Infibeam Avenues Ltd Q3 FY24 Earnings Conference Call Insights

Key highlights from Infibeam Avenues Ltd (INFIBEAM) Q3 FY24 Earnings Concall

• Payments Business Growth
  • India payments revenue crossed INR 500 million mark for the first time.
  • India payments TPV increased 34% YoY to INR 663 billion.
  • Added over 200,000 merchants in the quarter, averaging 2,500 per day.
  • Incrementally added INR 50 billion in transaction processing volume.
• Financials
  • Record high EBITDA margin of 61.2% and PAT margin of 37.3%.
  • Standalone EBITDA margin 67% and PAT margin 42.4%.
  • PAT increased 64% YoY to INR 42 crores.
  • Focus on profitable growth without compromising any metrics.
  • Consolidated margins amongst best in industry and better than top players.
  • Gross revenue crossed $100 million in a quarter for the first time, driven by 147% YoY increase in India payments revenue.
• AI Investments
  • Launched India’s first AI hub Phronetic.ai at GIFT City.
  • MoU with Gujarat government for INR 20 billion investment.
  • Focus on enhancing efficiency, security, customer experience.
• Market Share Gains
  • Credit card TPV contribution increased from under 50% to 53-55%.
  • Market share in credit card spends rose from 9% to over 10%.
  • Higher TPV and improved take rates driving growth.
  • RBI ensuring only serious players get license in payments, reducing competition.
  • Not compromising on payments revenue for lending revenue.
  • Banking on AI for security, efficiency, fraud prediction.
• Growth Outlook
  • Added 0.25 million merchants in Q3, will continue focus.
  • International revenue potential to reach 25-30% in 2 years from 6-7% now.
  • TapPay showing promise through partners like Chalo app.
  • Currently processing AED1 billion per month in UAE.
  • Aiming to scale merchants from 7,000 to 70,000 in next 12-24 months.
  • UAE business has double digit bps take rate.
• International Expansion Strategy
  • Currently scaling up international business which impacts take rates.
  • Huge growth opportunity seen in international markets.
  • Investing in each market for data localization and licensing.
  • International revenue share target is 25-30% in 2 years from 6-7% currently.
  • Tailored strategies for large markets like US and Australia.
  • Leveraging strengths like entertainment and hospitality verticals.
• New Products Using AI
  • Launched Visual AI product for video KYC in beta mode.
  • Will publish AI frameworks in next 1-2 quarters for community use.
  • Also building enterprise products for banks and financial institutions.
  • Large opportunity to monetize AI products across sectors.
• AI Hub Strategy
  • Using AI to help small retailers with inventory management.
  • Leveraging CCTV cameras for visual AI object detection.
  • Can identify inventory levels and share data across platforms.
  • Phases focused on getting statistically significant retailer participation.
  • Goal is high accuracy in small object identification.
• GeM GMV Trends
  • Quarterly fluctuations in GeM GMV are not unusual.
  • Overall strong growth, accomplished more in 9M than full last year.
  • Typically see strong Q4 for GeM given elections and incentives.
  • Expect continued growth in coming quarters.
• So Hum Investment
  • Acquiring remaining 49.5% stake in So Hum for INR 45 lakhs.
  • So Hum applied as consortium for NUE retail payments license.
  • Yet to hear back from RBI on NUE license bids.
  • Investment makes So Hum a 100% subsidiary.
• Pirimid Fintech Rationale
  • Pirimid builds low latency frameworks for lending and trading.
  • Looking to integrate payments into their platforms.
  • Opportunity in real-time capital markets settlements.
  • Allows customized AI models for each client’s vertical.
  • Fits into INFIBEAM lending strategy with large merchant base.
• ERP Customers
  • Currently showcase clients like JMG and Sony.
  • In process of onboarding more ERP customers.
  • ERP business poised for expansion with new clients.