AvenuesAI Limited (CCAVENUE) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Avenues AI Ltd. Q3 F526 Earnings Conference Call hosted by Go India Advisors. As a reminder, all participant lines will be in the lesson when we move, and there will be an option to be free to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajat Gupta from GoIndia Advisor. Thank you, and over to Mr. Gupta.

Yeah, thank you, Nirav. Good evening, everyone, and welcome to MNUJI Limited earnings call to discuss the Q3 F526 results. We have on the call with us today Mr. Vishal Mehta, Chairman, Managing Director, Mr. Vishwas Patel, Managing Director and Chief Executive Officer, and Mr. Sunil Bhagat, Chief Financial Officer. Also joining us on the call today is Mr. B. Ravi, who is advising Aminu's AI 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 rest 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. Good afternoon, everyone, and thank you for joining us. Today, I'd like to cover three important themes. First, our quarterly performance and how we think through growth and profitability. Second, I will explain the strategic structural evolution of Avenues AI into an AI-native transaction infrastructure platform, and by this shift, materially expands our long-term. Growth opportunity. And third, I'd like to outline how our integrated ecosystem with spans across Rediff, Rediff1, CC Avenue, and Thronautic AI, how they all work together as a compounding flywheel, and what investors should expect from us over the next two years. Let me begin. This quarter represents a genuine inflection point for the company, not just because of strong financial performance, but because the architecture that we have been building over the past several years is now operating at a unified, scalable system. We delivered one of our strongest quarters to date, with sustained growth in payment volumes, expanded profitability, and accelerating platform integration. But more importantly, the strategic pillars we committed to scale regulatory depth and AI integration, as well as our ecosystem design, are now converging into a visible competitive advantage. During the quarter, we completed our corporate rebranding to Avenues AI Limited. This is not a cosmetic change. It's a structural evolution. We are no longer a payment gateway company. We are building an AI-native transaction infrastructure platform, which is full-stack, regulated, data-rich, and compounding. As you all know, artificial intelligence is no longer an overlay for any system. For us, it is embedded across our routing, fraud detection, risk management, reconciliation, orchestration, customer engagement, and decision automation. The Avenue's AI identity represents what we have already become, an intelligence-driven financial infrastructure company anchored by CC Avenue and increasingly relevant in global markets. I want to share how we see our self-reinforcing flywheel. Avenues AI operates as a closed-loop ecosystem where consumers will generate intent, businesses will transact and operate, AI orchestrates the decision, payments monetize every interaction, and data will compound into an advantage for us. Every transaction makes the system smarter, and every data point improves automation. Every improvement strengthens our retention. And this is just not a linear revenue model. This is a learning system. At the center of this flywheel sits Rediff 1 and CC Avenue, the operating system of our ecosystem. Let me talk about our integrated architecture here. On the consumer side, Rediff integrates identity, intent, engagement, and increasingly financial participation. With a very large registered user base, UPI entry through a financial wellness positioning, and an evolving AI-native content layer, Rediff is becoming a meaningful consumer gateway for us. On the business side, Rediff1 becomes the convergence layer, the AI-native back office for SMEs, enterprises, and institutions. It integrates communication workflows, compliances, and operational intelligence into a single environment. At the monetization core sits CC Avenue, the economic engine of our system. Its role is evolving from payment gateway to an AI-optimized financial execution layer, combining compliance, scale, orchestration, and intelligence. Empowering all of this is Phronetic AI, the invisible orchestrator in our system. We think of Fronatik not just as a standalone AI company. It is the brains of our ecosystem. It converts every data into an action, whether to approve, reject, whether to root or retry, whether to predict or prevent, or whether to notify. It deploys agentic workflows across payments, operations, risk and compliance and customer communication. The outcome is somewhat measurable, which is lower customer acquisition cost. I want to touch upon how the system compounds over time. Consider a small business operating on Rediff 1. It acquires customers using Rediff. It runs operations on Rediff 1. It accepts payments via CC Avenue. It uses frenetic agents to optimize pricing, reduce payment failures, and automate reconciliation. As that business grows, payment volumes increase. As volume increases, our data intelligence improves. And as intelligence improves, automation increases. And we believe as automation increases, margins also expand. The switching costs move beyond just contractual dependency and they become operationally existential. This, we believe, is the power of integration. Finally, we see a clear two-year structural outcome. Consumer scale expanding via Rediff, business lock-in depending and deepening through Rediff 1, predictable monetization compounding through CC Avenue, and margin expansion over time through AI. This is not an incremental feature growth. This is a platform-level operating leverage. And we don't want to build a quarterly story. It's a compounding story. We believe very few companies operate simultaneously across consumers, merchants, regulated payment infrastructure, and AI-driven orchestration. And even fewer still have them integrated into a closed-loop learning architecture, and that is the opportunity in front of us. And this quarter, for the first time, we are seeing the flywheel move as one system. I will now hand over the call to Vishwas for the operating details. Vishwas, over to you.

Thank you, Vishal. Good afternoon, everyone. This quarter has been an execution-driven quarter for our payments and platform businesses. While the strategic direction has been clearly articulated earlier, the focus over the last few months has been on converting that strategy into operating scale, regulatory readiness, and monetizable infrastructure. Let me walk you through the key business developments. At the core, CCAvenue continues to scale steadily across merchant segments, supported by strong demand from large enterprises, utilities, telecom, travel, hospitality, etc. We are seeing higher share of credit card and large ticket transactions, increased participation from enterprise and institutional merchants, consistent onboarding across SMEs and cooperative banking networks. As discussed earlier, we are concisely prioritizing volume-like growth and absolute profitability over headline take rates. This approach is already delivering stronger cash flows and operating leverage even in a competitive pricing environment. This quarter was particularly important from a regulatory capability perspective. We received our in-principle RBI license for issuing prepaid payment instruments, enabling us to launch wallets, store where-due products, and prepaid solutions in the near future under the CCMU ecosystem. We secured the IFSCA approval at Gibbs City, which will allow us to participate directly in cross-border payments, escrow services, and international merchant acquiring. We also received the RBA authorization for offline payment aggregation, extending our presence across physical merchants' locations through POS-based networks. Importantly, most of these approvals are close to monetization and not long gestation initiatives. Our international payment business continues to gain traction. In the UAE and Saudi Arabia, the transaction volumes remain strong, supported by enterprise clients and platform integrations. In Oman, we are now working with multiple leading banks, expanding our role as a technology and payment infrastructure partner. Gift City will provide us with a strategic base for U.S. denominated settlements and cross-border flows, which we expect to scale meaningfully over the coming quarters. We remain confident that the international markets will contribute a growing share of net payment revenue over the medium term. A key focus this quarter was optimizing our AI-led payment architecture. With the launch of CCAvenue Commerce AI and Paycentral.ai, we are enabling autonomous transactions initiated by verified AI agents and compliance-ready auditable payment execution. This is not positioned as a consumer feature rollout, but as a foundational infrastructure for enterprises, platforms, and financial institutions that are preparing for AI-native workflows. We believe that the architecture will evolve gradually but has the potential to boost a structural revenue stream over time alongside a traditional payment processing. On the consumer side, RidicPay will continue to progress to regulatory and technical readiness. Our approach here is deliberately phase, UPI and wallet capabilities will coexist. Focus is on financial wellness, low cost distribution, and brand land engagement. We are avoiding high-man acquisition strategies seen elsewhere in the ecosystem. The advantage we have in our existing user reach and integrated payment infrastructure, which allows us to scale responsibility. To summarize, this quarter reflects a strong execution in our core payment business, the completion of a broad, defensible regulatory stack, the measured progress in AI-driven commerce and consumer platforms, and a continued discipline around scale, profitability, and risk management. Our Bill Avenue platform continues to gain ground, particularly in semi-urban and rural markets. We processed millions of utilities, mobile recharges, and bill payment transactions this quarter, with agent-led adoption driving deeper financial inclusion. In parallel, Res Avenue is leveraging our AI-based tools to help hotels implement smart pricing and optimize occupancy rates. This quarter, a revenue platform enabled hotel room bookings of 7,68,107 room nights at an average of 8,534 room nights a day, crossing over 6,050 million for our 3,500 plus hotel properties. It not only centers our position in the hospitality sector, but also demonstrates how AI is beginning to create tangible value across our merchant ecosystem. Early pilots in fraud detection, risk scoring, and dynamic pricing are demonstrating how AI can improve merchant efficiency, reduce costs, and unlock incremental revenues. We remain focused on building trusted, compliant, and intelligent payment infrastructure at scale, while selectively investing in platforms that extend a long-term growth runway. With this, now I invite a CFO, Mr. Sunil Bhagat, to take you through the call. Financial performance for this quarter. Over to you, Sunil Bhai.

Thank you, Vishwa, sir. Good afternoon to everyone on the call. This quarter reflects consistent execution across our core payments business, supported by improving scale, stable operating costs, and continued discipline on capital allocation. Our consolidated gross revenue for the quarter stood at 2,381 Croo. A growth of 122% year-over-year, driven primarily by higher payment volumes, a stronger contribution from enterprise merchants, and continuous expansion across domestic and international markets. The consolidated net revenue stood at 149 Crore, a growth of 6% year-over-year, reflecting steady monetization despite a competitive pricing environment and a higher mix of large ticket transactions. Our focus remains on absolute profitability and cash generation rather than headline tick rate metrics. Adjusted EBITDA for the quarter came in at Rs.98 crore, an absolute growth of 25% year-over-year, reflecting improved operating leverages as volumes scaled up. The EBITDA as a percentage of net revenue also jumped from 56% to 66% on year-over-year basis. Our adjusted PED stood at Rs.86 crore, a growth of 59% year-over-year, supported by cost control, stable credit costs, and higher contribution from value-added services. Our PED margin has also jumped from 39% to 58%. Even as we continue to invest in technology, regulatory readiness, and platform development, our EBITDA and PED margins remain healthy, demonstrating the resilience of our PED. Underlying business model. As discussed earlier, the quarter saw a higher share of credit card and enterprise-led volumes, which typically carry lower take rates but significantly higher absolute contribution. Our strategy is very clear. That is, prioritize volume-led customer acquisition and operating costs. We believe this approach creates a more durable earnings profile, particularly as scale continues to build across merchant and institutional segments. We continue to maintain a strong balance sheet with healthy cash flows from operations and low leverage. This financial flexibility allows us to fund investments in AI and platform infrastructure and selectively invest in growth initiatives such as RADIF without stressing returns on all liquidity. Our capital allocation remains measured and returns-driven. We have revised our full year guidance for Financially 26. As mentioned in slide number 17, the upward revision in FY26 guidance reflects a materially improved business outlook and stronger than anticipated operating momentum. Based on current trends in the transaction volumes, enterprise onboarding, and international expansion, we remain confident in meeting and potentially exceeding our stated financial objectives, while continuing to invest prudently in long-term growth engines. To conclude, this quarter demonstrates that scale and profitability are growing together, margins remain resilient despite mixed changes and our balance sheet strength positions as well for the next phase of growth. We remain focused on execution, efficiency, and reinforcing the financial foundations of the business as we build for the future. With this, we will now open the floor for questions.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask the question may press star and 1 on Datastone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question is answered.

Participants, you may press star and one to ask a question. First question is from the line of Mohit Jain, from DR Chokshi Fensal.

Please go ahead.

Hi team, thank you for taking my question. So my first question is on Paycentral's opportunity. So sir, I tried to, you know, size Paycentral's opportunity by looking at India's retail digital payment, This is somewhere around 900 lakh crores, but, And I tried to narrow it down to, you know, PG-adressable segments like cars, UTI, net banking, B2B vendor, etc., which gives me an intensizable market of around 50 lakh crore, but within InfiBeam's own 8 to 10 lakh crore TTV, I'm estimating 50% or 50% of it being automatable, and assuming just a 5% adoption rate, I'm getting a figure of like 30,000 to 40,000 crore in terms of market size of pay central TBE. Sir, is this the right way to think about pay central's addressable market and adoption potential? Over to you, sir.

Thanks. Basically, this is Vishal. I'll take this question. So, you're right. India is the largest real-time payment market. And, you know, the next value layer is intelligence on top of the rails. So, what traditional aggregator would do is somewhat route transactions, settle payments, and manage reconciliations. But this AI payment agent, which is pay central,

it cuts across all different payment aggregators.

So it integrates within the MCPs of all different payment aggregators and not just the CC Avenue. So it auto-routes transactions for success probability. It predicts the fraud. It disputes. It optimizes all the checkout flows, and it negotiates routing and settlement logic and automates all this merchant reconciliation and collections. So theoretically, the way to think about it is this payment is actually moving to a decision infrastructure decision layer. So, in some ways, it becomes like an operating system for all money flows, and it's just not a pipe. Now, with that said, the way we think about it internally is that, you know, I mean, through UPI alone, imagine the number of transactions that India processes, maybe 300 lakh crores, whatever that number is. And there's a lot more through other mechanism. And, you know, I mean, in some ways, that intelligence layer will command a few bits of that flow, which is enormous. So, I mean, theoretically, what we have seen is that the global pattern in this is, you know, somewhere, you know, this AI agent's monetization, which is the pay central piece, is somewhat, you know, that share of that BIPS that you would perhaps generate through this particular intelligence layers. And for that to work and the TAM to play out, you need to have open raise, which UPI does, which is completely interoperable and API-driven. You need to have massive scale with, you know, some margins, because that is what will force this innovation to come through. And then this whole merchant digitization wave, which already has started, it's usually playing out. So, in our thesis, where Bay Central sits, is, you know, merchants don't manage payments. AI agents manage money flows end to end. And whoever owns this layer will control the merchant financial workflow, their whole credit insights, the transaction intelligence, and the ecosystem control. And that is a far bigger price than a gateway margin. And so for us, it is somewhat. It's competing to become that intelligence layer, and, of course, that payment agents have to be adapted across. We believe it's only a matter of time. The adoption in the airwave is significantly picking up, and that's what we'd like to play out. But to your point, I think the time that you're talking about just on the CC Avenue ecosystem that we think about is also pretty significant. The other good thing, just so that you know, is that when you use agents, traditionally you will take a few minutes to close a transaction from intent to closure. Using agents, you can do it in seconds. So, theoretically, when you think about closing a transaction, you will have to look at the product, look at the checkout, figure out how you essentially make that payment, and then the payment routing comes back, and then the confirmation comes through. And generally, what you would see is that most companies, they optimize on how many less clicks would you need to make as a human to be able to close a transaction. As an agent, you can do it in a few seconds. It's far more sophisticated and much more controlled, and the determinism also is very, very large in that. And a lot of protocols are being set out, you know, to be able to handle such a thing. So, yeah, I think, to your point, I think the tax is very large, but it will also be a function of adoption by many of the... Many of the merchants. And we believe that consumer personal agents are any of us coming up. So I think transferring that agent-to-agent protocol and using Paycentral as a payment agent becomes very, you know, fertile, if you come to think of it.

Oh, thanks for the detailed answer, sir. Just to follow up on this, so I understand that it's not just a pay center, it's not just about, you know, the congestion, but it's about controlling the entire merchant financial workflow, which you just mentioned. Again, so I know it is initial stage, but I just want to understand how do we... You know, monetize it. Is it possible for you to tell the blended take rate which we can get from this opportunity itself? Or it's very initial stage and it's very hard to tell this?

No, it's not hard to tell. I will tell you, generally, payment gateway as a business is not going to go away. You still require the regulatory approvals and so on and so forth to come in. Thank you. When you actually give it to an agent, agent will also start earning BIPs on transactions. So theoretically, for someone whose payment, I mean, I think, you know, one can imagine that very low single-digit BIPs across all the transaction volume is what the opportunity holds out to become. And we believe that that's significant, if you come to think of it. So it'll just add up into the margins and the BIPs.

Okay, just to clarify, this low single digit or whatever it will be, it's an add-on to the earlier bits which we were collecting from just now. That is correct. Absolutely. Thank you. That answers my question. Thanks for the detailed one, sir. All the best.

Thank you. Next question is from Lennar Darshal Pandya from FinFest Capital. Please go ahead. Hi, can you hear me? Hello. Yes, sir, go ahead.

Yeah, so I just wanted to understand one thing. With the offline care, I think it's now in place, like, you know, you cover both online and fiscal payment flows. So, should you view offline as a manipulate related to your AI, or, you know, through this higher transaction density, which is merchant level database, we'll see something better?

So the question is that, is offline going to help your AI strategy? Can you kindly repeat the question?

Yeah, yeah, yeah.

So I think, you know, yeah, I mean, we have the online PA license, and now we also have the offline PA license. And, I mean, I don't want to use the word, you know, just a pipe, because theoretically, offline payments is just a pipe. That, you know, most offline merchants still have that basic pipe of QR scan payment done, you know, less intelligence in pricing, routing, credit, even if you come to think of it, all these collections and automations and cash flow optimization, all of that is somewhat, you know, the missing layer. And so, I mean, where the agent comes in in the offline payments is that rather than just the merchant receiving money, The agent can actually handle the context of the transaction, which means that it can decide what option to use as a payment routing. It can maximize the success rate, detect fraud, identify all the unusual transaction sizes, personalize the transaction by triggering certain workflows and somewhat automate collections as well. So, we think that... I mean, if you come to think of it, India has more than 60 million-plus small merchants. I mean, they're digital QR, and, you know, one can create a massive opportunity for a system that sits between the merchant and the payment rail. And you can learn from every offline transaction and improve the future decision automatically. That's the opportunity. So we think that if you come to think of this offline payment market, I mean, you can think of... Any influence transaction by the agent times the value which is unlocked is the opportunity somewhere. And that's far bigger than just the share of just the payment fees. So we think that, you know, this whole AI payment agent in some ways turns every, you know, offline payment transaction into a decision engine. Effectively becoming somewhat a merchant financial operating system rather than just a pipe that moves money.

Does this answer your question? Yeah, it does, it does.

Thank you. Next question is from the line of Pranav Mashruwala from Dollar Capital. Please go ahead.

Yeah, hi, I'm Erdogan.

Yes, sir, go ahead.

Yes. Yeah, hi. Thank you for the opportunity. One question was regarding Redis 1. So how many merchants have we onboarded on Redis 1, you know, shifted to that platform, and how is the activity in terms of active transaction and adoption? So some color on that would be great.

Sure. So, I mean, of course, you know, we've publicly disclosed that, you know, Saber, Redefund is the whole productivity suite of all these enterprise platforms, and they combine communication, commerce, business productivity software suites, and in some ways, you know, we target sovereignty, you know, by, you know, in some ways. Local data hosting advantages and air-gapping it out so that you don't have to use, you know, any cloud system if you come to think of it. And so the strategic performance that we think is, when you talk about the install base is that there are more than 20,000 plus merchants already on the Red F1 system. And, you know, that, you know, the number of users of that is... You know, magnitude of that number, much, much larger. And so we think that, yeah, I mean, it's growing fairly well for us. While we've not divulged the exact numbers, but the way to think of Rediff, one's performance is not just as a standalone, you know, it is essentially just a foundational identity and a productivity layer in our ecosystem. So somewhat the strength lies in activating all this. Existing enterprises and consumer base and deepening the engagement and enabling the entire ecosystem with payments and AI services. And so, I mean, for us, Redifun is less about the short-term revenue and more about building the structural control layer that somewhat underpins of a long-term monetization strategy, if that makes sense.

Sure, sure. So, of course, we have like almost 10 million plus merchant days, and I'm sure most of them are mid to small scale as well. So, typically, how much?

Thank you, Mr. D. We think a reasonable number to go after for the next 12 to 18 months is at least, you know, high single-digit to double-digit percentage of our base, and that's how we look at the opportunity so far. So, you know, we believe that given the touch points and given that they trust us with so many of their other transactions, I think, you know, that's a fair estimate to go after. But, yeah, it would be cool to have a million merchants using Redify.

That will be. Just a few booktapings here, if I may. What led to this guidance upgrade? Is there some one-off revenue or something that we are expecting?

No, I think we've already reached our, you know, I mean, you know that we've, for us, since payments becomes the intelligence layer, an intelligence-driven area, we think that we've deliberately made investments in scale and data density. So, I mean, payments are increasingly... You know, in some ways, intelligence service and maximizing transaction flows. So if you look at our performance, we've reached the guidance that we've given for the last, for this year in FY26. So the upgrade is really a combination of our capacity to actually monetize and somewhat we've prioritized revenue growth and also the depth in our ecosystem. So we are positioning the platform to generally significantly You know, give, you know, better, you know, value. And so it's, we don't see this as a, as a one-off. We think that, you know, that's how we potentially look like. And it's somewhat reflex in terms of if you look at the last three quarters and our performance, and if you look at the extrapolation of what it means for this quarter, you perhaps come down to other guidance numbers.

Just last one on mine, we usually used to share transaction processing value for various of our platforms. Just on the CC Avenue's TPVT.

If you look at the slide number 15, you would see that, the value.

Thank you. Thank you, sir.

Thank you. Next question is from Lionel Dipesh Sancheti from Mania Finance. Please go ahead.

Am I audible?

Yes, sir. Go ahead.

Okay. You mentioned AI reduced payment failures by 9% in Q3. How much of this improvement is structural and embedded versus a model-specific gain that could plateau?

Go ahead, Rishvast. So, basically, AI... is intelligent routing. So when we get a particular failure from a particular bank, right, and then we have the ability to route it to multiple other banks that we are working at at the back end. So an intelligent AI-based system that we have implemented, which gorges on the success rate, going down to as back as just the last five minutes. Which calculates the best success rates, it can be intelligently routed through this thing. And this is not across just one or two options, but this is across 200 plus options that is there, right? And even it's in different cards that we have with eight different banks and different systems. So this kind of this kind of Uh... This thing really helps in boosting success rates. Also, not only on the success rate, but a lot of transactions were also being dropped because of the earlier negative databases and frauds and dropship locations and many other things. Now, with AI, we have been able to do a very dynamic and real kind of a thing where we have been able to... You know, drop certain transactions where we see a fraud emerging in real time so that it does not go only for the real transactions. The success rate automatically gets improved when these guys are trying to multiple different modes and using different other fraudulent numbers and cards to stop it. So these are all helped in, you know, boosting real transactions and other things.

To answer your question, you know, I'll tell you, structurally, a lot of gains have already been accounted for in the system. For example, all this bank uptimes and all of that, I mean, that's already there, and I'm sure that it's improving by the day. So my expectation is that, you know, a lot of what you would see going forward is, you know, really this model gains that come through, Through all this, you know... The whole retry logics and the routings that Vishwas talked about and all this, you know, how do you handle all this timeouts and, you know, how do you essentially improve your somewhat scoring algorithms? And so I think my expectation is that we haven't quantified, it's a good question, we haven't quantified that yet, because we always assume that, you know, structural gains are... Are not going to be the largest contributing factor, given that, you know, India has some of the finest payment rails out there. So, and those are also, I mean, whatever that structural gain would happen, they're somewhat slow to appear. But it's very hard to attribute. It's a good question.

We won't be able to tell what is a direct EBITDA or a net take impact of this reduction?

No, we can. The question was that, are you seeing this, what I understood your question to be, is that are you able to, you know, get a better success rate based on structural changes or the model changes? And what I was communicating was that, yes, there is an improvement. We can compute the EBITDA, but to quantify how much of that success rate improvement is from structural changes versus model changes is not an exercise we have undertaken.

Okay.

So what I mean by that is that, I mean, did that come because we have a better bank uptime? Or, you know, Some enhancements that maybe the payment raise has gone through or, you know, some latency issues in the network that have been identified and cleaned up or whether it was a better authentication flow for the client. So those are somewhat more structural, but we think it's somewhat model-driven. That's what I meant. Because what Vishwas said is right, which is we've configured our framework to include, you know, with all the AI and optimizations that we've put in. It's much smarter routing and retry logics and all this timeout handling and other capabilities that improve and all the fraud scoring improvements that we've made that would have contributed to the largest portion of that improvement in success rate. That's what we've thought, you know, attributed to that improvement.

You state that switching costs become existential, not contractual. What percentage of revenue today comes from customers where payment, compliance, and workflows are all embedded inside ReDefCon, making switching operational infeasible?

You know, I mean, come to think of it, There is a lot of – Redefund has many productivity suites, and if you come to think of it, once you offer more than one service, the switching cost somewhat exponentially goes higher. And the moment you are handling a lot more data and data patterns, and then if you are also figuring out how to, you know, in some ways... That cost of actually moving all that data and being able to serve becomes slightly higher. So once you have a flywheel framework where you are able to offer to a particular client more than one service, We think that with somewhat, and especially when you, in the world of AI, where, you know, data becomes the mode, and I'm sure one can argue synthetic data can also be produced, but we think data is the mode, and if you've been able to utilize that data and offer those services to that merchant, the switching costs exponentially increases, because it won't do everything that, you know, any other system, it may be very good, but it won't be able to provide the same level of. The efficiency that, you know, a system, you know, that utilizes data and provides all the AI prompts to be able to offer to you with all the learnings.

Great, great.

Okay, I'll follow back online for the next question. Thank you.

Thank you. Next question is from Linos Rani Chanda from Alpes Financial Partners.

Please go ahead.

Hi, am I audible?

Bernie, you're sounding distant. Can you speak a little louder and closer, please?

Hello, am I audible now?

Yes, go ahead.

Yeah. Hi, so you've added multiple layers like agentic payments, offline PPI, cross-border, UPI, and AI orchestration. So how do you prevent organization and product complexity from diluting focus before the flywheel economics fully kick in? Hello?

Yeah, so the question is that, of course, the two brands that we have right now is CC Avenue and 3Diff, and the quote for us is payments. So, I mean, the question is that, are you focusing on too many areas? I think these are all related areas. And that's what completes our flywheel, the one that we have set out to architect. So we think the focus will continue being that. And we have, you know, orchestration layer using a lot of AI frameworks that can somewhat compound that opportunity for us, we believe. But, yeah, the things, these are nomenclatures, but at the core, it's, you know. In some ways, productivity suites and payments, and that will always continue being our focus.

Okay, so there are no SEC frameworks to prevent the complexities from diluting the focus.

No, I mean, we think that all of these are somewhat naturally interweaved with each other, and, you know, I think that in some ways it's convenience.

Okay.

So, I mean, the focus for us is actually to make the ecosystem flywheel work, and these are important components of that.

All right, and my second question is, what internal guardrails exist on the ROI?

In terms of our investments?

Yeah.

So you know that we've been appropriately conservative all the way from the beginning. And we forward invest, and we want to know what that investment will end up looking like for us. And so I think, you know, we'll continue with the same philosophy, which is how do we make sure that, you know, what we're spending for, you know, that ROI is measured and managed, and we are able to drive it. But see, our core principle, if you ask us, is that... Our guardrails is not about stopping investments. We just want to make sure that whatever we spend will help us in terms of advantage or some platform advantage, if not today, tomorrow. So our guardrails for ROI is not short-term thinking. We want to be an AI-first payments business. We want to evaluate what happens in the next 12 months because a lot of things are changing. And we want to track what is the margin on a transaction and how do we, much like the success rate and, you know, the loss reductions and time reductions. I mean, if you don't, we won't take up an initiative which won't improve our unit economics, if that makes sense. And that's like the very short-term, you know, thought process because a lot of things are changing. But from a long-term perspective, we have to think about merchant stickiness, pretty much what we talked about in terms of how do we essentially get the switching cost rather than contractual to make it slightly more existential, and how do we use data as a moat, which is how do we ensure that you are somewhat reducing the amount of effort. And then... The long-term ROI thinking is really about where do we see the nonlinear scale? How do we ensure that we are bringing intelligence because AI is really intelligence, and if we don't have that monetization, it won't work. So for us, you know, I mean, that future monetization is really the strategic ROI test for us. And, you know, we want to make sure that the ecosystem... Pulse should always increase for us, which means that every new feature, everything that we do should increase the dependency of the merchant or the customer or increase the engagement that they have with us. And that's been our philosophy of thinking through ROI. I hope this answers your question.

Okay. Thank you so much.

Thank you. Next question is from the line of Amish Kanani from Novice Investment Managers. Please go ahead.

Yeah, hi sir. Congress in a good quarter on property terms. Sir, this quarter, you know, we have seen quite a bit of interesting cross revenue growth versus a very muted net revenue growth and you know And that type rate is, you know, kind of halved from 11 to 6. And I understand you have been saying because you caught up with a change in absolute profitability and not a NPR. But you know net revenue growth of 6%. Interestingly in this quarter has you know driven our EBITDA by 25% and you know profitability at 60%. So, the question is one, sir, if I even simply you know difference the net revenue you know it's grown by only 8 to 9 crores versus EBITDA growing at 20 crores. So, one, you can explain, you know, how this quarter is panned out in terms of operating leverage and even our EBITDA is actually grown much more than, you know, the revenue and absolute terms. So, you can give us some sense of, you know, how is it that, you know, we could extract more profitability at EBITDA level more than even net revenue. So, if you can explain that, because it definitely, you know, in this quarter, you know, focusing on absolute profitability is, you know, burnout. So, you know, what kind of expense management that you have done or, you know, is there any one-off that was there last quarter, which is not this quarter, something like that. So, can I explain that? It would be helpful. And in that context, you know, I, pardon me for, you know, my, you know, knowledge of payment system not being, you know, full proof. I wanted to understand, if and when this UPI payment, you know, starts to, you know, become chargeable, does it help us or it, you know, kind of affects us, you know, at a structural level, if it can give us some sense of, you know, UPI payment being not charged as of now, there are lots of noise, right, will become chargeable at some stage, and some payment, you know, providers are saying, you know, you can't keep on, you know, subsidizing this infrastructure. So, then give us some sense of our business model versus you know just change it all that happens that will be really helpful. Thanks.

I'm sure. Vishwas, you want to take the UPI part, and then I'll tell Sonil, and I'll talk about the...

So, look, if and when UPI becomes chargeable, it's going to be beneficial to all the players, including us. Right now, MDR is at zero right now for UPI, right? So, the whole focus area is on all the other options that we have, other 199 options that we have to get the margins and to increase business on that one. But yes, of course, when the UPI becomes chargeable, the women are offline and online, both can contribute significant margins if and where if the MDR ever comes in. So, I, as a chair at PCI also, I have been working with the finance ministry and other things, and hopefully, we are hopeful that some kind of MDR should come in, at least for large merchants, as well as we are hoping that even the money that the finance ministry gives out every year to submit all this UPI transaction also grows significantly. So, that can be an additional one. Apart from that, Rishal, you.

Sure. So, to your point, two things. One is net take rate is decreased, but you're saying that if it has a percentage in the slide, it shows up to be a larger number as a percentage. So, if I understand your question, why is that particular, I mean,

net revenue is not going as much, but it can go on much more. And that explains our, yeah.

Yeah. So the way to think about – so for us, say, listen, as far as the net take rate is concerned, absolute terms, you're right. We've actually – the net take rate has gone down. But that's a deliberate investment in scale and data density for us because payments are increasingly a gateway to high-value financial intelligence service. That's the way we want to architect the company. And maximizing all these transaction flows today will strengthen what we look like in the long term monetization. And so by prioritizing revenue growth and some of the ecosystem depth in terms of usage, we think that positioning the platform to generate significantly higher lifetime value per merchant over time will be the right metrics for us to live with. And so, I mean, it's less a position of our competitiveness in the industry and our efficiency and more about a strategic decision on getting to that scale and data density. Now, if you look at the EBITDA numbers, EBITDA is basically a percentage of net revenue. And so as net revenue has increased, you know, from, you know, say about 140 crores to 148 crores, that 8.5 crores. The EBITDA percentage is a percentage of net revenue. And so certain expenses, of course, have been more efficient. You know that we have redeployed quite a bit in terms of how we want to scale and build out this company. It does not apply to us. It will apply for every company. There will be hiring freeze on many of the potential areas that can be automated using agents. A lot of manual tasks, reconciliations, onboarding, there will be, and we believe that there is a significant shift happening even today. Because, you know, you would – the kind of workforce that you would require in an AI-first framework is very different than what you would require in the past. And so you will see a significant change in terms of just the workforce mix. And while some of the large companies you've been hearing lately in the news that there is a change, we also have a significant opportunity to upgrade and change the kind of – So the position that we think about is that anything which is manual, which is task-driven, where you just have to keep on doing the same thing over and over again, all those activities will be taken over by task agents, and we're deploying that across all of our companies. Second is the orchestration piece where you would want to, once that task has been defined and identified and you need to actually create workflows, there will be orchestration agents. I think that also is somewhat completely automated going forward. The real... The trick over here is this decision agent that will perhaps drive decisions, and you will see that over a period of time, you will see many companies become super efficient and leaner. So we think that that's actually somewhat a margin expansion opportunity, but rather than thinking of it as, you know, So reducing the workforce, and we would rather essentially upgrade the entire workforce and make sure that there's a natural transition to where we are versus where we would want to think of being. So you see some of that going on, you know, in terms of the overall size and scale of the opportunity. But yeah, I mean, you know, I think that, you know, from a take rate perspective, yeah, since it's a percentage of the net revenue, that's why you see the percentages. Go in that direction, if that makes sense.

Sure, and sir about upgrade guidance, sir if we do a required run rate for fourth quarter from you know the 9 month and to take the bid point of the revised guidance.

Sir fourth quarter you know we have we are quite conservative here.

So, the question one I understand if the seasonally third quarter is the best one, but even if I take a bid point of you know our Thank you very much for the guidance and interest you know subtract the three quarters, then you know you know the run rate for even Adidas in fact, is not even you know matching the second quarter which is you know a normal quarter. So, the question is one are we conservative here and should we you know optimistically at least assume that you know we should be hopefully on the on the higher side of the guidance or is there some seasonality which you know we have to keep in mind while we

are in our position. Yeah, I think the midpoint of that guidance range should, of course, be achievable, in our opinion. And we have been appropriately conservative. We would like to, if we are doing, and if we find that we are doing, you know, better and larger, which is reasonable to also assume, we'd be investing more in branding, marketing, and some of the other activities. So it's reasonable to assume that we'll end up somewhere in the midpoint.

Joseph, you thank them.

Yeah. Thank you. Next question is from the man of Karen Mehta from Umkara Capital Private Limited. Please go ahead.

Hello, may I request you to unmute your line and proceed with the question, please?

The line for the part has been dropped. Ladies and gentlemen, we do time constraint. That will be the last question. I'll now hand the conference over to the management for closing comments.

Thank you all for joining our third quarter earnings call, and we look forward to keeping in touch and looking forward to building out a terrific strategy in a moat going forward using a lot of AI frameworks. So we will keep in touch and keep you updated. Thank you.

Thank you very much. On behalf of GoIndia Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your notes. Thank you.

Thank you.