WSFX Global Pay Limited (BSE: 511147) Q2 2025 Earnings Call dated Nov. 13, 2024
Corporate Participants:
Srikrishna Narasimhan — Whole-Time Director and Chief Executive Officer
Pooja Mishra — Chief Financial officer
Analysts:
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good evening, and welcome to investors call of WSFx Global Pay Limited, formerly known as Wall Street Finance Limited. [Operator Instructions] Please note that this conference is being recorded.
Material and information in this conference call is general background about the company’s activities as at the end of this presentation. Information in this presentation should not be considered as advice or recommendation to investors or potential investors in relation to holding, purchasing or selling securities and does not take into account your particular investment objectives, financial situation or needs. This information is given in summary form and does not support to be complete.
I now hand the conference over to Mr. Srikrishna, Narasimhan, CEO and Whole-Time Director; and Ms. Pooja Mishra, Chief Financial Officer. Thank you, and over to you, sir.
Srikrishna Narasimhan — Whole-Time Director and Chief Executive Officer
Thank you. Good evening, everyone. This is Srikrishna here, along with Pooja. And it’s pleasure once again to connect with our investors and present WSFx’s performance for the quarter and half year ended September 30, 2024.
I would like to take you through a small presentation of the company about its performance as of September 30, 2024, and its various digital initiatives. We already uploaded the presentation on the company’s website as well as on BSE website.
Now we go to the presentation. So we’ll start with a brief introduction about the company. So I would like to talk about the position which we want to — or the mind space which we want to occupy and which we have already started doing. We are India’s leading Forex fintech focused on students and corporates. As you are aware that these are two key segments which WSFx has always concentrated on, and we are proud to say that we have got significant share in these segments.
As a company, we are a regulated fintech. We have got digital platforms. We are omnichannel. We have physical branches of 31. We have a 325-plus strong team. From a business perspective, we have 700-plus corporates dealing with us, 500-plus B2B partnerships. We served over 100,000 customers last year. 57% of this business is through digital channels. And the primary product which we sell is Forex cards, foreign currencies and facilitating cross-border payments under LRS. So we have a strong partnership with banks. Some of the banks we have listed, which are Yes Bank, HDFC Bank, ICICI Bank, IDFC Bank, IndusInd Bank, et cetera. We have multiple partnerships and a very strong partnership with banks.
We go to the next slide, where we talk of the digital products and solutions. So we can see we are transforming the Forex ecosystem. We have platforms for every segment. We have a platform for corporates, which we call the Smart Corporate platform. We have a platform for agent partners to facilitate — to do order processing or lead management. That’s called Smart Agent platform. We also have FPaaS Global Pay platform, which can enable an agent partner to facilitate Forex services through his online offering. We also have our own B2C portal and app, WSFx Global Pay. Besides this, we also have our own BIN-sponsored card co-branded with Yes Bank, which has been a very successful product for us. We are happy to say that 57% of our GTO is through digital channels and process automation.
Coming back — coming to the next slide. We are very happy to launch our WSFx Global Pay card. This should be available to public by Christmas. This is one card where we are doing it in association with Visa. There are a lot of segment-first features which we are trying to incorporate in this card. This also allows us to get into card distribution as we are the principal who is issuing the card. And this is supposed to be a big growth pivot for WSFx. So in one sense, we now move from a fintech platform company to also a card principal. So this is going to be a major growth pivot for WSFx.
We come to Q2 and HY1 performance. The highlights are: we are happy to say we had a very good Q2. We did a PBT, profit before tax of INR3.14 crores. And for the half year, we ended up with INR4.18 crores. So we are very happy to say for the first half year, we ended up with a PBT of INR4.18 crores, surpassing our annual PBT of last year of INR4.12 crores. The team has worked very hard, and we are very happy to give these numbers.
Now coming back from a turnover perspective. In Q2, we did INR2,151 crores of turnover. For the half year, it was around INR3,482 crores. Net revenue was around INR13.15 crores. And for the half year, it was around INR32.51 crores.
So what was significant in HY2, as I already said, we are launching our WSFx Global Pay card, which is a direct model with Visa. We also grew digitally with 57% of GTO driven by digital channels. We got our PCI DSS certification, which is very important as a card issuer. We also opened two branches, one in Panjim and one in Vijayawada.
Of course, there were headwinds from the student segment. As you are all aware that there have been visa restrictions, particularly in places like Canada, Australia, which has impacted the student segment. Earlier, there has been a challenge also from the TCS side that TCS has gone up to 20%, which has also changed the consumer behavior in terms of sending family maintenance and gift remittances. These are certain headwinds, but because of the kind of an effort we have put in, we have been able to grow despite the market being affected as of now by these regulatory changes and also because of certain macroeconomic factors.
One thing I would like to add, if you really look at it, we took a strategic direction of focusing on students and corporates and also on digital platforms, which has actually worked in the company’s favor. And today, WSFx three years back took a call on wholesale, where we stopped our wholesale business, which accounted for 30% of our revenues. Today — we stopped wholesale three years back, and we are happy to say that today, without wholesale, we have crossed around 2x of our GTO when we look at it from that perspective.
Next slide, we compare — we give a comparison on our quarter-to-quarter performance. When you look at Q2 to Q1, our gross turnover grew by 77% and our PBT, which is at INR3.14 crores from INR1.03 crores, there was a growth of 204%. When we compare with Q2 of this year with Q2 of last year, we grew by 29%. Obviously, Q2 was a peak season for us because maximum students travel during this period. So our PBT of INR3.14 crores against last year same quarter of INR2.44 crores, 29% growth. If we compare half year to half year, last half year, we were at INR2.55 crores PBT. This year, we are at INR4.18 crores, which is a 64% growth. So there has been an overall growth in business.
We go to the next slide. This, in general, gives a comparison of the last six quarters, where it’s more of a trend where we have highlighted how we have been growing across our revenues and our PBT.
The next slide gives a comparison of the last eight quarters of the gross revenue, net revenue and selling, general and admin expenses. This again is a trend which we would like to highlight is: we have been driving our revenues; we have also kept a tight control on cost, thanks to a highly scalable digital model where the stress is on digital platforms and process automation. This is obviously working in our favor where we are able to drive higher revenues at lower costs.
We come to the next slide, which talks of one of our key segments, the student segment, where we — the major business is for university fee payment and living expenses. This is a big market, $3.5 billion was last year’s volume. We are — so we are happy to say we have a significant chunk of this business. Obviously, this is a market which is slightly affected now because of certain countries imposing a lot of restrictions on students that is going to have an impact this year. But we are happy to say we have been growing year-on-year on this segment despite these headwinds. We have got a 500-plus strong B2B network of agents in which around 250 study consultants we have.
We have a platform for our consultants. We also have a lot of solutions for students, which include university fee payments, Forex cards, currencies, GIC opening — bank account opening for GIC, block accounts, travel insurance, et cetera. So to give you an idea, last year, we serviced around 36,000-plus students. We did some 63,000-plus remittances. We have 250-plus consultants who give business to us. And we had a 73% growth year-on-year, and we expect to continue with these trends.
Next key segment is the corporate or business travel segment. This is something which got affected during COVID. But slowly, the business volumes are coming back. We have focused on it clearly because it represents a good opportunity for us. Today, we are happy to say we service companies like Accenture, Siemens, Ernst & Young, Zoho, Tech Mahindra, Reliance, LTIMindtree, Godrej, Titan, et cetera, the list is growing. We have 700-plus corporate customers onboarded and who deal with us for the foreign exchange requirements. We have shown a year-on-year growth of 52%. And overall, if you look at the quarter-on-quarter also, we have been growing in this segment.
The third important segment, which we have started focusing on has been the retail segment because earlier, as a company, we only focused on corporate and students. Now retail has grown, while there has been headwinds in other segments, retail as a segment, despite having a smaller ticket size is growing by leaps and bounds. In fact, the travel market size is around INR12 billion. Personal remittance market is around INR6 billion. So we have got platforms for that, and we are now trying to create a big distribution network to cater to this opportunity. Here also, we have started growing this opportunity. And we will be focusing more on this segment as we feel this is a big growth area for WSFx. And here also, we have shown around 53% growth year-on-year.
Next slide, we come to our Forex cards growth. Obviously, because of the optimism in this product, we are launching our own card also and also opening up distribution there once we launch our card. So if you see the last eight months, eight quarters cut trend, it has been always a growth trend. Obviously, Q2 numbers, there will be always a spike because that’s a major high season for students. Year-on-year, we have grown by 106% in this segment.
Now we talk of outward remittances growth. Here also, you will see a spike on Q2 because of high season of students. But if you see overall, we have been growing quarter-on-quarter, when we compare this quarter with the previous quarter, we have been showing growth. And from a base year, which was in 2018, ’19, we have shown 627% growth. So this has been a major success story for us with around 60%, 65% of our business coming from remittances.
The next slide gives the financial results. We closed with a PBT of INR3.14 crores and for the half year at INR4.17 crores.
Then we go to the next slide, where we talk of what is special about WSFx. We are in regulated space. We are also a listed entity. So there are certain things which are very dear to us, that is corporate governance. We have our Boards, Independent Boards. We have a strong system of audits. Compliance is key because in our business, compliance is everything. So we have a lot of system-level controls, risk assessments. We also have one of the ISO 27001 certified. We are a PCI DSS company, which takes care of information security. It’s a very process-oriented organization with strict compliance. That is very important, business hygiene.
Besides that, we are also totally invested in digital. We have an omnichannel network of 21 branches and digital platforms, continuous automation of processes, some way or other and also cost optimization. Last, but very important is customer centricity. We are trying to build a kind of a trust by our transparent pricing. We have tried to give a good uniform customer experience. And we also have good expertise in handling large volume corporate relationships also. So the base of this is trust, transparency, convenience and compliance. This is what kind of a value which we try to drive, which we try to inculcate in every team member.
If you go to the last slide, the way forward. As we always say, besides whatever we are doing, one of the things we are very clear is our consistent focus, unwavering focus on the vision, which we have, one is the digital-first approach where we have kept on investing in digital and building platforms, which has started becoming favorable for the company’s growth. We are also geared up for FXC model. As and when RBI approves, we will use the model for geographical reach through distribution network.
Leisure. Leisure has become a big focus for us, retail and leisure, personal remittances and leisure travel. And we have got a platform for — our app for leisure travel with a complete digital process, we will invest on this through more marketing efforts, and that is something which will be a key focus area for us in the next couple of quarters.
We are also going to apply for a PA-CB license, which gives us a kind of a stake in terms of the trade remittance. This is an application which we plan to apply. Board has approved for that. And that is one pivot for future because as a payments company, we want to be both in the cross-border remittances for personnel and as well as trade remittances.
One other important sector is student. Student has always been very important to us. We have a significant market share in the student remittance business. We are trying to innovate there by adding more products, creating more solutions, creating maybe a fee payment platform. These are all things we are working on there. The biggest launch in Q3 and early Q4 is our prepaid Forex card issuance, the direct issuance in [Indecipherable] in tie-up with Visa. This will be a very, very, very big growth pivot for the company in the future.
So the mantra for the company is being asset-light using the digitization, digital model, scalable, increasing revenues, reducing costs and also have a very efficient mechanism in place. The motto is building innovative Forex and payment tech products and solutions and create true value for all its stakeholders. So we are dedicated, we are committed to creating value.
So with this, I would like to come to the end of this presentation. Thank you. Thank you, everyone, and I would like to now hand over the conference to the moderator. Thank you.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of Aniket Gada [Phonetic], an Individual Investor. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Srikrishna Narasimhan
Yes, yes. Yes, Aniket.
Unidentified Participant
Hi, Sri. Congrats a good set of numbers. I wanted to ask your perspective on the second half. Like how is it looking for students and travel as well as business, corporate?
Srikrishna Narasimhan
Pardon, I didn’t get it.
Unidentified Participant
I wanted to ask your perspective of how the second half could look like for all the three sectors that you are servicing.
Srikrishna Narasimhan
So see, when you look at it, students has been a boom, uninterrupted boom over COVID period also, we had student business. But first time we are having headwinds in student segment, especially from Canada. I think it’s all over the papers about restrictions imposed. Recently, they also withdrew the special scheme where GIC was required. So Canada market is however down. In fact, it’s down in a big way, and that is going to definitely impact the students business. But obviously, the same level of impact is not there on the other geographies. Maybe you can say Canada and Australia to a certain extent. But Canada has been the major impact. We are hoping that this will be offset by growth in other geographies. Obviously, when there is a macroeconomic change, there will be an impact. So we do feel that Canadian business will leave an impact on the next six months or it may continue for the next 12 months also depending on the geopolitical situation on the — especially for Canada.
As far as corporate is concerned, it has been slow growth post COVID, but it is growing. We have seen quarter-on-quarter, things have improved. And we have been more focused on students earlier. Last two years, we focused on corporate and we have gained our market share. So we feel optimistic on corporate growth where we will try to offset some of the dips in the students business.
Leisure is something which is growing by leaps and bounds. Everyone is traveling. In fact, the thing is that India is more expensive. Traveling within India is more expensive than going overseas. So a lot of people are traveling. And that is why we have also started focusing on leisure segment in a big way, which was not our strategic focus over the last couple of years. Now we are trying to build solutions, create tie-ups, in fact, working on the digital proposition to attract more of leisure business and personal remittances business.
Unidentified Participant
So like when we are talking about all the three sector — segments and we have [Indecipherable] and students, especially from Canada, Australia, even U.K. and UAE also. I just wanted to ask like what are you seeing over the — like [Indecipherable] habits of Indians traveling abroad and studying abroad with regards to products like what they are like looking for like prepaid cards, wallets for international or any other products they’re you’re looking for? And maybe we can focus on that. Any habits you’re picking up?
Srikrishna Narasimhan
I couldn’t get the later part of your question.
Unidentified Participant
So I’m just asking like are you picking up on any trends of how they are — like what products they are using for traveling abroad or studying abroad? Like maybe they are using for prepaid cards or wallets or maybe just remittances [Speech Overlap]
Srikrishna Narasimhan
So essentially, the major impact will be on remittances because Canada is more about university fee payments and GIC payments. That will get impacted to a certain extent. In fact, last year, if you look at it, average 7.5 lakh to 8 lakh students would have traveled overseas. Of course, there are figures which goes up to 12 lakhs, some figures tells about 8 lakhs, but let’s assume an average of around 8 lakhs. We expect this time there will be a dip from 8 lakhs figure to maybe 650,000 or 6 lakhs. There will be a 20%, 25% dip in the number of people traveling. It is an expectation. Considering what is happening as of now, only in the end of the year, you know what is the exact figure. But obviously, this will have an impact on the student remittances, especially to Canada. Because Canada, there was no great card volumes happening. It was more about remittances only.
Unidentified Participant
Okay. And like what’s the market share in the students category?
Srikrishna Narasimhan
I didn’t get it.
Unidentified Participant
Like what’s our market share in students — like remittance category? Like how much are we capturing of the total size?
Srikrishna Narasimhan
Last year, if you seriously look at it from an LRS perspective, we command a significant share, maybe around 10% to 12% or around 12% to 15% of the market we would be covering, especially when we take it from a LRS perspective, from LRS data to what we are doing, our percentage will be anywhere between 10% to 15%.
Unidentified Participant
Okay. And like — or regards to your PA-CB license, like we have still not applied for it, right, for RBI?
Srikrishna Narasimhan
Yes, yes. We have just taken an approval. We updated at the Board meeting, we have taken approval because we deliberated and we felt it’s consistent with our strategic vision. And we also did some research, and we felt it’s a good opportunity to get in. So we are going to apply for it because as a listed company, we always are very transparent on what we are doing. So that’s why we have disclosed it that our intent and Board has approved our decision to go ahead with the application.
Unidentified Participant
And how long do you think would the approval be coming from RBI after applying for that?
Srikrishna Narasimhan
It’s a process. We don’t know. See, with RBI, they will do their own scrutiny. It’s a process. A lot of steps are involved, maybe anywhere between — it may take three months, six months, nine months, 12 [Phonetic] months also. So we can only fulfill the requirement, and then it is up to the regulator to decide and grant the license. So there’s no time frame I can say there.
Unidentified Participant
Because we are AD2 category license. So I think like I thought like maybe we can get it faster because we already have AD2 license from RBI.
Srikrishna Narasimhan
See, we are — while we are optimistic about our chances, we cannot comment on the time line because that’s not entirely no with — in our purview.
Unidentified Participant
And could you just talk about like the trade remittance to PA-CB license? Are we looking only for like imports or exports or like what we are looking for? Because there’s a transaction value of, I think, INR25 lakhs per unit. Like…
Srikrishna Narasimhan
So previously, this was a category called OPGSP. Now it’s called — RBI has made it into PA-CB. All the OPGSP also has to become PA-CB. Earlier, the limits were very low, maybe INR10 lakhs, $10,000 and $2,000. Now it’s got, I think, increased to INR25 lakhs per transaction. And there is a growing opportunity. A lot of people have gotten around four PA-CBs already there, RBI granted licenses. We feel this is a good opportunity to look at and it also gives us a way to access the trade remittance market. So as I said, we look at it, we feel it’s an opportunity which is consistent with our vision, and we are getting in.
Unidentified Participant
Hello?
Srikrishna Narasimhan
Yes.
Unidentified Participant
So wouldn’t it overlap with our corporate clients we are already looking after?
Srikrishna Narasimhan
So essentially, today, we are in personal remittance space, business travel space. We are under a category called LRS, right? We do personal remittances. We also do business travel [Foreign Speech] Forex. So from a product wise, there is no cannibalization or overlap. Obviously, in certain places, there can be synergy because some of the customers may require this service also.
Unidentified Participant
So it won’t be like — we won’t have to like — what I mean to say we won’t have to look for like — aggressively look for customers because you already have a large corporate base who’s already a client?
Srikrishna Narasimhan
Yes, the nature of the customers are a little different. Here, it will be more SMEs or exporters, small time exporters, et cetera. We have a team. We have 21 locations. We have a team. We have a digital team also to build up the solutions. So we feel that since we have the infrastructure and that thing, we should be able to scale up very fast.
Unidentified Participant
And regarding the WSFx prepaid card. [Technical Issues]
Srikrishna Narasimhan
Pardon. Hello?
Operator
It seems like our current participant got disconnected.
Srikrishna Narasimhan
Okay.
Operator
[Operator Instructions] The next follow-up question is from the line of Aniket Gada [Phonetic], an Individual Investor. Please go ahead.
Unidentified Participant
I’m sorry, I got cut off. I just wanted to ask like on the — regards to new card that we are going to launch, do you have any target for this?
Srikrishna Narasimhan
Pardon.
Unidentified Participant
The targets, like how many cards we are going to issue and like the revenue from it for the current year?
Srikrishna Narasimhan
No, I didn’t get the question.
Unidentified Participant
We are going to issue like WSFx Global Pay card with cooperation with Visa. So I just wanted to ask like what kind of revenue we are looking forward from it?
Srikrishna Narasimhan
So essentially, as I said, that’s something which I don’t want to disclose here. But the question is that this is going to be a — see, today also, we are selling cards, right? We are selling a huge volume of cards, 20% of our turnover comes from cards. So obviously, when we launch our own card, we want to drive the — our share of market, right? So initial period [Foreign Speech] obviously, a couple of months, it will be a little slow because the card will be launched, it will be — you can say initial period will be a little slow for our own card because we’ll get it tested properly. People will be using it and all. And after that, we will drive volumes. Idea will be to drive the volumes and get a market share.
Unidentified Participant
So like finally, what is the current yield for a transaction, average yield?
Srikrishna Narasimhan
Average yield goes anywhere from 0.5% to 1% when we talk of a net yield. So it can even go to 0.5% to 1%, 1.5%.
Unidentified Participant
Okay. Because I was looking at the website, the top five currencies are like 0.5% markup. So I was just wondering what’s the yield, average yield for the company?
Srikrishna Narasimhan
So essentially, that’s what I told you, anywhere between 0.5% to 1% is what the markets operate on.
Unidentified Participant
Okay. And finally, on a [Technical Issues] question, like there has been jump in the receivables. Have we lacked the credit period for clients?
Srikrishna Narasimhan
Pardon, can you repeat it?
Unidentified Participant
There has been a jump in receivables, a large — fairly large jump in the receivables. Have we like relaxed some credit period for clients?
Srikrishna Narasimhan
No, no, nothing like that. See, whenever there is a peak season, there is always a time difference before — as I said, we handle huge amount of remittances. We handle huge amount of corporate business. So these are all short-term credits which come in. And the volume also has gone up considerably. Every September, you will see this happening because of seasonality.
Pooja Mishra
If you see the creditor side, the creditors and advances from customers are also huge. So it is just the cycle which takes that one or two days, which takes for processing, it is only that amount. It is not something which is the old outstanding. It is the all within the due dates.
Unidentified Participant
And it’s like two days, like one or two days differences.
Pooja Mishra
Yes. Exactly. Yeah, exactly.
Unidentified Participant
Okay, thanks a lot for answering all my questions.
Srikrishna Narasimhan
Thank you.
Operator
Thank you. [Operator Instructions] As there are no further questions from the participant, I now hand the conference over to Mr. Srikrishna and Ms. Pooja Mishra for closing comments.
Srikrishna Narasimhan
Thank you. Thank you. Thank you, everyone, for joining us. And if you have further queries, please visit our website or you can reach out to our Company Secretary, Ms. Khushboo Doshi. I now request the moderator to conclude this call. Thank you.
Operator
[Operator Closing Remarks]