DiGiSPICE Technologies Limited (DIGISPICE) Earnings Call Transcript & Summary

Good morning, everyone. A very warm welcome to the earnings Zoom webinar of DiGiSPICE Technologies Limited for Q1 FY '26. We have with us Mr. Dilip Modi, Chairman of DiGiSPICE Technologies Limited; Mr. Sunil Kapoor, Whole-Time Director and Chief Financial Officer, Spice Money Limited; and Ms. Aastha Garg, Head, Investor Relations, Spice Money Limited. Before we begin, I'd like to state that some of the statements made in today's discussion may be forward-looking in nature. The actual results may vary as they are dependent on several external factors. A statement in this regard has been included in the results presentation sent to you earlier. We will commence the call with the management taking you through the operational and financial performance for the period under review, following which we will have an interactive Q&A session. I would now like to invite Mr. Dilip Modi to commence the presentation. Over to you, sir. Thank you.

Thank you, Amit. Thank you so much. Let me join Amit in welcoming you all to the quarter 1 call for DiGiSPICE Technologies. It's always a pleasure to connect with everyone who are interested in the story that we are building here at Spice Money. It's really a journey that we've been on for the last 5 years and something that we at Spice Money are very passionately building out, and it's so nice to get this opportunity to share with all of you how we are building the business, what's happened in the previous quarter and also talk about the journey going forward. So let me start by first walking you through some of the introductory slides around our core business, and then we will dive straight into the numbers. So can we move to the first slide, please? Can we move forward? So, friends, what we are building out at DiGiSPICE Technologies is a rural fintech platform business. This is something, like I said, we've been building for the last 5 years. The main -- the 3 key strategic building blocks for our business in the rural fintech space, and I'll talk through each one of them with you. Our leading platform is called Spice Money. This is one of India's #1 AePS platforms. And when I say AePS, it's Aadhaar-enabled payment system, which is an NPCI product. So effectively, what we have done with the Spice Money platform is onboarded over 1.5 million small merchants who we refer to as Spice Money Adhikaris on our Spice Money app, and we are doing transactions in deep rural India, in small towns, about 250,000 villages and 6,000 blocks. And basically, they are using our platform to enable consumers in their community to withdraw cash from their bank accounts, deposit cash into their bank accounts. They're enabling MFIs and NBFCs on cash collections, enabling customers to do their bill payments at a merchant point nearby to them. This is something which is really enabling digitization of cash at scale because effectively now instead of going -- traveling to a bank branch or an ATM machine to deposit or withdraw cash, consumers in small towns are able to do so at a merchant point near them, who's onboarded as a Spice Money Adikari. So effectively, it's a B2B2C platform. And through this platform, we are enabling multiple financial services to be delivered in deep rural India, something that we will talk about as we go forward. Spice Pay is our new platform that we are building. This is our entry into the UPI space. Here, we are building out for both consumers and merchants. So while Spice Money is our platform for agents, Spice Pay is our platform for consumers and merchants. Here, we have secured a license from the Reserve Bank of India referred to as PPI. This is a prepaid instrument wallet license, which has been secured by us, which allows us to open a digital wallet for both consumers and merchants and enable them to put cash into the wallet, withdraw cash from the wallet, but more importantly, do digital payments from the wallet. So our goal here is to bring on board new to UPI, both consumers and merchants, both on the send side and the receive side. And this is our focus on digitizing payments in what predominantly are cash first markets in small towns. So we've been focusing on building Spice Money as the agent platform, which we'll continue to scale both in terms of number of agents and number of transactions. And now we are looking forward in parallel to be building out our payments platform referred to as Spice Pay for entering the UPI space and enabling the next set of UPI users to come on board from small towns. On top of both of these, we will be building out our lending business, both for merchants and consumers. We've already started our lending business for agents, which has started reflecting in our numbers. Our goal here is to ensure that we can enable accessible, affordable credit to agents, consumers and merchants living in small towns. So overall, we refer to what we have built out The Spice Bharat Stack which is agent-led distribution, customer and merchant-led transactions and credit-led growth. So these are the 3 key strategic building blocks for our business. Moving forward, I'll just quickly talk you through some of the key metrics that we have achieved over the last period. Can we move to the next slide, please? So this is -- to give you a summary on some of our key metrics. So let me start right at the top. We have, to date, as of the end of June 2025 registered close to 15.8 lakhs agents on our Spice Money Adhikari platform. We have achieved a coverage of over 2.5 lakh villages. We, on an average, serve about 2.5 crore, 25 million customers, on a monthly basis who come to our agent points to do financial transactions, and we are 1,000 people strong company. In terms of some of the key product metrics, one of the key metrics that we track right upfront is the customer gross transaction value, which is a combination of the value of all the transactions done on our platforms. For the quarter ended June 26, we have closed at INR 32,760 crores, which is a 28% year-on-year growth over the same quarter last year. In the AePS segment, which is our core product, we are a clear market leader. We have over 18% market share in the Off-us AePS market. When I mentioned Off-us, these are non-bank pipes where the on-bank -- the bank pipes are referred to as On-us, while where we work with acquirer banks, these are Off-us pipes where we cater to banks -- customers of all banks. Our market share has also grown 7% year-on-year. So we are consolidating our market share in this segment of AePS. In terms of partners, enterprise partners for our collections business, we have closed this quarter with 74 enterprises, which is -- we've added over 9 enterprises in the last 1 year. And in terms of collections GTV, we've done close to INR 14,000 crores in the previous quarter, which is a 57% growth year-on-year. In terms of the lenders that are live on our Bharat Bill Payment System EMI product, this is again something that we have licensed from the RBI. And here, we have over 190-plus lenders who have now been enabled on the Bharat Bill Payment System platform for whom we are able to do EMI collections using our Spice Money agent network. CASA, which is current account - savings account is a product that we entered a couple of years back. We have end of quarter 1 FY '26 crossed a key milestone of opening 1 million accounts, so 11.4 lakh lifetime accounts that we've opened. And for the quarter, this is a 145% year-on-year growth. This we do with 2 key banks whose -- we open for them both savings account and current accounts for consumers in small towns. Over time, as we've opened these accounts, the float balances in these accounts have also grown to over INR 200 crores, signifying a 57% year-on-year growth. The fourth key product that we have been focusing on is disbursement of credit. Again, for the quarter gone by, we've done close to INR 110 crores of credit, which is a 165% year-on-year growth. So this is some of the key product metrics that we are seeing on our Spice Money platform business. In terms of financials and P&L, the 4 key metrics that we track, revenue, gross margin, EBIT and PAT. So on revenues, last quarter, we came in close to INR 123.8 crores, which is a 13% year-on-year growth. On gross margin, close to INR 49 crores, which is 18%. So if you look at the revenue of INR 123 crores, this is about 38 bps on our customer GTV. If you look at gross margin of INR 49 crores, this is 15 bps on our customer GTV, but effectively close to 39% of revenue. That's our gross margin. On EBIT, we came in close to INR 10 crores -- INR 10.2 crores, which is about 8% of our revenues. And PAT, we closed at INR 6.9 crores, which is about 5% of our revenue. As you can see on mostly all the numbers, we've grown year-on-year. So we'll go into details on the P&L side as we move forward. Let me go to the next slide, please, and just share with you some of the key highlights for the quarter gone by. So one big callout that we want to do is the fact that now the company has secured a PPI license in perpetuity from the Reserve Bank of India. This is a license that we had for some time, but in the quarter gone by now, this has been provided to us by the regulator in perpetuity, which gives us a window to build out this business to bring on board new to UPI consumers in a very systematic way over a period of time. Just to share with you some of the key highlights of our business. So our focus in the Spice Money Adhikari platform is to drive scale and leadership for some of our core financial services. Just to give you a sense of the kind of numbers we track. AePS, where we are a clear market leader in this segment, we do about INR 5,000 crores of monthly AePS GTV. This is basically cash withdrawal and cash deposit using Aadhaar. On cash collections, which is the CMS GTV, cash management services, we do close to INR 4,000 crores of GTV on a monthly basis. So effectively, our Spice Money Adhikari network, agent network is doubling up both as an ATM and a collections network in deep rural India for both consumers and enterprises. Account opening, this is something that is part of our drive as a nation to get people to transact using their bank accounts, so we at Spice are playing our role within that. On a monthly basis, we are opening over 50,000 accounts every month, and this is becoming a strong way for our customer acquisition engine. We've also now started hitting a run rate of close to INR 40 crores of monthly credit disbursements using our Spice Money agent network. Our goal here is to drive financial inclusion at scale given the size and reach of our network. We also are enabling close to INR 450 crores of monthly bill payments, which creates a recurring traffic at our Adhikari network. So consumers are coming in to pay their EMIs, consumers are coming in to pay their electricity bills, also bills relating to credit card, FASTag, DTH. And as the number of billers add up on the BBPS platform, we are able to enable more and more of those billers to use the reach of our network to be able to allow their consumers to be able to pay their bills at a point closer to where they live. Finally, on the drive scale and leadership, one of the things that we are committed to invest in is a digital-first growth plan, where effectively we are using digital to make sure that we can drive onboarding, adoption, engagement and growth across all our channels. So as small merchants and consumers in small towns go digital, we as a platform want to be the leading platform that they use when it comes to consuming financial services. One of the big call-outs that we wanted to do on this -- in this quarter is one of the things that we are doing in terms of driving productivity and distributor partner engagement. Why we are calling this out is, because it's very important for us to use automation and tech to drive productivity. We, as a company, while we are a tech business, we have an appetite to invest in feet on street. We truly believe that to serve rural India, you need a combination of technology and people. And therefore, we have put in the field a significant sized sales force, which we've enabled with tech. So this is what we call our sales force app. This has been custom built in-house for scale where we can, on a real-time basis, monitor both our partners, field sales executives as well as our own field teams. We have put in place a daily beat plan, which is geo-tagged to improve visibility, accountability and coverage. So it's a true play of people and tech that's working on the ground. It allows us to drive clear targets, clear metrics on a daily basis. And also ensures that as the app gets adopted by our partners, field sales executives as well as our own sales team, it drives higher returns in terms of effort to outcome. It also ensures that we can engage with our partners to make sure that we can drive a lot of activities on the ground. Now what this means is for many of our product partners, whether it's banks, NBFCs and MFIs, all kinds of companies, they can leverage this feet on street that we've got on the ground, which is tech-enabled to help them drive many outcomes. Going forward, our goal is to continue to drive operating leverage by bringing more and more products onto our platform. In this financial year, we've outlined for ourselves insurance and investment and savings products as 2 core new areas that we are looking at to enter beyond accounts and credit. And this is something that you'll hear from us as we move forward in the year. And the other area that we have been approached and being discussed with multiple banking partners is the opportunity for them to reduce traffic at their branches and use our agent points as person branches where they can enable their consumers to get -- again services, which normally they would get in a branch at a point closer to where they are. So we are working with them to figure out cost-effective solutions to be able to serve their customers at points closer, and therefore, it offers us another additional income stream, which are more branch linked and more linked to what we refer to as kiosk banking. So effectively, driving scale, making sure that we can get more products which are relevant to our consumers and small businesses that live in small towns, drive agent income through multiple product adoption and making sure that as an organization we continue to drive a very tech-enabled feet on street to ensure that as we deliver more financial products, we also have people on the ground who can help in driving adoption, KYC collections. So on the whole, we are building out a digital play, which involves both feet on street agents and both of them are going to be enabled with significant tech to serve small businesses and consumers in their community. So with that, let me hand over to Sunil, who will just quickly walk us through the numbers. Over to you, Sunil.

Thanks, Sunil. Yes. This slide contains about the consolidated profit and loss for the company. And for the quarter what we have growth on customer GTV about 3% and -- because we are working on some new engines and the platform revenue is a core revenues where we have a 6% growth quarter-on-quarter. So consequently, the gross margin is also 6.5% growth. And if we see on the indirect cost side, there's some onetime cost in the previous quarter. However there's also operational efficiency with respect to the -- more aligning the cost with the output on the gross margin. And we are having an efficiency over there. So our indirect costs on year-on-year basis 5% have grown. And if we see on the EBITDA side that's INR 6.5 crores compared to the previous quarter, it was only INR 70 lakhs. So it's a 9x jump. Of course, the base was lower. But on the platform side, it's 2.5x increase. And on the EBIT side that's -- we have clocked INR 10.2 crores EBIT number against the INR 5.2 crores in the previous quarter which is almost a 50% growth. And consequently, PAT is a INR 7 crore number against the previous quarter of INR 2.6 crores. And if you see that this INR 7 crore PAT compares to the last year also, that's -- in the last year, we have INR 6.5 crores for the whole year for the continued business and in comparison to this, we have achieved the same in this quarter. And discontinued business stand point of view, if you see that discontinued business has drastically now not impacting our -- the result of the continued business and that has become a negligible cost to carry on, and the resultant PAT is INR 6.9 crores against INR 1.5 crores in the previous quarter. And we hope that this performance we intend to continue in the coming quarters also considering our new engines which can contribute for the future growth maybe start kicking in, in the coming quarters. Thanks. I'm handing over this PPT to Aastha to take us forward with respect to the business updates.

Good morning, everyone. I will be covering the key business updates for the quarter gone by. Can we move to the next slide, please, [ Mona ]. So I'll be starting with the agent base. We have been working on expanding our reach pan-India and also deepening our market presence. If you look at the agent numbers that we have done in the last years, we have fairly grown by a CAGR of approximately 25% in the first 4 years, which is FY '21 to FY '24. And then if you see the quarter-on-quarter growth also, we have been growing every quarter. And now at the end of quarter 1 FY '26, we are approximately a base of 15.8 lakh agents who are sitting across 2.5 lakh villages and approximately 6,500 blocks across pan-India. I also covered the region-wise breakup of showing where our strengths major lie in the business. So if you look at the core areas where our SMAs are today sitting. Basically 85% of our total SMAs are sitting in the Northern, Eastern and Central regions. While strategically, we have made a push in the last 1 year to grow our base in the Southern and Western regions as well, and if you see that we are also now having approximately 15% of our total SMA base in the Southern and Western regions. So as we move forward, I think our focus will remain on strengthening our presence in the underserved areas and ensuring broader financial access to people in these areas as well. Mona, next slide please. So now covering the major GTV and gross margin trends for our business. So looking on the CICO side, I think our CICO industry, specifically AePS product has seen major industry regulations in the past few years. And on the Off-us side, the industry has not grown as significantly as the On-us side of the AePS industry. But still, our AePS GTVs have shown consistent quarter-on-quarter growth as well as if you see the growth in this quarter as compared to the last year same quarter, we have grown in both these periods. And hence, our market share has now crossed 18%. And we are -- one of the major reason for this has been the introduction of subscription packs. This has led to a stickiness of Adhikaris on our platform and enhanced the throughput that these Adhikaris do on our platform and ensured continuous growth of the business volumes. So we'll continue to drive AePS further. And also now we're driving AePS cash deposit also in the AePS overall space. Then the second big pie that we have grown in the last couple of years has been the collections business. Though this business has been seeing some huge margin pressures due to some competitive pricing that's happening in this space overall, we have been still been able to maintain a sustained growth in our GTVs and gross margins in the collections business. And the third pie for us, which is the financial services distribution pie, we can see that on that side also, we have grown both year-on-year and quarter-on-quarter. So we, hopefully, will maintain growth on all the product angles going forward. Can we now move to the next slide, please? So coming to the gross margin contribution mix. So we have been working into diversifying our product portfolios over the last few years. AePS and micro ATM, which were our key business attracting the customer footfall were almost covering 70% of our gross margins a couple of years back. But today, if we see the numbers, we have approximately 55% of our gross margin still coming from AePS and micro ATM, but this was approximately 63.6% in the last year same quarter. Also on the subscription pack side, there has been a huge jump from approximately 8% gross margin to now 12.4% margin coming from this product. On the collection side, this has now started contributing approximately 20% of our overall gross margins. Though we see that the collection GTV is nearly as high as the AePS GTVs, but the gross margin bps on this business is slightly lower than AePS. But still on the scale point of view, we're scaling well on the collection side as well. Now on the overall financial services distribution business front, whether it's distributing banking or lending products for various partners that we are working with or digital services products, we can see as a whole pie, this has now started contributing approximately 10.5% of our total business, which was approximately 6% in the last year same quarter. So we have been expanding on majorly all fronts in our business lines. Next slide, please. So now I'll be starting with the detailed updates for each of our business lines. I'll start with AePS first. So looking at our overall AePS cash withdrawal numbers, we have seen on the industry side that the industry has grown by approximately 3.4% quarter-on-quarter and 10% year-on-year, while our growth in Spice Money has been more than the industry growth, which has led to the growth in our overall market share in this business. Looking at the customer footfall also, there are approximately 4.5 crore customers who transact with us on a quarterly basis on AePS cash withdrawal. And we have been significantly able to grow our success rate of transactions from approximately 63.8% in financial year '24 to now touching 71.3% in Q1 financial year '26. So this has been a significant improvement and this has led to increases in our business volumes. The major reasons for this, as I already highlighted, has been introduction of subscription packs. We can see that the subscription packs have grown consistently quarter-on-quarter for the last 5 quarters. And also there has been a fair bit of renewal in these packs as well. So this is helping us drive Adhikaris stickiness and retention continuously and helping us grow on our business volumes. The next big opportunity in this space is the AePS cash deposit product. If we look at the numbers of AePS deposit, we can see that we have grown significantly and we've closed the GTV for this quarter at INR 328 crores, up from approximately INR 124 crores in the last year same quarter. So this has been a huge growth driver. And we see that as more and more banks go live on this product, we have a good opportunity to grow in the payment space on the back of this product as well. Covering some major key levers for future growth on this business, I think like I already mentioned, we'll continue to expand into the low-density districts, specifically South and West to ensure growth on our cash withdrawal product. Also on the deposit side, we'll be working with banks as they go live to distribute this product to ensure that the savings need for the customers in the rural Bharat are met through this product. We'll continue also to drive subscriptions as we have already been doing. And on the industry lever side also, we feel that the changes that are coming in the AePS industry, specifically face authentication and upgradation of devices to the L1 devices will help us grow further into these underserved biometric regions from the face auth product. And also the L1 devices will have majorly lower fraud and better AePS performance ratios as compared to the previous set of devices that we are having on this product. Also on the SHG side, we are working with NPCI and banks to enable this cash withdrawal and deposit product for a new segment, which is not really on AePS cash withdrawal product now, so this will help us drive further growth into AePS front. Can we move to the next slide? Coming to our collections business. First, I'll start with the cash management services business, where like I already mentioned, we have focused really on this product in the last couple of years, and we have seen a significant growth coming in the product from our last year numbers growing significantly by 56% in year-on-year numbers, while our quarter-on-quarter numbers have held stable at a run rate of INR 13,000 crores per quarter on the GTV front. Though I already mentioned that this product and industry has become highly price competitive, but we are aiming to grow more enterprise partnerships so that we are able to scale on this business further because there's a huge opportunity headroom that is still available in this business. Coming to how our enterprise partnerships look like. We've expanded approximately on all fronts, specifically NBFC and logistics partnerships in the last 1 year. And the contribution from the cash logistics has specifically grown in the last 1 year. Looking at the average GTV for our large SMA counters also, we have seen that the large -- these large counters are growing business volumes month-on-month and quarter-on-quarter and hence, their average GTVs are increasing, and this is helping us drive business volumes on the collections product. Covering the major opportunity ahead in this business, I would say that we will be working with enterprises to offer them tailor-made solutions for their overall needs. And also we'll work with them for deeper API integrations so that we can scale on the digital front as well, because the next big opportunity on CMS is Bharat Bill Payment System, which I will be covering next. Can we move to the next slide, Mona? So coming to Bharat Bill Payment Systems, we can see that this has been a focus area for us, but our GTVs has fairly held stable on INR 1,300 crores for a quarter. And this -- but this has been on the GTV front. If we look at the repeat customer base that we have clearly focused on, and we've been able to grow our repeat customer base from approximately 34.4% in financial year '24 to approximately 58.8% in Q1 FY '26. So this repeat customer base has helped us drive growth for our EMI as well as utility payments as well. As if you see the average ticket size, the average ticket size has grown continuously for us in the last 5 quarters. So if I talk about the key levers for driving future growth into BBPS EMI payments, I think we will be leveraging Spice Pay that is our PPI-based UPI product for driving digital bill payments as well as we will be working to build end-to-end customer solutions in partnership with the enterprises that we are working with. Also on the other payments side, we are working to grow as many service categories as much we can in the utility payments space. And today, we are live with approximately 18 categories. Credit card and electricity are the 2 categories that have significantly expanded in the last 1 year and will continue to drive growth into 2 to 3 big categories in this space. Next slide, please. Now coming to our current accounts and savings account distribution product. Like we already spoke about, we have now crossed 11.4 lakh accounts that we have opened till late, which is a huge 2.5x growth year-on-year and a 13% growth quarter-on-quarter. For the SMAs who have opened more than 5 accounts with us, those SMAs have also increased fairly, and we have seen a continuous growth in our float balances as well. And the closing float as at June has touched INR 225 crores with the average balance of more than INR 2,000 reflects a healthy average balance that is being maintained in the accounts that we are opening for India. And for driving further growth into this product, we are also coming with new variants, which are tailor-made for the customers who are sitting in these target segments that we're serving. Also, like Dilip already mentioned that we are now driving cross-sell into insurance and investments and those are the products that you will be hearing us talking about soon as we go and launch them. And also our focus will be on building float balances and this will be a major retention strategy. 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. Let's move to the next, please. So coming to the credit distribution product, we can see that the secured lending has emerged as a major business for us that we've been focusing on in the last 1 year. And if you see the secured loans, we've closed at approximately INR 87.2 crores loan disbursements in Q1 FY '26, which is up by 1.4x quarter-on-quarter and 3.2x year-on-year as compared to the last year same quarter. Overall, we have disbursed approximately INR 110 crores loan, including the unsecured business. If we look at the categorization of loans that we're distributing today, gold loans is a significant driver, and it's covering approximately 70% of our overall loans, which is INR 68 crores gold loans distributed in this quarter and approximately INR 19.2 crores other category loans, for example, commercial vehicle and other category loans we have distributed. For driving growth into this space, our focus will remain on scaling into 3 to 4 more categories on the secured credit side, as well as activating more partnerships both on the secured loan as well as the secured credit card side. Also, we are leveraging the data that we have on Spice Money and Spice Pay transaction data into building insights for the kind of leads that we generate for our partners as well as we are trying to use the tech and AI to enable better underwriting models for the partners that we are working with in this space. So now I'd like to hand over back to Dilip for taking you through our journey ahead.

Thank you, Aastha. So let me close on the next slide by just sharing with you our road map. We have a very simple strategy wherein today, we've built Bharat's largest assisted ATM network. This one person ATM points, one person branch points, which we refer to as Adhikaris across deep rural India. Cash withdrawal continues to be our biggest use case. So whether it's subsidies, remittances or even regular withdrawals from the accounts. Our goal is to get as close to the customer as possible to help them save on time and cost of travel. AePS-led cash deposit is the next big theme that we are going to work on to enable consumers not only to be able to withdraw cash conveniently at a point next to them -- at a merchant point next to them, but also be able to deposit cash. This, we believe, will enable us to contribute to digitizing small cash for small consumers and small merchants in small towns at scale. So today, we have about INR 4,000 crores or INR 5,000 crores of cash withdrawals. As we showed you, our cash deposit GTVs are growing, and we hope to be able to do similar numbers as cash withdrawal going forward. So this is really a function of more banks coming on board. So our goal is to make sure that our core platform business, which is on cash withdrawal, cash deposit continues to scale both in depth and width. On the back of this, the collections is a next big pillar that we are building, wherein we have already now got one of Bharat's largest rural cash collection networks. Again, our goal is to save on time, cost and risk of carrying cash, which is collected by MFIs in small towns and taken to the branches in the bigger towns. We want consumers going forward to be able to directly deposit their EMIs at their merchant point close to them. So that's going to be our big focus, which is BBPS-led EMI and utility collections. We really don't want consumers or agents to have to travel to small towns to collect cash or consumers being able to do it at a time and place at their convenience. So both on ATM and collections, we will continue to drive both depth and width of our network as well as products on the back of it. The third big pillar is financial services. We want to build Bharat's deepest financial distribution grid. We want to make sure that as more and more product manufacturers, whether it's on credit, savings, investment, insurance or any other financial product want to cater to small businesses and consumers in small towns, we can become the platform of their choice. As Aastha said, our goal here is to invest in tech-led integrations. We are working at Spice to build a full stack API-led both integration and a cross-sell model to enable our Adhikaris to earn more, but more importantly, for small businesses and consumers to get more. The challenge in small towns is that of unit economics. It's not economically viable for banks to open branches, so they end up going digital using app. But consumers who want to consume financial products need assistance. So we have a third channel for banks and various other product manufacturers to use, which is basically a human channel enabled with tech. And these are agents who are sitting in their communities. They enjoy their trust in the communities, they have knowledge about the communities. So whether it's about KYC or it's about collection or even recovery, they can play a big role in helping banks, NBFCs, MFIs and other financial institutions to both build products as well as distribute products at scale and make sure we can bring down the risk of collection. Spice Pay is our contribution or our journey towards enabling new to UPI consumers to come on board. Today, UPI is the success story coming out of India. Nearly 400 million consumers now on UPI. We want to contribute to the next 100 million. So we are working to ensure that both consumers and merchants can be onboarded onto the UPI platform and then making sure once we have them on our platform doing UPI transactions, what are the other financial products that we can enable for them. So both our assisted network as well as our own neo-banking app in the form of Spice Pay will play a role in ensuring that we can drive distribution of financial services in deep rural India. And finally, as part of financial inclusion, credit is a big enabler to grow income. We want to make sure that small businesses in small towns get access to affordable credit, which is backed with alternate data and making sure that we are able to leverage our Adhikari network as well as our Spice Pay platform to be able to both generate alternate data, to be able to enable cash flow lending, both to our agents and the merchants in small towns and making sure that we are able to drive growth of affordable accessible credit in deep rural India. So I'd like to close by saying that we are on a mission to drive a digital-led financial inclusion agenda for the country. We at Spice Money want to make sure that we can make our contribution to bring more and more consumers and small businesses into the formal financial fold. Thank you so much for your time. We'll be more than happy to answer any questions that any of you may have. Over to you, Amit. Thank you.

Thank you, Dilip. Participants post this opening brief, we'll open this forum for the Q&A session for the participants. [Operator Instructions] First question comes from [ Mr. Pankaj Prasoon ] whose has his raised your hand.

Pankaj Prasoon, this side. I have a couple of questions. Because I'm tracking DiGiSPICE for a long time, so after a long time, I had seen that quarter-on-quarter this is -- you're showing a positive result otherwise it was very choppy. So I hope this trend will continue. My first question is that only. So can you explain that this trend will continue, that we will not have much choppy earnings going forward. It can be a stable kind of business now?

Pankaj, thank you. Thank you for your question. We are in monsoon weather, so effectively there are clouded skies, but effectively, we are working towards the blue skies in terms of removing the choppiness in our numbers. One of the things -- Pankaj, thank you so much. 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 2 to 3 years, we have been investing the gross margins that we've earned in our business back into building products and building services. So effectively, if you see the gross margin in our business over the last 5 years, it's consistently grown year-on-year. So really, from a growth point of view, we've been growing net income, which is gross margin. But we've been reinvesting that back because we know that we are in a business that needs constant innovation, constant investment. So it's not like we are making losses. It's basically reinvesting back our earnings back into growth engines. And this is an area where we will continue to do. However, I believe that our core platform business today in terms of the investments that we've made both in feet on street as well as the back end is kind of more or less mature in terms of the investments. So any growth in top line should fall to the bottom line from a platform -- from the Spice Money Adhikari platform business. Spice Pay and credit are 2 big engines we are working on. You know UPI is a space that we have to tread carefully while there's growth. There are challenges when it comes to economics. So we are hoping that we can build an economically viable model for -- even in the UPI space linked to the wallet. And credit, of course, has clear income opportunity, but then again, there's risk that comes with it. So as a platform business, we want to work with our partners to make sure that we can minimize risk as much as possible. So we are trying to make sure that foundationally, we lay in place all the building blocks that will help us build a robust financial services play for Bharat. So, Pankaj, fingers crossed, I'm hoping that we can continue to deliver on operating leverage, but we will not slow down on investments. So effectively, it will be a combination of both operating leverage and investments.

I understood. So my next question is, what is the road map to scale up the EBITDA?

So the road map for EBITDA scale up is effectively income growth. So more products, more agents, more products per agent. So today, if you look at it, EBIT -- why we say EBIT more than EBITDA, Pankaj is, because for us the other income, basically, when Adhikaris work with us and they invest in working capital, that's also part of the growth in business. So therefore, we encourage anyone looking at this business financially to look at EBIT and not just EBITDA. But we are hoping that this number will grow in line with growth in income. We are hoping that we can use technology to drive some automation in terms of cost efficiency. But we believe that feet on street in our business is very essential. So this is something that we know that our small businesses and agents in small towns need this physical interaction. So we definitely want to keep investing in that. But like I mentioned right up front that we want to make it more tech-enabled so that we can drive productivity better. So I think, Pankaj short of giving you guidance in terms of what the numbers would look like, but effectively, like I said, 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.

So what is the vision for the management where you want to take it -- this company?

So we want to be -- our mission is to make sure that we use tech to transform banking for Bharat. We want to be a leading financial services platform for small businesses in small towns. And we want to make sure that as a platform we have financial products on one end and businesses and consumers at the other end. So Pankaj, our goal is to become the gateway for financial services for small businesses and consumers in Bharat.

So what kind of risk do you see in this sphere?

Lots of risks. There is regulatory, as Aastha outlined. AePS, as an industry, there are issues around fraud that we have to constantly look out for. We're very excited about face authentication because it's brought down fraud significantly. I think there's hardly any fraud happening using face auth. We are working in a market where the other risk is that getting enough on the supply side, making sure that there are enough financial product partners who want to serve this part of India and can work at an economic cycle. That's why we're trying to bring down the unit economics significantly in terms of delivery or distribution so that people can make enough margins and drive more scale in terms of numbers of products sold. So I would say one is, just not I would say risk, but just working with the regulatory environment to make sure that we can grow in a responsible way. Second is having enough supply of products on the partner side and being able to build products that work like micro nature of products, small credit, small insurance, small savings, so making sure that we can get enough supply. And I guess competition, as urban markets get mature, players will look at smaller towns and markets, and that's why we're getting ourselves organized in terms of ring-fencing our agents and also building in UPI kind of products. So as more competition comes in, we are ready to face competition. And finally, I think just customer moving towards digital, will it happen faster and therefore, will they stop withdrawing enough cash? Will they start transacting directly from the bank account? That's a risk, and that's something that we are hoping to counter with our own Spice Pay product to enable consumers to be able to do UPI on our Spice platform. So these, I would say, broadly are the 4 risks that we see. But it's a journey. And every day, we try and navigate and try and do as many possible mitigation measures for risk.

So a couple of more questions. As you mentioned that increase of market share due to subscription packs. Can you help me understand how do this subscription pack function and in which service do SMA get a better or higher benefit?

So basically -- Aastha you want to just call out how the subscription pack works?

Yes. So basically in the subscription packs, what we have bundled for an agent is that whenever he subscribe to a pack, he will get additional benefits on doing volume with us. So for each of our major products, for example, AePS, mATM, even DMT in some packs, we give them additional benefits if they drive volume up over a given GTV. As well as in some packs, we give them benefits like free devices that they have to procure. So all of those things help them get greater income. So today, if a Adhikari knows that he is doing a certain set of volume with us, he knows that if he'll subscribe to this subscription pack with us, he will definitely earn more month-on-month. So paying that onetime upfront fee is not something that he minds. And even on the renewal side, if this pack ends in 3 months, he definitely looks forward to renewing this pack. Why? Because he knows that the income that he's generating every month is much larger than the income he would have generated if he had not been on this pack. So that's why the renewal I called out when I was presenting as well has also started growing. And every month, we see approximately 65% of the packs that we sold are renewals. So that's as high as renewals today that we're doing on a monthly basis.

So one last question from my side. Our face value is INR 3, right? I will suggest management to make it INR 10. That sounds good. I think it will not change any metrics, but 3 is -- hardly I've seen any company having face value of INR 3. Let us make it INR 10.

Understood Pankaj. Thank you for your --

And this is sincere suggestion, I will speak to Amit also and separately you.

Yes. Thank you for your suggestion, sir.

Thank you, Pankajji. Great to have a discussion with you like always. The next question comes from [ Aniket Retkar ] from the chat box. He says, although DiGiSPICE is largely a service and platform-driven company, the rural fintech ecosystem depends on devices like micro ATMs, biometric scanners and POS machines, many of which have components sourced globally. With the U.S. revising tariffs on Chinese origin electronics and tech components, do you foresee any increase in procurement costs for hardware supplied?

Aniket, let me just take this on. We are actually trying to move beyond having to supply devices. So first is we do not see this. I think there are companies -- this is not a very tech-heavy kind of a hardware play. So there is now local domestic capability that's built on. We work with companies that work domestically. Most of the components now we are able to procure domestically. So I don't think in the whole biometric space, this is a challenge. And as we move more towards face auth adoption, I think the need for these devices are also significantly coming down. If you look at it, what's going to grow is face auth for AePS kind of transactions and more QR-based for UPI kind of transactions. So I think directionally, we are kind of moving away from add-on devices beyond your smartphone. So that's directionally where we are going.

Next question is from [ Utsav Baheti ]. [Operator Instructions]. Usha Baheti asks, congratulations for the awesome set of numbers. Has the AePS market seen consolidation of any sorts as there was a big headwind period for the segment? Has the headwind eased for the sector? Or are we still facing some headwinds?