Network People

Network People reported a strong financial recovery in Q3 FY26. Total income reached INR57.17 crores, marking a 17.46% sequential jump from INR48.67 crores in Q2 FY26 and a significant 145% increase year-on-year. Operational efficiency also improved, with EBITDA rising 20% QoQ to INR18.74 crores, an 118% jump compared to INR8.59 crores in Q3 FY25. Net profit (PAT) increased 17.28% QoQ to INR11.5 crores, and diluted EPS climbed to INR5.92, reflecting 35% QoQ and 137% YoY growth.

Following an unexpected dip in Q3 FY25, NPST has relentlessly worked on a business revamp. This includes a focused approach for the domestic market, segmenting it into large accounts and mid-to-small accounts with redesigned products. Concurrently, an independent team has been established for international markets, which has received positive initial responses. The company anticipates significant cumulative impact on revenue streams from these efforts in the coming financial year.

The payment platform opportunity has faced challenges due to reduced customer paying capacity and a shift in merchant profiles towards banks. To address this, NPST is introducing new products and services lines, expected to reflect in revenue in the next two quarters. This includes the upgrade of EVOK 3.0 with PPI through a partner bank, which is projected to add revenue from Q1 next year, and early-stage discussions for a lending platform over QR-based solutions.

NPST's AI-based risk engine has taken good shape and is showing traction, with expectations to contribute to revenue from multiple streams within the next two quarters. In the international market, the company is engaged in discussions across 10-11 countries, particularly in the Middle East, Africa, Central Asia, and Latin America. Management is confident that multiple international deals will materialize as early as the next two quarters.

RegTech, initially core to the payment platform, has been developed into a separate enterprise version due to specific demand and RFPs. It is expected to contribute a good amount of revenue in the coming six months. Additionally, Banking Connect, identified as a UPI movement for Internet banking, has already secured two clients and has a lengthy list of prospective clients. This initiative is projected to contribute 10-15% of the TSP business within a year as strong subscription-based revenue.

The company is actively shifting its TSP business model. Currently, about 7 out of 10 contracts are license-based, but this mix is expected to completely reverse next year towards SaaS-based revenue. This transition, along with global market expansion and new PPaaS offerings, is aimed at improving EBITDA margins. Management acknowledged that operating costs increased to 40% from 34%, leading to margin pressure, primarily due to the nature of current TSP projects, but anticipates non-linear growth to mitigate this.

Management addressed an observation from the monitoring agency regarding INR3.18 crores utilized under general corporate purpose. They clarified that these funds were strictly used for operational expenses, primarily office and employee salaries, in the ordinary course of business. The observation relates solely to disclosure granularity, not misutilization, and the company remains fully compliant with SEBI ICDR Regulations, upholding high standards of transparency.