Protean eGov

Protean eGov reported a strong Q2 FY25, with revenue from operations growing 12% quarter-on-quarter to INR 220 crores. Adjusted operating profit saw a 21% QoQ increase, reaching INR 32 crores, and the operating margin improved to 14.4% from 13.3% in Q1 FY25. Profit After Tax (PAT) also demonstrated robust growth, rising 33% QoQ to INR 28 crores from INR 21 crores in the previous quarter. The company maintains a healthy balance sheet with over INR 750 crores in cash and cash equivalents and remains debt-free.

The company's core Tax and Pension services were key drivers of performance. Tax services experienced a healthy 22% QoQ growth, primarily due to new government schemes post-elections, and increased its market share to 55.4% in Q2FY25 from 51.6% in Q2FY24. Protean issued 1.2 crore PAN cards, with online issuance surpassing offline for the first time at over 51%. Pension services grew 7% QoQ, adding 3.6 million new subscribers, including 826 corporates, and maintained a dominant 97% market share. The new NPS Vatsalya scheme for minors also saw a good start with over 25,000 subscribers by September 30, 2024.

Identity services recorded a 14% quarter-on-quarter degrowth. This was attributed to high volumes in the previous year, driven by the Aadhaar-PAN linkage deadline, and competitive pricing pressures in eSign services. To counter this, Protean is strategically investing in building value-added services like eSign Pro and Rise with Protean, an API marketplace, on top of the foundational identity layer. This strategy aims to drive more B2B engagement and business opportunities, differentiating the company beyond basic authentication services.

Protean is actively engaged in Open Digital Ecosystems, particularly ONDC, where it provides network-level tech (gateway and registry services) and builds buyer/seller applications. The company is already clocking revenues from the infra layer (reimbursed by ONDC) and aims for SaaS-based transactional revenues from application layers, with monetization expected to scale up. In Open Finance, a new vertical launched on ONDC, Protean introduced an Open Finance stack to enable discovery of loans, insurance, and mutual funds, collaborating with distribution partners like PayNearby to provide last-mile access.

During the quarter, Protean launched two new products: an Open Finance stack and Protean LIFE. Protean LIFE is India's first platform designed to create an interconnected ecosystem for philanthropy and CSR, connecting seekers and providers through a DPI-led approach. The company continues to invest in new lines of business, including data stack, international business, cloud, and infosec securities, with an aspiration for these new businesses to contribute around 25% of the total top line in the next two to three years.

Protean is actively pursuing international expansion, leveraging its expertise as a strong DPI player in India. The company is engaged with multiple countries in Africa and Southeast Asia, working on Proof of Concepts (POCs) for use cases built on digital public infrastructure like ID, pension, and taxation stacks. Protean participates in government-level bids, with expectations of quick results, and anticipates operating margins upwards of 20% in these mandates due to its technology and pricing model.