, commerce, insurance and all, Heena, are industries in themselves. And what we need to do is we want to make sure that we are able to get the right product market fit like we showed in our presentation in rural India, whether it’s assisted-led, the sachet of the products, the nature of the product, the simplicity with which we’re able to enable the consumers. There is a reason why there is an under penetration of these products in rural India. And so we have to solve for multiple things before we are able to see scale in each area.

So Heena, I would say that it’s a journey, but what’s exciting is that when we’re onboarding digital entrepreneurs, we can train them and they can self train themselves to be able to deliver multiple services using our platform. And so to that extent in this journey, we have to go step-by-step. So the approach we’re taking is for each set of services to figure out right partners, do a pilot, do a proof-of-concept, get the product market fit right, get the economic model in place and figure out the way to scale. So I think, Heena, that’s the roadmap we are on and that’s why we quarter-on-quarter are providing an update in terms of new services. When we started like eight quarters back providing an update, we used to talk about two services. Now we are talking in detail about six services as well as three more going in pilot phase.

So every quarter, we’re kind of giving an update, Heena, in terms of how we are progressing. So are something like bill collections, we showed the numbers, right? Quarter two last, year we did a GDP of about INR31 crores, right? Quarter three this year, it’s INR391 crores, right, just a bill collection on BBPS. So this is a product we’ve been working on for some time and now we’re seeing the take up in terms of [Indecipherable]. So I guess, each segment is going through its own journey. And as we understand as to what’s the relevant product, what’s the business model and we’ve tested it out in a particular market, we can start reporting numbers around it, Heena. So we are kind of building and imagining or re-imagining those products in a rural context and then working with partners to build for that. Sanjeev, you want to just add to it?

Sanjeev Nand Kumar — Co-Founder, Executive Director & Chief Executive Officer, Spice Money Limited

No, Dilip, I think you’ve covered it. So I think our intent is, Heena, is obviously it’s not about just getting our product on the platform, but it’s important to marry the demand and the supply. And I think that is a very, very big task in rural India. It’s not been done before. I assume that’s an opportunity. So we’re trying to pick a product-by-product, go deeper into it, not only a product, the user journey, but also the go-to-market operating plan and then we scale that up. So all the product that you said, yes, they will come on to platform, but they will come in a far more, let’s say, in a manner with robust operating model.

Operator

Thanks, Sanjeev. I think we are done. I think Heena, do you have any further questions?

Heena Parekh — — Analyst

Yes. I think one more question. So like can you please throw some light on what is driving the bill payments GTV as we can see a huge jump in that segment on a Q-on-Q and Y-o-Y basis?

Dilip Modi — Chairman

Rajneesh, do you want to take that?

Rajneesh Arora — Co-Founder, Chief Product & Strategy Officer, Spice Money Limited

So Heena, the — within bill payment, the key category that is growing is loan repayment category, okay? So the reason it has been growing now is because the pillars which means the lenders have come on BBPS platform. So this category was opened I think about a year or two back and then the billers started to come on the platform. The key use cases, so if you look at a lender who — so most of the repayments by the lender today happen on a debit to a bank account, okay? Take any bank or an NBFC, they will typically do a monthly EMI from your bank account. But there is a big bounce rate in key — in many of the lending categories, right? So by bounce, I mean, that we — on the day off EMI, so about 10%, 15%, 20% of the payments will fail, right, because there is insufficient balance or whatever reasons.

Now that is the payment which is a problem then for the borrower as well as the lender in terms of how do we pay, right? So how do you — to reach out to the customer, how do we pay. By those coming BBPS platform, it has become very easy for users to now. So you can walk across to any outlet because BBPS is an interoperable platform and if the biller is live on BBPS, you can walk across to a nearest Spice Money outlet and pay the bill. So that is the — like in cases of other products, it is offering that convenience to the person to be able to do a transaction at a nearby Spice Money outlet, okay? In case of micro finance, where most of the collections actually happens largely in cash and it happens through a collection officer on a weekly or nightly basis going to the village, conducting a collection meeting, getting all the group members, five or six members together and then collecting the cash and then going back to the branch, etc, right, and depositing.

The micro finance companies are trying to find a way where this whole process becomes comparatively lighter which means that why can’t — why does the — because the collection is in cash, why does a collection officer need to go every time for the collection meeting and just to collect cash, right? So one option is of course why don’t we make it completely digital where all of these digital apps come into play, but there is a reason — there is a customer segment why this continues to be cash despite digital tools being available. So the opportunity there is that the customer now instead of waiting for the collection officerr to come and collect the cash from each of these individuals, they can deposit within their village of the nearest [Indecipherable], right? So it cuts down on this whole effort of the collection officer going and having to do it. So that is the value add that this entire — the convenience that this product brings and that is the reason we’re seeing this growth, right? It is solving a problem for a micro finance industry and the borrower. Does that answer, Heena?

Operator

Yeah, thank, Rajneesh. I think, Heena, seems to be off now. So I think you’ve answered the question. And we’ll come — we will close the discussion today. I think, Dilip, over to you for any closing comments that you may have.

Dilip Modi — Chairman

Thank you. Thank you, Shiv. Let me on behalf of the DiGiSPICE family thank all the people who took time out to dial-in and listen to this conversation and ask their questions and give us an opportunity to being heard. I think if I just pick-up the overall theme, how we’re going to get our roadmap to profitable revenue growth, I think that’s like a common theme that I hear across most of these calls and as investors that’s an important theme and a central theme to what we are building. But let me just assure you all that we are building a business, which is going to be strong on fundamentals. Though we are a tech business, money matters to us in terms of delivering profitable growth. But the kind of opportunity we are seeing in rural today is huge and we see this truly as a tech-led opportunity and we can participate in so many industry value chains and capture a significant part of so many industries in terms of value chain when it comes to embedded financial solutions that we do not want to short change ourselves in terms of chasing that opportunity.

So if you look at our roadmap to profitable growth, I’ll just make three points. First is that when we look at our segments, we are focusing on building out Spice Money, which is our fintech platform business. The rest of the business is just 5% of our revenues, but still contributing 20% off on indirect costs. So we’re going to take a view on that business. So that’s the first. The second point I would make is if you look at our gross margin as far as the Spice Money business is concerned, nine months to nine months this year, we’ve actually grown 41%. So effectively our gross margins have been growing, right? And we’ll continue to figure out products, right, to drive that.

Now the only reason why you’re not seeing operating leverage yet is because we are investing in the organization and most of that investment, 81% as we shared with you is going in terms of people infrastructure and tech infrastructure. And we truly believe that we are doing it because we see green shoots where we can build on long-term growth. Now we’re going to be — we’ll make some sticks as we go along, but this is the rule of the game, right? We have to experiment. We have to try out things, some things will work, some things will not, but we will really short change ourselves if we don’t go for it and we’re going to make sure that we make every rupee stretch. We’re going to be focusing on cost efficiency along the way, but our main focus is growth because in growth lie answers across the board.

So as investors, analysts and the larger financial ecosystem, I would just urge you to look at us as a long-term play for rural India. If you believe in rural, if you believe in growth in digital in rural, I’m sure you will believe in us at DiGiSPICE. Thank you so much for taking out the time. I’d like to thank my colleagues who joined me on this call to answer questions. Thank you, Shiv, for helping us set up this call and coordinate everything. Please stay connected, tuned in. We are all reachable. We are a call away. Please do call us at anytime and we’re more than happy to get ideas, suggestions, clarifications. We are on this journey together. Thank you so much.

Operator

[Operator Closing Remarks]