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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.
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