Earnings Call Transcript - XNSE:CCAVENUE 2026-11-06

Operator

Ladies and gentlemen, good day and welcome to Venue's AI Limited Q2FY27 Earnings Conference Call hosted by Go India Advisors. As a reminder, all participant clients 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajat Gupta from Go India Advisors. Thank you, and over to you, sir.

Rajat Gupta, Head of Investor Relations

Yeah, thank you, Hoda. Good evening, everyone, and welcome to Avenues AI Ltd. earnings call to discuss the Q2 FY27 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 Mr. B. Ravi, who is advising a venue's eye 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 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.

Vishal Mehta, Chairman

Thank you, Rajat, and very good afternoon to everyone. Happy Dhanteras. Thank you for joining us in the Avenues AI second quarter and first half FI27 earnings call. I'm pleased to share our performance and, more importantly, our perspectives on how the next phase of Avenues AI's growth is expected to unfold. Let me start with a thought. Over the years, we have built an infrastructure to process payments. Our next opportunity is to create significantly greater value from the millions of digital interactions that happen on a weekly basis that this infrastructure enables. This is the transformation underway at Avenues AI. We are evolving from a payments technology company into an AI-first fintech infrastructure company, which combines payments, enterprise digital platforms, and transaction intelligence. Our first half results provide a very strong foundation for this journey. I will now invite Vishwas Patel, our Managing Director and CEO, to take us through the business performance and key developments, followed by Sunil Bhagat, our CFO, who will present the financial highlights. Vishwas, over to you.

Vishwas Patel, CEO

Thank you, Vishal. For the first half of F527, a consolidated revenue from operations increased 71% year-on-year to Rs. 5,560 crores. Our operating EBITDA, excluding other income, increased 19% to 199 crores. Our consolidated profit after tax grew 24% to Rs. 156 crores. In the second quarter, our revenue grew 47% year-on-year to Rs. 2,879 crores, while profit after tax increased 6% to Rs. 72 crores. These results demonstrate the growing scale of our business and our ability to generate profits while continuing to invest in our future. But I want to emphasize something important. Our ambition is not simply to process more transactions. It is to generate greater value from every merchant relationship, every enterprise relationship, and every technology capability that we have built. That is where we see the next phase of opportunity. Let me turn on to a payments business. During the second quarter, a total payments processing volume increased 19%, sequentially to Rs.1.77 lakh crores. This is an important development demonstrating continued growth in transactions throughput across a payment infrastructure. A net pay rate during the quarter was 5.06 basis points. Reflecting a competitive pricing strategy, we recognize that investors closely monitor take rates and margins. Our approach is deliberate. We are prioritizing transaction scale, merchant relationships, and long-term competitiveness while continuing to evaluate the economics of the business. An equally important part of a merchant strategy is settlement efficiency. We have been focusing on accelerating settlement cycles so that the merchants can receive their funds faster. This strengthens the merchant experience and can improve their working capital efficiency. Faster settlements can also create timing-related working capital requirements for our business. We believe that a combination of competitive pricing, reliable infrastructure, and efficient settlements can help us build stronger and more enduring relationships. However, scale alone is not sufficient. The opportunity ahead is to use our established merchant relationships to introduce additional services and improve the value we generate from our infrastructure. Today, we primarily monetize the processing of payments. Tomorrow, we want to build additional revenue opportunities around the enterprise technology, merchant intelligence, digital services, AI-enabled financial workflows. We believe the payment business is not the end of the opportunity. It is a foundation on which we can build several additional businesses. Let us now discuss Rediff, which is one of our most important strategic priorities. We believe Rediff has the potential to become much more than a traditional internet and communications business. Our vision is to develop a connected digital ecosystem, bringing together enterprise communications, commerce, payments, and other technology services. Reduct 1 provides an opportunity to deepen our relationship with enterprises through digital communications and commerce solutions, while Reduct Pay is intended to expand our participation in consumer payments and create additional digital engagement opportunities. CCAvenue, in turn, provides established payment infrastructure that can support this broader ecosystem. The strategic advantage is that there are complementary capabilities. An enterprise using communication services may also require commerce and payment solutions. A merchant using payment infrastructure may also require business software, customer engagement tools, and intelligent services. By bringing these capabilities together, we believe we can create opportunities to serve the customers across a broader range of requirements. This is how we intend to unlock value from Rediff. Our immediate focus is on commercial execution, integration, and building sustainable revenue streams. We are not assuming that value creation will happen automatically. It will require disciplined execution and measurable progress. But the opportunity is compelling. Rediff gave us a platform to participate in a much broader digital economy than payments alone. Our second strategic growth priority is our international expansion. Over the years, CCMU has developed payment technology and operating capabilities that we believe can support growth beyond our domestic market. We already have an international presence across the UAE, Saudi Arabia, and Oman. Our next objective is to validate opportunities to expand our payment infrastructure into additional markets, with the United States remaining an important priority. International expansion provides the potential to diversify our revenues, deepen relationships with global merchants, and develop additional payment processing opportunities. Of course, each market has its own regulatory requirements, competitive dynamics, and commercial considerations. We intend to pursue opportunities selectively with a clear focus on disciplined investment, measurable returns. Our ambition is to build CC Avenue into a more significant international payments infrastructure franchise over time. We have developed the technology and experience in payments. Our opportunity now is to extend its capabilities into markets where they can create commercial value. Let me now turn to what could become of one of the most differentiated aspects of Avenues AI's future, that is artificial intelligence. We believe the convergence of payments infrastructure, enterprise technology, and AI creates an important opportunity for our company. Every day, digital commerce generates information about transaction patterns, merchant activity, and financial behavior. With appropriate permissions, governance, and regulatory safeguards, such information can help businesses and financial institutions make better decisions. This is the opportunity we are pursuing through TESCO, a transaction intelligence initiative. Our objective is to develop AI-enabled capabilities for applications such as merchant intelligence, risk management, fraud prevention, and financial services workflows. Let me explain why this matters. Traditionally, payment infrastructure companies generate revenue by enabling transactions. Transaction intelligence introduces the possibility of generating additional value by helping customers understand and act on permitted transaction-related information. For example, financial institutions need better tools to assess market activity and risk. Businesses need better intelligence to understand operations and transaction behavior. And the broader financial ecosystem increasingly requires technology that can improve efficiency and decision-making. We believe AVENUE's AI is well-positioned to explore these opportunities because of its existing technology infrastructure and experience serving merchants and financial institutions over the last two decades. Disco is still being conceptualized, developed, and we will approach commercialization responsibly. But our longer-term ambition is clear. We want Avenues AI to evolve from a company that processes transactions into one that also helps businesses and financial institutions make better decisions. That is the opportunity we see in Applied Artificial Intelligence. We recognize that a growth strategy must ultimately translate into substantial earnings and cash generation. Our first half operating cash flow was negative 192 crores. This reflects significant working capital movements while management attributes primarily to faster settlements with merchants. Accelerating settlements is part of our effort to improve merchant experience, support merchant liquidity, and strengthen our competitive position. At the same time, we remain focused on optimizing working capital, maintaining adequate liquidity, and improving cash conversion as the business scales. We continue evaluating our investments and initiatives against their commercial potential, capital requirements, and expected returns. Our objective is not growth at any cost. Our objective is to build a larger, more diversified, and sustainably profitable technology business. Looking ahead, we have previously communicated F.27 consolidated revenue guidance of Rs.11,000 crores to Rs.13,000 crores. We have delivered revenue of Rs.5560 crores in the first half. Our focus on the remainder of the year is to continue to expand transaction scale, strengthening merchant experience, advancing reliefs, integration, and commercialization, developing DISCO, and pursue selective international opportunities. I want to conclude with three thoughts. First, we have scale. CCAvenue is an established payment infrastructure business with substantial transactions, throughput, and longstanding merchant relationships. Second, we have multiple growth opportunities. Relief international payments and AI-led transaction intelligence provide potential new avenues for revenues and value creation. Third, we have a very clear strategic direction. We are building towards a more integrated, print-tech infrastructure model, where payments, enterprise technology, and intelligence can reinforce one another. The opportunity is not simply to grow our existing business. It is to expand the role Avenues AI plays in the digital and financial ecosystem. We recognize that investors will judge us by execution, profitability, cash generation, and the commercial progress of our initiatives. This is exactly where our focus will remain. We believe the infrastructure we have built over the years provides a strong foundation. The next phase is about converting the foundation into broader commercial opportunities and enduring shareholder value. We are excited about the journey ahead. Thank you for your continued trust and support. I will now invite our CFO, Mr. Sunil Bhagat, to take you through the financial performance in greater detail. Thank you.

Sunil Bhagat, CFO

Thank you. Good afternoon, everyone. Let me take you through the key financial highlights for quarter two and half year F527. For the second quarter, our consolidated revenue from operations stood at 2879 crore. That is an increase of 47% compared with 1965 crore in the corresponding quarter last year. Our operating EBITDA, excluding other income, stood at 98.9 crore compared with 96.2 crore a year earlier. Our consolidated profit after tax for the quarter was Rs. 71.70 crore compared with Rs. 67.6 crore in quarter to F526. For the first half, revenue from operations increased 71% to 5560 crore. For operating EBITDA, excluding other income increased 19% to 199 crore, while consolidated profit after tax increased 24% to 156 crore. In our payments business, quarter to TPV increased 19% sequentially to Rs 1.77 lakh crore with a net take rate of 5.06 basis points. Our consolidated balance sheet reported total equity of 5145 crore as of September 30, 2026, while cash and cash equivalents stood at Rs. 546.5 crore. Our first half operating cash flow was negative Rs. 192 crore, reflecting significant working capital moments. Management attributes this primarily to our initiative to accelerate merchant settlements. Faster settlements help merchants access their funds sooner, improve their liquidity, and enhance their performance on our platform. While this can result in timing-related working capital outflows, we view settlement efficiency as an important competitive differentiator. We continue to focus on balancing faster merchant settlements with prudent liquidity management and efficient cash conversion. We remain focused on transaction growth, operating efficiency, disciplined investment, and sustainable profitability. With that, we can open the floor for questions.

GM, Analyst — ARC Consulting

Thank you.

Operator

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. The first question is from the line of Tamuk from MyInvestBuddy. Please proceed.

Tamuk, Analyst — MyInvestBuddy

Hi. Why has the growth reduced this quarter? Is it because of the seasonality?

Vishal Mehta, Chairman

So the question is around revenues this quarter, the revenues of profit growth.

Vishwas Patel, CEO

Profit growth, yeah.

Vishal Mehta, Chairman

So, you know, what we've done is we have prioritized growth, you know, as an objective. Growth gives us a lot more data. In the world of AI, we think data is the mode. And so, in other words, in the medium and long term, we should try to get, you know, transaction and volumes going. For that, if you look at our net take rate, that's reduced sequentially quarter over quarter by about 4%. So it's at 5.06 bps. You know, yes, we wanted to capture volumes, you know, for the upcoming festival. Plus, we have decided that we should continue focusing on scale. So it's a conscious decision, and that scale will potentially open up more opportunities to give services to everyone. merchants and customers.

Tamuk, Analyst — MyInvestBuddy

Got it. I have two more questions. Yeah. Yeah. So, like, one is regarding, like, the profit guidance for the entire year, and second is regarding Redis IPO. Like, when can we expect, like, it to come to fruit?

Vishal Mehta, Chairman

So we've given EPS guidance, you're right. You know, the EPS guidance that we've given was, you know, around, you know, close to 8.75 to 9.5 rupees per share. So if you look at slide number 11 of our presentation, earnings per share, we've given a guidance of 8.75 to 9.5. And if you look at our numbers as of now, And, you know, for the first half of the year, we've reached about four and a half rupees a share. So we think that we are staying by our guidance, our guidance range, as far as earnings per share is concerned. I mean, as far as the Radeff IPO is concerned, it's, of course, a board decision of Radeff board. What is out there in the open is that there has been a confidential filing which has... You know, being, you know, approved. But we believe that, you know, as of when we get, you know, more information that we'll immediately let.

Tamuk, Analyst — MyInvestBuddy

Got it. And, like, just one more question. Like, can we, like, like, is there, like, any promoter selling which is going to happen in the future or, like, there is no more of that?

Vishal Mehta, Chairman

No, there's no promoter selling, you know, in other words, you know, in avenues where promoters have been continuously at the same level. So, in primary, we've invested. Promoters have invested in primary doing the right offer.

Tamuk, Analyst — MyInvestBuddy

Got it. Congratulations on a good set of numbers. Thank you.

Operator

Thank you. The next question is from the line of Saurabh Bansal from SB Capital. Please proceed.

Saurabh Bansal, Analyst — SMSB Capital

Yeah. Hi, everyone. So, my first question is regarding to Rediff Fund Business. So, what are the revenues, EBITDA and Cash Fund contributions so far, and what are the timelines you're looking for to monetize it?

Vishal Mehta, Chairman

So, Redef Fund is part of Redef ecosystem. If you look at, you know, annualized revenues in Redef on a per-and-grade basis, it's upwards of 200 crores. It's much more than 200 crores, but, you know, that much I can tell you. And in terms of profitability, Redef will generate about 100 crores worth of profit a year. Um, these are the, um... The call part numbers that I've shared with you. In terms of, you know, the synergies to play out, which is what we discussed in terms of how these synergies, you know, we are working on that. So it may take a few quarters to actually start playing out in synergies, but maybe sooner, but, you know, I think, you know, of course, it may be difficult to make any forward-looking statements on that. But Rotative is profitable, and Rotative fund is the largest driver of that profitability.

Saurabh Bansal, Analyst — SMSB Capital

Okay, got it. And one is regarding the Redif Pay launch UPI system. So, is it subject to NPCI market cap or TPAP constant?

Vishal Mehta, Chairman

Vishwas is there, so he'll share more, but what I can tell you is that we got the permission from NPCI, we were in C-U-G, we got onboarding permissions pending all the security and compliances as of last month, middle of last month. I think, you know, now, you know, of course, given the festival season, so on and so forth, that... You know, UPA transactions are in the upswing, so you'll hear more from us in terms of the progress.

Saurabh Bansal, Analyst — SMSB Capital

Okay, so I have two more questions regarding the Commerce AI and CCA venue ASU. So what are the pricing, what are the nirvindics prediction for the next two financial years, like financial year 27 and 28?

Vishal Mehta, Chairman

DC Avenue transaction, you know, I mean, of course, there are two things. One is there's a UPI mandate, which is out there, which is still not implemented yet. But if you think about all the other, you know, payment types and so on and so forth, we've been very competitive. It varies by customer scale, the kind of business that they're in, so on and so forth. And, you know, payments as a business is a fairly competitive business. So, the net take rate, if you look into it, will give you some indications in terms of, you know, in order to scale that, you know, what is the impact to, you know, the take rates. But that, too, is a very conscious decision in the part of the company saying, we want to make it profitable, but eventually, not today, tomorrow, day after tomorrow, data will be the mode. And if you have more transactions, more intelligence in the system, that's when we can actually be able to monetize in the future. So that's one. I think, what was the second question? I'm sorry.

Saurabh Bansal, Analyst — SMSB Capital

So what are the revenue expectations for the next two financial years?

Vishal Mehta, Chairman

Yeah, so we've given you revenue projections for this year. We typically end up giving projections after the first quarter in the financial year in terms of guidance. So if you look at slide number 11, you will, you know, pretty much have an indication in terms of Our FY27 guidance that we've given. I think, you know, we have a lot going on as far as AI is concerned. And I think, you know, the playbook is out there for a lot to digest. But we think that we will continue investing in that opportunity to build up, you know, our own differentiation. And we think, you know, data is the most important difference. And I'll see you next time. In terms of, you know, the ecosystem that we breed.

Saurabh Bansal, Analyst — SMSB Capital

Okay, so I will ask this last question. So how are you going to measure the AI-driven margin expansion, given that the net revenue per, you know, TBB is currently falling right now?

Vishal Mehta, Chairman

It helps us build – AI has actually got two things. One is, you know, it gives us productivity benefits. So that's one. But second is that a lot of that benefits are being passed on to consumers and merchants at the moment. And so what we are doing is we want scale, we want magnitude, it allows us to do a lot more, given the opportunity that we sit on top of. Having said that, I think, you know, I mean, we are also learning a lot in terms of what it means to our ecosystem. So a lot of things like contextual engineering, how do we actually work at the specification level of building software, not just prompting it. Things like, you know, how do we build out, you know, the kind of mode and scale that we think are important. There's some experimentations also that we need to do to be able to see how that works. How do we reimagine the ecosystem and many pieces of our framework, which are somewhat more AI first. So while a lot of work is being done in the back end, which is not visible, because in this world we need to change a lot. You know, what we were before and how we need to look. So, there's significant work going on at the back end, which is not visible. But, yeah, so a lot of cost is somewhat front-loaded in this business. But, you know, in terms of, we look at it in two ways, monetization and survival. Both are equally important. And we think that not us, practically most of the businesses need to think of it. So we think that let's keep on building out a robust framework, and then we also see a lot of green shoots in terms of how we could monetize. So the TISCO score that we talk about, which is the transaction intelligence score, you know, it's not easy to build such things. So we think the probability is against us to make it successful or for it to become successful. But if we are able to make it successful, the returns are at least a few thousand X. So I think those are the bets, bold bets that we need to take up. They're calculated bets. They're one worth making because it changes the ecosystem. But like I said, the odds are always against us to take on such. I think with more and more data, the probability increases. The probability of success increases. Let me put it this way. And if that probability of success increases, the returns are a factor for magnitude more. So those are some bold bets that we have taken.

Saurabh Bansal, Analyst — SMSB Capital

But they're calculated, and we'll be monitoring and tracking them. Okay, thank you so much. That's it by my hand, and all the best for the future.

Operator

Thank you. The next question is from the line of Rahul from Dollars Capital. Please proceed.

Rahul, Analyst — Dollars Capital

Hello. Thanks for the opportunity. I wanted to understand how the landscape changes for us in terms of competition, given that there is an MDR opportunity on the UPI side. So are we shifting any gears in terms of merchant acquisition side and also on the payment gateway side, how the opportunity is shaping up given the current landscape that you see?

Vishwas Patel, CEO

So, Rahul, Biswas here. So, UPI, MDR has a good monetization strategy that will be helpful to not only work with the entire ecosystem. Today, almost 38 to 40% now of our transactions that we are processing for free for UPI, right? Almost 40% of those UPI will be chargeable under the MDR regime. So, we're looking forward once and then it gets implemented. So, it will add a good revenue boost to the existing ecosystem. And overall, also, UPI continues to grow on the deficit mechanism because all... So, it's a good monetization that will happen, probably, maybe implemented with no know, maybe January or earlier, we'll wait for indications from NPI. Overall, business continues to grow, because if you see on the offline scape, today, Brazil, Brazil and China, They have their power infrastructure reached to almost 90% of their population, of the merchant population, while we in India are still at 30%. Right? So there's a lot of potential going forward in increasing the escape. And as you know, payments is like any product or service is sold, then payments has to come in. In any businesses, in any line, even a decent teacher getting payment from his students, there is an opportunity for us to get in. So that scope is vast, it will keep growing, and we are very confident of the landscape growing faster. Well, sure.

Rahul, Analyst — Dollars Capital

And Vishwas, if you could attribute some of the innovative product that we launched during this GFF, I think we did a lot of partnerships. So how are some of these partnerships taking shape and which of these could, you know, become a meaningful contributor to our net takeaway basis?

Vishwas Patel, CEO

So, everything helps in getting newer merchants as well as deepening the relationship with our existing merchants. So, see, we went live with Apple Pay and we launched it with the Overall Hotels Group. Right? So that itself where all Indian and Indonesia customers can quickly pay for Apple Pay and others increases the hard efficiencies. Like Indian customers, if Apple Pay is there, which is more easier to pay than UPI, right? So then people shift that. And traditionally, earnings has always been better on credit cards. So, those things will definitely help. There were a lot of launches on Forms AI, which, you know, through a few commands, you can create them as a dynamic form. You can use it to correct fees or your club or this thing or any alumni need or a pilots association want to connect. Just a few groups, a form with a pre-integrated CCI payment gateway is created within seconds now. So that itself opens up a lot of new businesses with a lot of in-stream WhatsApp, in-stream payments that we launched. No redirects out of the process. and a link within WhatsApp. The entire payment journey is concluded within WhatsApp. That's because of a deep partnership with Meta on the WhatsApp platform where CC Avenue now is available. So that also opens up for a lot of negotiated sales in the business ecosystem where, you know, transactions, which is connected in an instant within a WhatsApp chat. Similarly, we launched Witsiprocket to Fastener Checkout, where we now have access to the name and the billing name and address preloaded when a customer comes in and puts in a mobile number. So automatically all his delivery addresses and everything is preloaded so that, you know, the transactions are finished off in just two or three clicks. So a lot of partnerships helps in boosting existing business, getting new businesses, and newer business models evolve based on the functionality that is developed. We launched Commerce AI, which is 2.2, which is built on Google's AQA platform. So, payments can be done without even a manual intervention, end-to-end. So, that's for AI agents to complete this. So, those platforms are also ready. We also did tap-to-own device. Where, you know, if you're going on an app, say you're on a CE, so at the end, you always get a credit card, debit card, net banking as a payment option. Why not tap your own card to your own phone and complete the payment? So you don't have to insert any card number or save any card number with anybody else. Just at the checkout, take out a card and just tap it at the back of your own phone and the transaction is complete. So tap to own device. Those are the world's first. That's one of the things that we have launched after RBI gave a permission just before GFF, the Global Fit Debt Press. So many products we launched, which are quite path-breaking, and these all solutions have increased business. So that's where the innovation and the scale that I was just talking up earlier. Right? And then when more transactions comes in, the ArtTisco Engine, the Transaction Intelligence Initiative that we are pertaining with AI capabilities will help more data to complete more transactions and skills further.

Vishal Mehta, Chairman

Now, to just add to what Vishwa said, I think we look at it as incremental TPP. I think we should be able to get to at least 50,000 to 1 lakh crore of incremental TPP in the next 24 months by all the partnerships, and that's our internal estimate. And, of course, the upside in earnings comes because of, you know, transaction conversions in all the distribution-led growth. You know, what Vishwas described on Shiprocket and all of that, and, you know, some higher margin incomes that come because of all the forms and reconciliations and integrations and tools, and that's what we'll track and demonstrate going forward.

Rahul, Analyst — Dollars Capital

That sounds pretty interesting, both Vishwas and Vishal. Just last bit, if I may, we also used to have this solution for hospitality where we were doing the reservation system. So, are some of this consumer partnership and our ability to provide integration with the reservation system, are some of these things can become a very integrated play for players like us who are into the SaaS application as well as consumer innovation side.

Vishwas Patel, CEO

So, Rahul, you are right on that. So, our ResRevenue solution is working today across more than 3,000 plus hotels. So, it's just not a payment gateway with some services. This is a full end-to-end vertical specific hospitality solutions. With deep integrations, like we are one of the only Oracle Micro Spadalio Property Management System certified, where, you know, a reservation comes and it's then further distributed through our Channel Manager, which is connected to almost 150 OTA websites, including Booking.com, Hotels, Expedia, MakeMyTrip, Ctrip. So all those ecosystems where hoteliers can connect, the inventory is visible across all these ecosystems, and we said that we did almost 1.2 million room nights in the last 90 days on two hours management systems, and payments becomes the last integrated part. Right? So, when a reservation comes and someone pays to a payment link at, say, CAA in the ninth year in India, through the connect on the PMS, it gets automated, updated. Without any physical manual intervention, that this money has come and someone has to update. It's an entire automated system. So, hospitality is very gung-ho. Because it's a very dynamic, aggressive mass cause. Inventory is perishable. They have to put the worms on the beds, fill up the occupancy. Plus, the margins are good. Today also, they have a mindset of paying 10-15% commissions to agents to get the room bookings. So, that way, it is much more open and

Vishal Mehta, Chairman

And to add to what Vishwas said, I think the way we look into this is also, In the world of AI, it is a distribution layer. So in the future, we think that there is an AI assistant which will actually access the distribution layer for hotel inventory booking confirmations where CC Avenue becomes a payment infra. So we think that, you know, I mean, today maybe people go directly to a booking or a make-my-trip or whatever. But tomorrow, we think that the biggest opportunity is this AI agent's booking directly with hotels. And so we think that that is perhaps where it needs to go. And if we are able to build out, you know, in some ways, you know, for the hotels, what price to charge, what customers to target, how to maximize their occupancy, with channels to prioritize, how to increase their profitability, those are all the services that you need to layer in, which becomes an opportunity for RISE Avenue. So I think it's just much more than what it is today. Which becomes an opportunity for us going forward.

Rahul, Analyst — Dollars Capital

Great, great. Thanks for the color. That's it from my side.

Operator

Thank you. The next question is from the line of Dinesh Kumar from Peace Preventure. Please proceed.

Janish Kumar, Analyst — Peace Preventure

Hello, are you able to hear me, ma'am?

Operator

Sir, can you please speak this loudly?

Janish Kumar, Analyst — Peace Preventure

Yeah, okay. So, I'm Janish Kumar. I'm Janish Kumar. He said, sir, I'm sure I am able to, sorry, you're able to hear me. Sir, I have a couple of questions here. Firstly, on the 700 crore right issue, major part was deployed on Quantum Edge AI sovereign data center. Can you just highlight on what kind of investment it was? Status. You can just highlight on the status of the investments, and also, in line with the same question, electronic AI monetization has also happened. Can you just highlight on the status of this also?

Vishal Mehta, Chairman

Yeah, so the issue proceeds in the use is part of our publication, and if you look into this, You're right. You know, what we have done was we have said that about 294-odd crores were in investments that essentially enable us to build out advanced technology solutions in AI software. We have not deployed that capital yet as much. You know, we are a lot of things changing. In fact, you know, every day there are two or three breakthroughs. I mean, the pace at which it's moving is very quick. We ourselves are, you know, rather than being a spectator, we are involved in terms of figuring out, you know, what to do and how to build up. And we are assessing, you know, how we need to think through the deployment of that capital. But, you know, If you look into, you know, the deployment of that capital as part of rights, we have not deployed that capital as much. And what we need to think about is that going forward, you know, what are some of the things that we spend on, like, you know, pretty much the agent frameworks, the Cisco solutions. In current quarter, we'll see a lot of that going forward. So we'll keep you updated.

Janish Kumar, Analyst — Peace Preventure

Okay. Thank you, sir. And next one is regarding... Our international businesses and geopolitical rules, we have recently got licenses from Saudi and RBI also. What kind of margins are we seeing going ahead in this, internationally and domestically? What kind of arbitrage we are seeing both of them? Can you just highlight on that?

Vishal Mehta, Chairman

The international margins are much better than India. We think that, you know, given the macroeconomics that you highlighted, of course, you know, we see that, you know, we don't see as much of a dip. We definitely would have grown more. We definitely see a slowdown, but we think that the margins are still very robust there, and primarily because And those geographies, they have a lot more, you know, card solutions, a lot more travel, entertainment, certain categories that are very valuable. And, you know, for that ecosystem, there are more, you know, travelers than incumbents. So I think, of course, there is geopolitical instability, and that geopolitical instability will cause those disruptions. But to us, they have been slightly minor compared to, you know, the greater ecosystem. We think that's when we said that we also need to prioritize growing up in the U.S. Middle East is good for us. The next important geography that we'd like to target, you know, is the United States. But we don't see too much of an impact yet.

Janish Kumar, Analyst — Peace Preventure

Okay, sir. So, the next one is in line with embedded credit analysis and the future outlook. Opal, OPM and Ratnafeng organizations, what is the actual loan origination volume process via CCMU and plus online PSB loans and Ratnafeng during the quarter to 5527? What is the next? What is the net margin on your transaction? And did AI revenues recognize from these credit lines in rupees and percentage?

Vishal Mehta, Chairman

See, OPL and Ratnafin are investments. We don't record any of those transactions and values as part of our P&L and balance sheet. They stay as investments. We do have an aspiration to open up our merchant ecosystem to such companies where we are strategically invested in, and that becomes an opportunity for us to monetize. The TISCO score that we are working towards conceptualizing and developing will also be valuable where such investments add tremendous value in terms of the build-out. So, you know, the loan origination does not start with CCAvenue. We do have EMIs and others that are offered to consumers, but we don't segment them and provide that detail.

Janish Kumar, Analyst — Peace Preventure

Yes, sir. Sir, on this line, regarding the same question, how much have we earned in this quarter regarding our investment in just enough in organization and help? How much margin also have we extracted? And what kind of cash flows are we seeing from these kind of transactions?

Vishal Mehta, Chairman

No, we don't see cash flows from such transactions. We have made investments. These are investments that have been made. Cash flows will come when we actually open up our ecosystem in the medium to long term. Currently, these are strategic investments. They sit in our books as investments, both online PSB loans, as well as these are long-term investments. They are not short-term investments. So these are strategic investments that we've made in – OPL is, of course, the backbone for many of the PSU banks. You know, that utilize the framework for loan origination processing. Similarly, NBFCs like Ratnafin are the ones where they provide such loans to merchants, and they help that they will, you know, work with us within our own ecosystem as well as for us to build out such intelligence coding frameworks. So these are long-term strategic investments. They don't contribute to cash flow into the company.

Janish Kumar, Analyst — Peace Preventure

Okay, sir. Sir, for SI27 guidance, does the quarter to profit before tax compression alters your two-year 27 consolidated prior expectations which we had given, and do you maintain the...

Vishal Mehta, Chairman

We've given EPS guidance. If you look at slide 11, we've given EPS guidance of 8.75 to 9.5. You know, I think if you look at the first half, we're at almost 4.5 rupees a share. So we don't want to alter the guidance. We'll be staying with the guidance that we've given.

Janish Kumar, Analyst — Peace Preventure

Okay. Can I have one more question? On the same end, Are our net margins stabilizing, sir? Do we see, I mean, our net margins are quite falling. Are we seeing it to stabilize or flow or something that's not providing a guidance or any highlight on this? What kind of status do we have on our net margins?

Vishal Mehta, Chairman

Yeah, I mean, the take rates have, of course, sequentially been slightly under pressure. So you will look at, you know, the take rates have sequentially reduced by 4% quarter over quarter, and, you know, that reflects in the margins. I think, you know, with the scale we are there, there will be some things that help us increase the margins like, you know, take rate on UPI and others. They potentially come up, but we are forward investing. We think that there are a few things that will help us. The second is the kind of services we put on top of our existing transactions and our ecosystem will help us in terms of margin expansion. So I think you're right, there's going to be some compression, and then we'll work on those expansion opportunities because at scale, when you work on those, and if it works, then they become large by themselves.

Janish Kumar, Analyst — Peace Preventure

Sir, this is probably the second last question. If MDR comes into the picture, what kind of impact are we seeing in the remaining period of this FI release and enter?

Vishal Mehta, Chairman

Vishwas will tell more, but one thing we know is that up to 40 basis points was The earlier conversation, so whatever comes in, and it's, again, a competitive world, which means that there are many providers, and depending upon who wants to submit what, so there is no, you know, ceiling or a floor by the regulator. What that means is that there is going to be, of course, but we think that whatever it is will always be a positive, and so it will help increase the margins.

Vishwas Patel, CEO

Well, the implementation of merchants and the implement data is yet to be done. We'll do it closer to when we have to charge, but the actual revenue operation, once the MDI is in effect, we'll most probably like to know by next quarter how much has that incrementally increased the volume revenue on our system.

Janish Kumar, Analyst — Peace Preventure

Okay. Okay. Sir, is there any expansion and new avenues are we looking forward to, which we are expecting to come in the near term?

Vishwas Patel, CEO

I think we have already said what we are aiming for in my speech earlier, where we clearly said that we are looking at more increase of business here through multiple avenues that we already have in place. Addition of new services and other things. We are looking at national expansion. UAE is delivering very well. Saudi is growing. I think Oman, also, the top four or five banks are using our entire systems, looking at the United States in the next quarter. So that also is a very interesting market. They're looking, because of, you know, excellent technology and features, I think it's a very good market to tap. Up to the world's biggest economy and market. So, even a small good push can really scale things here.

Janish Kumar, Analyst — Peace Preventure

Sir, is there any news or any margin expansion in the data center?

Vishal Mehta, Chairman

We're appropriately conservative. So, we'd, of course, invest in... We have certain processing that you would expect if we wanted to actually scale up our AI opportunities, but, you know, we are tracking what is going on in the ecosystem, and we are probably conservative given that there's a lot of changes happening on a daily basis, forget the weekly basis. So we need to actually get a tunnel vision and then go make those specific calls. But you can expect that to happen in the next, I mean, the current quarter is the next quarter.

Janish Kumar, Analyst — Peace Preventure

Okay, that's my last question. What, regarding the ICO, can you just, because we are not clear on the timelines of the ICO, so is there any expectation in the near term or the, because we have already said the draft During Prospective. So, long back, long back last, okay, long back we have filed a Redis IPO prospectus. So, what kind of timelines are we looking at for the IPO launch and what valuations are we seeing on the front line?

Vishal Mehta, Chairman

See, yeah, whatever is there in the public is what we can discuss. We had filed, Redef had filed a confidential DRHP, and subsequent to that, there were observations that were provided. Final timeline of the IPO and filing would be a board decision of Redef based on the markets and the market timings and, you know, the valuations will be determined by the bankers as and when that would happen. But that's all I can share. What we can tell you is that as soon as we have more information, that we'll be able to share that with the shareholders.

Janish Kumar, Analyst — Peace Preventure

Okay. So what kind of, you are not able to, okay. Sir, one last question. So what in this quarter, or you can take this for a year also, what are the good points, what were the expectations which we have met, which we had earlier, and what are the expectations we were not able to meet? Let's highlight on the status of our expectations from the financial year and the quarter year.

Vishal Mehta, Chairman

I think we had given indications on the beginning of the quarter in terms of how, you know, the quarter would look like, you know, so I think, you know, if you look at slide 11 again, we went back to that. I think we are tracking that. So, strong payment growth volume, positivity in profits. You know, we fell a little short on the net revenue growth decrease. You know, the operating earnings momentum, I think, you know, that's where, you know, those are the, if you ask us, the not met, but the met was strong payment volume and positive profitability. That's the way we see it. If you look at, you know, TPVs up, you know, we grew our volumes quite a bit. And despite all the competitive pricing and pressures, we were able to manage profitability. So those are the things. But take rate, of course, is compressed. So I think that demonstrates that, you know, we are lower yields and while our pricing is deliberate, but the economic benefits we'll have to demonstrate going forward. You know, the earnings growth were modest. You know, they're in line with expectations, but... Um, you know, there's always this, this is Maggie Moore.

Janish Kumar, Analyst — Peace Preventure

Okay, that's all from my sector, and congratulations on the results. Thank you.

Vishal Mehta, Chairman

Thank you.

Operator

Thank you. The next question is from the line of GM from ARC Consulting. Please proceed.

GM, Analyst — ARC Consulting

Are you able to hear me?

Operator

Yes, sir.

GM, Analyst — ARC Consulting

Okay, so the first question would be that I observed two years there was no dividend payment. Is there any plan to pay dividend to the investor? And the second question would be regarding the ReDif IPO when it comes, part of the business from Avenues AI will be transferred to ReDif. So how it is going to affect the Avenues AI? Shareholders, because the top three decisions were not helpful to the retailers, be it reverse merger or origma, or the rights issue. So that's my concept. Thank you.

Vishal Mehta, Chairman

Yeah, so I'll answer the second question on RADIF. RADIF is, anyways, the business was transferred last year in FY26, so, you know, currently, Avenues AI owns about 82 odd percentage in RADIF, and it gets consolidated as part of our P&L and balance sheet, so that transaction is through. Which means that whatever quarterly numbers that you're looking at, you know, is all consolidated and, you know, that thing has been completed. So there's no impact, additional impact that you see as a result of this business transfer, you know, between Avenues AI and Redef. You know, regarding, you know, Redef as a company, we think it's a strong brand. It resonates a lot with it. And there's a lot more, you know, potential to actually build out that brand going forward. And so I encourage you to try out some of the Redispay applications. If you go to the Google Store or Apple Store and you're able to download the application, you'll be able to experience it. Regarding your first point on dividends, I mean, we understand that, you know, shareholders look forward to that, and we appreciate that expectation also. But the stage board believes that retained earnings and reinvesting in our growth will create a greater longer-term value for shareholders. At least in the last two years, that's the thought process that we had. And with CCI being expanding in payment volumes, re-diff entering the next phase of growth, our own investments in AI international markets, we see opportunities to deploy capital productively. So, you know, the object is not just to grow the business. We want to translate that into earnings end. So, obviously, the Board will continue reviewing the priorities on dividend policy as the business evolves. You know, the key is to balance that growth investments with...

GM, Analyst — ARC Consulting

Okay, thank you. All the best to the team for the hard work they are putting in. Thank you.

Operator

Thank you. The next question is from the line of Tamukh, from MyInvestBuddy. Please go ahead.

Tamuk, Analyst — MyInvestBuddy

Hi. So, like, in Varian, like, we had, like, a 29.3 million EAD, like, profit from sale of investment. So, can you give more color on this? On 2425.

Vishal Mehta, Chairman

Yeah, that was nothing else, but we explained that there was an entity that was created with the Marvian-owned entity, and there was an entity created in Abu Dhabi, which then owns. So in consolidation, it cancels itself out. There's restructuring, where you created an entity in Abu Dhabi, which owned the asset that owns CCAvenue.ae. So, if you look at the consolidated results, it cancels each other out. It doesn't reflect in the consolidation.

Tamuk, Analyst — MyInvestBuddy

Got it, sir. Thank you.

Operator

Thank you. Ladies and gentlemen, due to time constraints, that was the last question for today. I now hand the conference over to the management for closing comments.

Vishal Mehta, Chairman

Thank you all for joining our second quarter earnings call, and happy Dunderas and happy Diwali to all you and your families, and we look forward to keeping in touch.

Operator

Thank you very much. On behalf of Go India Advisors that concludes this conference, thank you for joining us and you may now disconnect your line. Thank you.