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.