Network People Services Technologies Ltd Q2 FY2025 Concall Summary

Key Takeaways

• H1 FY25 revenue doubled YoY: Half-yearly total income grew 142% YoY to ~₹129 crores, with net profit margin expanding 708 bps to 26.13%, driven by transaction growth and new bank additions.
• Platform upgrades create near-term friction: EvoK 3.0 went live with a new bank, but policy upgrades for the platform caused a short-term impact on payment platform business specific to one bank, making H2 trajectory uncertain.
• Revenue diversification is accelerating: New products launched at Global FinTech Fest (instant credit line on UPI, Risk Intelligence Decisioning Platform), plus internet banking interoperability and offline payment stack, are expanding revenue sources beyond core TSP.
• International expansion is a two-year story: Management is testing products in Africa, Middle East, and Southeast Asia but won't commit to revenue until a local partner and product reshaping exercise is complete, which may take another year.
• What to watch next quarter: Whether the short-term policy impact on one bank's platform business resolves, the pace of commercialization for two new sponsor banks, and any revision to the 75-100% FY25 revenue growth guidance.

Platform Evolution & Product Launches

• EvoK 3.0 now live: The complete platform upgrade includes mirroring and shadow ledger capabilities, reducing peak-hour transaction load on core banking by batching hits every two hours into one transaction, with shadow ledger ensuring reconciliation. Went into closed user group testing with a new bank, signed off, and went live.
• Policy upgrade friction: Policy upgrades applied for EvoK 2.0/3.0 created a short-term impact on payment platform business specific to one bank; management wants to understand this impact before revising guidance.
• Risk Intelligence Decisioning Platform: Launched at Global FinTech Fest for merchant and transaction risk profiling; offered at no cost for six months as part of the platform. Banks are now requesting implementation for their existing systems, and management believes monetization begins this financial year.
• FRM integration: Building fraud risk management rules into the system to reduce risk even before third-party FRM is applied at the bank level, strengthening the platform's risk capability.
• Internet banking interoperability: Ventured into this space after the regulator's April announcement; partnered and working with a few banks (names not released). The opportunity spans all 1,000-2,000 banks where internet banking exists, layered from top 50 to next 100 to next 1,000-odd banks.
• Offline payment stack: Launched payment platform as a service for offline business covering QR, Soundbox, and mobile apps; received an incremental order from existing customers.
• Embedded payments/IoT: Invested for the last year toward enabling any internet-connected device to pay itself for payments generated toward its use.

Deepak Thakur: "We are actually building regulatory requirements, compliance requirements, operational excellency. All of those pieces are added to our stack right now. That is what is Evoke 3.0. So that's the edge."

Bank & Customer Expansion

• Bank count doubled: Number of banks served grew from 7 (March 2023) to 15-16 now, with continuous change requests coming in for the TSP business and new products being sold to new banks.
• Two sponsor banks added: One in production CUG, one in pre-production stage; both expected to be fully commercialized by end of October or mid-November. Vision is to add 10 sponsor banks.
• Super app orders: Received orders for two more banks (Kerala Gramin Bank and Karnataka Gramin Bank) going live this quarter; one more bank in the final stage.
• Bharat Bill payment aggregation switch: Secured from two banks, currently in operationalization stage.
• Online dispute resolution: Secured one more order from a bank.
• Payout POC: Initiated under guidance of one of the banks.
• Competitive positioning vs Paytm and PhonePe: Management clarified these players can be customers, not competitors; NPST's edge is building regulatory requirements, compliance, and operational excellence in addition to the platform.

Revenue Model & Growth Drivers

• Revenue sources expanding: Initially just a simple payment solution; added stickiness to the platform. Now evaluating revenue from regulatory tech products launched on the platform, which can add basis points to revenue. Growth calculated as either additional business per platform or revenue per account.
• Transaction growth: 20% growth in transaction processing on the platform this financial year; processing more than ₹1,500 crore transactions annually.
• TSP vs platform split: TSP contributes ~18-20% of revenue; the rest is platforms.
• GMV stable: Gross merchandise value is about the same as last year, ~₹10,000k.
• Credit transaction revenue negligible: Revenue from credit card UPI and credit line UPI is way too small to split out; management doesn't even calculate that revenue separately because the numbers are very, very low. However, if these products grow, NPST will get some share wherever a SaaS-based model exists.
• Innovation pace: Organization shape changes significantly from beginning to end of year based on new products launched and services added.

International Expansion

• Two-year horizon: Assessed markets include Africa, Middle East, and Asia; good conversations around UK-like structures globally. Establishing an office beyond the domestic market may take a couple more quarters.
• Product reshaping underway: In the stage of testing in Africa, Middle East, and Southeast Asian markets; learning what product resizing and reshaping is needed. Management expects to be in a good position to identify the exact market target in about two quarters.
• Commitment before entry: Management will not jump into international markets without being committed to revenue numbers, preferring to find a local partner who can take the product and advise on reshaping.

Deepak Thakur: "We don't want to jump because as soon as we do so, we want to be committed to numbers as well. We want to be committed to the revenue as well, just not go there and, you know, scratch the surface."

Corporate Actions

• Main board listing: Completed the last criterion with the half-yearly result; received unanimous board backing; decided to list on both NSE and BSE. Postal ballot opened and will close within 30 days, after which the company will proceed with mainboarding.
• ESOP grant: First lot granted and released in 2023; approval completed.
• Management reappointment: Deepak Chand (Deepak Thakur) reappointed as Chairman and Managing Director by rotation/by policy.

Guidance & Commitments

Key Metrics