DiGiSPICE Technologies Limited — Q1 FY26 earnings call

Call held 14 Aug 2025

Management summary

DigiSpice Tech. reported a strong Q1 FY26 with customer GTV growing 28% YoY to ₹32,760 crores and PAT significantly improving to ₹6.9 crores. The company secured a perpetual PPI license, enabling further expansion into the UPI space and digital payments. While facing industry headwinds in the AePS segment and acknowledging various risks, management highlighted operational leverage and continued investment in its rural fintech platform, aiming for sustained growth and financial inclusion.

Highlights

  • Customer cross-transaction value (GTV) closed at ₹32,760 crores, marking a 28% year-on-year growth.

  • PAT closed at ₹6.9 crores, compared to ₹1.5 crores in the previous quarter, indicating strong profitability improvement.

  • Secured a PPI license in perpetuity from the Reserve Bank of India, enabling expansion into UPI space.

  • AePS Cash Deposit GTV grew significantly to ₹328 crores in Q1 FY26, up from ₹124 crores in the same quarter last year.

  • CASA accounts opened reached 11.4 lakh, a 145% year-on-year growth, with float balances exceeding ₹200 crores.

Concerns

  • Customer GTV growth was only about 2% quarter-on-quarter, despite strong YoY growth, indicating some short-term moderation.

  • The AePS industry, particularly Off-Us segment, has not grown significantly due to regulatory restrictions and competitive pricing pressures.

  • The company acknowledges various risks including regulatory changes, fraud, supply-side challenges, competition, and the long-term shift of customers towards digital transactions.

Key financials

  1. Revenue ₹123.8 Cr +13%YoY
  2. Gross Margin ₹49 Cr +18%YoY
  3. EBIT ₹10.2 Cr +50%QoQ
  4. PAT ₹6.9 Cr +360%QoQ
  5. Customer GTV ₹32,760 Cr +28%YoY

What they filed

Q1 FY27: revenue down 12.9%, net profit down 4.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue109 113 117 124 125 +14%109 −3%107 −8%108 −13%
EBITDA-3 -2 1 6 7 +333%6 +472%1 +69%9 +34%
Net profit-7 -20 -12 7 7 +198%2 +112%3 +123%7 −5%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence
The company operates a rural fintech platform business model, generating revenue from transaction volumes (GTV) rather than traditional IT services Total Contract Value (TCV) or project-based order books.

Source: Inferred

Capital allocation

high confidence
  • M&A Legacy VAS business entities (Middle East, Indonesia) Divestment · Integrated

    Streamlining operations, reducing negligible cost to carry on from discontinued business.

    Discontinued business now has a negligible cost to carry on, contributing to improved PAT.

    We are going through the process of either closure or sale of those entities, country by country. We have exited, for example, the one in the Middle East. We are close to exiting the one in Indonesia.

Guidance & targets

CASA Accounts

  • Monthly New Accounts Opened CASA Accounts · monthly basis · High confidence 1 lakh
    And our target is that we can touch 1 lakh accounts on a monthly basis that we open as we drive growth in this product.

    — Aastha Garg

Platform Modernization

  • Transition from Legacy to Modern Platforms Platform Modernization · another year or so · Medium confidence complete
    I think it will take another year or so to be able to completely be able to move out of legacy into more modern kind of platforms.

    — Dilip Modi

Operating Leverage

  • Operating Leverage Operating Leverage · ongoing · Medium confidence continue to deliver
    So, Pankaj, fingers crossed. I am hoping that we can continue to deliver on operating leverage, but we will not slow down on investment.

    — Dilip Modi

Costs

  • Cost Control Costs · ongoing · Medium confidence more or less held
    I think our costs are more or less going to be held and therefore whatever growth we see in income will more or less come into the bottom line.

    — Dilip Modi

What to watch in Q2 FY26

Monthly New CASA Accounts Opened

next quarter
Current >50,000 accounts per month
Target 1 lakh accounts per month

Why it matters

This is a specific, quantifiable target for customer acquisition in a key product area (CASA) that management explicitly stated.

And our target is that we can touch 1 lakh accounts on a monthly basis that we open as we drive growth in this product.

Risks & concerns

  • Regulatory changes and fraud in AePS industry

    medium

    Regulatory issues around fraud in AePS, being mitigated with face authentication and new guidelines.

    Management acknowledged

  • Competition in rural fintech

    medium

    As urban markets mature, players will look at smaller towns; company is preparing to face competition with its unique 'phygital' model.

    Management acknowledged

  • Economics of UPI and credit

    medium

    Challenges in building an economically viable model for UPI and managing risks associated with credit disbursement.

    Management acknowledged

  • Customer shift towards digital transactions (reducing cash withdrawals)

    low

    Potential for customers to move away from cash withdrawals; company is developing Spice Pay for UPI and cash deposit products to adapt.

    Management acknowledged

Q&A highlights

8 direct
Sustainability of positive results and choppiness in earnings. Direct
I think, one of the things I just want to emphasize is, yes, we are beginning to see operating leverage play out. Over the last two to three years, we have been investing the gross margins that we have earned in our business back into building products and building services effectively.

Addresses investor concern about past volatile earnings and management's strategy for sustained profitability through operating leverage and reinvestment.

Asked by Pankaj Prasoon

Roadmap to scale EBITDA. Direct
So, the roadmap for EBITDA scale-up is effectively income growth. So, more products, more agents, more products per agent.

Clarifies that EBITDA growth is tied to product expansion and agent network growth, not just cost cutting, and emphasizes EBIT as a better metric due to working capital investments.

Asked by Pankaj Prasoon

Impact of US tariffs on Chinese components on hardware procurement costs. Direct
we are actually trying to move beyond having to supply devices. So, first is, we do not see this. I think there are companies, you know, this is not a very tech-heavy kind of a hardware play. So, there is now local domestic capability that is built on. We work with companies that work domestically. Most of the components now we are able to procure domestically.

Management indicates low exposure to this risk due to domestic sourcing and a strategic shift away from device dependency towards face-auth and QR-based transactions.

Asked by Aniket Redkar

AePS market consolidation and easing of headwinds. Direct
I would say that the headwinds like, you know, the industry as Aastha was showing us the numbers, it has not been growing, right? And the Off-Us industry. And the reason it's not been growing is because there continue to be a lot of restrictions that are put on transactions done on Off-Us versus On-Us networks by the banks.

Confirms ongoing headwinds in the core AePS segment due to regulatory restrictions but expresses hope for new tailwinds from clarity and products like AePS-led cash deposit.

Asked by Utsav Bahety

Status of winding up formalities for legacy businesses. Direct
So, yes, Utsav, as you can see from the numbers, our discontinued business numbers from a kind of closure cost perspective have significantly come down, only about Rs. 10 lakhs loss for the previous quarter. So, all the formalities with respect to people exits, transfer of contracts, all of that has been completed.

Provides clarity on the progress of divesting non-core assets, indicating that most operational aspects are complete, reducing future drag on financials.

Asked by Utsav Bahety

Competitive intensity in rural fintech and differentiation. Direct
However, to serve rural market is not the same way to serve urban market. The unit economics is very different in rural. And so, I don't believe that the playbook used in urban can be replicated in rural exactly in the manner in which it has been played out. You know, rural does need a combination of digital and physical. And rolling out a network of agents is very different than rolling out a digital payment acceptance product for merchants. So, I would say that we do have a unique position on the ground.

Management emphasizes its unique "phygital" approach and agent network as a differentiator against urban-focused competitors and banks.

Asked by Aniket Redkar

Roadmap for platform modernization and cost savings through API integrations. Direct
So, this is a big focus area, Aniket. And that is why when I was answering Pankaj's question on profitability, I believe that one of the big areas that we will have to invest in is technology and automation. And developing the kind of API stacks where we are able to drive will require platform modernization.

Highlights technology investment as a key driver for future profitability and efficiency, with a timeline of "another year or so" for full transition.

Asked by Aniket Redkar

Measures to minimize churn and retain agents. Direct
I think our agents are basically looking for better service when consumers come to their outlets to withdraw cash, deposit cash, do any financial transactions. Their transactions should not get stuck. If they get stuck, they should be resolved ahead of others. So, things like those are kind of points that add up to churn. And so we have a big focus on predicting and controlling churn. And churn is very important.

Reveals management's focus on service quality and transaction success rates as primary drivers for agent retention, alongside product offerings and subscription packs.

Asked by Nimesh Pandya

3 min read 7 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

DigiSpice Tech. reported a Q1 FY26 revenue of ₹123.8 crores, reflecting a 13% year-on-year growth. Gross margin stood at ₹49 crores, growing 18% YoY and 6.5% QoQ. The company achieved an EBIT of ₹10.2 crores, a 50% increase quarter-on-quarter, and a PAT of ₹6.9 crores, significantly up from ₹1.5 crores in the previous quarter. Customer Gross Transaction Value (GTV) reached ₹32,760 crores, demonstrating a 28% YoY growth, though QoQ growth was a more modest 2%.

Strategic Focus: Rural Fintech Platform & PPI License

The company is building a rural fintech platform centered around Spice Money (AePS) and Spice Pay (UPI). A significant highlight for the quarter was securing a perpetual Prepaid Payment Instrument (PPI) license from the RBI, which enables the company to expand its presence in the UPI space for both consumers and merchants. This license is crucial for digitizing payments in cash-first markets and onboarding new UPI users from small towns.

AePS and Cash Management Services Growth

DigiSpice maintains its leadership in the AePS segment, holding over 18% market share in the Off-Us AePS market. Monthly AePS GTV is approximately ₹5,000 crores. The AePS cash deposit product showed strong growth, with GTV reaching ₹328 crores in Q1 FY26, a substantial increase from ₹124 crores in the same quarter last year. Cash management services (CMS) also contributed significantly, with a monthly GTV of around ₹4,000 crores, and collections GTV growing 57% YoY to ₹14,000 crores in the previous quarter.

Expansion in CASA and Credit Distribution

The company crossed a milestone of 11.4 lakh Current Account Savings Account (CASA) accounts opened by the end of Q1 FY26, representing a 145% YoY and 13% QoQ growth. Float balances in these accounts grew to over ₹200 crores, up 57% YoY. In credit distribution, the company disbursed ₹110 crores in total credit, with secured lending alone at ₹87.2 crores, marking a 3.2x YoY and 1.4x QoQ increase. Gold loans constitute a significant portion, accounting for ₹68 crores or 70% of overall loans.

Operational Efficiency and Technology Investment

Management emphasized the play of 'people and tech' through its Sales Force app to drive productivity and partner engagement. The company is investing in technology and automation for platform modernization, aiming to move from legacy systems to modern platforms within 'another year or so.' This focus on tech-enabled feet-on-street operations and API integrations is expected to drive operating leverage and cost savings, contributing to bottom-line growth.

Agent Network and Retention Strategy

The company's agent network, comprising 15.8 lakh agents across 2.5 lakh villages, is a core asset. Agent retention is driven by providing better service, ensuring smooth transactions, and offering subscription packs that provide additional benefits for higher transaction volumes. Approximately 65% of subscription packs sold are renewals, indicating strong agent stickiness and continuous engagement with the platform.

Risks and Future Outlook

DigiSpice acknowledges several risks, including regulatory changes and fraud in the AePS industry, competitive intensity in rural fintech, and the long-term shift of customers towards digital transactions. Management is actively mitigating these risks through measures like face authentication, a unique 'phygital' model, and developing new products like Spice Pay to adapt to evolving customer behavior. The company aims to continue scaling its core platform, expanding product offerings, and driving financial inclusion in rural India.

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