Release Date: February 04, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Infibeam Avenues Ltd (BOM:539807, Financial) reported an 18% year-over-year growth in gross revenue for Q3 FY25, driven by strong transaction volumes and increased adoption of payment solutions.
- The company achieved a 28% year-over-year increase in net revenues and a 15% rise in EBITDA, reflecting operational efficiencies and improved margins.
- Infibeam's acquisition of a controlling stake in Rediff has provided a platform to expand into consumer payments and financial services, with plans to offer UPI services upon approval.
- The company is investing in AI-driven solutions and data center infrastructure, with AI expected to contribute 5% to 10% of net revenue in the coming years.
- Infibeam Avenues Ltd is expanding its presence in international markets, with significant strides in the GCC region and plans to capture a larger share of the digital payments market in Saudi Arabia.
Negative Points
- Despite the growth in revenue, the company's EBITDA margins have shown some compression due to customer acquisition costs and forward investments in AI initiatives.
- There is a slight decline in quarter-over-quarter TPV, attributed to competitive pressures and strategic decisions to optimize for cash flows rather than TPV.
- The company faces challenges in the competitive digital payments industry, with downward pressure on margins due to competition from players like Razorpay and PayU.
- Infibeam Avenues Ltd has not budgeted any income from UPI for the last two calendar years, and there is uncertainty regarding UPI incentives from the government.
- The integration of Rediff into the company's financials has added bandwidth costs and other expenses, impacting overall profitability.
Q & A Highlights
Q: How does Infibeam plan to convert Rediff's large but not necessarily tech-savvy audience into financial services customers?
A: Vishal Mehta, Chairman and Managing Director, explained that Rediff has millions of daily active users, and the strategy is to migrate these users to a super app that integrates payments and financial services. The focus will be on maintaining security while adding layers for financial transactions, leveraging the existing user base without significant capital expenditure.
Q: With the growing demand for Buy Now, Pay Later (BNPL) solutions in Saudi Arabia, is Infibeam planning to integrate with established players or develop its own solution?
A: Vishwas Patel, Joint Managing Director, stated that CCAvenue is neutral to payment options and integrates all available methods, including BNPL. The goal is to provide merchants with all possible payment options, earning revenue from transaction processing fees.
Q: What are the implications of the government reducing UPI incentives for the payments ecosystem?
A: Vishwas Patel noted that Infibeam has not budgeted any income from UPI incentives for the past two years. He mentioned that government budget allocations and actual disbursements often differ, as seen in previous years.
Q: How does Infibeam plan to expand its market share in the competitive digital payment industry, especially against players like Razorpay and PayU?
A: Vishal Mehta highlighted initiatives like Express settlement and the introduction of Soundbox for offline transactions, which offer better margins. The focus is on expanding the merchant base, particularly among small merchants, to drive growth.
Q: What is the revenue potential of Infibeam's recent partnerships in Saudi Arabia, and are there plans to expand to other enterprise clients?
A: Vishwas Patel emphasized Saudi Arabia as a key growth market due to its wealth and digital payment potential. Infibeam has secured a license from the Saudi Arabian Monetary Authority and is actively pursuing opportunities to capture a significant market share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
