AvenuesAI Limited (539807) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Infibeam Avenues Limited Earnings Conference Call for Q2 FY 2021 hosted by K.R. Choksey Research. This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on the date of this call. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Parvati Rai from K.R. Choksey Research. Thank you, and over to you, ma'am.

Thank you, Malika. Good evening, everyone. On behalf of K.R. Choksey Research, we welcome you all for the Q2 FY '21 Earnings Conference Call of Infibeam Avenues Limited. I take this opportunity to welcome the management of Infibeam Avenue represented by Mr. Vishal Mehta, Managing Director; Mr. Vishwas Patel, Director as well as Founder and CEO of Payments Business; Mr. R. Srikanth, President; and Mr. Hiren Padhya, Chief Financial Officer. We begin the call with a brief overview of the company by the management, followed by the Q&A session. I now hand over the call to Mr. Vishal Mehta for his opening remarks. Thank you, and over to you, sir.

Thank you, Parvati. Good evening and a very warm welcome to all of you on the call. On behalf of the management present on the call, I welcome everyone to our second quarter 2021 earnings call. It gives me a great pleasure to present the stand-alone and consolidated accounts of our company during the call. Our financial results, earnings press release as well as investor presentations have been uploaded on the stock exchange and the company's website that is ia.ooo. I'd like to spend a few minutes to give you a brief update on the quarter before I hand over the call to Vishwas to give you further details and then Srikanth. In the last quarter, we had seen a V-shaped recovery by end of June, early July, by -- which is when we had surpassed the pre-COVID-19 payment processing level. This quarter, we have seen an accelerated growth in payments. We adopted certain tactical measures to capture growth in payments, which was aided in the digital transformation that happened due to COVID. And I'd like to take you over the quarterly performance as you turn to Slide #7. Infibeam Avenues continued to maintain and accelerate its digital payments and platform business growth in both domestic as well as international markets. During the quarter, the company has registered fantastic all around performance across all its digital offerings. We have achieved the highest ever payment processing transaction volume in second quarter of INR 22,780 crores. That is up 61% sequentially and 56% year-over-year. We've now achieved a stable average monthly run rate of INR 7,500 crores in processing volumes, which means that in today's exchange rate, we process about close to $1 billion every month in payments. Payment transactions were also the highest ever in the history of our company at 44 million in the quarter unique transactions, that's up 23% quarter-over-quarter. Q3, which is the existing coming quarter, which is the festival quarter and gradually opening up the economy in sectors like aviation, travel, hospitality and entertainment, et cetera, will further add to the ongoing growth in our payment processing volumes. Our bill payments have seen a stellar Q1 as well as Q2. Bill payment volume has gone through the roof during the COVID period as people resorted to paying for utilities digitally rather than paying in cash, a historical trend in India. Bill payments volume exponentially increased in Q2 to 4.9 million, up 89% quarter-over-quarter and 168% year-over-year. We continue to see great traction in bill payments through our BBPS infrastructure. Merchant registration continues to increase as new sectors and individuals queue up to offer online services. Merchant registrations was up 26% quarter-over-quarter. We've built a very strong pipeline of merchants, which help us to grow organically and scale as the business grows. Word of mouth as well as our brand carries the identity with 2 decades of history, and it remains as the most preferred customer acquisition route along with bank alliances. This helps us significantly in saving our marketing costs compared to most of the other competitors in this space. One of the biggest achievements for us during the quarter, after a long screening and a diligence exercise, was to sign a definitive agreement with Jio Platforms Limited to license, customize and maintain the e-commerce software and payments platform for the business use. It gives us great pride to become a part of the JPL ecosystem, along with some of the world's largest and most revered companies as investors. We continued our journey to expand overseas by entering into Oman, our third GCC country, after entering into UAE in 2018 and Saudi Arabia in 2019. We have partnered with Oman's second largest bank by market value, Bank Dhofar, to offer our newly launched payment solution, CPGS, which will recover shortly. We will process card payments of various payment networks like Visa, Mastercard, Amex in Oman where Bank Dhofar is the acquiring bank. Oman is a developing e-commerce market in the GCC region. And our early entry gives us a very strong headway there. Another important business development for us during the quarter was to sign up with JPMorgan Chase Bank to offer our flagship payment platform, CCAvenue, for processing transactions of large enterprise merchants of JPMC. We think these developments are a testimony to our very strong technology orientation and the fintech business. Vishwas will touch upon it in a minute. The 2 decades of management experience that we have gathered along with our team members, our core leadership team that continues to work with us since inception, a never heard phenomenal fintech sector of India and a strong governance that gives us ample comfort to all of our customers to work with us across regions to operate in. I now hand over the call to Vishwas to give you a quick brief on the technology stack that we have built comprising of a unique combination of fintech platforms, which offer a 360-degree solution to our customers, followed by the financial and other developments during the quarter. Over to you, Vishwas.

Thank you, Vishal, and good afternoon to everybody on the call. I'll go straight to Slide #5 of our presentation. We have built a very powerful tech stack comprising of a robust combination of digital payment and enterprise payment solutions to offer almost everything to a customer under a single roof, be it a SME or a large enterprise, governments as well as financial institution across the world. We have built this stack over a period of 20 years since inception in the year 2000, 2001. We have invented and added features 15 years ago, which the competitors are offering only since last few years like SMS payment links, social media payments, et cetera. We have been building industry level bank-grade solutions when this industry was not even known to many or who did not even believe in the power of Internet and online payments. So let me quickly explain the 7 platform and payments that we have within our ecosystems. So the first 4 are our digital payment platforms and the other 3 are our enterprise software platforms. So most of you are well aware of our CCAvenue platform, the payment gateway, which we launched in the year 2001. Today, it has 200-plus payment options, connects to almost 75-plus banks in India, India core banking solutions directly. We are -- it also is a white label solution, which is used by the likes of HDFC Bank, Kotak Bank, JPMorgan Chase. So the world's best are using our CCAvenue payment gateway white labeled for them to go out to their clients. Some of the biggest market clients that we have direct relationship and everything is like -- we have in the hospitality, Taj Group of Hotels, Oberoi, ITC; in OTAs, Makemytrip, Yatra, Cleartrip. So the whole spectrum of every -- various verticals, we have all the top clients. It's already now launched in UAE where we are the #2 player there being in excess of AED 2.5 billion they are processing. We launched out of Saudi Arabia now and Oman and U.S.A. we are starting very, very soon. We are compliant to all local regulations in these geographies and whatever the necessary licenses in these regions. Our other product is doing backward integrations to compete with the likes of FSS and Hitachi payments. So we're building our own switch, our own MPI plug-in. We have already now test-launched it in Oman. Bank Dhofar is going to use it, which is already announced. And one of the biggest banks in the region, we'll announce in the coming week, although signed up with it. The same platform is also being used white label by the Jio platforms for their entire processing. It is PG agnostic and can work either in a SaaS model or on-prem deployment within the banks or the telco's data center. We plan to take this globally in the coming months. The third solution that we have is a B2B plus white label for big corporates to handle not only receivables, but even payouts to thousands of their vendors and everything. It's also white label to HDFC Bank. Some of the major merchants that we have onboarded on this platform, including Hindustan Unilever, Bisleri, et cetera. Now this is the entire acquiring piece from back to back what we have done. The last piece, what we have going is on the issuance side and the lending side. So that's how we've acquired this company called Cardpay Technologies. They are building out a GRIT platform. GRIT means coverage and we'll be taking this to a lot of big enterprise clients as well as MSME and others to give them a complete, just like an aggregator of banks where all the -- where with a single log-in, you'll be able to see the balances across bank accounts and you can do multiple transfers, do vendor settlements as well as entire lending and credit card issuance where you can generate virtual cards or physical cards at will. It's a very interesting platform which we have just launched, and we expect great things coming in the coming days. This completes the entire payment stack board, be it on acquiring and issuing. On the other side, we have this enterprise software platforms. The first is BillAvenue. Vishal briefly told you that what an exponential growth we have had during this COVID-19 pandemic. It's already built out very well. We have the RBI license to do both the biller on biller operating unit as well as a customer operating unit. Already, we have signed up 600,000-plus agents in 2,600-plus towns across India. So all the small stalls that you see across stations are in the village square. They pulled the feeds to our BillAvenue solutions. We have onboarded a lot of billers, including the Gurgaon Municipal Corporation, Amdavad Municipal Corporation, the top 3 LPG companies like Bharat Gas, HP Gas, IOCL. We have onboarded last month also around 1,600 schools for their fees collection onto the platform. It's growing exponentially. In India, there are 23 million bills generated every day for the 1.3 billion Indians that reside in this country. So I think the bill payments, which is a non-touch and this thing, BillAvenue should have a very sharp and good growth and should continue the momentum that we have got in the last few quarters. Hospitality solution also, once this COVID ends, it will really grow. We have 2,500-plus hotels using our enterprise level, booking engine plus a channel manager where a hotel can distribute inventory to any OTAs, be it Hotels.com, Booking.com or Makemytrip, Yatra or Ctrip.com through a single interface. It has a payment gateway attached to it. The enterprise GeM platform now is the enterprise platform. That is the GeM platform as well as now the recent signed up Jio platforms as well as in the region in Middle East used by Jumbo Electronics and Saudi Telecom. I think Srikanth will take you more -- giving out more details on the SaaS platforms. So coming back to -- overall, if you see, we have a very asset-light nonlinear scalable business, and it's not linked to a very people-centric model unlike other IT companies. So -- and we have extremely low marketing costs. So just to give an example on CCAvenue, we operate always -- we do almost INR 1 lakh crores of payment business with only 325 people, and we generate profits unlike other payment peers. So our payments platform is a very high EBITDA margin business. If you move on to Slide #8. So our business -- payment business registered a very strong growth in this quarter. Vishal also mentioned that we saw accelerated growth in this business post gradual lockdown relaxations in June. We have already suppressed the pre-COVID daily average by the end of June. And during the quarter, we structured the pricing in the payment business for capturing market opportunities in line with the industry to sustain profitable growth. Our daily gross transaction value in the month of September was 2.5x what was there in April, so averaging more than INR 275 crores daily, be it Sunday or Monday or a working day in the month of September. So GTV by the end of Q2 -- in the month of September crossed more than INR 8,000 crores, that is India and UAE included. So that is more than $1 billion plus in a month. The growth in GTV is despite many sectors are still not recovering. As you are very well aware, airline business where we power more than 22 airlines, or even the hospitality sector, where we power more than 2,000 hotels, including Taj, Oberoi, ITC. So despite this, your company has scaled very well. And once these come up, I think potentially, we should be able to do INR 10,000 crores per month very soon in the coming months. If you notice the chart at the bottom left of the slide, also the credit card spends have also increased by 3x since April 2020. So it indicates that jobs are moving back and consumers are back -- are now spending on the card. We are witnessing a very strong growth on credit card spends every month, which is an encouraging sign of growing business. This also means that the overall spending in the economy is improving, leading to a very positive growth in the economy versus the dull experienced in Q1. We are also experiencing a very strong merchant registration, which continues to build our growth pipeline. We are getting 150-plus registrations per day on an average in Q2. So retail, education continues to take the large pie of Q1. Grocery is a new addition and continues to build up. Doctors, advisers, consultants, legal professionals, individuals are increasing, availing our PG services, which are part of others. You'll also notice that aviation, travel, hospitality and entertainment, which are not part of this chart as these businesses are experiencing low footfalls at the moment. This was not the case in FY '20 or earlier when we used to get healthy registrations and transactions from these sectors. Hence, there is still a headroom to grow the existing business itself apart from growing businesses from other sectors like education, grocery, health care and tech companies. To add to this, we are taking all our solutions internationally. So Saudi Arabia, we already went. UAE and Saudi Arabia comprises almost 85% of GCC. We are already there. In U.S.A., we are just going live. It will add to our growth. In Saudi, we are just awaiting one MADA certification to connect to the local debit cards, which is requirement there. And post that, we should -- we'll be very aggressive in the Saudi market. Saudi is also the #1 travel destination in the world in religious tourism. And we also expect that U.S.A. will also come back in a strong way post the elections. We are waiting -- we are already a team of 5 people onboarded since February of this year. To sum up on this business, there are about 160 million unique digital payment users in India, constituting about 12% of the user base in the country. The smartphone users in the country is expected to reach 825 million users by 2022 as per the Cisco's VNI report. So there is a relatively low digital transactions per annum at '22 in India. In FY '19 compared to Singapore, 782 million; U.S.A., 474 million; Brazil, 149 million; and China, 97 million. Moody's Analytics analyzed that 56 countries that accounted for the 93% of the world GDP between 20 -- 2008 to 2012. So electronic payments is expected to add $983 billion to the GDP of various countries and raise consumption by an average of 0.7% across 56 nations. So our government committee is working to increase digital economy's contribution to 20% from the current 8% to 12% that is there. So there is enough headroom and we have strong tailwinds backed by the government's digital India platform, which will help take your company to grow even further and faster. If you turn to the Slide #9, that is the -- our bill payments, BillAvenue platform. As I mentioned earlier, BillAvenue is a unified, interoperable, online payments platform for Indian citizens to pay all their bills to a single window under the Bharat BillPay or the BBPS infrastructure. BillAvenue had a stellar quarter in Q2, nearly 2x that on Q1. We recorded highest growth in bill payment volume of $4.9 million in the quarter, averaging almost 1.6 million bill payments each month. Considering the month of October, we are on a Q3 run rate to process 6 million bills, averaging $2 million monthly, a 25% growth. We are working with very marque clients as mentioned earlier, with all the proceeding companies with various municipalities and education institutions. In the month of October, part -- we have integrated hundreds of schools. We are currently also in discussion with other education institutions to onboard them on the platform. We have a 100% repeat business for our billers in BillAvenue. This is a sticky business and as consumers adopt BBPS platform, the volumes will increase. Bill payment in India is likely still done in cash. To capture this opportunity, we have gone offline yet asset-light model in BillAvenue, tying up with agent institutions to service consumers across India. Through that, we have the 600,000 agents registered to service millions of consumers across this. Some of the major agent institutions include UAE Exchange, Muthoot Group, Vakrangee, et cetera. So as per RBI studies, 20 million bills get generated every day. There are 1 million plus billers across the country. Telecom sector generates 1 billion bills every month as a greater access to billers across various sectors, municipalities, government bodies. The volume of bill payments through BBPS will rise significantly. You can see from the chart that our bill payments volume has grown 5x in September compared to April. Also the number of billers on BBPS, hence, the volume has also risen sharply between April and September, which you can see in the table at the bottom left. So as we move to the Slide #10, the CPGS platform. So a newly CPGS platform, that is the CCAvenue payment gateway service, is either a SaaS based and can be deployed on premise to any bank to process cards of various banks, including Visa, Mastercard, American Express, RuPay for financial institutions anywhere in the world. So this business will serve as a revenue and profitability driver for the company. It's already launched in the international market in Oman by tying up with Bank Dhofar. And as we said, we already also tied up with Jio to do the Jio's processing as Jio enterprise payment platform. Just to give a perspective of how lucrative and scalable the model is, Oman has a population of approx 5 million people. There are 170% mobile penetration in the market generating nearly 8 million bills every month. Apart from that, e-commerce transactions, car fuel transactions, travel and hospitality, others generate a few million transactions a month, totaling to around 12 million to 15 million transactions a month. Bank Dhofar is among the leading card acquirers in the region. And just like it's peer countries like UAE and Saudi, it's supporting a proactive working to boost digital transactions. So all -- henceforth, all online transactions acquired by Bank Dhofar will entail CPGS to process and validate these transactions for the bank. And as digital transactions scale in the country, from a low single digit to higher volume, we will benefit. So our company has also offered this solution to Jio platform, as I shared earlier. We're also in discussion with multiple financial institutions. And one more big bank in the Middle East, we will update in the coming weeks. If we move to Slide #11, it's on the express settlement and GRIT. So we're seeing a good transaction in express settlements. So the business went commercially live in September. On a daily GTV in PG, we see a high single percentage where customers want -- merchants want express settlement. So typically, we charge anywhere between 5 bps or 50 bps per day for providing the services, which has not passed through. So this enhances our net take rate as well as make our customers sticky. We are utilizing our internal accruals to lend to customers on instant basis. However, our cost of funds is nil. We are targeting 20% of the daily India TPS as express settlement in the next 12 to 18 months. Issuance was a missing piece in the portfolio. Hence, we acquired Cardpay Technologies, the GRIT platform in June this year, to enter the issuance -- card issuance business. GRIT will transition to offering Neo banking or digital banking services to SME and corporates. It will also offer a spend management platform for CFOs to track all expenses, issue card to employees for expenses, allow opening of bank accounts, do bulk payments, bill payments and much, much more. We have a rich database of 1.5 million merchants who is our target segment. Digital banking is slowly and regularly picking up and globally as well in India with banks also opening up their APIs for fintech, for better technology and deeper penetration and more use cases. There are already some successful models in Neo banking in some of the developed countries and in some emerging countries as well. The platform is partially ready as in -- and is in test phase. By the end of this year, we plan to make it commercially live rollout to our merchants in India. Now with this, I'll now hand it over to Srikanth to explain more of our other enterprise software platforms. Over to you, Srikanth.

Thanks, Vishwas. I'm going to talk about the next 5 minutes also actually on our enterprise software platform business. And this is our second business, first being actually payment offerings and second being our hosted e-commerce marketplace platform business. This is basically on the cloud-based software business, as you all know, and this is enterprise to enterprise, and this is being offered actually on a SaaS model platform, which would mean that this will allow the corporates to transact all online transactions and manage all the back-end orders be it orders or be it inventory or be it any logistics support and make actually digital payments and, of course, undertake actually other online subsidiary services and other value-added services and so on. So this is basically a very super scalable platform, which we developed. And of course, it is customized actually and customizable and customized to the enterprise customers' actual requirements. And this platform actually will meet the very large scale implementation. When I say large scale, it's really very, very large scale. And of course, from our business point of view, it is basically having a very high EBITDA margin. And this is our growth driver in terms of our profits. And this will also -- this business will also facilitate our payment processing business in a significant manner. So I'm going to talk about 2 named accounts, our large customers in the next 2 to 3 minutes. First being that, as you're all aware that we signed our contract in consortium with our master service providers with Government eMarketplace with Government of India, with SPV and it basically hosts one of our largest online market for government procurement, be it actually data centers, including the government buying units and so on. And that is basically called Government eMarketplace, which we shortly call the GeM actually. This portal is basically developed, maintained and run actually by Infibeam in consortium -- with the consortium partners. This would mean that all the government units with data centers are procured goods and services actually through this platform. And that is basically converting the conventional DGS&D contracts into the digital economics to boost the country's GDP in the context of optimized procurements. There are a lot of advantage actually for government units buying the units, goods and services through this portal. And the sellers are all actually across pan India, be it small scale or SMEs or MSMEs, or any large-scale vendors right from stationary actually to the large-scale machineries and so on. This would mean that recently, as you all have been aware that Indian Railways have been planning to integrate actually their procurements into this system. And eventually, over a period of time, the defense and other army may also actually get integrated into this uniform -- unified portal. And just to have the data points, it is pretty confidential between the government and the companies not to disclose their numbers per se. But in terms of actually Railways, I think we believe that the volume is going to be actually hitting $10 billion actually per annum in a very short span of time the moment integration phase is over. This particular thing is basically, of course, the vendors and merchants who are in this platform are working, and GeM is also working with various banks, and also trade receivables, discounting system called TreDS and also SIDBI to offer bill discounting, other financing of working capitals and so on. And possibly, once our issuance platforms and credit platforms are going to be live online, that could be a huge opportunity for Infibeam CCAvenue Finance, which we brand to offer our credit facilities and insurance facilities to our sellers who are actually onboarded in GeM platforms. So this way, actually, we have direct and indirect benefits to our organization. In terms of data points that -- we all know that in FY '19, we have processed about INR 17,000 crores. And they have -- order booking is about INR 17,000 crores. In FY '20, it was about INR 27,000 crores. And of course, this business, in terms of order closure, got affected due to COVID because the entire units of central and state government got actually shut. And as of now, we are at about INR 15,000 crores in the first half of this year. And the overall estimate is actually in 1 billion -- and 3-digit billions of dollars. But I think it is going to be a very long-term strategic contract from our perspective. And this is going to be one of India's largest online marketplace actually going forward. That is what we strongly believe. So -- and we are party to that and we are partners with that. And beyond business and beyond money, we take a pride as an organization that we are contributing actually for the national importance project. So this is on the GeM side. And of course, you're all being aware, end of September, as Vishal was mentioning in the previous -- in the beginning of this conversation, we signed a very prestigious contract with Jio Platforms Limited along with its affiliates to license our marketplace enterprise software and also to customize actually to their requirements and, of course, to maintain and access and run the platforms to the satisfaction of the customers. And the business model is actually a licensing free business model and transaction-based subsidiary models and so on and so forth. And this is capable of taking -- the system is capable of taking actually the huge volume of transactions as in the case of GeM. And more importantly, that this particular system, this emerging system, which has the largest ever catalog management system and also actually we got third-party 3p systems and so on and so forth. So this is actually a prestigious contract. This would mean that with this contract, we are entering JPL and its affiliates with -- across the business of JPL, initially, actually from the enterprise software point of view actually to strengthen the JioMart applications. And by the way, actually, this will facilitate our payment processing business in a very huge manner. And of course, JPL contracts also, we have our payment processing right to use. They have the right to use our enterprise payment platform at our environment and also hosting that, eventually at their environment and so on and so forth. But fundamentally, that this will enable the payment processing for both JPL's business entities for their internal business use going forward. The next one is that this announcement, I think with our SIDBI PR release a few minutes ago. And this is a very important announcement and very important strategic investment from our perspective. And as you all know, that Reserve Bank of India governed the rules and regulations and issued the guideline. For the new pan India, new umbrella entity, which called NUE licenses to govern the retail payment systems in the country. So this guideline is already in place by RBI. And based on these guidelines, they are giving the opportunity to companies to really apply and obtain the NUE licenses to govern retail payment system actually in the country. This particular thing is exactly similar to our NPCI licenses. It is a very prestigious licenses from our perspective. And we being the first company in the payment space way back in 2000, and forefathers for many innovations and creativities actually on the payment side of business, we understand this payment business and end-to-end payment business in all manners. And we believe that we should be a true partner actually for this NUE entity. And that is the reason why we are going to really participate in this NUE entity, umbrella entity as -- by taking actually investments up to INR 18 crores for 1/3 stake in a company, which is actually started and set up by the Chairman Emeritus of -- PCI Chairman Emeritus, Mr. Naveen Surya and basically to pursue this operation. And this company is called the e So Hum Bharat Digital Payments Private Limited, shortly, it is called So Hum. It is a very spiritual word from our -- from the namesake. And as much the meaning of So Hum is that as much actually, it's a huge opportunity to make digital payments are very natural, very effortless, very invisible actually in our technology just like actually what we are breathing air in our body like natural effortless and invisible and so on. And that is what is called So Hum. And that means that we will be doing every bit of payments actually under this particular entity. In case if, hopefully, by god's grace, we should get that license. And we believe that this So Hum is entitled with all this eligible criteria. And if a company authorized -- if the company has to be authorized by the Reserve Bank of India based on their guidelines and this company is actually governed by the guidelines of Reserve Bank of India under Section 4 of PSS Act of 2007. And of course, with the scope, we have -- it has a development. We can develop, own and operate new apart from Rupay cross-border retail payment network. And of course, setting up new payment systems, retail payments comprising of new-generation ATMs, white label PoS and other based payments and remittance of services and develop new payment methodology and standards and techniques and more and more. So this is the overall scope. But of course, opportunity is well drafted by Vishal earlier and -- I'm sorry, by Vishwas earlier. There are rich consulting reports, and there are about Moody's Analytics report with respect to the opportunity on the digital payment system, especially on the retail payment system. Government MeitY is actually working to increase digital economic contribution to 20% by 2025 from the percent level of 7.78% as it today. So there is an opportunity, there is a scope is well drafted when there is a company, which we are going to really partner and which are going to really invest. And we will be really applying -- along with the consortium partners, we'll be applying it actually for these NUE licenses with Reserve Bank of India within the guidelines as governed by Reserve Bank of India. I would like to really hand over the floor to Hiren Padhya, our CFO, to take on Slide #15.

Thank you, Srikanth. I will directly move to Slide #15. First thing like it was an excellent recovery during the quarter in terms of payment growth transaction value, which is more than INR 23,000 crores, which is up by 60% quarter-on-quarter. Similarly, the monthly run rate is INR 7,500 crores, which is equivalent to almost USD 1 billion on one side. And on second side, it is an increase in volume also by 23%. In case of Q1, quarter-on-quarter, bill payment also, again, the gross transaction value has increased to INR 406 crores, which is up by 141 percentage. Same way the bill payment volume, it is up 4.9 million, which is again up by 90% quarter-on-quarter. We can say that above figures have been reflected in terms of revenue, which grew by 50% quarter-on-quarter to INR 154 crores despite very low contribution from aviation, travel and tourism, hotel and entertainment industry. Similarly, EBITDA has grew 12% quarter-on-quarter to INR 35 crores. And lastly, the PAT, profit after tax, which is excluding share of associate, has also improved by 26% quarter-on-quarter. Now in spite of the fact that COVID still persisted in the month of July, the company has seen V-shaped recovery from August onwards. During the quarter and it is evident from other financial metrics, but we have achieved positive EBITDA and positive operational cash flow with clear path for sustained profitability for corresponding quarters. Further, we will continue to monitor cost optimization on one side and efficiency measures and we'll also evaluate the new business opportunities, including new geography for market share expansion, which will lead to next growth trajectory. During the quarter, we structured pricing in payment business for capturing market opportunities in line with the industry, mainly to sustain profitable growth. Over and above, new businesses, namely express settlement, Neo banking, including card issuance and lending and CPGS that is card processing for financial institutions, this all will also strengthen our domestic and internal foothold going forward apart from our expansion in Saudi Arabia, Oman and U.S.A. Now I will hand over the call to moderator for questions and answers.

[Operator Instructions] The first question is from the line of [ Manan Shah ] from ICICI.

First of all, many congratulations for the stellar performance of impending revenues in this quarter. I think COVID has helped us innovate, has helped to penetrate digital payments in the country. My question for Vishal is when -- what is the vision of the company over the next 5 to 10 years if I go? How can we use that the market share that we have gained in payments to help us increase the offerings for our merchants and consumers? How can we leverage that data to increase the revenue?

Sure, [ Manan ]. So as you know as per Slide 5 of the presentation, we have built out about close to 7 platforms today that enable payments. So the core of what we do right now is to enable payments and make it more sticky. As a payment gateway, what we realize is that there are many companies who can offer payment gateway solutions. And maybe over a period of time, we've got an edge with 20 years of ensuring that we've got the best-in-class fraud practices, risk practices, compliances and make sure that the success rates are the highest in the industry. So we've built that out. But beyond that, like you mentioned, what we want to do is we want to offer solutions that potentially allow merchants as well as customers to be able to utilize more and more of us. So the one strategy that we have is to vertically integrate. In that, what we mean by that is we are more on the application side right now. We have provided software solutioning as well as payment as a combined solution to merchants and customers that actually increases the succession, it tells you a lot more data about what is the product which is being sold, what was the promotion that was applied, what is the success criteria, what is the value? And then providing all these analytics and dashboards to customers. In fact, if you look at our product, we've got some of the best-in-class analytics that we provide to merchants in the back end as well to be able to enable them to understand how to increase the success rate of transactions, how to offer additional payment-related upselling to customers. We realized and merchants also realized that it is the payment that is driving consumption. There's an affordability with EMIs and many others. So the productization of that is what we are working on. Now we have actually gone to the switch layer. It is vertically integrated because in payments, the tighter the integration that we do -- and you would appreciate that we also provide solutioning to now banks that if we offer such solutioning with very tight application layers as well as with the switch level, be able to go and provide such solutioning to banks as well as to merchants, then it becomes more of a very concentrated effort to give a complete solutioning to merchants and customers. So that's one way that we are going at, which is how do we actually vertically integrate and offer more and more solutioning from a payments and a software perspective. To your question about analytics and the data that we generate, you see, what we have realized is that if we are able to provide inherent analytical information to merchants to be able to increase the sell-through, then it becomes extremely sticky. We're a neutral player in the market. We have been working across industries for so many years. We've got industry-specific analytics and solutions that we've identified and cater to. We have more than 50,000 different integrations that we have done into the software systems of third parties. And for that, as an example, if it is a property management solution, then we've integrated very deeply into such property management solutions so that when we give it to one merchant, then every merchant who's on that solution would potentially come up. And you know that over a period of 20 years, doing more than 50,000 integrations takes a lot of time and keeping them updated and current. So with that, we have built out this ecosystem, which enables us to grow internationally. In the next 5, 10 years, we think that we can actually, one of things that Srikanth pointed out, is there a possibility that we can actually enable a whole network level operation and not necessarily be a processor and application layer and a switch layer. But in fact, be part of an operate -- network level operations, and that becomes a very interesting possibility for the company as we scale up that one. And second is that as we have access to millions of merchants, you see historically in companies that overseas who work in a similar space, there are 3 revenue -- large revenue streams for the company. First is the payment processing volume or payment-related revenue stream and software revenue stream, which we are doing right now. Second is the lending part, where to all these merchants and customers that whether it means that partnering up or being able to be present in terms of giving such opportunities, one thing that we have started is secured lending, which we wish to scale up, which I mean -- what I mean by that is that there is a T plus 2 settlement as per RBI norms, and we have started something called express settlement where we can settle for the merchant and give them the remittances the same day. So those kind of opportunities, as you know, we process about INR 1 lakh crore of transaction volume every year that -- can we do it faster because cash flow for 2 days will improve and merchants are willing to pay more for getting cash flows better. So we think that those lending-related opportunities are the ones that we'll also look at. GRIT being one of them, but we've just invested into that we'll operationalize and commercialize it by the end of the year. So those are the opportunities, which become very large because it just sits on top of all the data analytics and payments that we already process. And we think that, that becomes an interesting revenue stream and an opportunity for us. And the third thing is the advertising-related opportunities that come along with that. And so those are the 3 revenue streams historically that most companies are focused on, and you can imagine that right now, we've got one pillar of revenue that we're focused on. We've just opened up lending-related opportunities, which have deep analytics by partnering with banks as well as financial institutions to be able to give the merchants and others. And then we'll offer additional analytical opportunities in terms of advertising and others as well in the future.

The next question is from the line of [ Nilesh Soni ] from K.R. Choksey.

I have a couple of questions. Sir, in the Neo banking segment, which you currently entered into, sir, can you just -- can you please roll out the corporate clients, which you are currently catering to or the sector which you are focusing in to tap this market? And my second question is, what is your -- I think you're the only one clearing the domestic market in this segment. So what could be the entry barriers for other players to enter into such industry?

Vishwas, do you want to take that?

Okay. Okay. So basically, what we're trying to attempt through this Neo Banking thing is it's -- we're aiming for the corporate CFO and all the requirements that is there. So the requirements spanning from -- right from the CFO requiring, doing the entire credit for all his -- the sales staff or marketing staff. Say, if you're going for Delhi, you can just generate a credit card of INR 30,000 limit, and that card you can use it to buy your ticket on the airline portal, your hotel on the OTA platform or even your spend, their investments and automatically, the entire expense management goes into it, right, into the main company's accounting Tally or SAP or whatever, right? So that is just one use case. Apart from that -- and through that, the entire credit mechanism comes in. So GRIT as a platform, that we are talking about, will help us start our lending feature. As Vishal already told you, we have 1 million plus merchants in CCAvenue, where we have the full data of the merchants, their transaction history and other things. There are also a lot of sellers who sell to the government and the many other data points that we have, which will take us informed good decisions on extending credit to it. So GRIT as a platform will have a lot of functionality feature that's rich for the clients as well as give them credit. From our perspective, it is an arm for the next-generation digital banking that GRIT would evolve into which will not only give them credit, but also give them a lot of functionalities to do a lot of things, make it easier with them, be able to do single interface, do all their bill payments for multiple offices across the country, map the electric consumer numbers and through one click, the payments can go. So all those facilities built out. So it's a complete end-to-end new-age digital banking platform where they can see balances of their multiple bank accounts into one platform. So that is what we are aiming at right now. It's just been launched, does not have any plans right now. The company just took in last quarter, some of the solutions, in Neo banking integrations with different banks and tie up in the back end with banks and NBFC is in process right now. Does that answer your question?

Regarding this entry barrier, so don't you think you, even banks -- the other leading banks could come out with such offerings immediately after we are rolling out these features? So do you see that threat for your bill payment?

So I think they can also come out. But what happens is that this solution is an aggregator of banks. Just like an aggregator of PGs, we have 200-plus payment options. Here through our interface, a potential company can see his balance in HDFC account, his SBI account and Kotak Mahindra account for a single interface and transfer monies to them. A bank potentially like an ICICI Bank may not be able to take the API of SBI or HDFC and display on its own portal because: one, they are competing in the market; second, they wouldn't want to show or promote any of their competitor banks. So here, it is a very neutral aggregator model of banks, which makes it convenient for the end merchant that we are looking to map their multiple bank accounts, transfer money and do a 1,001 feature, which most of it we have evolved like bill payments to BillAvenue and even all the other types of bulk payouts and other things that we have built, especially APIs to multiple banks. So that way, that is inherent as far as, what do you say, moat to protect this passive bank competition is concerned.

Okay, okay, okay. And my second question pertains to this BillAvenue. So can you give us some sense that which new categories are government or RBI planning to add into this BillAvenue segment like they are currently into utility health care? So any rough idea of what they are planning to add new?

Okay. So earlier, it was restricted to 5 categories, mainly electricity, municipal bills, gas and other 2. Now what they have given for RBI through a notification around 2 months back, said that any kind of a billing which can have a recurring payment, right, in a monthly cycle can be brought up on the Bharat Bill Payment System. Now this has created massive opportunities into this. So not only are these typical utility bill and other things are coming in, even your credit card bill is coming online, even your bill towards the loans that you have taken. So if you have seen in the last 2, 3 months, we have onboarded L&T Finance, we have Murugan Finance, many, many finance companies, their loan correction we have done, putting them up through our systems onto the BBPS platform. So any kind of recurring payment you can think of can be there, be it your school fees, college fees or the insurance premiums and everything has been onboarded right now. So the scope is, as I said, 21 million such kind of bill payments are generated in the country every day.

Okay. Sir, this is the reason for this volume growth which we are seeing in bill payment from last since March, this can be...

Yes, as more and more utilities come in, so let's say, if we have an agent in Guwahati in Assam, right? So Guwahati, if I offer him Adani Power here in Mumbai, he won't get customers there locally because he will need the Guwahati Power to be there, right? So [indiscernible] utilities, which are local and generic coming because on the other side, agency has already signed up, we need to put up more and more billers. And more and more billers come in, the more and more transaction increases. When you say, [indiscernible] solution, that one side, you have to onboard hundreds of billers, other side, thousands of agents and then the whole ecosystem starts going.

Next question is from the line of [ Monal Cataria ], an individual investor.