Infibeam Avenues Ltd. Announces Financial Results for Q3 FY24

Highest ever quarterly Gross Revenue of INR 9,120 million in 3Q FY24, up by 120% YoY

Payments business incrementally added over INR 1 billion Gross Revenue in a single quarter.

Highest ever quarterly EBITDA 3 of INR 690 million, up by 45% YoY.

Highest ever PAT 3 at INR 421 million, up 64% YoY.

Company Board approved 49.50% equity acquisition in So Hum Bharat; post-acquisition, it would become wholly owned subsidiary of Infibeam Avenues Ltd.

Bengaluru, January 23, 2024 – India’s first listed software platforms and payments infrastructure company, Infibeam Avenues Limited (“Infibeam” or “The Company” or “IAL”), (BSE: 539807; NSE: INFIBEAM), has today announced its financial results for the second quarter ending December 31, 2023.

Consolidated Financial Highlights (INR million)

Particulars

Q3 FY24

Q3 FY23

Y-o-Y

9m FY24

9m FY23

YoY

TPV 1

1,810,197

1,035,916

75%

47,78,027

29,69,478

61%

Gross Revenue

9,120

4,147

120%

24,442

13,097

87%

Net Revenue 2

1,128

846

33%

3,224

2,368

36%

EBITDA 3

690

475

45%

1,926

1,300

48%

EBITDA margin 3 4

61.2%

56,2%

59.7%

54.9%

Profit After Tax (PAT) 3

421

257

64%

1,121

615

82%

PAT margin 3 4

37.3%

30.4%

34.8%

26.0%

1 Includes i) Payments TPV [CCAvenue India and International + BillAvenue + Go Payments] + ii) GeM platform TPV.

2 Net Revenue = Gross Revenue – Direct Operating Expenses (predominantly payment processing revenue collected on behalf of ecosystem partners)

3 Excluding the notional impact arising from mark-to-market gain / (loss) from investment in listed security [this has no impact on cash flows]

4 as percentage of Net Revenue

Consolidated Financial Performance Review:

Infibeam Avenues Ltd has reported robust consolidated gross revenue of INR 9,120 million, accompanied by a Profit After Tax (PAT) of INR 421 million in the third quarter of FY24. The Q3 FY24 gross revenue witnessed a remarkable increase of 120%, and Q3 PAT saw a substantial growth of 64% compared to the corresponding quarter of the previous financial year. The EBITDA also exhibited noteworthy growth of 45% Year-over-Year (YoY) to INR 690 million.

The company’s robust performance in PAT further underscores its strong operational capabilities. This notable third-quarter growth is attributed to the festive season and the increasing adoption of CCAvenue payment solution by the merchants. The third quarter, being a festive period, witnessed a surge in financial transactions. The increased transactions (TPV) were predominantly driven by growth in the hospitality, travel, telecom, airline travel, and hotel sectors. The TPV rose by 75% YoY, reaching INR 1,810 billion, with payment TPV increasing by 32% to INR 709 billion and platform TPV by 134% to INR 981 billion, during the third quarter.

In Q3 FY23-24, the company’s India payment net take rates remained stable at 8.5 basis points, same as the previous quarter, but higher compared to the same quarter of last year. Company’s India payments business thus continues to grow without compromising on profitability. A constant rise in the number of merchants has been a key contributor to Q3 growth, with approx. 228,000 merchants added during the quarter, averaging approx. 2,500 daily. The company attributes this growth to the growing relationship with the bank partners, and the impact of the RBI licensing regime, setting high standards for fintech players and creating significant entry barriers for new players.

Comments:

Chairman & Managing Director, Mr Vishal Mehta:

” Over the past several years, we have been forward investing in new technologies and have successfully continued our upward growth trajectory. Whether it is in the case of our payment business vertical or platform business vertical, we have been tireless in our efforts to innovate and grow. Now, we have added Artificial Intelligence (AI) as a horizontal business vertical supporting Platforms and Payments. This is a significant milestone for us, and we believe that it will completely change the way businesses are done by us. With the confidence in this new addition propelling us, we aspire to reach new heights, sustaining our upward growth trajectory.

Our third quarter (Q3) has witnessed strong growth, and we expect the same for the coming quarters. However, taking a long-term view after adding AI as our new major business growth driver, we expect to scale our revenue and profits. We are excited about the future and look forward to continuing to innovate and grow.”

Joint Managing Director, Mr Vishwas Patel:

“Infibeam Avenues Ltd has witnessed overwhelming growth in Q3, on the back of growth in platform and payment businesses. We expect to see more action in the coming years in the payment space, as our innovative payment technology – CCAvenue TapPay – is increasingly gaining its foothold in the domestic market. CCAvenue TapPay, which is a digital PoS, has been at the forefront of transforming the way merchants collect money from their customers.

We have evolved with new strategies to scale up the CCAvenue TapPay through tie-ups with third-party vendors, and in this Q3 we are already tasted the success of this strategy. We expect this strategy to pay handsome dividends in the form of extraordinary business growth in the payment space in the coming quarters and years to come. We are confident that our innovative payment technology will continue to drive our growth and help us achieve our long-term goals.”

Board Resolution:

The board of Directors of Infibeam Avenues Ltd has approved to acquire 49.50% equity from the existing shareholder of So Hum Bharat Digital Payments Private Limited which has applied for RBI’s New Umbrella Entity license for retail payment systems with consortium partners. Post-acquisition, So Hum would become the Wholly Owned Subsidiary of Infibeam Avenues Ltd.

Expect to achieve FY23-24’s Financial Guidelines:

The company maintains its Financial Guidance for FY24 of, INR 30,000-33,000 million of Gross Revenue, INR 4100-4150 million of Net Revenue, INR 2300-2350 million in EBITDA and INR 1,300-1,500 million of Profit after Tax.

Growth factors:

‘Revenge tourism,’ initially identified as a post-Covid trend, has now solidified into a new normal, significantly contributing to the continuous rise in spending within the travel and hospitality sector, thereby benefiting Infibeam Avenues Ltd. The tourism-related expenditures have played a pivotal role in driving transaction growth (TPV), and this trend is anticipated to persist for years to come.

Noteworthy contributions to the company’s growth have also stemmed from sectors such as retail, grocery, education, and utilities. The Reserve Bank of India’s (RBI) licensing regime for bill payment businesses implemented last year has streamlined the industry by eliminating unlicensed players and reducing discount-related challenges. This has enabled the company’s digital utility bill collection brand, BillAvenue, to experience substantial growth. Post-pandemic, the cash payment for utility bills continued to remain low and thus the online digital bill payments have demonstrated a consistent upward trajectory.

The CCAvenue TapPay, the contactless payment solution, is progressing towards wider reach as we witness surge in adoption of CCAvenue TapPay in domestic markets, with more and more merchants using the technology through online and offline channels.

In the offline version, the company enrolls merchants through third party white labeling, including banks and other fintech players, who, in turn, introduce their own clients to CCAvenue TapPay under their own brand names. An exclusive arrangement, where Chalo app has integrated CCAvenue TapPay technology for payment collection in Mumbai’s public transportation service -BEST, benefiting an estimated 2.5 million daily passengers

The platform business has also significantly contributed to the overall TPV growth. Additionally, the company’s strategic decision to introduce QR code payment acceptance in the UAE has also resulted in TPV growth for the company’s international business. The expansion of international business in the MENA region, coupled with the introduction of CCAvenue TapPay for front-end merchants, will allow company to scale faster in UAE followed by Saudi and other markets of the MENA region.

The company’s increasing presence in the MENA region, and partnerships with major banks utilizing CCAvenue payment infrastructure, has facilitated the introduction of QR code facility in UAE market. Recently, CCAvenue.ae, payment gateway has enabled its merchants in UAE with QR code scanning for payment acceptance and it has gained traction in the UAE market, contributing to the company’s increasing international TPV.

Future high growth under progress:

Building on its earlier commitment to Artificial Intelligence (AI), the company has made significant strides in Q3 to establish an AI-Hub at GIFT City, Gandhinagar, naming it as ‘Phronetic.AI,’ and strategically acquiring a building in Ahmedabad to extend this hub.

To steer AI venture, the company has appointed a CEO, Mr. Rajesh Kumar, ex-Meesho Director of Machine Learning. The company has also inked an INR 20,000 million MoU with the Gujarat Government at the Vibrant Gujarat Global Summit held in early January 2024.

To enable future high growth, the company, which processed transaction worth US$54 billion in FY23, expects to witness an increase in its payment processing business through its entry into capital market software tech space as it made strategic investment in Pirimid Fintech. Currently, the company is actively engaged in developing innovative AI products and services and expects to position itself as a key player in the dynamic AI landscape. The company aspires to touch USD 1 Billion revenue (approximately INR 83 billion) company by the end of March 2026.

Other key updates:

⮚ Company forays into capital market software tech space, by acquiring 49% in Pirimid Fintech. Infibeam Avenues Ltd to invest INR 250 million to acquire a substantial stake.

⮚ Infibeam Avenues’ subsidiary has planned GIFT City AI-Hub expansion by acquiring building in Ahmedabad.

⮚ Infibeam Avenues Ltd christened its AI-Hub based at GIFT City, Gandhinagar, as ‘Phronetic.AI’.

⮚ Company appointed Mr Rajesh Kumar SA, ex-Meesho Director of Machine Learning, as the CEO of its AI business vertical- Phronetic.AI .

⮚ Company inked INR 20,000 million MoU with the Gujarat Government at the Vibrant Gujarat Global Summit held in January 2024.

⮚ Infibeam Avenues Ltd was bestowed with the honour of Fortune India ‘The Next 500 Award’, acknowledging its status as one of India’s top emerging companies in the IT and Fintech sector.

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