AvenuesAI Limited (CCAVENUE) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Avenue's AI Ltd. Earnings Conference Calls, QNFI 27, hosted by Go India 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 the conference call, please signal an operator by pressing start then zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Rajat Gupta from Co-India Advisors. Thank you, and over to you soon.

Thank you, Anushka. Good evening, everyone, and welcome to Event News AI Limited, earnings call to discuss the Q1 F527 results. We have on the call with us today, Mr. Vishal Mehta, Chairman and Managing Director, Mr. Vishwas Patel, Managing Director and Chief Executive Officer, Mr. Sunil Bhagat, Chief Financial Officer, and also Mr. B. Ravi, who is advising Invenues 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 viewed in conjunction with the risk 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.

At the outset, I want to let you know that we had strong revenues this quarter. Revenues increased by 109% year over year. We have been concentrating on building volumes and absolute profitability, and both have gone in the right direction, with the profit after tax going up by 45%. I want to walk you through the Avenues AI strategy, and we believe we have got four focus areas. One is payment. Second is consumer. Third is intelligence, and fourth is credit, and they increasingly reinforce one another. Payments is our foundation. CC Avenue moves money for merchants and continues to fund our investments in the next phase of our business. Consumer is Rediff. Rediff, Rediff Fund, Rediff Pay, Rediff TV, they give us direct relationship with consumers and business, something most fintech companies simply may not have. Intelligence as Pronetic AI, which is now proposed to be merged with Avenues AI, we are putting AI on top of transactions, payments, and enterprise workflows to create new products and capabilities. Credit is our emerging distribution layer. Through strategic minority investments in regulated financial institutions, we can distribute credit without putting lending risk on Avenues AI balance sheet. The important point is that these are no longer separate businesses. They are becoming one integrated platform. We have been building Rediff into a broader consumer and enterprise platform. Rediff Pay is progressing well as our UPI-based consumer payments platform. It will be out of COG this month and into production. Rediff 1 is evolving into an operating platform for businesses bringing together commerce, communication, compliance, and intelligence. Red FTV, as in news and Red FGurus, they add content and community. The opportunity is therefore much bigger than legacy Red F business. We are connecting Red F's consumers and business with avenues AI learning from payments and AI capabilities and unlocking value from the ecosystem. AI is the next layer of payments. We believe the next generation of payments will not simply move money faster. It will enable machines to transact. Through Phrenetic AI, we launched PayCentral, which we believe is India's first agent-like payment platform built on Google's agent payments protocol. It enables AI agents to transact directly with one another without requiring a person to manually initiate every payment. Think of it simply, an AI agent understands the intent, finds the product or service, makes the decision, and completes the payment. We call this Uberizing Payments, removing the friction between intent, commerce, and payment without replacing the merchant or the consumer. We believe this can now become a layer of digital commerce. That is the reason why we have changed our name from InfiBeam Avenues to Avenues AI. We are no longer a payments company that does AI. We are building AI-first fintech infrastructure company that started with payments. Payments give a scale. Rediff gives us consumers and enterprises. AI gives us intelligence. And Credit Partnerships gives us access to financial products without balance sheet lending risk. This is the ecosystem we are building. The first quarter, FY27, we actually made meaningful progress across each of these pillars. We received in-principle approval from Central Bank of UAE for Retail Payment Services, which is a CAD-3 license for avenues. UA is already one of our strongest international markets. The license will allow us to broaden our customer reach and product suite and strengthen our long-term international payment strategy. In India, RBI authorized Davenu's AI to set up payment system for issuance and operations of prepaid payment instruments. These approvals further strengthen our regulated payments infrastructure across India and international market. In terms of our asset-light expansion on credit, we've moved from strategy to execution and credit. We have progressed well in proposed investments of up to 2.5% in Ratnafin Capital, which is a RBI-registered NBFC, with a very strong SME lending franchisee. We also approved a strategic investment of up to 7% in online PSB loans, India's largest public sector-backed digital credit platform. Our model is deliberately asset-light. Avenues AI provides AI payments, infrastructure, and merchant distribution. Regulated partners provide the balance sheet and underwriting. This allows us to participate in India's digital credit opportunity without taking lending risk onto our own balance sheet. As far as trust is concerned, on the intelligence side, we are building another important capability, enterprise AI that stays inside the enterprise. Through Phonetic AI, we are developing on-prem AI solutions using small language models in specific about a billion to 10 billion parameter range. These models can be deployed, trained, monitored, and retained within client's own infrastructure, with sensitive data remaining inside the organization. Our platforms are built specifically around this requirement. For enterprises, particularly those handling sensitive data, software entity, security, and controls, these model capabilities are becoming increasingly important. We believe this allows us to compete on trust, not simply on model size, and creates a new AI-native revenue opportunity beyond payments. The Board of Directors have also taken two significant decisions this quarter. First, Neuromind, which is our fully-owned AI-based subsidiary, is being merged into Avenues AI. This will give us synergies and seamless operations and lead to cost, benefits, and data consent also. The second we are doing is a reverse split, which is a face value of share, which was 1 rupee now, is being increased to 10 rupees per share. Consolidating the face value to 10 rupees instead of 1 rupee has a significant impact on how our shareholders will perceive us, as well as earn the liquidity. I will now hand over. The call to Vishwas to take you through the payments business. Vishwas, over to you.

Thank you, Vishal, and good evening, everyone. Vishal has laid down the strategy. Let me bring it down to what we are seeing with merchants and consumers. Our strategy is simple. We are not trying to add another payment option. We are trying to become more deeply embedded in the merchant's workflow. A good example is the integration of CC Avenue Payment Gateway with SIP Rocket Checkout. SIP Rocket's D2C and SMB merchants can now access same-day settlement, international payments, no-cost EMI, and payment links across WhatsApp, SMS, Instagram, and email without managing a separate payment relationships. We are applying the same model across other verticals. Our form builder has onboarded thousands of education institutions and even merchants. Our Bill Avenue platform process millions of utilities, mobile recharges, and bill payment transactions with agent-led adoption, driving deeper financial inclusion. Our ResEvenue platform, that is our Integrated Reservations and Payments platform, is scaling across thousands of hotels and connects with systems such as Opera, Micros, Fidelio, Property Management Systems, and leverages our AI-based tools to help them implement smart pricing and optimize occupancy rates. The principle is consistent. Make payments part of the workflow, create more value for the merchant, and the transaction volume follows. Our transaction processing volume for the quarter grew 74% year-on-year to INR $1,479 billion, with continuous strength across utility payments, government payments, retail, B2B, and hospitality. Our performance reflects that. Strong execution in our core payments business, completion of a broad and defensible regulatory stack, measured progress in AI-driven commerce and consumer platforms, Continued discipline around scale, profitability, and risk management. We remain focused on building trust, compliant, and intelligent payment infrastructure at scale, while selectively investing in platforms that extends a long-term growth runway. On the consumer side, Rediff Pay will continue to scale as a UPI platform once it has passed the COG stage. We see Redipay as a genuine second leg of the payment business, bringing consumer transactions increasingly onto our own payment rails. Redip1 is also expanding beyond email and communication into commerce, compliance, and intelligence, making it an operating platform for businesses. On embedded lending, our merchant network is becoming the distribution layer. As Ratnafin and OPL progress towards closing, we expect merchant financing, checkout financing, and working capital products to become available across the CCMN ecosystem with lending risk remaining with our regulated partners. With that, I hand over to Sunil Bhai for the financial performance. Over to you, Sunil Bhai.

Thank you Vishwasar, and good evening, everyone. Let me start with the Q1 FY27 numbers. On a conservative basis, our gross revenue from operations stood at 2680 crore, which is up 109% year on year. Our net revenue stood at 147 crore, marginally down by 3%. Our EBITDA, excluding other incomes, stood at 100 crore, representing 41% increase year-over-year. Our profit after tax for the quarters stood at 85 crore, which is up 45% year-on-year. This performance builds on the strong full financial year 26th trajectory, where our gross revenue was 8,116 crore, which is up 103%, our net revenue was full year 603 crore, which is up 15%, and PAT was 295 crore, up 25%. So far as our FY27 outlook is concerned, our company expects FY27 consolidated revenue to be in the range of INR 11,000 crore to 13,000 crore, that is growth of around 35% and above, and also expects the FY27 EPS to be in the range of INR 8.75 to 9.5 per share, which is based on the proposed post-corporate action face value of Rs.10 per share. Our cost base remains front-loaded as we invest in AI infrastructure, international expansion, and our new financial services capabilities. We are therefore not building for a short term margin spike. We are building for a structurally stronger and more scalable margin profile through FI27 and FI28 as these businesses begin to compound. With this, I will now hand over the call for Q&A.

Thank you very much. We will now begin the question and answer session.

Anyone who wishes to ask a question

may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Amish Kanani from NoWise Investment Managers. Please proceed.

Hi, sir. Congrats on good growth. Sir, we had filed for this DRHP of Redef, and I understand it was confidential. Last quarter also I had asked this question, but you can give us one, the progress on the same, and we were more worried about, you know, this Corporate action that we are taking, whether, you know, that could impact our, you know, timing of the issue, because one, if you can just remind us of this, you know, reason for this corporate, you know, action, was it so critical and whether that, you know, impacts our timeline for Rediff, because I understand the valuation of our company would really be unlocked if, you know, Rediff has, you know. A separate way of valuation because the data is also not coming out in total. So one, if you can address that.

Sure. So this is Vishal here. Basically, we don't see any impact of the corporate action on the filing of a rediff. They're two separate events. The corporate action is, to remind you, just increasing the face value of the share from one rupee to 10 rupees. And so that applies to the shareholders of Appenews AI.

So, the merger of that other subsidiary that we are merging with Avenues AI. Correct.

So, the fully owned subsidiary of the company is merged into the parent. So, that has no bearing to the shareholders of Avenues AI. Basically, it's a 100% subsidiary of Avenues AI. And so the proposed corporate action that we have suggested is to merge the fully-owned subsidiary, which was undertaking the work of AI models, AI frameworks, and all the opportunities related to that. And, you know, we believe that if we bring that company directly as part of Avenues AI, then the AI adoption... We'll grow much faster. It is part of the, we've also recently in our press release mentioned that we plan to build out transaction intelligence cores and many more. And so with that kind of, you see in AI data becomes extremely critical and important, consented data. And so what we believe in is that if it becomes part of the main entity, then the growth opportunities and trajectories are significantly more. So, we don't believe that this corporate action of merging the subsidiary into parent has any bearing to the proposed filing of Rediff.

Any update there?

It's slightly early to directly talk about it, but yeah, I think that we followed the due process, and you can see some updates which are there on the SEBI website.

And, sir, this is a pay central thing that, you know, we are doing. If you can give us update on, you know, how the, you know, commercial traction there in terms of, you know, merchant onboarding. And a real good question there, sir, is, you know, this last week was, you know, all over place about MDR. I understand to quarterback, I had asked you this question, if and when the MDR comes, but there will be a beneficiary, and, you know, you did mention it will be a beneficiary to us. The only, you know, concern that, you know, now in the public domain is being discussed is that the large, you know, payment providers will get a larger share of the MDR, and hence, maybe the market gets consolidated. Given our market share being relatively on a lower side, would it be an opportunity or a threat in that context?

Vishwas, you want to take the MDR first?

Yeah. So MDR UPI is significantly growing on our base. Today, almost 22% of our transactions are on UPI. So any kind of monetization on that UPI will add additional revenues definitely to our platform. Right now, as we stand, the act has been passed by the Lok Sabha. It still awaits Rajya Sabha, and it still awaits the President's approval, and then the Gazette, and then we will know what kind of pricing and monetization that NPCI and RBI is allowing to be done. No, for sure, it's going to be on big merchants and for higher value transactions. But once the final let come in, then maybe we'll be able to propose what kind of revenue can be generated. As far as threat is concerned, there's no threat as per se. There are... Options is like UPI, which runs across, deeply across all kind of payments that happen. So, there is something for everybody in the ecosystem to gain out of it. And there is no consolidation on the acquiring side. On the issuing side, yes, where a lot of TPAPs have some base. But on the acquiring side, on the online acquiring side, it's quite evenly spread out. So we do have a significant 8% to 10% share of the overall market. So let's see, as in that monetization, Apple, it will be good only. It is an endeavor that we ourselves as a company and myself have been working on it to get that monetization bit going for the last couple of years. So, finally, it is booktified.

Sure, sir. Congratulations on that. And, sir, any update on the merchant onboarding and Paycentral, you know, how are we kind of progressing?

It's early days still. So, in other words, the protocol is new. I think internationally it's growing a little bit faster than in India. I think... The intent protocol is actually working fairly well. I think as far as using AI for merchant onboarding and productivity, I think there are three things that typically you can do with this. One is you can actually increase productivity significantly, which is AI is actually complementing the human in terms of getting productivity through. I think there we've made massive amounts of progress. Second is replacing humans. I think it's dystopian, but it's not something you can rule out. So in other words, if you take it further, that particular opportunity can replace a human actually in the loop. And then the third thing is actually AI will end up doing things that you could technically not do in the past. For example, reconciliation of every single transaction as an audit. I don't think that from that perspective it was possible in the past. You could do sampling, you could do many more, but now you can. So just give you an example of what you could do now. So we think that all these three things are happening as we speak. As far as, you know, consumers opting to actually transact using agents, that is still in the early phases.

Sure. So last question before I fall back in the queue. You know, this quarter, you know, we were saying that we were not chasing gross revenue, top-line growth, but a net revenue. But unfortunately, you know, that number has not grown. And still, we have been able to increase our, you know, operating profit, which seems to be coming more from, you know, compressing the expense line item. So if we can explain, you know, what is happening there and, you know, what is the trend like? Should we be? Should we be focusing more on gross revenue or net revenue? Because the guidance also, I think, we have given it in terms of gross revenue.

Yeah, you should focus on net revenue, in our opinion, because that is the one which will perhaps give you the best indications in terms of how the company is progressing. You know, yeah, we will, you know, there are certain, you know, specifics that we would take up, including the ones that we talked about, which is distribution of credit and so on and so forth. And that should all pour back directly into the net revenue. So we think that that is something that one should definitely take a look at. Gross revenue may fluctuate based on mix and other specifics.

So the operating, you know, EBITDA margins, the operating revenue margins are increasing more from the expense line item, right, sir?

Yes, that's right.

Thank you. We take the next question from the line of Dipesh from Mania Finance. Please proceed.

Hi, I'm Audubi.

Hello.

Yes, you are.

Okay.

On the enterprise SLM, private GPT, there's a new unproven line competing against the well-capitalized global players like OpenAI, Anthropix. So, what is the go-to-market strategy or the target customer and the expected revenue contribution timeline?

So, we find that SLMs are very good at solving specific problems. A lot of it is actually, if you come to think of it, and if you try it out, you can increase, I mean, you must be a user of many of the SLMs, but if you keep on prompting, prompting, prompting, you can actually get much better results. In this particular instance, what you do is you take data which is specific to a particular company, you vectorize it, you build out knowledge graphs on top of it, SLMs, and then some application layers. We find that enterprises like where data is critical, financial institutions, critical operations in some ways. They would all want this kind of setup, which is SLM-driven. I think the opportunity is significantly large. It is still in early phases. I think, you know, it actually reduces the token cost also significantly. And what we realize is that many of these companies, they can solve a lot of problems building workflows. You don't even have to use tokens and then perhaps optimizing it using SLMs. And that becomes specific to that particular setup. So we think that, you know, it's, I mean, how do we productize it is a bigger opportunity. And if you are able to give some kind of a DTX in something which consumers and enterprises can start utilizing, it becomes valuable. In terms of impact to our business is concerned, I think it's about anywhere from 9 to 18 months out where you'll start seeing some good impact.

Right. And what is the exposure on the token which uses the LLMs? What will be a risk on the token prices and how has been the trend of the token prices right now for us?

Tokens are slightly inflationary. You know that. So, in other words, you know, I mean, there's lots of optimizations that one can do, you know, in that area, in that space. You know, and then there's new stuff happening on a daily basis. So, I think, you know, for us, you know, and, you know, typically infrastructure, tokens, and so on and so forth. For our internal use, of course, we'd spend, but, you know, for the ones that we give to our clients, clients would actually end up paying that. So we pass on the cost. It's a pass-through for us, typically speaking. You know, but if you think about SLMs and if you have this kind of a fabric, then, you know, token cost falls by about one-tenth of what you would typically see because you don't have to. The data is actually somewhat air-gapped. It's not going out. It's within the premises. And so, you know, the utilization and so on and so forth is significantly improved, you know, with this particular setup. So, I mean, the way we see the opportunity is that, you know, for critical infrastructure, for financial data, for many others, the utilization of LLM will be limited because of the data security concerns. You know, it will move towards the SLM framework, and that is what most companies would end up, you know, working on. That is an opportunity that we believe will perhaps work as well, but if we can actually productize it, it's even bigger.

Right. And about RADIF Pay, now still pre-launch, and the UAE and RBI licenses only newly received, how much of the FY27 growth guidance is already assumed? And the contribution from these unlaunched or newly launched businesses versus being a pure core CCIV neutral?

I think we've not assumed much from Rediff Pay because it's a UPI payment option. So for FY27 guidance, we have not assumed a meaningful contribution from that, if it makes sense to you.

Right. And, I mean, as the previous participant said that, you know, we are planning to list Rediff as a separate entity. What has the revenues and will be list Rediff as a AI provider or we will list it as a more of Rediff pay and, you know, very similar to the pay teams of the world?

So Redif has, you know, three large opportunities. One is Redif Fund, which is the enterprise side of the business, which has emails, commerce, you know, in some ways, you know, CRM, HRMS, ERP. Think of it as something similar to Zoho one in some ways. But I think that that's one opportunity that Redif will go after. Second is Redif Pay, which is what you mentioned, which is more like the UPI payment with FinTech opportunities, wealth management, and many others. And the third opportunity is... We describe it as content and Rediff TV, which is not the linear TV that we talk about streaming with a lot of content. So we think that it is not going to be the legacy-only business. It will be AI-enabled, new version of what we think consumers and business will connect into.

So how is it going to be different from – I mean, sorry, I'm sure you wanted to add, but how is it going to be different to our existing company?

That's consumer-facing payments. This is, you know, acquiring is in CC Avenue. So, merchant acquiring is the, you know, so avenues here will focus on the B2C payments. I mean, consumers paying to businesses. And Rediff is going to focus on the consumer side of payments. You see, payments are two different elements. Today, for example, a consumer does not download a CC Avenue app and utilize the app. They will go to the merchant where they will find a payment options and they will pay using CC Avenue. So we are on the business side, on the acquiring side. We are not on the consumer side. Rediff is on the consumer side.

Right. And what about the AI? I mean, you've excellently explained how the payment module will be from B2C and with Avenues AI, B2B. What about the AI part of our company? Will that entirely go to readers?

AI is completely as part of Avenues AI. So, Phronetik is being merged into Avenues AI, which is NeuroBind as a subsidiary, which is 100% subsidiary, is merged into Avenues AI now. So the entire AI vertical line with people and everyone else will be part of Avenues AI.

Great, great. Thank you so much, guys, and all the very best.

Thank you. We take the next question from the line of Corey Shankar Dalal from Creator Capital. Please proceed.

Hello, sir. I'm out of the room.

Yes.

Yeah. So, just a couple of queries I had. So, first of all, EBITDA margins have expanded sharply to around 80% of net revenue, which is 40% a year ago. So, like, what would be the sustainable margins, like, both all the investments into AI and the platforms have been done?

We've given guidance for the year, this year. So, if you look at, you know, the press release and our guidance, we're projecting, you know, revenues to come in between 11,000 to 13,000 crores and earnings per share from 8.75 to 9.50. That is net of the capital that has been allocated to be spending on A&M platforms. And I think that, you know, we've adopted the approach of... Ensuring that we are not chasing the short-term profitability. We are looking at the long-term impact, but we're going to track and monitor what happens in the short-term very sharply. So we have a slightly disciplined approach, and we have put certain guardrails. But, yeah, we would definitely be, you know, increasing our intent to forward invest in AI, and that will continue on. Okay. I think as far as the EBITDA for the quarter is concerned and next quarter is in the full year, you know, we have given the guidance so you can actually be able to, you know, look at whatever EBITDA margins has been compared to PAT and come up with the EBITDA version.

Okay, and apart from this, as you have mentioned, the gross premium target for the entire financial year, it is around 25 to 60%, from 8,000 crores approximately to 11,000 to 13,000 crores. But the EPS is flat, the guidance in the EPS part is flat. So considering the fat for the 57%, the EPS should also have grown by around 20% or so, while the EPS is flat in the guidance that we have shared.

Yeah, so one thing that we think we want to continue on is, and we've got a philosophy, and it's pretty simple, that we want to protect our earnings of the core business, and we will want to forward invest incremental cash generation to build the business of tomorrow, which is actually in the AI and other areas. So we expect the core business to remain strong and profitable and generate increasing operating accruals. And we believe that beyond a certain amount, the incremental capacity will be selectively reinvested into AI, transaction intelligence, and other high-convection growth opportunities that we have. So if you think about our philosophy and our approach, the thing is that we want to grow the core. We want to generate incremental accruals. We want to reinvest selectively in AI. We want to build out all new revenue streams, and then we want to compound earnings over time. So, you're right. I think that, you know, we believe that, you know, additional accruals that come in as part of our build out will be reinvested back. And, you know, we want to think about if we think about an ambition from 27 to 29, you know, it's not simply about maximizing, you know, earnings. It is... to emerge at the end of the period with both a very strong earnings base and a significantly large AI-led business. And so you can expect that we will invest that incremental accruals back into the business of where we have very high convection. So it's a conscious decision that we want to compound today's profitability while investing in the business that can drive tomorrow's growth.

Sure, got it. And after that one more query, the net rating has declined around 3% around here, and 1% quarter on quarter. Can you give us some reasons in the flavor about the net rating has declined?

Yeah, you know, this typically first quarter is a slightly, you know, low quarter. You know, second, third quarter is slightly better because of festival season and others. And we believe that, you know, as more and more transactions happen through our platform, you know, we have slightly compression. As far as our margins are concerned, if you look at our takeaways, they've compressed slightly, and that has impacted our net revenue. But we believe as we build out other opportunities, which is somewhat credit-based distribution, many others that we should be able to. You know, pick up. And we remain slightly appropriately conservative in terms of how we think through this. But, yeah, you're right. I think it's a combination of payments being a competitive business. Second, our aspiration to grow payments and increase the core profitability and pull-in volumes. And third is we think that with that we can, you know, Build out a lot of other revenue streams, which potentially will offset and help us increase our margins in the medium to long term. Right. Got it.

Vishal, can I comment? Vishal, I just comment. I would also like to add one thing. If you notice, you know, though the net revenue maybe is like flattish or slightly gone down, the EBITDA has gone up by 41% and the EBITDA percentages have gone with just 47% in YOY in P1 FY26 is now 68%. So concentration has been on improving the absolute profitability and the margins there is based on the gross revenues and the take rate, not necessarily on the net revenue. So that is a positive part of the entire result.

Yeah, that's right. But the only issue was that there's a lot of investment into AI automation and all. That's where the EBITDA margins and all, they're not able to clearly figure out what is the ideal sustainable EBITDA margins going forward, excluding all the S&P.

The guardrails that you can establish is about 15%. That's like the guardrail, if you ask me. We always want to have guardrails, which is we never want to go below that certain amount. Rather than going into how much EBITDA we can improve and so on and so forth, we want to set up certain guardrails that enable us to ensure that we continue reinvesting into our future and maintain certain profitability in our core. Right, sure. It's not a target, it's just a guardrail. Sure.

Just a last question. The e-commerce platform business was flagged last quarter as flagged was slightly higher and on a high margin value. So when was the promise platform AI would show up in the growth number? And what about the growth of this platform business?

So, we expect that, you know, I mean, we're investing quite a bit in that area, and some meaningful results should start showing up in Q3 timeframe. So, you can expect that maybe some movement will start in the Q3, Q4 timeframe for us in that space. Sure.

Thank you so much.

Thank you. All the best.

Thank you. We take the next question from the line of Dinesh Kumar from Coward Investment. Please proceed. Hello. Am I audible, ma'am?

Yes.

Thank you. I wanted to reflect on what is the test that we have on Reduce IPO timeline, sir. One second on and what kind of AI investment or AI infrastructure are you building for next like you have guidance for 2007, 27, 29. We are focusing on the monetization of our business. So what kind of AI infrastructure are we building up on, sir? And what kind of returns on net basis do we see in EBITDA, EBITDA, and back margins are we looking forward?

So I'll take the second question. I think, you know, as far as the AI part is concerned, it's a very large topic. So we want to work only and keep on keeping our heads straight in terms of not just investing in AI, but we want to actually make sure that there is an investment in the harvesting cycle as well. So, our thesis in this is that, you know, there is this whole, you know, infrastructure-related AI investments, which is not what we want to. As far as data centers and so on and so forth, this concerns high, huge amounts of CAPEX and, you know, returns over a period of time. So that is not what the company wants to pursue at the moment. You know, we may invest electively in smaller capacities, but not the large ones. So that's one. And as far as, you know, we've recently, in our release, mentioned that we want to build out Transaction Intelligence Core, you know, and think of it as, in some ways, alternative risk score. It's not a replacement to any of the scores, but it's actually more about how we do it. We start with transactions. We have universe of transactions. That is our biggest advantage. We have frequency, transaction value, merchant category, tickets, repeat purchase, refunds, chargebacks, you name it. And, you know, we want to be able to evaluate using AI, how does this business behave financially, or how does this person behave financially? So for that, you need to create this whole financial behavior graph, which is build out, you know, graph for person, device, bank accounts, merchant transactions, refunds, and the whole payment behavior. And once you do that, you can build out certain liability scores. And I think these are the ones which we want to pursue, which is slightly more. Good morning, everyone, and welcome to the call. That gives you, you know, some kind of an indication on how we can monetize on it. And then consented external financial data that can potentially be part of the system with training data sets. So we are building out all these predictive models. So you have logistics regression with gradient testing with neural models and graphs and LLMs enhanced with giving you some indication of what is the probability of certain activities. So we think that these kinds of things will be highly interesting, and we have a huge edge over it because none of the LLMs can actually replicate what we can do. They don't have the data, and they will never have the data as well. And so we think that that becomes a differentiator, in our opinion, on how we should differentiate. And then if you build out guard drills and explanation layers and create some kind of a version of what it would look like, then it becomes very meaningful. So I'm just giving you a perspective of how we think through AI, not necessarily, you know, what we'll not do is we'll not invest into hundreds of megawatts of data center infrastructure. We may selectively go and invest into smaller data center capabilities. And number two, we will work on application layers, SLMs, which potentially enable us to assimilate all this information and build out. So that's the thesis that we carry. I hope this helps you and answers your question.

Thank you. Combined with Reddiv's congealer ecosystem and international license. Sir, the strategic engine is very fresh. Sir, what kind of output benefits are going to get from this kind of thing?

I'm slightly sorry. I'm not able to hear the question properly.

Yes, I'll just repeat. UKMDR bill is one of the points of discussion in the notes of work. What kind of results or benefits are we expecting from such kind of enactment?

See, I'll tell you, I think it's still early days, like Vishwas mentioned, you know, there's certain guidelines that are expected to come in consumer to consumer. There is no MDR. To businesses, there will be an MDR. You know, it's here to be ascertained what it will end up looking like. I think that there is a benefit for both CC Avenue and Relief Bay if that materializes. The extent to which it will benefit, we don't know. It is also based on a competitive scenario. In other words, there are many large incumbents, many who can actually subsidize payments. So we have to see what is a competitive landscape, what does the regulation end up looking like. But one thing we know is that, yeah, it will be meaningfully positive. It can't be, it is not going to be to the pre, yeah.

So in the last quarter, we had mentioned that we are targeting some 50 to 500 crores of fat. What kind of timeline are we looking for that kind of estimation? And second, sir, promoter holds also. We have not seen a substantial, we have not seen a substantial holding and there is no sign of any increment. Can we just give us a timeline or such when promoters are willing to participate in the run?

The promoters are long-term investors, so that much I can tell you. I think whatever is material information out there is what is already out there in the open. But, yeah, we are long-term as far as the promoters are concerned. You know, in terms of, you know, the other question on Pat, I think one decision that you can count on us is that we are not going to, you know, look at... You know, just a spike in one-time setup. We want to have a, I mean, theoretically, it's like a build-out. And, you know, our investments in AI and some of the forward-looking things, you know, we would rather invest in that and build out the long-term, you know, sustainable vision for the company. So we will not be looking at short-term spike in profitability, but we would rather keep on investing in... It's a conscious capital allocation decision, but we want to focus on EPS and make sure that there's guardrails, and we want to keep on investing in our future. Three years ago, we had made the call that we want to reach $12 billion in revenues. We made that call somewhere in 1923, 1924, and I think we are there, and we said in three years, we'll reach $1 billion in revenues, so we've been fortunate to get there. Now we believe that we want to continue building out and investing into the future. If we don't, then I think we won't have a long term. And we think that if we keep that disciplined approach to capital allocation and put cartiers, then we can build out something very meaningful and maximize the three-year earnings. I think not the immediate quarter and the immediate year earnings. We have given guidance of EPS, which you could follow for this year, but we want to look at what the company should look like three years from now, and that is what we want to keep on investing into.

Yes, sir. Last question. What are the good things which have you planned out and have been executed or have happened during the previous year, 24, 25, 26? And what are the some things that were planned out which didn't go well? So, can you just mention something which was planned out and which went well, and something which was planned out and didn't go the way you wanted it to go? Something key business decision?

Yeah, I think we could have expanded internationally more last year. I think given the macroeconomics, you know, it's had an impact. And so I think that, you know, we would have liked to be more aggressive in terms of our international growth, something that we'd like to take up this year. So that's one. I think, you know, we could – we believe we can do a lot more in the AI setup. You know, we could have made certain – You know, larger investments to get to market and do things faster. We think that, you know, we can still continue doing that. I think lots of things are changing in that, but again, you know, we think we could have done that better. And third is we should have worked more on ensuring that we can keep on building out the net take rates. And, you know, there, you know, the incremental revenue from other activities that we've picked up should somewhat complement what we are doing in terms of going after growth. And so there's a slight, you know, latency because a lot of these investments are up front. So these are the things we think we could have improved. You know, what we did well, I think, you know, we've done fairly well in growth and actually build out of, you know, some of the RADIF. So, I think our disciplined approach is, I think, what worked for us.

So, the last one, what kind of our customer structure, some of our top five clients contribute how much for the revenue, and are we planning to increase this, or is it getting contracted and distributed more on, remaining half past on the five, big five? So, what is our concentration, and what kind of diversification, or what kind of strategy are we looking towards our top five or top ten contributors for our revenue?

Yeah, so you won't see CC Avenue on Amazon or some of the large merchants if you transact online, you see it in airlines and a few others, but not on the likes of QuickCommerce and Amazon and others. So we think that going after the larger client base should be our strategy. We want to go as horizontal as possible. Because when you start thinking about even credit, credit scores, and many others, and such alternative on a thin file merchant, how do you enable, and these transactions can give you a lot more information about them than any other thing. So we think that going after a larger basis should be our approach as we move forward. I think, you know, from... And, you know, larger clients, I think when we grow internationally, we want to go after large clients. So our domestic approach is likely different compared to international. In international, because the size and scale of the digital industry is so large, if you look at U.S., most of the transactions are digital in nature. And so I think, you know, there we would like to, you know, work on those, you know, larger clients and larger opportunities. And I think in India also, there will always be occasionally good clients that come our way, which is where if we are able to add value and we are able to grow, then I think we'll certainly. But India is super competitive, as you can tell. So we think that this thing will continue on. And if you look at the merchant profile, we've actually mentioned several of the marquee clients in one of the slides in our presentation, so you can refer to that as well.

Thank you, and I'll do this for the future.

Thank you.

Thank you. We take the next question from the line of Pramukh from MyInvestBuddy. Please proceed.

Hi. So, just a small question. How will you be different from Apple Pay or like PayPal and EOS?

Okay, I will take that.

Yeah, yeah.

So, Apple Pay is more on the customer side on the phone

where they tokenize their card and they use

to, you know, pay the merchant. So, it's just an enabling form factor. For doing a transaction and where their revenues will come is from the issuing side of the bank who has issued the cards. We are on the acquiring side as far as CC Avenue is concerned where we onboard merchants and other things. Like if you have seen in UAE and in India also, we have gone live with Apple Pay where we enable the integration and the platform and the systems to the merchant. To enable them to collect their customers to pay through their Apple Pay. So Apple Pay is on the issuing side, which is just a form factor to enable customers to pay, while we are on the acquiring side. So we, as hundreds of different options and different form factors, we do allow Apple Pay, Samsung Pay in our systems in India and UAE. Uh, to, uh, accept payments on us, on a platform. It's clear.

Got it. Got it. And, uh, another question is on the, uh, war side, like, uh, how is the war impacted our revenues and what percentage of our growth come from increase in the currency, currency appreciation and, uh, what percentage otherwise?

See, I think, you know, from a macroeconomic perspective, you know, potentially some growth in the Middle East would have been impacted as a result of, you know, the macroeconomic impact should have been there. We don't see too much, though. It is there for sure. But, you know... We think that, you know, that should come back. People are going to pay utility bills and people, some travel would be impacted. But other than that, there's a local industry, local commerce, local people, so that should continue on. Anyone who has to pay rent, they have to pay rent and so on and so forth. So internationally, yeah, we operate UAE, Saudi, they're two large areas that we think we can focus on, and that would definitely have an impact. But again, like I said, we think it's short-term, it is not long-term, so that will have some impact. As far as the currency and so on and so forth is concerned, there's no material impact as much. So we don't see that as a material, you know, impact yet. But we do believe, because, see, I think that, you know, we do have aspirations to build out U.S. this year. And that's where we'll see maybe that question slightly become slightly more relevant.

All right, sir. Thank you for the opportunity. Congratulations on the good set of numbers.

Thank you. Due to time constraints, we take that as the last question for the day and would now like to hand the conference over to the management for closing comments. Over to you, sir.

Thanks all for joining the call and looking forward to keeping you updated on our progress. Thanks again. Thank you all.

Thank you.

Thank you.

On behalf of GoIndia Advisors, that concludes this conference. Thank you for joining us in Human Art as Connect Alliance.