Release Date: November 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Infibeam Avenues Ltd (BOM:539807, Financial) reported a strong growth trajectory with gross revenue increasing from INR 787 crore in Q2 FY24 to INR 1,017 crore in Q2 FY25.
- The company achieved a significant improvement in net take rate, rising from 9.3 basis points in Q2 FY24 to 11.3 basis points in Q2 FY25, reflecting a 21% increase.
- Infibeam Avenues Ltd (BOM:539807) has successfully integrated Rediff, transforming it into a super app with a focus on financial products, which is expected to contribute 2-4% of total revenue this year.
- The company is expanding its international presence, particularly in the UAE and Saudi Arabia, with international business expected to contribute 12-15% of net revenue in the coming years.
- Infibeam Avenues Ltd (BOM:539807) has received approval for the RBI payment aggregator license, enhancing its ability to scale merchant onboarding and expand cross-border payment capabilities.
Negative Points
- Operating expenses have increased by 3-4% year-on-year and quarter-on-quarter, impacting the overall profitability.
- There are additional investments required to optimize the Rediff platform for Infibeam's business model, which may affect short-term financials.
- The company's share price performance has been stagnant despite revenue growth, with concerns about insider selling affecting investor confidence.
- The integration of Rediff's services such as cloud-based email and content distribution presents operational and technical challenges.
- Infibeam Avenues Ltd (BOM:539807) faces competition in the digital payment space, requiring continuous innovation and strategic partnerships to maintain its market position.
Q & A Highlights
Q: When should we expect the launch of Rediff Pay, and are you looking to become a fintech company similar to Jio Finance and ATMs?
A: Rediff Pay will be integrated into the existing Rediff mail app, transforming it into a super app. We plan to introduce more financial products alongside Rediff Pay, which will sit on top of a communication framework already downloaded by millions of users. We are indeed positioning ourselves as a fintech company.
Q: Could you provide clarity on the timeline of revenue recognition from the Phonetic AI contracts?
A: Revenue from Phonetic AI contracts will be recognized this year. We have already started monetizing, with an annual run rate expected to be upwards of a million dollars. Phonetic AI is being implemented in multiple areas, expanding beyond gas stations to weighbridges and more.
Q: What proportion of capital will be allocated towards AI and international expansions versus core digital payments and platform development?
A: We have raised about 165-167 crores to expand our international business, aiming for it to contribute 10-15% of our revenues. For AI, we are investing in edge compute and data centers, with CapEx for a one-megawatt data center being between 10 and 20 crores. Our investment in India will primarily focus on people and data centers.
Q: Could you give a breakdown of the key factors driving the rise in other expenses this quarter? Are these expenses recurring or one-time?
A: Other expenses are about 1.5 to 2% of total revenue, corresponding with revenue increases. There are some one-time expenses booked this quarter, accounting for about 1.5% of the total. These are not recurring.
Q: Are there any plans for further acquisitions or demergers, particularly with Phonetic AI?
A: Currently, there are no plans for further acquisitions. We evaluate opportunities from time to time and will communicate any developments. Regarding Phonetic AI, we are focused on building it up and will evaluate the potential for demerger as we progress.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
