Network People Services Technologies Limited (NPST) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Network People Services Technologies Ltd. Q1-FI-2027 Earnings Conference Call, hosted by Valoram Advisors. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-down phone. Please note that this conference is being recorded. And now in the conference, over to Ms. Pravangi Jain from Valoram Advisors. Thank you, and over to you, Ms. Jain.

Thank you. Good morning, everyone. My name is Pravangi Jain from Valoram Advisors. We represent the Investor Relations for NPST Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the first quarter of the financial year, 2027. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now let me introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Deepak Chan Thakur, Chairman and Managing Director, and Mr. Ashish Agarwal, Joint Managing Director. Without any delay, I request Mr. Deepak Thakur to start with his opening remarks. Thank you, and over to you, sir.

Thanks. Thanks, Prabangi. Hi, everyone. A very good morning, and happy to connect with all of you. This being a first quarter result, we would like to share not just the numbers, but the fundamentals set around it, and how this will pan out this year, as well as the next few years. We believe that companies are built by creating sustainable platforms, solving meaningful We are constantly executing long-term vision rather than chasing short-term goals. We did chase business transformation last year, and we continue to make efforts in building a stronger platform for a global company you want to see in NPST. We have delivered strong year-on-year growth, increased our revenue sources, expanded our product portfolio. We have accelerated our international journey. In fact, we have made it a little earlier, and continued investing in future-ready AI-based technologies. As a result, revenue grew significantly year-on-year, while the profitability also remained strong despite our ongoing investment for future growth. You know, and last fall, like we committed, you know, we have explained in our financial results that our focus has been multi-pronged to take the organization to the next stage. A, we want to de-receive organizations from industry impact due to regulatory landscape changes that bring more stability, pivot into multiple new products and segments, including rec-tech and AI-based risk intelligence, create global footprint and acquire accounts from newer territories, and build SaaS-based profiles to add recurring revenue. We worked our way on all the above directions, and now we are seeing funnel as well as results moving in this direction. Although we have brought down the contribution from payment platform, like in my last presentation, but any positive move on MDR on UPI will revive this segment. We are closely monitoring the progress for now. We may not see immediate impact, but it will have a visible difference. This is how early the industry absorbs. In RedTech, we have picked up deals in cooperative segment, and now we have an order from large PSU as well. So we intend to launch SaaS-based subscription for mid-to-small-sized banks. That will again give us a larger universe to address. We have been informed in our vision for Global Forex, and here we have been able to capture a global account in QuarterOne itself. Our team is now increasing new account quite frequently due to presence of SaaS-based bank-in-a-box model that we invested last year. Well, historically, we have been associated with payments, but the efforts invested last year to diversify has evolved NPST into a broader fintech company. A platform which has capability not just across payments, but also rec tech, banking technology, AI-led compliance solution, and international digital financial infrastructure drafting. Another significant milestone during the quarter has been the continued progress on our international business, where we are not just aspiring to get the success, but we now have a revenue contribution coming in. This validates our relevance of the technology which we have built. It is not just in India, but it can go beyond that and demonstrate the scalability of our product across different geographies. In the national market, we not just look at it as an additional healthy stream, but we believe it is going to be a strategic pillar for the company going forward. We are consciously investing in product, global business development, artificial intelligence, SaaS infrastructure, and asset revival. These investments, although cost today, but they are a growth enabler intended to strengthen our competitive position in coming years. We will see continued momentum across banking clients, growing demand for regulatory technology, increase in adoption for digital payment, emerging international opportunities, and stronger technology ecosystem. Our pipeline remains healthy. Our customer Our engagement continues to deepen, and the strategy direction, whatever we have given in the beginning of the year, that remains unchanged. Coming to numbers, I think if you have gone through it, the year-on-year uptick has been about 75% in revenue. We closed at about 61.42 crore. Our EBITDA has grown by 66%, and our net profit has gone up by 53 crore, which is about 11.4. I think that should be good enough for now. I will take questions here on. Yeah, probably. Over to you.

Thank you very much. We now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. Remove yourself from the question queue. You may press star and two. Participants are requested to use handsets while asking your question. Wait for a moment while the question queue assembles. You may press star and one to ask the question. The question is from the land of Akshay, from AK Investments. Please, go ahead.

Hi, sir. Thanks for the opportunity, and congratulations on the good numbers. Sir, my first question is about revenue guidance. So, we had earlier guided that we should be able to grow by around 15 to 20 percent quarter-on-quarter throughout the year. But in the first quarter itself, we have de-grown quarter-on-quarter. So, what should be the fair results on the revenue content? And also, we had guided that we should be somewhere around highest revenue per quarter of around 67 crore in the next quarter, but we are still 10 crore behind this target. So, please put some more color on the growth trajectory going forward.

Thanks, Akshay. Well, we gave a guidance of about 60% to 70% growth, and that remains unchanged. There is no challenge at all. In fact, I addressed this question in detail in the last quarter itself, and I gave the nature of the business. I clarified that. So I would like to reiterate the fact that we brought down our projection in the PFAS segment to just about 5% to reduce the risk associated with that segment. And now we are more of a technology-led subscription and the overall solution that we are selling in the ecosystem. Exactly the same nature of renew every quarter. And that is the reason why I even gave a clarity that you should definitely be looking at, you know, yearly numbers that is coming out. Funnels we had, we had that clarity. And that's why we're looking at how the company is growing year on year. And you should be looking at what numbers we are sharing. Is it meeting the guidelines? And the answer is yes. We are actually following the same trend. There is no change in guideline. When it comes to the overall numbers, I think last quarter, we have been able to do about 68 crore, which we already did when it comes to the highest. It will be due in this year as well. So the triggers coming in, the numbers coming in, the execution and implementation will definitely shoot up much higher than that.

Okay, sir. Fair enough. And we are also sticking to the full year FF27 EBITDA margins guidance of around 30%, right?

That remains unchanged.

Okay, sir. And my second question is about the MDR. So, recently there was a bill in parliament that approved the MDR on UPI. So, do we get any benefit out of it, and what is the economics of the bank's revenue and our sharing on that front?

So, it's an advantage to the company, but we are actually waiting for the guidance to come from the regulator banks and, you know, from NPCI, which is, I mean, we are extremely positive about how this should shape up. Just to give you an idea, we build the acquiring infrastructure for banks on which the entire UPI payment ecosystem would work. And based on that platform, there are certain contracts which we usually do on SaaS-based models. Now, the entire industry had a limited fund in absence of MDI. The moment MDI starts flowing in, when UPI is doing about 23 billion transactions, even 5-10% of such transactions brings in huge amount of revenue to the entire industry. And that goes across the payment aggregators, banks, and DSPs like us. We start generating that revenue. So, the PFAS segment, which was just about 5%, that will start flourishing, where we brought down the risk associated with the platform revenue. Now, the MDR revenue will start keeping it. It will add a good amount of revenue to the organization.

And, sir, lastly, on the international market presence. So, we are continuously developing our international presence. So, what type of products and solutions do we provide in the international market? And, also, in the presentation, you have mentioned that we have got the license, we have got the order for one of the biggest telecom companies in India for the Super Air. So, can you put some light on these two developments?

Unfortunately, I will not be able to zero down exactly on what product is, is the hero product because of the competition. What I can definitely tell you is that when it comes to digital transformation around payments, digital banking, we have multiple products with us, right? We have interoperable payment platform. We have merchant acquiring platform. We have banking super app. So all of these, we take as a bouquet and go to international market. So what we have got now as an order, we are actually transforming the entire digital landscape and payment for the telecom provider. So just like you have, you know, exactly if I replicate it, like you have, you know, Airtel as a telecom provider, but Airtel also has Airtel money, Airtel payment bank. So, that's where it opens up opportunity for us when the telecom provider has a FinTech options.

Okay, sir. Fair enough. Thank you so much and all the best. Thank you.

Thank you. Next question is from Nishant Joshi from EquiSense Advisors. Please go ahead.

Thank you. How much of our deals are coming from the international market, and how do you see growing it in the couple to 15 months?

The orders that we pick up will go through an implementation cycle, and the implementation cycle can range from, you know, four months to about nine months. That's the journey. There are milestones that come with it. So, there will be early revenue realisation in certain cases, and there will be cases where, post-implementation, it immediately hits the quarter. And that's the reason why I was saying. So we got one and we are, I mean, to be honest, there are two more deals in pipeline. So we'll be sitting at a good bucket by the end of this quarter. And when it comes to the margin, yes, that margin is what we are looking at. And yes, that's the margin which we will be working on. So, for now, if you see the consolidated numbers, we have about 10 to 12% coming in from international, and as and when the project goes. So, the project can range from 4 years, 5 years, or even longer than that. So, those stages, we start generating more and more margin, as and when the implementation gets completed and, you know, the revenue starts looking in.

Okay, okay. So, my second theory was, again, related to the same UPA payment system industry. Can you give an outlook to the industry overall if MDR is introduced? Do you see value of transaction and volume of transaction that MDR will be implemented giving a lower growth trajectory?

I think what I'm going to tell you right now is strictly my personal experience. Why? Because we are yet to receive guidance from our customers, like from banks and MPCI and the regulator that is yet not released. So it is way too early, and that's the reason why we are giving, you know, we are not giving a very aggressive numbers around it, because we are yet to see how this is going to pan out. But once it goes, because it has already gone in a very positive direction. So once it goes, it straight away, you know, brings an upgrade to the projection which we have made around payment platform as a service, which we have completely tapered down for now, until we see that impact coming in. So that segment will get a boost. Second, we must also understand that the conversation which is happening right now is around the higher ticket size transactions. And honestly, it's not going to be customers. Merchants are going to get charged. So high ticket is definitely around those merchants who can afford to sell those kind of products. So if you're going to a small grocery store, your ticket size is much lesser compared to when you do a bigger shopping. So there is the ticket size is larger. MDRs they are talking about is not even equal to what we have in cards. Much, much lower than that. So, I don't think that the revenue bucket around those particular transactions, sorry, the transactions around those revenue buckets will get impacted because much lesser rate on UPI, rather than car, they will still prefer UPI, much, much lower on UPI compared to car. Small businesses should not get affected and large businesses will definitely have an option, you know, UPI.

Thank you, sir. Thank you for the review.

Thank you for taking my question.

My first question is related to the last point which you just mentioned regarding large transaction. So, I think 4 to 6% of the total UPI transaction falls under that bucket. So, looking at our current present, do we see a sufficient enough pool for us, given that it is only restricted to...

See, that businesses, those 6-7% are those large merchants, right? Those are not small merchants. So, if you see the ratio amongst the large merchants, I think if we categorize those merchants where the balance sheet is much bigger, then we are probably talking about almost 80-90% of those merchants, top merchants.

Sir, one thing I was not very clear, and I'm sure, as in you alluded to your previous remarks also, So that still everything is not clear. You're waiting for the point which I want to understand. Will we directly get a benefit of MDR as in a share in that, or we will just get the benefit of this market getting expanded?

In addition, that means we work for regulated entities where UPI will have an impact. These regulated entities are banks and payment aggregators, where we have deployed our payment platform as well as our infrastructure. Now, we have, unless and until we do not receive communication from those directions, that is where we are saying that the communication is yet not there. However, the industry is already moving in that direction. Once, you know, that entire journey is completed, then it will reach our customers, and then from there it will come to us. That is what I meant. So, I'm not denying that it is in positive direction, but I don't want to make any number projections unless we receive the paper from them. Like, you know, these are the changes you do it, and now MDR can be charged. That is what I'm referring to. Yeah, that was very helpful. So, my next question is related. I'll answer the second one. So, how we are getting benefit? One is, there will be good revenue available. So, the total transacted value on you pay today is 2.7 trillion, approximately every month. Now, if you take this number, and whatever number you calculated right now, 4-5%, and then you take MDR, imagine the money flowing in the ecosystem. And when that happens, there is more money available to this providers, benefit we get. Second, on a payment platform, we have orders where we have implemented acquiring platform, and we get paid for a transaction. So, that is a direct benefit we get.

Yeah, thank you so much for that detailed answer. In the same MDR issue in the honorable fraud detection software.

So, we precipitated this problem being in this segment for over a decade now. And we are the only company who not only has infrastructure around bank, payment platform, but we also have a rectum. So, we invested into AI-based risk intelligence about two and a half years, three years back. And last on call, we clearly said that it was just a product. Now, we have created as a separate vertical. VEC is an opportunity or much bigger opportunity for NPST. You know, it's an ambition now to have such kind of software. And for that, what we built was completely AI intelligence around the merchant acquiring platform, how the transaction loopholes can be identified, and how merchant risk can be underwritten. For that is what I was referring to when I said we got an order from large PSU to create a subscription-based model for the small to mid-size industry. So that is definitely on cards, and with the growth, if at all, there is any further positive change in regulation that demands this kind of software to be mandated to help us in our rectum growth.

One last question, if I may. How do you see this MDR thing impacting the micro-ATM and the smartphone in the rural areas, far off areas where

AEPs, wherein the withdrawal happens through biometric, and there is also a product called UPI Cashpoint, where the MDR always existed. It never changed. So, it has a very different segment altogether. We cannot directly compare it with this impact because MDR on UPI cache, if you want to withdraw cache through a QR code, there was an MDR cost to it. And there is no change in that. Second, when it comes to the competition between micro-ATM, ATM, EPS, that's a completely different product. So, I wouldn't like to call out anything in that direction.

So, let's keep the MDR aside. How do you see the micro-ATM market going forward?

Unfortunately, I'm not exactly in that segment, so it will be difficult for me. However, what I see is that in 2-2, cash will definitely make inroads. As again, the larger costs involved in micro ATMs. So, if at all, there is more confidence, the cyber risk is less, and, you know, it's good. That's where the infra cost goes down, and the revenue is available for everyone.

Thank you so much, sir. That was very helpful, and all the best for the future.

Thanks, Dr. Thank you. Next question is from the line of Hardik Gandhi from HBMG. Please, go ahead.

Hello, I'm out of this. Yeah, tell me. Yeah, hi. So, I have two questions. First, I think we've put out a very aggressive guidance on the margins, and after such, in the last quarter, right, and this quarter, when I'm looking at the margins, on the EBITDA level, we've dropped. What is the reason for that, and do we have to look at it on a year-on-year basis? How do we go about that? That's my first question.

So, like I said that the margin, what we have referred to is a combination of, so if you see the table which we gave last year, sorry, last call, it's a combination of domestic, global, and rec-tech all taken together. And that's why we gave the cautious understanding also that the nature of business has also changed. It was 90% on P-Pass, which has gone down to, you know, 5% as projection now. So you should be looking at the technology-led growth. So the order that we have picked up in Q1, the order which we have picked up in Q2, these margin will start adding up, and then the averaging out will definitely be much higher than what we currently have right now. And that is the reason why we are confident that by the end of the year, we are definitely meeting our guidance. So, Global Play will add margin as well as RedTech, which is an AI-based product. So, that also has a higher margin. So, that is where it will impact.

A follow-up on the global business. I just wanted to know that if we are able to expand our offerings to new banks, Or are we just trying to cross-sell to our existing clients?

Our first target is always banks, central banks, and, you know, BFSI segment. Because that's where it evolves. But when we are going to global market, the interesting case that we are coming across is the other segment of also struggling with the same problem. So, the nature of payment ecosystem in a geography differs from the other geographies. However, the product that we have designed, developed, has a universal acceptance. It may be banking, it may be telecom or any other sector. Of the three first orders that we are going to pick up, there is going to be just one order from the other sector.

Because, you know, we earlier mentioned that we are far ahead compared to the global peers. Our technology is far advanced, given that our quick adoption of UPA and other technology in India. And we mentioned that these will be the low-hanging fruits for us to capture the global banks in different countries. And I think that we have not been able to tap as successfully, or is it just taking time? I'm not sure.

I think we are connecting in less than three months. And I've already given, I've already shared the order book. So, I mean, what we already have and what is the new that is coming in. That talks about the traction which is available. Yeah, there may be possibility that certain orders we are anticipating in three months, it may come in five months. That may happen. But the overall business, whatever we saw with last year's efforts, it is still intact. Our funnel is growing, and at the same time, our traction has only improved. So, I don't see there is any change at all.

Correct. And just last question. For the IPO funds, I think we received it in December. I think it's been eight months. We've used only 10%, roughly 10-15% of it. So, what is the deployment schedule or plan?

So, we currently have zeroed down on three-odd opportunities where we intend to invest. Our conditions are very, very strict, and that's the reason why it has taken time. In fact, I mentioned this last year also. We don't want to completely invest into only one segment, so we wanted to diversify that. RecTech was one area where we had to zero down on few companies. Then there was solutions around AI, you know, and then there was solutions around, you know, payment infrastructure we have identified. So we will definitely see some traction soon.

Meaningful that was that what will be the time of deployment that within next year we'll be able to deploy the funds? Or will it be like a very good gradual process where, you know, it will take us two to three years?

Yeah, not the entire fund, but we'll start seeing deployment in next two waters.

And those will be on product development.

So, we are looking at market expansion. Do we get an access to the international market, ready customers with new product altogether? So, all those parameters exist. All the best. All the best. Thanks.

Thank you. Next question is from the line of Prith Shah from Blue Star Capital. Please go ahead.

So, from last two quarters, we have been saying that next quarter will be fine, next quarter will be fine. I understand the business is changing, but we can see from the quarter which we have already declared. So, 68 was in Q4 last year, so we already reached that maximum number after, even between the transformation period and the change in the business model. We try to maintain that. Secondly, what we have done is we have grown about 75% year-on-year. Decision cycle and implementation milestones, those are the ones which start giving the revenue. So this year, again, no change in guide in the number. And all the other parameters, if you evaluate, did we get international revenue? The answer is yes. Have we been able to, you know, grow the numbers? Have we been able to maintain EBITDA? Have we been able to grow those subscription-based business? Are we getting revenue from the other verticals like RecTech? So, all those are green flags. So, if you see that, whatever we have committed is getting achieved. Got it. So, sir, as you are guiding for 60 to 70% growth on revenue, so is my understanding correct? You are saying roughly 320 to 340 CR revenue for this year? And we have got 56 for Q1? The range is around that, yeah.

Yeah, okay.

And we are paying 30% EBITDA margins, right, for this year?

Yes, sir. That's the guidance, I mean.

Yeah. Okay, got it. Yeah, yeah. Very good. All the best and thank you, sir.

Thank you. Next question is from Laino Sampadnai from ZTO Capital Advisors. Please go ahead.

Hi, sir. Sir, this is again a question regarding MDR. I just wanted to understand if we are the direct beneficiary of this MDR implementation or the indirect. So, when I say direct, let's say some large machine collects the MDR fees, so will we be getting that or will we be part of indirect spending by these

banks or payment rates? So, the exchange revenue generated by the acquiring bank, where we have our infrastructure, that is where we'll get paid. We will get paid from bank for the acquiring staff. We'll not be charging merchant. It is the bank which will charge the merchant, and they will do a share with us.

Again, I mean, let's say there's a transaction. For every transaction, will we get paid or will we get paid for the... Yes.

So there are two businesses. One is TSP, another one is payment platform. Wherever we have TSP, there are any incremental development on software to generate more revenue. Whatever investments they are doing, that is where there will be an incremental business coming in, in our TSP model. The other model is payment platform, where whatever acquiring platform we have deployed, on that, whatever per transition revenue is generated by bank due to MDR, which is not present right now, there the bank will share the revenue with us. So that becomes a direct revenue over the revenue generated from the merchant.

Okay. So, I mean, there are both direct and indirect revenue opportunities are open now, correct?

Absolutely. Absolutely.

Thank you.

Next question is from the land of Suman and Division Investor. Please go ahead.

I think there are enough questions on MDR. I'll request when the things are clarified, please have a special session on that. Now coming to other questions, how's your competition in direct tech? That's number one. Secondly, how's your time pay moving on?

Yeah, because, okay, so first one on the competition, I think rec tech is a very broader subject, precise, when we talk about the established products like EFRM, or EWS, you know, those all those products, there the competition exists, is there for, you know, decade or what we have built is the AI based risk intelligence, which is completely new. And that can be only evolved if at all you are able to deploy that solution in the banking environment, which we did. And we processed about almost about 650 million transactions. We not only have product, machine learning, and we also have the data intelligence, which is in that went into this particular product with the belief that. And then, now, when we go ahead and we talk about this product, we don't have to compete. We have to actually give them an idea how this is going to solve the problem. So, that's the status, right?

Okay.

But this prima facie looks very encouraging. I think number of banks...

In fact, we have got a good attraction even from the global market, Okay.

So, that should translate into a good top line, I believe, in the next couple of quarters. Anyway, all the best. How about time pay?

Yeah, time pay. Again, since this is B2C, we are still looking for the overall, you know, decision on MDR. Yeah. If Fetall has a direct impact on the payer revenue, which is the payer PSP also gets a share of that revenue, then for sure it will create an influx of opportunity on time pay. And then we can probably revive that product to a different, with a very, very focused thought process on what would be the investment. And if this stream of revenue adds in, then you know how this product will shape up. So, that's something we are looking forward to.

So, we can safely assume that you will cross all-time high top line sooner than later in the next few quarters, right? Absolutely.

From Sapphire Capital Partners, please go ahead. I'm not able, sir.

Yeah, tell me. Yeah, thank you very much for this opportunity, sir. So, just wanted to understand from the international business perspective, Now, what's our current mix right now in international revenue, and in the next two, three years, how do you see the revenue from international mix going towards here?

Right now, it is about 11-12%. I don't have the exact, but yeah, that's the range, between 10-12% coming from international, and that's majorly from TSP. Now, I don't have the exact scope for 229.

Some range would do, I mean, overall at a company level.

The difference should be between around 30% in the next two years.

30% in the next two years, you're saying by FY28?

28, 29, you can say. We are sitting in 26, 27 now. Around two years from here, we are targeting around 50% from the international business or maybe more.

So by FY28, FY29, something like that?

Yeah.

Yeah, you can say. Okay, and what's the margin differential between domestic versus international? I mean, how much better margins do we see in international?

Almost about, I mean, if it is about 15-20% in India, international will be anywhere above 35%. 30-35-40.

30-35%, right? Okay. So, got it. So, this year, we are looking at, what, 30% EBITDA margin, right? It should be around that. And when we say next two, three years, this international business will go towards 30%, and that differential is also bigger. So where do you see the aspiration in terms of margins for you in next two, three years?

Maybe you can say, apparently, we are between 25% to 30%. In next two years, we should target at least 35% around the margin, or maybe more than that.

Okay, understood. And in terms of growth, we said 60-70% this year, I mean, does the CAGR for next 2-3 years we are looking at?

Yes, year on year, you can say, CAGR, 60-70% we are targeting for next 2-3 years.

So that effectively means what, 850-900 crores, top line by FI 29, right?

Maybe, I have not done the calculation, but tentatively, yes, you are right. Next year should be around 850-900 crores for me.

Okay, okay. And this, you're specifically on TSP domestic business, the share will reduce, but this business itself will also see a growth? Absolutely. Absolutely, absolutely. But other businesses should see higher growth, so accordingly the TSP domestic share you expect to decline. Yes, yes, yes. Okay, okay. Yeah, that would be it from my side. Wish you all the best. Thank you.

Thank you. Next question is from the line of Abhishek Kajal, individual investor. Please, go ahead.

Hi, thank you for taking my question. My question is on the P&L statement. In the consolidated statement, under the header, changes in inventories of finished code, work in progress, and stock in trade, there is a significant hike to 17-odd crores from two crores in the last quarter. If you could shed some color on that, that would be really helpful.

Ashish, you want to take that out?

Ashish, actually we are doing a multiple kind of project, we do a turn-through project also. So there can be a hardware kind of material which is a part of our delivery. So that covers under this part. So it's basically the nature of business where we can put some hardware, then it will cover under this. That's the default.

Okay, so that's basically the hardware that we are supplying to the bank's offline payment. So, let's say if you pick up a project worth about 5 crore or odd, it will require a complete end-to-end, you know, hardware and software and services. So, basis milestone, it changes. So, in a certain milestone, there will be early realization of those pieces. And when it comes to the software and service milestones...

Next follow-up question is from Lano, Nishan Joshi, from EquiSense Advisors. Please go ahead.

So you've already partially answered my question. It was regarding the inorganic growth which company is working. I just want to understand it is due to the market expansion which we are seeing. That's why we'll be acquiring any company or where we want to...

There are too many interlinked decisions here. I mean, when the company was going through transformation and about almost two years back when there was a dip in revenue, we did a lot of corrective actions, and then we realized that, you know, the best way to do it is de-risk and diversify. So there was a particular quarter where I took the investors exactly through these two points. So it is critical for the company to, you know, to do a forward-backward integration when the time is right. And then also see the complementary products, which is exactly close to the domain, where the customers are the same, your accounts are the same, but the demand for products have increased. So that has been our experience all these long. So that is the reason why we are trying to invest into these. Like, for example, when it comes to payments, payments will always have some risk associated with it. But we are not selling Rectech, we are not selling anything that is needed to the customer that we are selling. So that's how we have made a decision around diversification, de-risking, and then, of course, when you get into it, it has its own channel and it has its own growth segment and the projections. So, obviously, projections also multiply.

Thank you. Thank you.

Thank you. Next follow-up question is from the line of Sampat Nayak from ZTO Capital Advisors. Please go ahead.

90,000 crores. So, since you told me we could be the direct beneficiary of this, so what kind of quantum we can, you know, consider to be added to the problem?

I think, first of all, I was, I clearly said that unless we don't have a mandate coming in, we would, we can, I can only give my personal experience. I just cannot, it is not there on paper yet. That's not how the MDR is switching fees. It further gets split. She's here can be the one who has acquired a user, which is like PSP applications, those who have acquired merchants, and that is where our bank plays a critical role. So, if at all, I have given acquiring platform and, you know, the QR code generated over the POS for where the bank directly to, given it via payment aggregator, then the payment aggregator also shares a certain revenue. You know, a stack in between where it has, I don't think that that is instantly available right now to anyone. So let's, let me not quote, definitely tell you that we being a part finitely get certain direct revenue out of it. Okay. Thank you so much.

Thank you. Next question is from the line of Ashish Soni from Family Office. Please go ahead.

Sir, in your results, sir, there are other expenses to the tune of almost 19 points on crores compared to almost 2 crores last year, same quarter. So, what is this additional expense of almost 17 crores?

Yeah, I think this is a grouping issue. The team has merged the purchase cost in these expenses. That's a 17 crore amount. So, other expenses is 2 crore only.

And your growth in this quarter was almost 70-odd percent, but your employee expenses has not increased, so is it because of your software service platform or the fee which was more, because proportionality didn't increase at all, it's hardly 10-20 percent is what I I understand. So what caused that?

So there are multiple issues? Yeah, Dipakha, do you want to?

It's okay, you start.

Yeah. First is there are multiple reasons, yes. First is that we are in a business where the employee cost is maybe not directly proportioned with the revenue. Second, the adoption of AI is very important, where we are doing multiple things, multiple developments we are taking with the help of AI. We are, I think Deepakai has already covered this part that as an organization we have adopted AI. So that's the reason I think Employee Post will not increase at proportion to the revenue.

We are trying our best to create an AI-driven organization. There are policies being written. Now when the policies get written, they impact over the AI security, they impact over the tools that is being used. So we just don't want to make it a random decision. We have made a decision that the organization will shift towards AI-based policies and processes. That is already going on. So whatever benefit we got, I think it's visible now. And in fact, on our investor presentation, we have clearly given that we want to improve our efficiency. The target of about 30% is still there. So that's the target you'll start seeing.

And regarding your guidance of 60-70% seizure for the next 2-3 years, so does that include your inorganic growth or it will be additional on top of it?

It is not inorganic.

Okay. And one last question on with event of methods coming in, okay, so there was RBI guidelines for banks to question is what is our stance on securing our platform against such attacks? And are we getting additional opportunities because of this RBI stance, which came, I think, in June, and if I be correct?

We have not launched an AI patent wherein there will be an impact. For now, whatever RBI guidelines has come around the AI attack, that will pave the way for, you know, larger, not larger, but I don't know, I can't value it. But yes, investment towards AI-based security. So, as and when the technology upgrades, the security layer also changes. So, those are areas which even we are looking forward to. So, there will be certain policy guidelines that will be released from banks that, you know, how they intend to look into it and how the software changes are expected from the vendors. It will happen over a period of time.

And inorganic acquisitions, so which acquisitions can come faster, because I think you are pursuing two, three, based on whatever you have been telling, and what will be the margin, same as our business, or it will be lower, I'm just trying to, because typically you are targeting overseas acquisitions, so my, because typically overseas acquisitions generally comes with a lower margin, unless it's a product, a well-established product.

I don't think the focus criteria right now, because when it comes to Priority, what we are looking at is the geographical access, instant access that we can get, new product that we can get, which is missing from our stack, which we wanted to build, and the growth trajectory that particular, you know, organization is giving right now. So, it will be way too early right now to, you know, share that particular information. But, yeah, that's the direction which we are going right now.

Can we expect something in Q2 or Q3, can we expect any acquisition?

I think Q2 is early, I don't think, but we'll come back on this one. Okay, thanks and all the wish for the future.

Thank you. Next question is from the line of Ketan Patak, individual investor. Please go ahead.

Hi, good afternoon. Am I already good? Yes, Ketan. The guidance that you gave last quarter was about 70% year-on-year growth in top line, whereas on a quarter-on-quarter basis, this quarter, we are down 10% in top line. So my question was, do we still stick to that guidance because that means we have to do about 270-280 crores in the next three quarters, which is like 90 crore run rate. So do we have visibility and are we on track to do that? Yeah, I think I have addressed this in the very first question, that early guidance does not change, that still remains the same. It is just that by nature, when are we executing the project, when the implementation is due and the milestone is triggered. So those are the reasons why, in fact, we knew this kind of, you know, when there is a change in the nature of business, in last quarter, call itself, we gave the clarity that, you know, do not expect the sequential triggers. This particular growth will definitely come, and you should be looking at the yearly numbers. Last question, follow-up to that is, for this quarter, I think at the past level, we were at a 17 or 18% margin. Would that improve to about 20% by end of this year? Yes, there will be improvement because the milestone-based revenue, when they come in, the margins improve. And obviously, when it comes to global revenue share, we are pretty confident about those numbers. Thank you.

Reminder to all the participants, you may press star and one to ask the question. For the questions, Arnau and the conference, go to the management for closing comments.

I think nothing much. I think you guys should definitely start developing the company the way I have addressed in today's call. A lot of traction, a lot of growth opportunities, a lot of triggers available. We are also very closely monitoring how it is going to evolve the payment industry, basically. And, you know, I believe there is a lot that we have to work on, including the AI-based strategy. We are very, very aggressive on that part. Purwangi, you can, you know, take it up from here.

On behalf of Eloram Advisors and Network People Services Technologies Limited, that concludes this conference. Thank you for joining us on Emi Now Disconnect Your Line. Thank you.