Network People Services Technologies (NSE:NPST) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, welcome to Network People Services Technologies Limited Q1 FY twenty twenty seven Earnings Conference Call hosted by Valorum Advisors. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Ms. Prawangi Jain from Valorum Advisors. Thank you and over to you Ms. Jain. Thank you. Good morning, everyone. My name is Prawangi Jain from Valorum Advisors. We represent the Investor Relations for NPST Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the first quarter of the financial 2027.

0:52 Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward looking in nature. Such forward looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward looking statements in making any investment decision. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks.

1:39 We have with us Mr. Deepak Chanthakur, Chairman and Managing Director and Mr. Ashish Agarwal, Joint Managing Director. Without any delay, I request Mr. Deepak Thakur to start with his opening remarks. Thank you and over to you, sir. Thanks, Prawangi. Hi, everyone. A very good morning and happy to connect with all of you. This being a first quarter result, we would like to share not just the numbers, but the fundamentals set around it and how this will pan out this year as well as the next few years. We believe that companies are built by creating sustainable platforms, solving meaningful customer problems and consistently executing long term vision rather than chasing short term goals.

2:26 We did chase business transformation last year and we continue to make efforts in building stronger platform for a global company you want to see in NPST. We have delivered strong year on year growth, increased our revenue sources, expanded our product portfolio. We have accelerated our international journey, in fact, we have made it a little earlier, and continued investing in future ready AI based technologies. As a result, revenue grew significantly year on year, while the profitability also remained strong despite our ongoing investment for future growth. In last call, like we submitted, we have explained in our financial results that our focus has been multi pronged to take the organization to next stage.

3:12 A, we want to derisk the organization from industry impact due to regulatory landscape changes that brings more stability. Pivot into multiple new products and segment, including Red Tech and AI based Risk Intelligence. Create global footprint and acquire accounts from newer territories and build SaaS based profile to add recurring revenue. We worked our way on all the above directions and now we are seeing funnel as well as results moving in this direction. Although we have brought down the contribution from payment platform like in my last presentation, but any positive move on MDR on UPI will revive this segment. We are closely monitoring the progress for now.

3:59 We may not see immediate impact, but it will have a visible difference. This is how early the industry absorbs. In Red Tech, we have picked up deals in cooperative segment and now we have an order from large PSU as well. So we intend to launch SaaS based subscription for mid to small sized banks that will again give us a larger universe to address. We have been informed in our vision for global foray and here we have been able to capture global account in quarter one itself. Our team is now increasing new account quite frequently due to presence of SaaS based bank in a box model that we invested last year. While historically we have been associated with payments, but the efforts invested last year to diversify has evolved NPST into a broader fintech company, a platform which has capability not just across payments, but also rec tech, banking technology, AI led compliance solution and international digital financial infrastructure drafting.

5:03 Another significant milestone during the quarter has been the continued progress on our international business where we are not just aspiring to get the business, but we now have a revenue contribution coming in. This validates our relevance of the technology which we have built. It is not just in India, but it can go beyond that and demonstrate the scalability of our product across different geographies. International market, we not just look at it as an additional healthiest stream, but we believe it is going to be a strategic pillar for the company going forward. We are consciously investing in product, global business development, artificial intelligence, SaaS infrastructure and skill set survival. These investments although cost today, but they are growth enabler intended to strengthen our competitive position in coming years.

5:54 We will see continued momentum across banking clients, growing demand for regulatory technology, increase in adoption for digital payment, emerging international opportunities and stronger technology ecosystem. Our pipeline remains healthy, our customer engagement continues to deepen and the strategy direction whatever we have given in the beginning of the year that remains unchanged. Coming to numbers, I think if you have gone through it, the year on year uptick has been about 75% in revenue. We closed at about INR61.42 crore. Our EBITDA has grown by 66% and our net profit has gone up by INR53 crore, which is about INR11.4 crore.

6:43 I think that should be good enough. So now I will take questions here on. Yes, probably. Over to you. Thank you very much. We'll now begin the question and answer session. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from the line of Akshay from AK Investments. Sir, my first question is about the revenue guidance. So we had earlier guided that we should be able to grow by around 15% to 20% quarter on quarter throughout the year. But in the first quarter itself, we have regrown quarter on quarter. So what should be the fair assumption on the revenue content? Also, we had guided that we should be somewhere around highest revenue per quarter of around INR 67 crore in the next quarter, but we are still INR 10 crore behind this target. So please put some more color on the growth trajectory going forward.

8:13 Thanks, Akshay. Well, we gave a guidance of about 60% to 70% growth, and that remains unchanged. There is no challenge at all. In fact, I addressed this question in detail in the last quarter itself and I gave the nature of the business. I clarified that. So I would like to reiterate the fact that we brought down our projection in the PPAP segment to just about 5% to reduce the risk associated with that segment. And now we are more of a technology led subscription and the overall solution that we are selling in the ecosystem, which may not have exactly the same nature of revenue every quarter. And that is the reason why I even gave a clarity that you should definitely be looking at yearly numbers that is coming out. So whatever funnels we had, we had that clarity.

9:07 We knew how this is going to work out. And that's why comparing Q4 of last year with Q1 may not be the right approach. You should be looking at how the company is growing year on year and you should be looking at what numbers we are sharing, is this meeting the guidelines. And the answer is yes. We are actually following the same trend. There is no change in guideline. When it comes to the overall numbers, think last quarter we have been able to do about INR68 crores, which we already did when it comes to the highest performing quarter. And it will be due in this year as well. So the triggers coming in, the numbers coming in, the execution and implementation as and when it goes ahead, in some quarter, we will definitely shoot up higher than that.

10:00 Okay, sir. Fair enough. And we are also sticking to the full year FY 'twenty seven EBITDA margins guidance of around 30%, right? That remains unchanged. Okay, sir. And my second question is about the MDR. So recently there was a bill in parliament that approved MDR on UPI. So do we get any benefit out of it and what is the economics of the bank's revenue and our sharing on that front? So it's an advantage to the company, but we are actually waiting for the guidance to come from the regulator banks and from NPCI, which is I mean, we are extremely positive about how this should shape up. Just to give you an idea, we will be acquiring infrastructure for banks on which the entire UPI payment ecosystem would work.

10:54 And this is that platform, there are certain contracts which we usually do on SaaS based model. Now the entire industry had a limited fund in absence of MDR. The moment MDR starts flowing in, when UPI is doing about 23,000,000,000 transactions, even 5%, 10% of such transactions brings in huge amount of revenue to the entire industry. And that goes across the payment aggregators, banks and DSPs like us. We start generating that revenue. So the PPAS segment, which was just about 5%, that will start flourishing, where we brought down the risk associated with the platform revenue. Now the MDR revenue will start kicking in. And that will add a much good amount of revenue to the organization.

11:50 Okay, sir. And sir, lastly on the international market presence. So we are continuously developing international... Our international presence. So what type of products and solutions do we provide in the international market? And also in the presentation, you have mentioned that we have got the license we have got the order for one of the biggest telecom companies in India for the SuperAir. So can you put some light on these two developments? Unfortunately, I will not be able to zero down exactly on what we have... What what product is is is the the hero product because of the competition. What I can definitely tell you is that when it comes to digital transformation around payments, digital banking, we have multiple products with us, right? We have interoperable payment platform. We have merchant acquiring platform. We have banking super app. So all of these we take as a bouquet and go to international market. So what we have got now as an order, we are actually transforming the entire digital landscape and payment for the telecom provider.

13:02 So just like you have, you know, exactly if I replicate it, like you have, you know, Airtel as a telecom provider, but Airtel also has Airtel money, Airtel payment bank. So that's where it opens up opportunity for us when the telecom provider has a Fintech option. Okay, Fair enough. Thank you so much and all the best. Thank you. Thank you. Next question is from the line of Nishant Joshi from Equisense Advisors. Please go ahead. Good morning, sir. Last in last Console, you have mentioned that if we do business with Indian companies, we get a margin in range of around 15% to 20%, whereas for global clients, it could be range of 30% to 35%, which can reach up to 40% also.

13:55 And you also have mentioned that the international business would be on a faster growth trajectory. So do you still stick with it? And can you give a number that how much of our deals are coming from international market? And how do you see doing it in next twelve to fifteen months? So the orders that we pick up will go through an implementation cycle. And the implementation cycle can range from four months to about nine months. That's the journey. There are milestones that come with it. So there will be early revenue realization in certain cases and there will be cases where post implementation we immediately reach the quarter. And that's the reason why I was saying. So we got one and we are I mean, to be honest, there are two more deals in pipeline. So we'll be sitting at a good bucket by the end of this quarter.

14:50 And when it comes to the margin, yes, that margin is what we are looking at and yes, that's the margin which we will be working on. For now, if you see the consolidated numbers, we have about 10% to 12% coming in from international. And as and when the project goes, so project can range from four years, five years or even longer than that. So those stages, we start generating more and more margin as and when the implementation gets completed and the revenue start kicking in. Okay. Okay. So my second query was, again, related to the same U. K. Payment system industry. Can you give an outlook to the industry overall? If MDR is introduced, do you see value of transaction and volume of transactions with MDR will be implemented giving a lower growth trajectory?

15:48 What I'm going to tell you right now is strictly my personal experience. Why? Because we are yet to receive guidance from our customers like from banks and NPCR and the regulator that is yet not released. So it is way too early and that's the reason why we are giving you know, we are not giving a very aggressive numbers around it because we are yet to see how this is going to pan out. But once it goes, because it has already gone in a very positive direction. So once it goes, it straight away brings an upgrade to the projection which we have made around payment platform as a service, which we have completely tapered down for now until we see that impact coming in.

16:40 So that segment will get a boost. Second, we must also understand that the conversation which is happening right now is around the higher ticket size transitions. And honestly, it's not going to be customers, merchants are going to get charged. So high ticket is definitely around those merchants who can afford to sell those kind of products. So if you're going to a small grocery store, your ticket size is much lesser compared to when you do a bigger shopping. So there if the ticket size is larger, then the kind of MDRs they are talking about is not even equal to what we have in cards, much, much lower than that.

17:28 So I don't think that the revenue bucket around those particular transactions sorry, the transactions around those revenue buckets will get impacted because that particular business is already making good value transitions. And MDR at much lesser rate on UPI is better than paying for the higher cost card based transactions. So rather than card, they will still prefer UPI because the MDR is much, much lower on UPI compared to car. So small businesses should not get affected and large businesses will definitely have an option to use UPI at a lower cost. Thank you, sir. Thank you for review.

18:16 Yeah. Thank you. Next question is from the line of Ankit Kanodia from ZenNavish. Please go ahead. Thank you for taking my question. My first question is related to the last point which you just mentioned regarding large transaction. So I think 4% to 6% of the total UPI transaction falls under that bucket, where there will be an MDR available. So looking at our current scheme of things in terms of how we are present, do we see a sufficient enough pool for us given that it is only restricted to 6%? See that businesses, those 6%, 7% are those large merchants, right?

19:07 Those are not small merchants. So if you see the ratio among the large merchants, I think if we categorize those merchants where the balance sheet is much bigger, then we are probably talking about almost 80, 90% of those merchants, top merchants who will come under MDR bucket. And where do we have these merchants? These merchants are basically across all acquiring platforms. So there are not more than 80, 90 banks who have the acquiring ability, of which about, you know, top 15, 20 banks are the ones who are actually catering to such kind of merchants. In our market, are PSU banks, we are private bank and we are cooperative bank, all of them on our acquiring platform. So we definitely see some credit. Sir, one thing I was not very clear, and I'm sure as in you alluded to your previous remarks also that still everything is not clear. You're waiting for the point which I want to understand is, will we directly get a benefit of MDR as in a share in that? Or we will just get the benefit of the this market getting expanded? This 4% to 6% market may be doing really well, and that will increase business for us the long run or we'll get a direct share in the MDR also when it comes in. So I'll split it into three.

20:25 When I say that we have not got communication, that means we work for regulated entities where UPI will have an impact. These regulated entities are banks and payment aggregators where we have deployed our payment platform as well as our infrastructure. Now we have unless and until we do not receive communication from those directions, we that is where we are saying that the communication is yet not there. However, the industry is already moving in that direction. Once you know that entire journey is completed, then it will reach our customers and then from there it will come to us. That is what I meant. I'm not denying that it is in positive direction, but I don't want to make any number of projections unless we receive the paper from them.

21:20 These are the changes you do it and now MDR can be charged. That is what I'm referring to. Yes, that was very helpful. So my next question is related. My second I'll answer the second one. How we are getting benefit? One is there will be good revenue available. So the total transacted value on U. K. Today is INR 2,700,000,000,000 approximately every month. Now if you take this number and whatever number you're calculating right now, 4%, five percent and then you take MDR, imagine the money flowing in the ecosystem. And when that happens, there is more money available to pay to technology service providers to start upgrading platform or to faster the roadmap to generate more revenue.

22:09 There will definitely be competition amongst banks to generate more revenue because of this India. And there will be more investments coming in. So, TST gets an added advantage. So, this is an indirect benefit we get. Second, on a payment platform, we have orders where we have implemented acquiring platform and we get paid per transaction. So that is a direct benefit we get. Yes. Thank you so much for that detailed answer. In the same MDR issue when the Honorable Finance Minister was talking in the parliament, he also highlighted about the need for cybersecurity and fraud detection software. So how do we see there opportunity for us?

22:55 Maybe I'm not asking for any finished guidance, but from a maybe from a qualitative view, do you see that how are we placed and how do we see that business going forward for us? Yes. Just a second. So we anticipated this problem being in this segment for over a decade now. And we are the only company who not only has infrastructure around bank, payment platform, but we also have a tech. So we invested into AI based risk intelligence about two and a half years, three years back. And last one call, we clearly said that it was just a product. Now we have treated as a separate work people to focus on to it. What we see is an opportunity or much bigger opportunity for NPST, wherein Red Tech will start, you know, it's it's an unsaid regulation now to to have such kind of software to control the cyber frauds.

23:56 And for that, what we built was completely AI intelligence around the merchant acquiring platform, how the transaction loopholes can be identified and how merchant risk can be underwritten. For that is what I was referring to when I said we got an order from large PSU, the product is proven, and now we are going to create a subscription based model for the small to mid size industry. So that is definitely on cards and with the growth if at all there is any further positive change in regulation that demand this kind of software to be mandated, it is straight away going to help us in our direct growth. One last question, if I may.

24:42 How do you see this MDR thing impacting the micro ATM and the smartphone POS deployment in the rural area, far off area where there is still there is no scope of ATM and micro ATMs are the only way. One point of time, had BI having a PIDF, which is Payment Infrastructure Development Fund, which data got stopped. You see with MDR, this also getting revised in some ways and we get benefit from that. To be honest, that is more related to AETs, wherein the withdrawal happens through biometric. And there is also a product called as UPI Cash Point, where the MDR always existed.

25:31 It never changed. So it has a very different segment altogether. We cannot directly compare it with this impact because MDR on UPI cash, if you want to withdraw cash through a QR code, there was an MDR cost to it. And did not there is no change in that. Second, when it comes to, you know, the competition between micro ATM, ATM, EPS, that's a completely different product. So I wouldn't like to call out anything in that direction. So let's keep the MDR aside. How do you see the micro ATM market going for going forward? Unfortunately, I'm not exactly in that segment, so will be difficult for me. However, what I see is that in two to three years, UPI cash will definitely make inroads as against the larger cost involved in micro ATMs.

26:28 So if at all there is more confidence, the cyber risk is less and it's a good compliant system, then we see that UPI cash point will grow and that's where the intra cost goes down and the revenue is available for everyone. Thank you so much sir. That was very helpful and all the best for the future. Thank you. Question is from the line of Hardik Gandhi from HPMG. Please go ahead. Hello, am I audible? Yes, tell me. Yes, hi. So I have two questions. First, I think we've put out a very aggressive guidance on the margins. And after such in the last quarter, right? And this quarter, when I'm looking at the margins, on the EBITDA level, we have dropped.

27:20 So what is the reason for that? And do we have to look it on a year on year basis? How do we go about that? That's my first question. So like I said that the margin, what we have referred to is a combination of so if you see the table which we gave last year sorry, last call, it's a combination of domestic, global and direct tech all taken together. And that's why we gave the cautious understanding also that the nature of business has also changed. It was 90% on PPAS, which has gone down to 5% as projection now. So you should be looking at the technology led growth. So the order that we have picked up in Q1, the order which we have picked up in Q2, these margin will start adding up and then the averaging out will definitely be much higher than what we currently have right now.

28:17 That is the reason why we are confident that by the end of the year, we are definitely meeting our guidance. So Global Play will add margin as well as SelectTech, which is AI based product. So that also has a higher margin. So that is where it will impact. A follow-up on the global business. Just wanted to know that if we are able to expand our offerings to like new banks or are we just trying to cross sell to our existing clients? Our first target is always banks, central banks, and, you know, BFSI segment, because that's where it evolves. But when we are going to global market, the interesting case that we are coming across is the other segment are also struggling with the same problem. So the nature of of payment ecosystem and geography differs from the other geography.

29:16 However, the product that we have designed, developed has a universal acceptance. It may be banking, it may be telecom or any other segment. We are still evolving. So to be very clear, the other two orders are going to be of the three first orders that we are going to pick up, it's going to be just one order from the payment service provider. Rest are going to be from the other segment. Okay. Okay. So I just wanted to know on that faction because, you know, we earlier mentioned that we are far ahead compared to the global peers. Our technology is far advanced given that our quick adoption of UPN and other technology in India. And you mentioned that these will be the low hanging fruits for us to capture the global banks in different countries.

30:06 And I think we've... That so that we have not been able to tap as successfully or is it just taking time? I'm not sure. I think we are connecting in less than three months, and I've already given... I've already shared the order book. So, I mean, what we already have and what is the new that is coming in. That talks about the traction which is available. Yeah. There may be possibility that certain orders we are anticipating in three months, it may come in five months. That that may happen. But but the but the overall business, whatever we saw with last year's efforts, it is still intact. Our funnel is growing, and at the same time, our traction has only improved. So I don't see there is any change at all. Correct. And just last question.

30:55 For for the IPO funds, I think we received it in December. I think it's been eight months. We've used only 10% roughly 1015% of it. So what is the deployment schedule or plan? So we currently have zeroed down on three odd opportunities where we intend to invest. Our conditions are very, very strict and that's the reason why it has taken time. In fact, mentioned this last year also. We don't want to completely invest into only one segment, so we wanted to diversify that. Tech Tech was one area where we had to zero down on few companies. Then there was solutions around AI, and then there was solutions around you know, payment infrastructure.

31:47 So all of these, we have identified. So we will definitely see some traction soon. No. No. So just the meaning for that was that what will be the rough time of deployment that within within next next year we'll be able to deploy the funds? Or or will it be like a very good gradual process where, you know, it will take us two to three years?... Next year. Yeah. Not the entire fund, but we'll start seeing deployment in next two quarters. And those will be on product development? So we are looking at market expansion. Do we get an access to the international market ready customers with new product altogether? So all those parameters exist.

32:35 Okay. Perfect. All the best. Thanks. Thanks. You. Next question is from the line of Preet Shah from Bluestar Capital. Please go ahead. Hello. Good morning, sir. Good morning, Preet. Yeah. So I just want to understand. So from last two quarters, we have been saying that next quarter will be fine, next quarter will be fine. I understand the business is changing. But again, you can help me to understand when we will see a good growth Y on Y and Q on Q, from which quarter we can see and how confident you are to achieve PCL guidance?

33:23 I believe you should start looking from the quarter which we have already declared. So 68 was in Q4 last year, so we already reached that maximum number after even between the transformation period and the change in the business model. We try to maintain that. Secondly, what we have done is we have grown about 75% year on year this time And the execution cycle and implementation milestones, those are the ones which starts giving the revenue. So this year, again, no change in guidance that remains intact. We continue to scale the number and all the other parameters if you evaluate, did we get international revenue? The answer is yes.

34:13 Have we been able to grow the numbers? Have we been able to maintain EBITDA? Have we been able to grow those subscription based business? Are we getting revenue from the other verticals like Red Tech? So all those are green flags. So if you see that, it straightaway takes us to a direction where it whatever we have committed is getting achieved. Got it. So sir, as you are guiding for 60% to 70% growth, so on revenue, so is my understanding correct? You are saying roughly three twenty to three forty CR revenue for this year? And we have got 56 for Q1. The range is around that, yes.

35:00 Yes. Okay. And we are paying 30% EBITDA margins, right, for this year? Yes. That's the guidance, I mean. Okay. Got it. Yes, yes. Fair enough. All the best and thank you, sir. Thank you. Next question is from the line of Sampan Nai from ZTO Capital Advisors. Please go ahead. Sir, this is, again, question regarding India. Just wanted to understand if we are the direct beneficiary of this MDR implementation or the indirect. So when I say direct, let's say, some large merchant does collect the India fees. So will we be getting that or will we be part of indirect spending by these banks or payment gateway? So bank so the revenue the interchange revenue generated by the acquiring bank where we have our infrastructure, that is where we'll get paid.

36:02 So we will get paid from bank for the for the acquiring staff. We'll not we'll not be charging merchant. Okay. It is the bank which will charge the merchant and and they will do a share with us. No. No. No. So, again, I mean, let's say there's a transaction. For every transaction, will we get paid or will we get paid for the... So so there are two businesses. One is DSP, another one is payment platform. Wherever we have DSP, there any incremental development on software or to to to generate more revenue, whatever investments they are doing, that is where there will be an incremental business coming in, in our TSB model. The other model is payment platform where whatever acquiring platform we have deployed, on that whatever per transaction revenue is generated by bank due to MDR, which is not present right now, there the bank will share the revenue with us. So that becomes a direct revenue over the revenue generated from the merchant.

37:10 Okay. For the I mean I mean, there are both direct and indirect revenue of entities are open now, correct? Absolutely. Okay. Thank you so much. Thank you. Next question is from the line of Suman, a division investor. Please go ahead. Yes. Thanks. I think there are enough questions on MDR. I'll request when the things are clarified, please have a special session on that. Coming to other questions, I got a question. How is your competition in Red Tech? That's number one. Secondly Uh-huh. How is your time pay moving on? So because okay, so first one on the competition, I think, Rec Tech is a very broader subject.

38:05 To be precise, when we talk about the established products like EFRM or AWS, you know, those... All those products, there the competition exists. It's there for, you know, decade on. What we have built is the AI based risk intelligence, which is completely new, and that can be only evolved if at all you you are able to deploy that solution in the banking environment, which we did, and we processed about almost about 650,000,000 transactions on it. So so we not only have product, we also have machine learning and we also have the data intelligence, which is at 98% accuracy.

38:50 So Okay. If I take that particular point, we don't have any competition at all right now. That was the first move we did in the market. We invested as a company, a good amount of investment that went into this particular product with the belief that we'll be able to take it to market. And then now when we go ahead and we talk about this product, we have to not we don't have to compete. We have to actually give them an idea how this is going to solve the problem. So that's the status right now. Okay. But this prima facie looks very encouraging. Think number of In fact, we have got the... We've got a good attraction even from the global market wherever we are talking.

39:37 Okay. So that should translate into good top line, I believe, in the next couple of quarters. Anyway, all the best. How about TimePay? Yes. TimePay, again, since this is B2C, we are still looking for the overall decision on MDR. If at all MDR has a direct impact on the payer revenue, which is the payer PSP also gets a share of that revenue. Then for sure, it will create an influx of opportunity on time pay. And then we can probably revise that product to a different with a very, very focused thought process on what would be the investment and if this stream of revenue adds in, then how this product will shape up. So that's something we are looking forward to.

40:30 Okay. That's again encouraging. So we can safely assume that you will cross all time high top line sooner than later in the next few quarters, right? Absolutely. Absolutely. Fine. Okay. All the best. Thank you. Thank you. Next question is from the line of Deepak Poddaar from Sapphire Capital Partners. Please go ahead. Sir, are audible, sir? Yes, yes. Tell me. Yes, yes. Thank you very much for this opportunity, sir. So just wanted to understand from the international business perspective, what's our current mix right now in international revenue in the next two, three years, how do you see the revenue from international mix going towards here?

41:16 Right now, it is about 11%, 12%. I don't have the exact, but yes, that's the range between 10% to 12% coming from international and that majorly from TSP. This, no, I don't have the exact split for 20 Some range would do, I mean, overall at a company Because it should be between around 20% in next two years. By the end June. 30% in next two years, you're saying by FY '28? 'twenty eight, 'twenty nine, you can say. We are sitting in 'twenty six, 'twenty seven, Yes. So around two years from here, we are targeting around 50% of the international business or maybe more. So by FY 'twenty eight, FY 'twenty nine, something like that?

42:02 Yes, you can say. Okay. And what's the margin differential between domestic versus international? I mean, how much better margins we see in international? Almost about I mean, if it is about 15%, 20% in India, international will be anywhere above 35, 30%, 35%, 40%. 30%, 35% rate. So got it. So this year, are looking at what 30% EBITDA margin, right? It should be around that. It should be around that. And when we say next two, three years, this international business will go towards 30% and that differential is also bigger. So where do you see the aspiration in terms of margins for you in next two, three years?

42:54 Maybe you can say currently, are between 25% to 30%. In next two years, we should target at least 35% around margin or maybe more than that. Okay. Understood. And in terms of growth, we said 60%, 70% this year. I mean, does the CAGR for next two, three years we are looking at? Yes. Year on year, 60%, 70% we are targeting for next two, three years. So that effectively means INR85900 crores top line by FY 'twenty nine, right? Maybe calculation. I've not done the calculation. Tentatively, yes, you're right. Next year should be around INR85900 crores only. Okay, okay. And this you're specifically on TSP domestic business, the share will reduce, but this business itself will also see a growth or... Absolutely.

43:45 Absolutely, absolutely. But other business should see higher growth, so accordingly the TSP domestic share you expect to Yes. Okay, okay, okay. Yes, that would be it from my side. Wish you all the best. Thank you. Thank you. Next question is from the line of Abhishek Kajal, Individual Investor. Please go ahead. Hi. Thank you for taking my question. My question is on the P and L statement. In the consolidated statement, under the tender changes in inventories of finished goods, work in progress and stock in trade, there is a significant hike from INR $2.17 odd crores from two goods in the last quarter. If you could shed some color on that, that would be really helpful.

44:34 Ashish, do you wanna take that up? Yeah. Yeah. Yeah. I was sick. Actually, we are doing a multiple kind of projects within total project also. So there are... Can be hardware kind of material, which is a part of our delivery. So that covers under this part. So it's basically the nature of business where we can put some hardware then it will cover under this side. That's the reason. Okay. So that's basically the hardware that we are supplying to the bank for the offline payments. And if you pick up project for about five or odd, it will require a complete end to end hardware and software and services. So basis milestone, it changes. So in a certain milestone, there will be early realization of the...

45:20 Those pieces. And when it comes to the software and service milestones, it gets spread out. That's how it goes. All right. All Thank you. Thank you. Next follow-up question is from Lanu Nishan Joshi from Equisense Advisors. Please go ahead. So you've already partially answered my question. It was regarding the inorganic growth which company is holding. I just want to understand it is just due to market expansion which we have seen that's why we'll be acquiring any company? Or we also see certain segments of product where we want to take those products into our segments? There are too many interlinked decisions here. I mean, when the company was going through transformation and about almost two years back when there was a dip in revenue, we did a lot of corrective actions and then we realized that, you know, the best way to do it is de risk and diversify.

46:22 So there was a particular quarter where I took the investors exactly through these two points. So it is critical for the company to, you know, to do a forward backward integration when the time is right. And then also see the complementary products, which is which is exactly close to the domain, where the customers are same, your accounts are same, but the demand for products have increased. So that has been our experience all these long. So that is the reason why we are trying to invest into these. Like for example, when it comes to payments, payments will always have always have some risk associated with it. So we are selling payment platform, but we are not selling Recteq, we are not selling anything that is needed to secure the payment.

47:11 So that gives us a complimentary product access to the same customer that we are selling. So that's how we have made a decision around diversification, derisking and then of course when you get into it, it has its own channel and it has its own growth segment and the projections. So obviously, projection also multiplies. Thank you. Thank you. Thank you. Next follow-up question is from the line of Sampat Nayak from ZTO Capital Advisors. Please go ahead. Hi, sir. So I just did some number crunching on the MDR. So like if the 5% customers have to pay MDR, so that comes roughly around to INR1792800 crores.

48:07 And if we charge INR0.25 crores on that transaction value, roughly the amount comes around INR89000 crores. Since you told me we could be the direct beneficiary of this, so what kind of quantum we can consider to be added to the I top think it's let's see. First of all, I was I clearly said that unless we don't have a mandate coming in, we would... We can... I can only give my personal experience. I just cannot... I don't want to quote which is not there on paper yet. Right? Secondly, that's not how the MDR adds number. So whatever is the MDR, it has acquiring component.

48:52 It has interchange component. It has switching fees. It further gets split. Then the beneficiaries here can be the one who has acquired a user, which is like PSC applications. Those who have acquired merchants and that is where our bank plays a critical role. So if at all I have given acquiring platform and the QR code generated over the POS from on a POS is where the bank has given POS directly to the merchant. It's a direct interchange income coming to bank. But if they have given it via payment aggregator, then the payment aggregator also shares certain revenue. So there are a lot of, you know, stack in between where it has to be calculated.

49:40 So I don't think that that is instantly available right now to anyone. So let's... Let me not quote it anything right now, any number, but what I can definitely tell you that we being a part to this ecosystem will definitely get certain direct revenue out of it. Okay. Thank you so much and all the best. Thanks. Thank you. Next question is from the line of Ashish Soni from Family Office. Please go ahead. Sir, in your results, there are other expenses to the tune of almost INR 19 point some crores compared to almost INR 2 crores last year same quarter. So what is this additional expense of almost INR 17 crores this quarter? Ashish, I think this is a grouping issue.

50:29 The team has merged the purchase portion of these expenses. That is INR17 crore amount. So that expenses is INR2 crore only. And your growth in this quarter was almost 70 odd percent and but your employee expenses has not increased. So is it because of your software service platform or the fee, which was more and or what what... Because proportionality, it didn't increase at all. It's hardly 1010101020% is what I understand. So what caused that? It's okay. You start at at work. Yeah. Firstly, there are multiple reasons. Yes. First is that we are in a business where the... Maybe maybe not directly proportion with the revenue.

51:18 Second, the adoption of AI is very important where we are doing multiple things, multiple developments we are taking from... With the help of AI. We are... I think Deepak has already covered this part that as as an organization, we have a rooted AI. So that's the reason I think employee cost will not increase that proportion to the revenue. We are trying our best to create an AI driven organization. There are policies being written. Now when the policies get written, the impact over the AI security, the impact over the tools that is being used. So we just don't want to make it a random decision. We have made a decision that the organization will shift towards AI based policies and processes.

52:03 That is already going on. So whatever benefit we got, I think it's visible now. And in fact, on our investor presentation, we have clearly given that we want to improve our efficiency. That's the target of about 30% is still there. So that's the target. So, yeah, so those kind of reflections you'll start seeing. And regarding your guidance of 60%, 70% CAGR for next two, three years, so does that include your inorganic growth or it will be additional on top of it? It is not inorganic. Okay. And one last question on with event of methods coming in, okay. So there was earlier guidelines for banks to assess security threat against it. So what is first question is, what is our stance on securing our platform against such attacks?

53:04 And are we getting additional opportunities because of this RBA stance which came I think in June and if I recollect? Since we have not launched an AI product to an extent wherein there will be an impact. For now, whatever RBI guidelines has come around the AI attack, that will pave the way for, you know, larger... Not larger, but I don't know. I can't value it, but, yes, investment towards the AI based security. So as and when the technology upgrades, the security layer also changes. So those are areas which even we are looking forward to. So there will be certain policy guidelines that will be released from banks that how they intend to look into it and how the software changes are expected, what expectation they have from the vendors.

54:02 So those implementations will happen over a period of time. Okay. And inorganic acquisition, so which acquisition can come faster? Because I think you're passing two, three based on whatever you have been telling. And what will be the will that any acquisition you do, will EBITDA margin the same as our business or it will be lower? I'm just trying to understand because typically and you're targeting overseas acquisitions. So my because typically overseas acquisition generally comes with a lower margin unless a product will establish product. I don't think that's a focus criteria right now because when it comes to priority what we are looking at is the geographical access, instant access that we can get, new product that we can get, which is missing from our stack, which we wanted to build, and and the growth trajectory that particular, you know, organization is giving right now. So it will be way too early right now to share that particular information.

55:10 But, yeah, that's the direction which we are going right now. Can we expect something in Q2 or Q3, can we expect any acquisition? I think Q2 is early, don't think, but we'll come back on this one. Okay. Thanks and all the best for the future. Thank you. Next question is from the line of Ketan Patak, Individual Investor. Please go ahead. Hi, good afternoon. Am I audible? Yes, Ketan. Yes, sir. Mike, The guidance that you gave last quarter was about 70% year on year growth in top line, whereas on a quarter on quarter basis, this quarter, we are down 10% in top line.

55:56 So my question was, do you stick to that guidance because that means we have to do about $2.70 crores, $2.80 crores in next three quarters, which is like INR 90 crores or INR 100 crores. So do we have visibility on and are we on track to do that? Yes. I think I've addressed this in the very first question that yearly guidance does not change, that still remains the same. It is just that by nature, when are we executing the project, when the implementation is due and the milestone is triggered. So those are the reasons why, in fact, we knew this kind of when there is a change in the nature of business, then in last quarter, the call itself, we gave the clarity that you know do not expect the sequential figures.

56:46 This particular growth will definitely come and you should be looking at the yearly numbers. Last question follow-up to that is for this quarter, I think at the past level, we were at a 17% or 18% margin. Would that improve to about 20% by end of this year? Yes, there will be improvement because the milestone based revenue when they come in, the margins improve. And obviously, when it comes to global revenue share, that's why we are adding. That is the reason why we are pretty confident about those numbers. Okay. Thank you. Yes. Thank you. A reminder to all the participants, you may press star and one to ask a question. As there are no further questions, I'll now hand the conference over to the management for closing comments.

57:49 Think much. Think you guys should definitely start developing the company the way I have addressed in today's call. Lot of traction, lot of growth opportunities, lot of figures available. We are also very closely monitoring how it is going to evolve the payment industry basically. And I believe there is a lot that we have to work on, including the AI based strategy that we are very, very aggressive on that part. Purwangi, you can take it up from here. Thank you very much. On behalf of Eloram Advisors and Network People Services Technologies Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.

58:38 Thanks. Thanks everyone. Thank you.