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Infibeam Avenues Ltd
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Ladies and gentlemen, good day, and welcome to Infibeam Avenues Limited Q4 FY '24 Earnings Conference Call, hosted by Go India Advisors. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Rajat Gupta from Go India Advisors. Thank you, and over to you, sir.
Yes. Thank you, Manav. Good evening, everyone, and welcome to Infibeam Avenues Limited earnings call to discuss the Q4 and FY '24 results. We have on the call with us today, Mr. Vishal Mehta, Chairman and Managing Director; Mr. Vishwas Patel, Joint Managing Director; and Mr. Sunil Bhagat, Chief Financial Officer. Also joining us on the call today is Mr. B. Ravi, who is advising Infibeam on corporate and financial strategy as an independent consultant.
We must remind you that the discussion on today's call may include certain forward-looking statements and must be, therefore, viewed in conjunction with the risks that the company faces.
I now request Mr. Vishal Mehta to take us through the company's business outlook and financial highlights, subsequent to which we'll open the floor for Q&A. Thank you, and over to you, sir.
Thank you, Rajat. Hello, everyone, and welcome to our Q4 2024 and full-year FY '24 Financial Results Conference Call. I'm very pleased to report that the company has built a very strong liquidity position, holding cash and cash equivalents of INR 837 crores. versus INR 365 crores that we reported in 2023. So our cash and cash liquidity position has increased by 129% year-over-year.
Today, we reported the quarter with revenues of INR 727 crores, EBITDA of INR 60 crores and a PAT of INR 36 crores. While we've made meaningful progress in our financial measures, what we are most pleased about is our continued improvements in our take rates and margins on the CCAvenue payments business. Put simply, a take rate is how much money we make from a payment transaction, so higher the take rate, higher the profits.
We increased our take rates from 8.5 basis points in the beginning of the year in Q1 FY '24 to 9.2 basis points in Q4 FY '24. This increase in take rate is a result of disciplined execution, optimization and reimagining a lot of digital payments. So it comes across the teams of Infibeam.
Looking back at Q4, I will start with our CCAvenue payments business, we continue to have the broadest range of payment options in the industry with deep payments integrations across thousands of third-party merchant systems. Being sharp on pricing payments to merchants is always important. But merchants are careful about how much they spend for acquiring payments, particularly as more and more transactions are moving digital.
Alongside our payments business, our platform business remains strong, which is also up more than 29% year-over-year, primarily driven by large enterprise clients. We have not reported any income from one of our clients GeM, which is called Government e-Marketplace in the fourth quarter of FY '24, in spite of our continued utilization of our e-commerce platform by GeM. We have extended a commercial offer to GeM for licensing our base marketplace platform intellectual property, but the matter has not been concluded. Since we have not been able to reach conclusions, so if we have not reported any revenue from GeM in Q4 FY '24 onwards.
2024 also was a very significant year for starting our journey in the field of artificial intelligence under our brand, Phronetic.AI. During this period, we proudly announced a revolutionary video AI platform that we introduced called THEIA, which is poised to redefine how business institutions and governments harness AI for increased productivity and efficiency. In an age where AI locks insights from so many data types, video understanding emerges as the next frontier. THEIA leads this charge empowering organizations to extract valuable information from videos, optimize workflows and enhance operational efficiencies.
What customers have learned in the early stage of AI in our opinion is that there is meaningful iterations required in building a production application with the requisite enterprise quality at the cost in latency, which is required. Customers want practical, scalable and multimodal frameworks. They want different models for different types of applications and different-sized models for different applications.
Our team continuously rapidly iterate, deliver capabilities, including guardrails to safeguard with retrieval-augmented generation and real-time queries, agents to complete multiple multistep tasks and fine-tuning to keep teaching and refining the models, all of which will help customer applications be higher quality and have better customer experiences. We are already in pilot phases with many customers at this time.
In 2024, we delivered solid financial operating results across our key performance metrics. This was accomplished during a challenging period of dynamic competitive environment in which we operate. We ended the year with 10 million-plus merchant accounts, revenue increased by 62% to more than INR 3,000 crores compared to 2023. And in 2024, we processed more than INR 2.5 lakh crores in payment value, not including the RuPay debit cards and UPI payments.
For full year FY '24, I'm happy to report that Infibeam has achieved full-year FY '24 financial guidance. At the start of the year, we had a gross revenue target of INR 3,000 crores to INR 3,300 crores and net revenue target of INR 410 crores to INR 415 crores, respectively. We closed the year recording gross revenue of INR 3,171 crores and net revenue of INR 429 crores, which is at the high end of the estimates.
Both EBITDA and PAT also reached and exceeded the high end of our guidance. We closed the year with EBITDA of INR 253 crores, compared to the target of INR 235 crores, and PAT came in at INR 148 crores versus our estimate of INR 130 crores to INR 150 crores, yet I think this is just the start of what's possible. We have a very long way to go, and there is a considerable upside in each of the business.
With that, I will turn on and give the call to Vishwas. Vishwas, all yours.
Thanks, Vishal, and good afternoon to everybody on the call. So our CCAvenue payments business is built on a strong foundation, designed to drive growth and differentiate us from the competitors. A critical element of our overall growth strategy involves increasing the engagement of our merchant accounts, which we expect will contribute in growth to the payment transactions, total payment volumes and net revenues.
During this past quarter, Infibeam Avenues received a final authorization from RBI for the payment aggregator license. So this will enable the company to further expand its payment brand, CCAvenue. This authorization enhances the credibility and trustworthiness in the digital payments industry, allows us to attract more merchants onto our platform.
With an already substantial merchant base exceeding 10 million, the ability to operate as a payment aggregator will facilitate seamless and secure digital payment transactions at a scale. This is -- in turn, is expected to drive increased adoption of CCAvenue among merchants, leading to accelerated market share growth and further expansion opportunities in the payment gateway and the bill payment space.
We are also focusing in growing our international payment business and working towards scaling the business. This past quarter, we invested USD 10 million for a 20% stake in Xduce, a leading U.S.-based enterprise application and AI development company. This strategic move is aimed to enhance Infibeam Avenues' Phronetic.AI solutions and CCAvenue payments business in the U.S. market by integrating AI capabilities and expanding CCAvenue's presence there.
Furthermore, in the Kingdom of Saudi Arabia, we achieved a significant milestone by being the first Indian payment gateway player to secure an eMSP Payment Technical Service Provider Approval from the Saudi Arabian Monetary Authority, also called SAMA. Saudi Arabia is experiencing rapid economic growth, driven by the government's 2030 vision and of targeting 130 million tourists annually. With this certification, CCAvenue is poised to become a leading player in digital markets within the Saudi Arabian market.
Our payment gateway solution has been localized data storage and hosting within the Kingdom of Saudi Arabia and obtained the approval from the authorities. We believe our competitive strengths includes the following: one, the merchant network. Our payment platform connects merchants and consumers, enable CCAvenue to offer unique end-to-end product experiences while gaining invaluable insights in how the clients use our platforms.
Our payments platform provides for digital and in-store CCAvenue TapPay point-of-sale transactions while both -- while being both technology and platform agnostic. Payment choice, our payment solution support an open ecosystem that provides choice to both merchants, enabling flexibility to receive payments using a wide variety of payment options and digital wallet solutions.
Scale, our domestic and increasing international scale helps us to drive organic growth. As of March 2024, we had 10 million-plus merchant accounts with more than 200 payment options. And in this FY '24, we processed transactions in excess of INR 2.57 lakh crores.
Trusted brands, we have built and strengthened well recognized trusted brands like our CCAvenue for online, CCAvenue TapPay for offline and ResAvenue and BillAvenue for the bill payments. Our communications and relationships with banks across multiple geographies, demographic groups play an important role in building brand visibility, usage and overall preference among merchants.
Risk and compliance management, our enterprise risk and compliance management is designed to help secure merchant information to help ensure we process legitimate transactions around the world while identifying and minimizing illegal and high risk of fraudulent transactions.
Regulatory licenses, we believe that our regulatory licenses, which enable us to operate in India and international, are a distinct advantage and helps support business growth. In the past decade, we have partnered with our merchants to help grow and expand their businesses by powering all aspects of their digital checkout. We offer a maximum number of payment methods, provide best-in-class fraud prevention and risk management solutions, reduce merchant loss and offer tools and insights for utilizing data analytics to attract and engage customers and improve sales conversions.
We employ a technology and platform agnostic approach, intended to enable merchants of all sizes to quickly and easily provide digital online payment acceptance, as well in-store using TapPay across all platform and devices and to secure and simply receive payments from their customers. Our diversified suites and products is still yet to meet the needs of merchants, regardless of their size or business complexity. We aim to offer a seamless omnichannel solution that merchants manage and help grow their business.
In FY '25, we will focus on international growth. And our international subsidiary has announced a pre-IPO round of up to USD 25 million to accelerate our growth in the Middle East region. We have doubled in all our metrics over 1 year in that region. And with express settlement to merchants, rollout of TapPay as well as international experience -- expansions in the neighboring countries there, we believe there is a tremendous potential to grow.
We also plan to offer access to merchants with financial products through the business loan products, insurance products as well as wealth managements under a new brand name, which will collectively refer to as our Merchant Finance Offerings. We believe that our Merchant Finance Offerings enable us to deepen our engagement with our existing small and medium-sized merchants and expand services to new merchants by providing access to financial products that were not available to them.
Within the next 4 quarters, we'll be focused on providing affordable, convenient and secured consumer financial products and services, intend to democratize the management and movement of money. We'll continue to update you on our execution throughout the year and be transparent about our process. I'm confident we are taking the right steps to build a long-term profitable growth.
Now with all that, I hand over to Sunil Bhagat, our CFO, to take you through our first quarter and full-year results. Over to you, Sunil Bhai.
Thank you, Vishwas sir. Good evening to all of you. For the full year 2024, we had a meaningful improvement across our financial results. Revenue came in at INR 3,171 crores. Our PAT, we have reported INR 148 crores, which has increased by 56% year-over-year. And our cash flow from operations stood at INR 720 crores. which is up by 537% as against last year. These financial outputs are a result of a lot of improvements in our key input metrics such as take rate, which increased year-over-year and our ability to onboard merchants. I want to thank our merchants, partners and our team members for continuously innovating and building cutting-edge platforms for a very strong 2024 performance.
Focusing on the fourth quarter, revenue was INR 727 crores, which is an increase of 11% year-over-year. We have reported net revenue of INR 106 crores, which was also up 16% year-over-year. And our EBITDA, we have reported INR 60 crores, which was up by 21%. We continue to invest in our AI business, which have tremendous synergies to both our platforms and payment business, and we'll have more to share in FY '25.
Our return on equity for FY '24 stood at 9% as compared to 7% in FY '23, while our return on capital employed, excluding goodwill, which -- reached at 12% compared to 10% in FY '23. Finally, we are pleased that Board has approved -- Board has proposed a final dividend of 5% for FY '24, subject to the approval of the shareholders.
Now allow me to present our financial guidance for FY '25. We are setting our sights on achieving the gross revenue in the range of INR 3,900 crores to INR 4,200 crores, net revenue between INR 450 crores to INR 500 crores, EBITDA within a range of INR 275 crores to INR 300 crores and profit after tax at INR 175 crores to INR 200 crores. To realize these ambitious goals, we are committed to amplifying our strategic initiatives that were set in the motion during FY '24.
In the next 2 years, our focus will be intensified as we elevate our international business to new heights, aiming to contribute 30% to our total income. Presently, our international operations account for less than 10% of our total income. As we enter FY '25, we remain committed to pursuing more profitable growth initiatives.
I will now hand -- request moderator to open the floor for question and answers. Thank you.
[Operator Instructions] We have our first question from the line of Kunj Nandwani from Concept Investwell.
So how significant is it for CCAvenue to be recognized as the first Indian payment gateway to secure this approval from Saudi Payments? And what are the specific objectives or benefits expected from this collaboration in the Saudi Arabian market? Could you provide insights into the potential impact of these developments on our market positioning and revenue growth?
Vishwas here. Look Saudi Arabia is a very interesting market. It is the most populous nation there in GCC countries. And from the religious tourism perspective, it is one of the -- I think, the largest anywhere receiving the -- visitors from anywhere in the world. So from that perspective, which the Kingdom has 130 million a year visitors target, right, and the kind of changes happening there, Saudi Arabia attains a very significant thing.
At the same time, the government there has built a local network called mada, similar to NPCI. And they want data localization there. So that makes it very difficult to do a primary hosting within Riyadh and a DR also within the Kingdom, so that all and then get the license and certification through SAMA. So we have invested quite a bit CapEx there to do all these things. And with that and the certification and the final approval from SAMA to operate.
Now a lot of our merchants, where in UAE, where we are doing in excess of AED 1 billion a month, are also present in Saudi market because they're adjoining the other country, right? So from that perspective, for us, the initial growth momentum should come through that. And a lot of our solutions and other things since it's a difficult market for the Westerners, but for us, we are quite adapted. So we're looking very aggressively towards this, and we intend to do in the midterm better than what we have done in the UAE market. So that's the perspective that we have on UAE. And I think growth numbers in the coming quarters will reflect on that.
Okay. And what is our current monthly processing volumes across the UAE digital payments? And could you elaborate on dealings, the UAE subsidiary and its recent fundraising and listing plan?
Sure. So basically, we process upwards of AED 1 billion a month in UAE across more than 6,000, 7,000 clients. So UAE is a market we've been around for more than 3 years now. And we see a lot of growth prospects. Vishwas mentioned that we have doubled year-over-year in UAE. And we expect that we have not even yet rolled out TapPay and some of the other solutions that we talked about in that market, which we intend to do in FY '25.
So while we see a lot of uptick in terms of our performance in UAE, we see that there is also a very large opportunity there. As far as the fundraise is concerned, yes, we've been reporting that the subsidiary has raised the pre-IPO round of up to USD 25 million, which we expect to close this month. And that capital will be used for multiple reasons, one is merchants always want their payments faster. So in other words, rather than having a settlement period, if we can process faster, it also drives more volume to us.
Second is geographical expansion, we'd like to grow beyond UAE to other geographies, neighboring countries. And third is rolling out of TapPay in some of the other opportunities as well. So we think that the opportunity will be right for us to take on a significant role. And with respect to UAE, you would have asked and you would have seen our QR codes also now being present in UAE. So if you want to make a payment, it will be through a QR code. CCAvenue QR code will start appearing in many of the communities and many others. So I think we've got a very confident and strong plan in terms of growth in that region that we'll pursue that plan accordingly.
We have our next question from the line of Shivam from SBI Securities.
I am [ Shobha Patel ] from SBI Securities. So congratulation on this great set of numbers. We have seen that the take rate has improved from -- on a yearly basis from 8.2% to 8.8%. If you could give a guidance on FY '25 basis, how are you seeing this number moving ahead?
Sure. So basically, we had announced in the past that we want to get to a double-digit take rate and -- in India. In international geographies, we already have a double-digit take rate. But in India, it's competitive, and we need to optimize significantly to build out that kind of a take rate. So we've continuously worked on that. And so I think from a guidance perspective, all I can tell you is that we would want to get to our goal of a double-digit take rate in India.
And if you could give us your initiative on like which would help in augmentation of this?
What will help us achieve that, is that the question?
Yes.
Yes. So I'll tell you 3 things. One is we have announced that we are expanding our presence through TapPay into local commerce. TapPay is the version where you can download the app on the phone and you can tap a card or in fact you can do even an online transaction, send a link to someone to make payments. And so a lot of facilities opened up. And those -- some of those transactions become card present, which have a much better economics compared to card not present, which you see in an online format.
So I think that becomes an opportunity for us to gain market segment share. We are definitely not going into devices. We are going to -- because we think phone is a very ideal mode for merchants to download an app and to be able to accept payments. And so rather than going and focusing on devices and investing in CapEx on devices, we will open up our TapPay framework. And with more and more cards becoming somewhat NFC-enabled and in some ways even phones accepting such cards, I think -- from an NFC perspective I think that we see a lot of potential there. So that's one.
Second is, we think that in some ways settling faster with the merchant helps us in terms of our take rate, which means that rather than allowing a merchant to get payments later after a few days, maybe a day, 2 days, 3 days, we would like to offer faster payments. So that's second.
And third is a significant amount of optimization in terms of being able to identify a transaction and to be able to deliver that transaction through merchant and through card networks. And rather than going into specifics, but you can imagine that it's a very complicated problem because every transaction is a different type.
And to be able to drive that across these billions of transactions in a format so that it's completely recognizable, traceable and be able to attach to the right code, there's significant amount of optimizations. And you can imagine that a lot of artificial intelligence will play a role in terms of optimization of those as well.
So I think rather than getting into specific programs that we have, we think that optimizing that whole entire card framework, routing frameworks and others, will become an important moat. And it's very defensible because doing it across the scale, very few companies in the world may have even attempted to do it, but we are going to try.
Sir, on the RBI front, you have received a payment aggregate license. If you could give a quantum of like what is the total processing value that we can expect from this front in addition in FY '25?
So in terms of our guidance for next year, FY '25, Sunil mentioned, that in terms of the revenue, we'd be targeting close to INR 4,000 crores in revenues, and that's upwards of 30% year-over-year. So our guidance is INR 3,900 crores to INR 4,200 crores. We do not report the transactions, which are UPI transactions through us and RuPay card transactions because they don't have any take rate for us. But yes, I think that -- in terms of the overall perspective, international is expected to double for us year-over-year through expansion in geographies and other places. And India also we see a very strong digital presence. But I think, yes, we can imagine we'd be targeting anywhere between 30% to 50%.
We have our next question from the line of Pranav Mashruwala from Dolat Capital.
So just a few questions on the enterprise business. So now that we don't have GeM, which are the clients that are opting to revenue [Technical Difficulty].
Sorry to interrupt, Mr. Pranav, your voice is breaking.
Yes. Is it any better?
Yes, sir, it is better now.
Yes. So I was asking about the enterprise business. Now that we don't have any revenue from GeM, which are some of the clients -- enterprise clients that are contributing to this revenue this quarter? And what would be the outlook going forward? And can we expect a similar kind of run rate, some color on that, please?
Sure. So we have international clients, the ones that we have announced are Saudi Telecom, we have signed up a couple of more international clients as well on to our enterprise business. So what we did last quarter, which was important is to secure our intellectual property with GeM. And now we are very clear that there is no gray area on where the intellectual property belongs.
I think we mentioned in our call earlier also that we have not concluded all of our relationships. GeM continues to use our intellectual property, but we wanted to ensure that it's very clear in black and white that all intellectual property belongs to us. And one of the reasons is because given that we are giving our frameworks and platforms to other clients also that it exposes us to that risk. So I'm very happy to tell you that at least from the perspective of both GeM as well as Infibeam, we are clear that intellectual property for the entire platform belongs solely to Infibeam, so that's one.
And second is that GeM continues building up using our platform. Even today, it is being utilized. So the conversations around commercials are somewhat disputed/being able to figure out how to close that. That's one of the reasons why we have not reported any revenue out of GeM in Q4. In terms of -- given that now that it's very clear just last quarter in a few -- a couple of months back that intellectual property only belongs to Infi and not to anyone else, then we plan to sign up a very -- 1 or 2 very large enterprise clients this year. So one can expect that '25 would look similar to '24 or slightly better. And that is assuming that GeM is also not lighted up in terms of the numbers into us.
Sorry, I didn't hear the last part, '25 -- you mean FY '25 looks better than FY '24?
'25 should look equal or better than '24.
Okay. Okay. Sir, and regarding the -- question pertains to the XDuce acquisition, so we have acquired about 20%, would we be upping our stake? So how are you planning to utilize this acquisition?
XDuce has many Wall Street clients on their roster, clients who have been signed up with a master service agreement. And these are all name brands that they've been working with for several years. And in order to give any kind of a framework, including artificial intelligence frameworks or payments framework, so anyone, requires you to initially have an MSA. An MSA typically takes a long time to close. So initially, the conversation and the relationship for us would be to use that funnel to be able to expand our presence in U.S. and to be able to start working with clients, Wall Street clients in specific.
So you would have imagined even companies like Pershing Capital and others, which are very large in that region, they are all clients of XDuce. And so there will be a bilateral engagement. We essentially -- they have present -- there are a few hundred people in markets in New York City, where we think that we would like to expand both of our artificial intelligence framework business as well as payments business. And as we build up and grow into a relationship, then we'll be able to tell you more in terms of our interest. But yes, this investment is a strategic interest for us, that much I can tell you.
We have our next question from the line of Akshat Shah from Niveshaay Investment Advisory.
I have the question on the side of THEIA platform. So how does the company foresee THEIA platform reorganizing business operations?
See, THEIA is a visual AI platform, which means that what we think is important in the AI world is data. And we realized that cameras is data. And whenever we think about fraud authentication risk also, including video KYCs and many others and deepfake and you name it, it's all video-based. So in terms of the use of AI, we think they can be used on text, audio and video.
And there are a lot of models that have been there, general purpose models, which have been there for text as well as in some cases, audio. But video generally popped up as models, somewhat are missing now with GPT 4.0 and many others that potentially those will also may be there on some roadmaps on there. But I think that's where we think that we want to spend our opportunity on.
And as far as how it increases efficiency, if you look at the world and say that AI will replace all desk jobs, which is very possible given the proximity in many things that we are looking at doing in that front. And when I say replace, meaning the existing, the way people do it and not necessarily the job specifically. We think that the role of the manager, if you train the framework to be able to start looking at how things get done and then -- it is already happening in software development, but even in other places, I think security, cleanliness, many things that potentially are our facilities as far as the supervisory or the manager role, that potentially is somewhat replaceable in someways we feel.
So for us, we think that if we are able to open up the platform and allow more and more, so CCTV camera is just security, if you will. But if you look at anything and everything that people do, everything is about management of a facility. If it's a retail store, it's facility. And whether it's a coffee shop, it's a facility. And in that facility, you've got customers, you've got inventory. And if you're able to go and train the models to understand several of these activities, then it can bring significant amount of efficiency. And just -- in some ways, allow you to follow the SOPs that have been prescribed.
So that's very interesting to us. We think that our models are learning by the day. We are -- we've opened up the pilots. We are continuously working on those pilots. And you have to iterate a lot in this. And the faster you iterate the better. But I think that we've got a much better handle in terms of perhaps how we need to think about it compared to what we -- because earlier, we were solving technology problems, now we have gone into a point in pilot where we are looking at business problems. And I think that's a big shift, and we've got a -- we're getting a much better handle in terms of how to think through this. Hopefully, this helps.
What do you think that make it different from other platforms like THEIA?
THEIA is a general purpose model. Many of the platforms, some -- you will find some open source framework, which will only identify faces. So facial recognition is the only thing that the model will do. And similarly, you have other models that potentially only perhaps look at attributes in some ways of certain things. THEIA is actually general purpose. It does all of that. So it's a single model, a single framework that -- and we've opened up the APIs to software developers.
So theoretically, you can utilize it and build out your own expert model on top of THEIA that potentially allow you to do a lot more than what you're doing before. You have to think of platforms and applications. What I'm saying is that we are building out the platform, THEIA is a platform, and there will be applications, and you can have n number of applications sitting on top of THEIA.
Okay. Sir, another question is that what terms of transactions are we seeing on the platform for non-GeM segment?
Sorry, I didn't catch that.
On platform revenue perspective, what transactions are we seeing in non-GeM segment?
See, we have signed up international clients on the platform, number one. We already have many international clients using it. And we are working on one of our large Indian client as well. So I just mentioned earlier that we cleared out the fact that intellectual property belongs to us. Without that clearance, you will not be able to give such similar frameworks to many clients. So I think with the clearance from both GeM as well as with us, there is no dispute about that anymore. That actually solely belongs to us and not to GeM.
We have our next question from the line of Majid Ahamed from Smart Sync Investment Advisory.
Sorry to interrupt, sir. May I request you to use your handset to ask the question?
Now am I clear...
No, sir, your voice is very muffled.
So what will be final driver for improving the ROA and ROE, considering they are currently [indiscernible]? And additionally, how much of that impact [Technical Difficulty]?
Sir, we are unable to understand you. I would request you to come again in the queue.
We have our next question from the line of Grishma Shah from Envision Capital.
Wanted to know how was the competitive intensity in the Indian payment market given that we had one major player experiencing a series of problems. So how did we see the competition on the ground? And were we able to gain more market share, therefore?
Vishwas here. So look, we have already reported very, very strong numbers. And from regulatory perspective and others, definitely, we have the gold standards that come in even from the regulator's mouth that we are the gold standards when it comes to compliance and norms. So from that perspective, we have always scored and always been on the right side. And that definitely, if you see even on the online space, 2, 3 of the biggest competitors or 4 of the biggest competitors could not onboard merchants for over a year. And same happened in the offline space, but our growth continues.
As I said, when we -- initially in my comments, I always said about the viability and develop the respect over this. Over the last 20, 22 years, the CCAvenue brand has. That's the -- what do you say, that builds a good goodwill and brand recognition to all the new merchants as well as the existing merchants. So that has helped us on the other growth.
And as we see regulators becoming more and more aggressive, right, it is on the existing incumbents to scale up and go on. So from that perspective, I'm pleased to report that your company has always been the front leader as far as -- on the compliance and risk and every other thing completed. So even we have let business go if we even have an iota of doubt on the merchant producers and other things.
So yes, that has contributed while others have faltered. And I think that should give us a premium everywhere where we go on the best practices and other things that is there. So it has helped us. You've seen the numbers. So we will not comment more on what has helped on that.
Okay. So what's the market share right now?
Market share is a very -- this word, what we can say is that what is the digital transaction or what is the fintech also, definition, we've not been able to get that. So market share, there are 200 different options. There are different things people reporting. People doing -- like we said that we are not reporting RuPay or UPI transactions, right? Others are expanding that numbers and other things, that is there, right?
So the reason is that profitable transactions is what we are reporting, but we actually make a revenue on every transaction is what we are reporting and other things. So market share is a different thing. People who are just doing a mass payout by uploading a file counting it as a processed transaction, so market share is a very [indiscernible] word as far as the payment systems is concerned, so we cannot give an exact tilt this is 8%, 10% or 20%, so...
But our thesis -- to add to what Vishwas said, our thesis is that it's anywhere between 10% to 15% based on our understanding of the market.
Okay. Okay. And I wanted you to elaborate on our partnership with PayPal. I mean, what's the kind of partnership that we have? And how is it going to unfold?
So the PayPal partnership is restricted to the Middle East region as of now. Middle East PayPal did not have any presence. And since we had the significant market share in the UAE region, so they wanted to tie up with us to offer PayPal as options there and also give services to local markets there. So we have given our merchant base the option to accept PayPal via these partnerships, which gives us some good revenues also, be it on transactions also and some other marketing joint initiatives also.
But we have our own products as well, right?
Yes, yes. We have our own product, but then PayPal has some 400 -- 500 million-plus PayPal wallets across the country. So that adds as an additional option to the Master, Visa and the other option there, American Express and the options that we have to have an additional PayPal and make revenue out of it. So that helps. And specifically, UAE being such a global financial center, right, so a lot of payments coming through and that through PayPal wallet. So an additional option is also good from the merchant perspective that it gives all the reasons for their customers to make payment to them.
We have our next question from the line of [ Dipesh Majithia ] from [indiscernible] Finance.
Yes. Firstly, the projections which you have given in -- for FY '25, can you repeat those projections, where you have mentioned that INR 175 crores PAT, if we can have that projections again, please?
Sunil, this side. So we have targeted -- we have given the estimate of gross revenue in the range of INR 3,900 crores to INR 4,200 crores, the net revenue in the range of INR 450 crores to INR 500 crores, EBITDA in the range of INR 275 crores to INR 300 crores and our PAT in the range of INR 175 crores to INR 200 crores.
Okay. Okay. And how do we plan to increase our ROE?
I think also in terms of our positioning, one thing is that we are going to figure out how do our -- currently our ROE, if you look at year-over-year in FY '23, it was 7%. And in FY '24, it is at 9%. And so I think that we've done a lot of steps to optimize our network. Our take rates have gone up in the business. I think, in a very competitive world, we have been able to extract and then generate profit. So since our profit after tax is expected to increase, we expect the ROA also -- ROE also to increase along with it.
Okay. So you expect double-digit for FY '25? Will that be a fair estimate...
Yes. That's a fair estimate, double digits.
Okay. And my next question is regarding this promoter shareholding. Now since your brother has already been out of the promoter list, the promoter shareholding has gone down quite significantly. So how do you plan to increase? Or do you have any plans to increase or raise capital by preferential or any other route to increase your shareholding into the company?
So much like every promoter, I mean we'll, of course, be doing the right disclosures at the right time. So I don't have too much to tell you at the moment, unfortunately, but promoter shareholding traditionally would have been increased through many methodology, including grouping, acquisition and many others. So having said that -- and that would also require capital to be able to deploy. So from -- to answer your question, I don't have too much to add at this time. It's the beginning of the year for us. We have focused more on the business and how to grow that and how to build it up for the next year. But as and when I have more information, I'll be glad to tell you.
Okay. But going ahead, the promoters -- I mean, you as a promoter, want to increase your stake into the company, right?
Would that be common for most of the promoters? I think it's a rhetorical question, but -- it's a rhetorical question.
No, no. It's just for the intention of the promoter, that's it.
Yes. Absolutely.
We have our next question from the line of Sanjana Shah from RRS Shares and Stockbrokers.
My question is with regard to THEIA, your video AI developer platform, right? So has this product been pitched to any government for use on, let's say, airports or any other facilities for further monetization as of now? And if not, then are there plans to pitch it in the future to any sort of governments, maybe India or UAE or any other government?
It's a great question. And I'll tell you, it's not being piloted today at an airport, but there are multiple pilots going on across other facilities. And I think from a positioning perspective, government is very important because what video AI platform does is security becomes core to that and -- I mean, solving security-related issues. And visual AI can play a very important role. So the short answer is just we'd love to offer that to the governments and -- but today, we don't do the airports. We don't have a pilot at the airport, that much I can tell you.
Congratulations on a fantastic result.
We have our next question from the line of Pranay Jain from DealWealth Capital.
So first one is with the measures such as merchant finance that we are implementing, how much do you think it can really move the needle on the return ratios a couple of years down the line? I understand we are taking a lot of effort on expanding our merchant base and also partnering with networks. So logically, it is going to do it, but just wanted to understand how much needle it can move on the return ratios.
See the size and scale of the opportunity is tremendous. So you're right, we have a base of merchants. And the products, we don't need to define because products are also there. So I think we are the pipes, and we need to actually drive those products into the entire network. And we are -- we understand aggregation very well as a company. So aggregating these products and being able to offer it is somewhat core to our philosophy of aggregation in some ways.
So from other perspective, express settlement was just one piece of what we did. We were able to get a lot of value because merchants accepted that there will be some products that merchants will just use off the cuff because it actually helps them expand and gain business. There will be other products that in some ways certain credit-based products, they'll have certain propensity to be accepted very quickly. And there will be others that potentially will be -- will take a little bit of time. For example, any insurance-related products or some other products will have a certain take rate along with it.
So to answer your question, I think the opportunity sign of opportunity is significantly big -- significantly large. And what we need to do, and what we announced today, is that we'll build out a separate brand for it. And it will be -- and going forward, we'll talk about in some ways merchant services.
And much like in artificial intelligence, we built out a brand called Phronetic. Similarly, in these kinds of activities, we will talk about it in terms of building out a separate brand, and it will fall under merchant finance services. So I think it's -- right now in terms of what that means in the next 2 years, but we have -- once we have -- once we'll announce the launch and talk about the brand, we will, of course, give slightly more indications in terms of what we expect in the next few quarters.
So that would be sometime next quarter, will be able to hear more on this?
Yes. It will be end of this quarter or early next quarter.
Sorry, I didn't hear your last line.
End of this quarter, early next quarter.
Got it. And with the kind of authorization we have on the payment aggregator as well as BBPS, your presentation says that we are awaiting the retail payment network. So all of that put together, when do you think it's going to start making a material uptick in our numbers?
I think -- Vishwas here, the payment aggregator, we're already doing it, and the numbers what are reflecting today is due to that payment aggregator license, right? The BBPS numbers also, we are there and pleased to report that now we have got a perpetual license, not a time-bound license from RBI on the Bharat Bill Payment Systems, right? So those numbers are already reflected in the current numbers that you have before you, right?
The NUE network is similar to a network license like a MasterCard or a Visa or a NPCI, so those were applied a year or a 2 back, and they are still sitting with the Central Bank. So there has been different news coming in, but no official uptake. But we do expect that a lot of effort had gone in by the 7, 8 consortiums to put that license to apply for the NUE license. And somewhere down the line, there is a thought that increasingly, everything is being relied on the single network that we have currently.
So there needs to be multiple networks, just like U.S., there are 4 or 5 networks like MasterCard, Visa, American Express, Discover. In India, there is only one network currently. So dependency and -- on these things, there will be licenses opened up, but when is the question mark, so -- but as it is, we have already formed a consortium with 3 other players. I think it is already reported with Reliance Industries, Meta and Google. And if and ever RBI comes out, I think we'll announce it, but anyway, before us, I think the press is the first ones who will carry it.
Okay. Also, since you've already decided on foraying in U.S., Australia and also Southeast Asian markets, would you be able to offer visibility by when we are going to do this in the year? And what kind of CapEx or expense will be required for the same?
So right now, the focus is on the Middle East. We already announced that we are present in UAE, Saudi Arabia and Oman. So Oman, even just this month, the third major bank in Oman also went live with our systems. That is for our international. So that is already there and in Saudi and UAE. So once we have a good grip on the GCC markets, and definitely, we also said in today's presentation that U.S. is very interesting for us looking at enhancing the investment into XDuce and other things and putting our next-gen AI capability along with payment processing. So focused on doing those markets like U.S. and Australia next. But right now, this quarter -- and this is closing on the funding round for the -- this thing in UAE and Saudi and making significant dent in the Saudi market. So that's the immediate focus.
I understand that is our priority. And these new regions of U.S., Australia, perhaps would be late into the year, I get that picture. But overall, what are the total investments in CapEx that we are planning for building our payments as well as platforms and any other initiatives that we are taking over the next 12 to 24 months?
So the large regions -- yes, go ahead, Vishwas.
I think the large investments in CapEx, it's reasonable to assume that it's about $5 million to $6 million per region as a rule of thumb.
Got it. And so the adjacencies we are building around our core, it would take care of that? Or is that going to be separate on the platform side, on the AI side, all those things? I was asking cumulatively as a company for the investments in CapEx plan?
Yes. No. So there are a lot of things go because of every country wanting to issue a license. And every license has a lot of requirements on data, data security, data localization. There are n number of boxes to check. And then beyond that also putting all the compliances and stuff in place to be able to report them on a basis. So I think when we talk about the framework that we build for each region, we believe that there will be revenue generating when we build that out for clients. There'll not be more -- there'll be less of a CapEx, but more of revenue generation for us. But yes, I think this is all combined, it would be only for one and not the other. And it's reasonable to assume that that's one. With scale, they will be slightly incremental in initial CapEx, but that would be a good rule of thumb to use.
All right. And my last question is on the potential dues and receivables that we have estimated, such as the UPI dues combined. I understand -- while I understand on the GeM side, things may be a little gray, but what seems to be a reasonable estimate, which we think could come our way, maybe 3 or 6 months down the line? Or if you really think it could take longer than that.
So we expect that will come within 6 months.
And the potential dues or receivables, at least as a safe estimate, would be around?
A few hundred crores.
[Operator Instructions] We have our next question from the line of Rahul from Dolat Capital.
Firstly, just wanted to understand slightly more deeper into your guidance outlook, if you could double click and share us the reason -- key factor that would be driving the growth for you going into next fiscal? I clearly got the input that international could be the biggest driver of it, but if you could explain by pieces of the business that where you have the highest confidence from the growth driver perspective.
Sure, Rahul. So you're right, international has growth potential. We expect to double our international business. We have doubled it last year. Hopefully, we can increase it even further this year. And with some capital infusion opening up new geographies and so on and so forth will potentially mean that we'll be able to expand. So Sunil in his positioning mentioned that we plan to make the share of international to 30% of our revenue in the coming years compared to 10% -- less than 10% that we have right now. So that becomes a growth driver.
But more importantly, for the coming FY '25 positioning that we have, we think that this whole combination of -- in some ways merchants that we've added in the past year and being able to continue building up from there becomes an opportunity for us. That's one growth driver, which is addition of merchants.
Second growth driver for us is being able to offer certain financial products that we have talked about in our presentation today. So financial products, meaning in some ways, credit, insurance and many others that we already do express settlement with merchants, but we can actually expand that portfolio. And just so that you know, we are not just looking at merchants who are currently on our network, so we will open it up to ones who are not on our network, okay?
TapPay is the third one. We think that the growth of TapPay we will amplify it out this year. We've got some plans in terms of how we want to do it. And maybe we'll talk about it in the coming few weeks, but we think that, that has a potential. And there is also -- while we have not counted on it, but there is a positive upside on our ongoing matter with GeM.
So I think -- with these 3 or 4 things, we think appropriately conservatively that we'd be able to achieve these numbers.
Right. And on the platform business, if you could clarify a little bit? Of course, this was a very bumper quarter despite the GeM impact. Do you see -- is there a seasonality to the numbers that we have reported in Q4? How do you expect -- you said annual, it could be flattish, but Will it be like heavy on the Q4 and softer through the year building up into Q4? Is that the trajectory that you expect?
And lastly, on the XDuce, when we expect it to consolidate? Will it only be a minority interest? Or will we intend to consolidate line by line by taking a bigger stake in it?
So currently, of course, we are building out the business with them. And so it is a strategic interest. And as the business builds out, we'll be able to talk more. This is not a financial investment for us, so -- it's a good question, and we'll see how the progress is in terms of the synergies. And based on those, we will act accordingly. But yes, it is a strategic investment, and we'll talk about it as we go through in the coming quarters. That's as far as XDuce is concerned.
Your second question -- sorry, the first -- earlier question was...
Platform.
Sorry, platforms. Yes, platform is -- if GeM was there, there was seasonality in that business because GeM had some seasonality associated with them. If we don't have that, we've -- GeM is figured out, and we have taken acknowledgments because there was a little gray area in terms of intellectual property, the ownership of intellectual property, which was, in some ways "disheartening" for us because intellectual property is what we live by as a company.
But fortunately, with the progress that we have made, it is very clear in black and white and acknowledged by GeM that all platform intellectual property for Infi product is belonging solely to us and not to anyone else. So that is one. And that is a big, in some ways, achievement in terms of having that clarity in place.
Once this clarity is in place, now we will open up the platform to 1 or 2 very large clients this year. So we don't expect a lot of seasonality. We do believe there will be an upside if a few other things click in. But yes, we expect that it will be flat to higher. But we don't want to forward talk about because we have zero agreements in terms of the commercials with GeM yet. And until we have that, we will not report any revenue.
Just a clarification since you have mentioned this particular aspect a couple of times. I do understand the IP importance of having the complete control and assurance on it. But as far as the Q4 is concerned, we don't have booked any revenue even potentially from the new system integrator or it is taken as a part of a non-GeM revenue in the current number.
No, we have not booked it yet. So we have reported 0 revenue in Q4.
So the INR 57 crores revenue in Q4 comes from our erstwhile client and any new client that we have added during the quarter. And since you are not building any GeM and expect that to be a potential upside if that has to click for you. And outside of it, do you expect INR 220 crore odd, which you will get this year, should, give or take, be around that number? So basically, this INR 55 crore kind of a run rate with small movement here or there should be the usual run rate for all your 4 quarters.
Yes, I think so. So you'll have plus or minus 10% quarter-over-quarter. So -- but yes, within that one would expect that, that would be the case, okay? And that will have an impact in terms of -- the net revenue will be plus or minus 10% in that.
We have a next question from the line of Karthik Boggarapu, a shareholder.
Okay. Sir, just wanted to -- you have already mentioned that the Middle East is your priority market, just wanted to know what are your plans to expand to Africa, which is like the second fastest-growing regions in terms of developing world.
Yes. So I'll talk about it, and perhaps, Vishwas can join in. But whatever -- our thesis is that we want to -- I think we are not important if we don't have scale in any region that we operate in. And so our internal bias is always to scale up because, otherwise, we are not important. We are making a difference. Much like we have scaled up in India, Middle East becomes a priority and focus because we already have scale and we need to scale up even further.
And so between going and covering more territories versus scaling up in certain specific regions, our bias is to scale up in regions first. And that defines our priority. And we are not saying that we are shy about evaluating Africa or any other territory, but -- if the question is either/or, then we prefer scale compared to expansion across -- horizontally expanding across geographies.
Now the good thing is digital does not have boundaries. And so the other buyers that we have is we follow our clients, where if we find that our clients operate in more than one geography, then we find out where they operate in. And given that they trust us to operate in one region, then we can expand with them in other region faster. So that will also define our prioritization in terms of where we would expand next.
And the third factor being, of course, external, which is that there is an opportunity that came up, somewhat passive, not active, which allows us to open up, so much like what we have done in Oman, where we have given our framework to a bank, and the bank gives it out to others. We don't have a physical presence in Oman today. But we partner with bank, and we, in some cases, white label our solution for the bank so that they operate. That does not seclude and exclude us from being able to go directly also.
So I think the perspective is that if such opportunities come up, then it makes it much easier for us to open up and offer it to them as opposed to not taking up the opportunity because we think that we are somewhat focused on scaling. So the platform is scale agnostic. It can potentially go to a bank and can be offered to them. So we've done that in Oman. We may end up doing that in some of the other regions also. Or I can tell you that in FY '25, Africa is not on the horizon.
We have our last question for today from the line of Satish Kumar, our shareholder.
Yes. My question is regarding our -- very recently, somewhere in Gujarat, so all the INR 100 crores investment, that is already completed?
Yes. You're talking about the AI hub, sir?
Yes. Right.
Yes. The AI hub investment has been made. Yes.
We will hand over the call to the management for the closing comments.
Thank you all for your participation in our call, and we look forward to keeping you updated on all the progress about the company. And thank you all once again, and have a good evening.
On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.