Network People Services Technologies Limited — Q3 FY25 earnings call

Call held 14 Feb 2025

Management summary

NPST experienced a significant revenue dip in Q3 FY25 due to policy changes affecting its primary cooperative bank partner in the payment platform vertical. Despite this, the company maintained healthy profitability and aggressively pursued diversification by launching new products like RegTech and UPI credit lines, and onboarding new types of banks. Management acknowledged the impact on FY25 guidance but expressed confidence in the long-term growth story driven by these new initiatives and market expansion.

Highlights

  • Q3 FY25 Revenue declined to Rs. 23.23 crores, down from Rs. 68.97 crores in Q2 FY25 and Rs. 31.39 crores in Q3 FY24.

  • EBITDA for Q3 FY25 stood at Rs. 8.21 crores, with a margin of 35.33%.

  • PAT for Q3 FY25 was Rs. 5.14 crores, maintaining a 22% PAT ratio.

  • Nine months consolidated figures showed strong growth: revenue up 78%, EBITDA up 96%, and PAT up 133%.

  • Management revised FY25 revenue growth guidance, stating it is 'difficult to achieve 75%'.

  • Strategic diversification included the launch of RegTech (AI/ML for fraud/compliance), UPI credit line (live with Canara Bank), BBPS, and offline payment solutions (QR/Soundbox).

  • Payment platform expanded to include private sector, payments banks, and two small finance banks in the pipeline, mitigating risk from cooperative bank policy changes.

  • Target to manage at least 1 million Soundboxes through the platform.

Concerns

  • Impact of Cooperative Bank Policy Changes

Key financials

  1. Revenue ₹23.23 Cr -26%YoY
  2. EBITDA ₹8.21 Cr
  3. EBITDA Margin 35.3%
  4. PAT ₹5.14 Cr
  5. PAT Ratio 22%
  6. Nine Months Revenue Growth 78%
  7. Nine Months EBITDA Growth 96%
  8. Nine Months PAT Growth 133%

What they filed

Q1 FY27: revenue up 64.7%, net profit up 57.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue67 21 26 34 47 −30%53 +152%62 +138%56 +65%
EBITDA23 7 9 10 14 −39%14 +100%13 +44%14 +40%
Net profit18 5 5 7 10 −44%12 +140%12 +140%11 +57%
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.

Guidance & targets

Revenue

  • FY25 Revenue Growth Revenue · FY25 · Low confidence difficult to achieve 75%

    Previously 75-100% → difficult to achieve 75%

    Let me be honest, I personally feel that that it is difficult to achieve 75%. But we are still trying. So my confidence is not 100%, a little lower than that.

    — Deepak Thakur, Chairman and Managing Director

  • FY26 Revenue Growth Aspiration Revenue · FY26 · Medium confidence 75%-odd
    Our aspiration, our wish list is to maintain whatever we have achieved, whatever we intend to do around 75%-odd.

    — Deepak Thakur, Chairman and Managing Director

  • FY26 Revenue Contribution (Existing Portfolio) Revenue · FY26 · Medium confidence 85% to 90% odd
    the existing business portfolio of the organization will be almost about -- will contribute about 85% to 90% odd

    — Deepak Thakur, Chairman and Managing Director

  • FY26 Revenue Contribution (New Portfolio) Revenue · FY26 · Medium confidence 10%, 15%
    and the new portfolio that we are building should add at least 10%, 15% in the P&L.

    — Deepak Thakur, Chairman and Managing Director

Volume

  • Soundboxes Managed Volume · future · High confidence 1 million
    So the target is to have at least 1 million Soundboxes being managed through our platform.

    — Deepak Thakur, Chairman and Managing Director

Product Launch

  • RegTech Product Availability Product Launch · Q1 FY26 · High confidence mid-April
    It should be by mid-April that we will have a complete full-blown product.

    — Deepak Thakur, Chairman and Managing Director

Risks & concerns

  • Impact of Cooperative Bank Policy Changes

    high

    Policy changes at a primary cooperative bank led to a halt in acquiring business, impacting the payment platform vertical and causing a significant Q3 revenue dip.

    Management acknowledged

  • Difficulty in achieving FY25 Revenue Growth Guidance

    medium

    Due to the Q3 impact and spillover into January, achieving the previously stated 75% growth for FY25 is now considered difficult by management.

    Management acknowledged

  • TimePay App Performance and User Experience Issues

    medium

    Users reported money getting stuck and poor UI/performance on the TimePay app, which management is actively working to resolve for monetization.

    Analyst acknowledged

Q&A highlights

3 direct
FY25 Revenue Guidance Revision & Investor Trust Direct
Let me be honest, I personally feel that that it is difficult to achieve 75%. But we are still trying. So my confidence is not 100%, a little lower than that.

This question directly addressed the significant revenue miss and the credibility of future projections, leading to management's revised outlook for the current fiscal year.

Asked by Akshay Kaila

Client Churn and Take Rate Changes on Payment Platform Direct
I would say that the take rate will change, and it will balance out because now you do not have one bank, you have multiple banks. So each bank has its own policy how they want to monetize... I believe that it will not have an impact on the revenue, if that is what you mean, because the numbers will actually balance out based on the volume and the take rate taken together.

This question explored the impact of policy changes on customer retention and the future revenue model with new banking partners, crucial for understanding the payment platform's recovery and sustainability.

Asked by Prateek Chaudhary

TimePay App User Issues Direct
I feel that, I mean, every single of those issues have been addressed because... we took a decision to also take this toward monetization... we have come across these challenges. There is no denial to that. However, now we are, we have product tech business team completely aligned to TimePay and they are contributing to complete revamp of the solution.

This question highlighted a specific product quality issue impacting user experience and potential reputation, with management outlining their plan for resolution and monetization.

Asked by Saurabh Sadhwani

2 min read 5 chapters

Detailed narrative

Q3 FY25 Performance Overview and Revenue Dip

Network People Services Technologies Ltd. reported a substantial decline in Q3 FY25 revenues, reaching Rs. 23.23 crores. This marks a significant decrease from Rs. 68.97 crores in Q2 FY25 and Rs. 31.39 crores in Q3 FY24. Despite the revenue contraction, the company maintained healthy profitability, with EBITDA at Rs. 8.21 crores (35.33% margin) and PAT at Rs. 5.14 crores (22% PAT ratio). For the nine months consolidated period, NPST still achieved robust growth, with revenue up 78%, EBITDA up 96%, and PAT up 133%.

Impact of Cooperative Bank Policy Changes and Mitigation

The primary reason for the Q3 revenue dip was policy changes at a cooperative bank, which served as NPST's main source in the payment platform vertical. This regulatory shift led to a halt in the acquiring business for cooperative banks, impacting the entire quarter and spilling over into January 2025. To mitigate this risk, NPST has diversified its payment platform by onboarding private sector and payments banks, with two small finance banks also in the pipeline, and the acquiring business has now restarted.

Strategic Diversification and New Business Verticals

NPST aggressively pursued diversification by fast-tracking new product launches and market entries. Key initiatives include RegTech, an AI/ML engine for fraud prediction and compliance, which was recently awarded at the Bharat Fintech Summit. The company also launched a UPI credit line, already live with Canara Bank, and is part of two more tenders. Additionally, BBPS was launched last quarter, and efforts in offline payments (QR and Soundbox solutions) are progressing, with a target to manage 1 million Soundboxes through its platform.

FY25 Guidance Revision and FY26 Outlook

Management acknowledged that achieving the previously stated 75% revenue growth guidance for FY25 is now 'difficult' due to the Q3 impact and spillover. While a specific revised number was not provided, clarity is expected by the end of Q4. For FY26, the company's aspiration remains to maintain a growth rate of '75%-odd', with existing business expected to contribute 85-90% and new portfolios adding 10-15% to the P&L.

International Market Entry and TimePay App Challenges

NPST is expanding its footprint internationally, with plans to open its first office in Dubai by March 2025, focusing on the Middle East and African markets as a payment expert and software provider. Domestically, the TimePay app faced user complaints regarding money getting stuck and UI issues. Management acknowledged these challenges, attributing them to the app's push towards monetization, and confirmed that a dedicated product tech team is actively revamping the solution, with all compliance-related complaints already settled.

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