Network People Services Technologies Ltd Q1 FY2027 Concall Summary

Key Takeaways

• Transformation quarter, guidance intact: Revenue grew ~75% YoY to ₹61.42 crore while QoQ declined as the business deliberately shifted from PPaaS to technology-led subscription and solutions; full-year 60–70% growth guidance was reiterated.
• The PPaaS derisking is nearly complete: Payment platform contribution is down to ~5% of business, a deliberate pivot away from regulatory risk; any MDR on UPI mandate would revive this segment, but management refuses to quantify until a paper mandate arrives.
• International is now visible, not just promised: A global account was captured in Q1, contributing ~10–12% of consolidated revenue, with management targeting ~50% international mix in around two years.
• RegTech is the new growth engine: A separate vertical now exists, with a large PSU order, a first-mover AI-based risk intelligence product that has processed ~65 crore transactions, and a planned subscription model for small and mid-sized banks.
• What to watch next quarter: Whether milestone-triggered revenue actually inflects after two quarters of "next quarter will be fine," the pace of IPO fund deployment into RegTech/AI/payment infrastructure, and any MDR mandate paper from regulated entities.

Business Transformation & Revenue Model

• Why QoQ comparisons mislead: Revenue now arrives when implementations are due and milestones trigger, not sequentially; management flagged this in the prior call and explicitly asked investors to evaluate yearly numbers.
• The PPaaS taper: Payment platform contribution was reduced to ~5% to derisk from regulatory landscape changes; the business pivoted into RegTech, AI-based risk intelligence, global footprint, and SaaS-based recurring revenue.
• Inventory spike explained: The ₹17 crore change in inventories (vs ₹2 crore last quarter) reflects turnkey projects that include hardware as part of delivery; hardware supplied to banks for offline payment is recognized at certain milestones while software and service milestones spread out.
• Other expenses are a grouping artifact: The apparent ₹17 crore increase is because purchase cost was merged into other expenses; actual other expense remains ₹2 crore.
• Employee cost efficiency: Employee expenses grew only 10–20% despite ~70% revenue growth because employee cost is not directly proportionate to revenue in this business, and AI adoption across the organization is driving efficiency in development and operations.

Deepak Chand Thakur: "It is just that by nature, when we executing the project, when the implementation is due and the milestone is triggered. So, those are the reasons why, in fact, we knew this kind of, you know, when there is a change in the nature of business, then in last quarter call itself, we gave the clarity that do not expect the sequential triggers."

MDR on UPI: The Optionality

• The regulatory backdrop: A bill in Parliament approved MDR on UPI; management is waiting for guidance from the regulator, banks, and NPCI, and describes the direction as positive but unquantified.
• Direct benefit mechanism: On payment platform orders where the acquiring platform is implemented, NPST gets paid per transaction; the bank shares MDR revenue with NPST on the acquiring stack. NPST will not charge merchants directly.
• Indirect benefit: More money available to pay technology service providers to upgrade platforms or accelerate roadmaps; competition among banks to generate more revenue will drive more investments, giving the TSP an added advantage.
• PPaaS revival: MDR revenue will start kicking in and add good revenue to the organization; the PPaaS segment will start flourishing once MDR flows, and management says MDR will bring an upgrade to the projection made around PPaaS, which has been completely tapered down until impact is visible.
• TimePay optionality: If MDR has direct impact on payer revenue (payer PSP also gets a share), it will create an influx of opportunity on TimePay; the product can then be revived with focused investment thought.
• Why no numbers: Management declined to quantify the MDR pool capture, citing the stack split (acquiring, interchange, switching fees, PSP, payment aggregator shares) and the absence of a paper mandate.

Deepak Chand Thakur: "I am not denying that it is in a positive direction, but I don't want to make any number projections unless we receive the paper from them. These are the changes you do and now MDR can be charged. That is what I am referring to."

International Expansion

• First global account captured in Q1: International revenue contribution is now visible at ~10–12% of consolidated revenue, validating technology relevance beyond India.
• Telecom super app order: Won an order from one of the biggest telecom companies in India for a super app, transforming the entire digital landscape and payment for the telecom provider.
• Margin profile: Management confirms 30–35% (up to 40%) margin expectation for global clients; current consolidated numbers show ~10–12% from international, with margins expected to improve as implementation completes and revenue kicks in.
• Project duration: International projects can range 4–5 years or longer; margins increase as implementation completes and revenue starts.
• Pipeline: Two more deals in pipeline; management expects to be "sitting at a good bucket" by end of this quarter.
• Hero product withheld: Management declined to specify the hero product internationally, citing competition.

Deepak Chand Thakur: "So, around 2 years from here, we are targeting around 50% from the international business, or maybe more."

RegTech & AI-Based Risk Intelligence

• Separate vertical created: Previously just a product, RegTech is now a separate vertical to focus on it; deals picked up in the cooperative segment and an order was received from a large PSU.
• First-mover position: Established products like EFRM or EWS have decade-old competition, but AI-based risk intelligence is completely new; deployed in a banking environment and processed ~65 crore transactions.
• Subscription model planned: Going to create a subscription-based model for small to mid-sized industry, giving a larger universe to address.
• Regulatory tailwind: If regulation further demands such software to be mandated, it will straightaway help RegTech growth.
• Global traction: Got good attraction from the global market wherever talking.

Deepak Chand Thakur: "So, if I take that particular point, we don't have any competition at all right now. That was the first mover we did in the market. We invested as a company, good amount of investment that went into this particular product with the belief that we will be able to take it to market."

Margins & Profitability

• Current quarter: EBITDA grew 66% YoY and net profit reached ~₹11.4 crore; PAT margin at 17–18%.
• EBITDA margin dip explained: Management explained the margin guidance referred to a combination of domestic, global, and RegTech taken together; the nature of business has changed from 90% PPaaS down to 5% projection. Q1 and Q2 orders will start adding margins and averaging out higher by year-end.
• PAT margin trajectory: Expected to improve to about 20% by end of this year, driven by milestone-based revenue and global revenue share.
• Two-year margin ambition: Current 25–30%; targeting at least 35% EBITDA margin in next 2 years, "or maybe more than that."
• AI efficiency target: Target of about 30% efficiency improvement is still there; "those kinds of reflections you will start seeing."

Capital Deployment & Inorganic Growth

• IPO fund deployment: Zeroed down on three opportunities for investment: RegTech companies, AI solutions, and payment infrastructure solutions.
• Timing: Will start seeing deployment in next two quarters; those will be on product development, market expansion, access to international market, and ready customers with new product.
• Acquisition criteria: Driven by geographical access, new products missing from the stack, and growth trajectory of target organizations; EBITDA margin of target is not a focused criterion right now.
• Acquisition timeline: Q2 is early; management will come back on this one.

Deepak Chand Thakur: "No, no. We can't wait till next year. Not the entire fund, but we will start seeing deployment in next two quarters."

Guidance & Commitments

Key Metrics