Protean eGov Technologies Limited (544021) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Protean eGovernance Technologies Limited Q2 FY '25 Investors Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Pushpa Mani. Thank you, and over to you, ma'am.

Thanks, Sejal. Good morning, everyone. I wish you all a very happy Diwali and a prosperous new year. We welcome you all to the Quarter 2 and H1 FY '25 results discussion. You must have received the results and investor presentation of the company which is available on the BSE as well as the company's website. As usual, we will start the forum with the opening remarks by our leadership team, and then we will open the floor for the question-and-answer session. If you have any queries and answers during the conference call, you may reach out to us. The management on today's call would be represented by Mr. Suresh Sethi, Managing Director and Chief Executive Officer; Mr. Jayesh Sule, Whole-time Director and Chief Operating Officer; Mr. Sandeep Mantri, Chief Financial Officer; and myself, Ms. Pushpa Mani, Head Investor Relations. Before we begin, I would like to mention that some of the statements in today's discussion may be forward-looking in nature, and we believe that the expectations contained in these statements are reasonable. However, these statements involve a number of risks and uncertainties that may lead to different results. With this, I invite our MD, Mr. Suresh Sethi, to give opening remarks. Thank you, and over to you, sir.

Good morning, everyone. First of all, very auspicious day. Let me wish you all a very happy Diwali, and thank you for joining us for our quarter 2 and H1 FY '25 earnings call. Let me start with the overall performance. During this quarter, our revenue from operations grew by 12% quarter-on-quarter. This was mainly led by growth in our tax and pension services business. Tax Services witnessed a healthy growth of 22% Q-o-Q primarily driven by the launch of certain government schemes following the elections. Our overall growth in this business is also coupled with a gain in market share. We gained almost 380 basis points year-on-year rising from 51.6% in quarter 2 of FY '24 to almost 55.4% in quarter 2 FY '25. The total number of PAN cards issued by Protean in quarter 2 FY '25 stood at INR 1.2 crore. And our online PAN issuance have passed offline PAN issuances for the very first time. These accounted for almost 51% of the total issuances. This is a very positive trend and bodes very well for our tax business and is more cost efficient. Coming to pension services. Again, the quarter marked a resilient growth. We grew 7% quarter-on-quarter. During this quarter, we added 3.6 million new subscribers, over 826 corporates, and this reflected a 40% quarter-on-quarter growth in the subscriber base. We continue to maintain our dominant market position with a 97% aggregate market share. NPS Vatsalya, the pension scheme for minors, which was announced by the government during the finance budget of 2024, was officially launched on 18th of September 2024. We are, again very proud to report that we have added more than 25,000 subscribers till 30th September, a very good start to NPS Vatsalya. During this quarter, also, the company launched a completely revamped NPS and APY mobile application. This has a superior user interface and experience, along with several new features including enhanced security and transactional [indiscernible] like new account opening and Tier II activation. Relating to our identity services, we witnessed a degrowth of 14% quarter-on-quarter, a large attribution to this is the high volumes in the previous year, which were driven by the Aadhaar-PAN linkage deadline. And secondly, we are facing competitive pricing at the foundational level for the E-Sign services. This very much ties with our strategy to strategically invest in building value-added services on top of E-Sign and eKYC and e-authentication, basically the foundational identity layer and that is where we have launched services like E-Sign Pro and RISE with Protean, which is an API marketplace, within our data stack verticals, and we are layering it on top of the foundational identity services to drive more B2B engagements and business opportunities. The new businesses continue to show early momentum. We are clearly seeing traction in the space of open digital ecosystems. There is good market movement in ONDC. And similarly, in agriculture, we are seeing multiple states getting connected to the core agri stack to take the agri digitization forward. Our suite of digital services, which have been built as a vertical integration on top of the foundational identity DPI is also showing good traction, complementing India's digital growth story. We are very enthusiastic about the recent developments in the DTI space in India, and we are continued -- continuing to invest in these new lines of business. Our primary aim is to mature this business in the next 3 to 5 years and establish them as core contributors to our overall top line. During this quarter, we are glad to share that we launched 2 new products. One was in the space of Open Finance and a new product called Protean LIFE. Let me first talk about Open Finance. As we all know, ONDC has forayed into the financial sector, with the launch of a new vertical, which enables Open Finance. This very much follows their success in digital commerce and mobility across various categories like food, grocery, fashion and electronics. The open architecture of ONDC, therefore, provides a great opportunity to discover financial services by connecting the speakers and providers. We have launched an Open Finance stack which enables discovery of loans, insurance and mutual funds through various seeker applications, where financial data can actually be shared using the account aggregator framework. We are also further collaborating with various distribution partners to provide last mile assisted access to financial services. One such collaboration I'll call out is with PayNearby, a distribution partner with a strength of over INR 2 lakh active retail touch points. Coming to Protean RISE. We see that despite the significant growth in social sector spending, the landscape of philanthropy and CSR remains fragmented. Seekers often struggle to find suitable funding and resources, while providers face challenges in identifying impactful projects and ensuring efficient utilization of funds. At the Global Fintech Fest this year, the company unveiled Protean LIFE India's first and one of its kind platform to create an interconnected ecosystem, their seekers ranging from individuals, NGOs and implementing agencies and providers like corporations, foundations and individual philanthropy and collaborate transparently and efficiently to adjust social and environmental challenges, and we are approaching this through a DPI-led approach. Glad to share that Protean was recognized and awarded as the best digital public infrastructure company during the Global Fintech Fest 2024. This further underscores our pioneering contributions in this space. Our balance sheet continues to remain strong with more than INR 750 crores of cash and cash equivalents, including marketable securities, and we are a 0 debt company. Finally, I would like to introduce Mr. Sandeep Mantri, our CFO. He is a chartered accountant and CPA and has an alumnus of UC Berkeley-Haas School of Business and IIM Calcutta. So 2 decades of experience. Sandeep has built a reputation for driving transformation strategies. We are glad to have him on board. His expertise will play a pivotal role in accelerating Protean's vision of advancing technology-driven governance solutions within DPI. Sandeep's leadership will help strengthen our overall management team, Protean's strategic growth and financial stability in this rapidly evolving tech landscape. I hand it over to Sandeep now for a discussion on the financial performance. Over to you, Sandeep.

Thank you, Suresh, for the nice introduction and valuable insight about business. Good morning, everyone. I wish that you and your family a very happy Diwali and a prosperous New Year. Thank you again for joining us for our quarter 2 and FY '25 Earnings Call. Launched in 2015, the Digital India Program has become a transformative force and an inspiration to many other countries in the world, altering the pace of India's growth story while transforming the globe into a digitally empowered society and a knowledge based economy. This vision is being realized through 3 key pillars, which is robust digital infrastructure, accessible government services and empower citizens. Protean is honored to be at the forefront of this dynamic ecosystem and playing a pivotal role as the foundational pillar in the evolution of digital world. Let me take you through the financial highlights for Q2 FY '25. Our consolidated revenue from operations included INR 220 crores, growing by 12% Q-o-Q led by robust performance by the tech services and pension services. Additionally, we see early momentum in our new businesses. Adjusted operating profit, excluding other income and ECL provisioning for the quarter grew by 21% Q-o-Q to INR 32 crores with operating margin of 14.4% versus 13.3% in Q1 of FY '25. Profit after tax for the quarter grew by 33% quarter-on-quarter, rising from INR 21 crores in Q1 of FY '25 to INR 28 crores in Q2 of FY '25. However, the normalized PAT post adjustment of ECL was INR 26 crores in Q1 FY '25 with normalized PAT margin of 12.2% versus similar kind of margin in Q2 FY '25. Overall, with an increase in the market share in our tech services business and 40% quarter-on-quarter increase in new subscriber in the pension services, we are optimistic about future growth potential. Additionally, growing momentum in the new businesses, our ongoing cost optimization and automation measures in existing businesses will also drive margin improvement in the coming quarters. As far as our balance sheet is concerned, we continue to remain strong with cash and cash equivalents and marketable security of more than INR 750 crores with no debt on the book. We continue to actively explore inorganic growth opportunity while consistently investing in enhancement of our existing businesses. Looking ahead, we are proud to help drive the development of India's digital infrastructure and pair that with a robust regulatory framework. I'm very excited about the future that lies ahead. With that, I open the floor for question and answer session.

The first question is from the line of [ Kamlesh Jain ] from Lotus Asset Management.

Just one question on the part that over the years, we have been seeing contraction in the margins as well as I say, revenue has not been growing from our conventional businesses. So going forward, where do we see like say, over the next 3, 4 years, how do we see the growth coming from our, let's say, other than the tax services and the identity services growing?

Kamlesh, let me just put 2 points of view over here. As I mentioned earlier, as far as tax and pension is concerned, these are businesses in which there's a very strong headroom because from a PAN perspective, the penetration in the country is under 50%. PAN being more an ID, which is taken at the point of either opening of account or when somebody gets their first job or now we are also seeing a propensity a lot of government schemes actually require the availability of a PAN to be able to be part of the beneficiary pool as an identifying document. So PAN there continues to be a strong headroom. Likewise, in pension, as I mentioned, we are a very underpenetrated society. Our total sort of foray into pension is just 6% versus where we see in OECD countries, it's around 82%. And total pension base today, including APY and NPS is around INR 7.7. crore. So we continue to see these businesses as contributing to us from a revenue growth perspective also. The comment I had made earlier was that in the space of digital identity, we are seeing some competitive pricing coming in the space of E-Sign and that is where it is in a way leading to margin compression. And now let me come to the businesses which are also aligned there. So for identity, we took a clear call to build a data stack, which is a vertical integration on top of the foundational identity services where we provide value-added services for digital onboarding, for doing credit surrogates, credit scoring, digital lending, along with our account aggregator license, and we are trying to build moats over there to build a business, which is value-added on top of the foundational identity. Our other foray, clearly, as you know, is in the space of open digital ecosystems. And likewise, we are also looking at taking the India DCI stack global where we are currently engaged with multiple countries. So these new lines of business to call out, whether it is data stack or ODEs or international business or our investments in cloud and infosec securities. These are going to be our growth vectors. And aspirationally, we are looking that in the next 2 to 3 years. Where today, we have a concentration in our core business lines above 90%. We want to have a 25%-75% split, with new businesses contributing around 25% of our top line.

Okay great. And secondly, like this PAN 2.0, that particular tender. So how do we see the competitive intensity there? I do appreciate that you have a 55-odd percent market share there. But going forward, as there are very much chances that the competitive intensity is going to be higher in the upcoming tender. So what particular margin levels we are seeing while bidding there?

So basically, in terms of the RFP, this is basically a measure of good governance that the tax department this time has come out with a tender-based approach, provides equal opportunities for players to come in. Considering that it is at RFP stage, we don't have too much visibility on what you said in terms of margins and all. Currently, it's an OpEx model. So largely, our PAN business, we are -- basically the business model B2C. We get paid by the people who are applying for the PAN card, and we don't get any revenue pools coming from the IT department. So we assume this will continue to be the case. But at this stage, early to comment on that.

The next question is from the line of Amit Goel from [ RED Enterprise ].

Sir, can you tell us a little bit about what's happening on the ONDC space and how are we positioned over there right now?

Amit, happy Diwali. ONDC is seeing good traction as we have been saying earlier. There is a strong growth, which we are seeing. I would at least say quarter-on-quarter, high double-digit growth, we are continuing to see. As we speak, they are expanding and have expanded into multiple categories. The journey, as you know, started with mobility and transport, moved on to digital commerce. And under that, we have seen multiple categories come in and especially categories like F&B have picked up very strongly. And today, there are 13 categories live on the system. And if I look at the September month, almost INR 1 crore monthly orders were placed. So there's good trajectory and build over there. As I called out earlier, ONDC is now also forayed into Open Finance, which is basically building an open ecosystem for connecting borrowers and lenders and providing various financial services. So multiple stacks are getting created on top of this open network. And I would say, at this stage, there are almost 100-plus buyer, seller and logistics applications riding on top of ONDC, and it's a strong network, which has got created. We naturally are seeing very good growth, but hoping that it will continue and we will reach an inflection point from where it takes off.

Sir, what role we are playing in this right now, like how do you see us going back? And one more like you had announced during that fest, that exhibition, you had said that you had tied up with a very major financial institution on the financial side. They were using one of your apps or applications. So how is that entire thing playing out?

Sure. So Amit, in terms of our role, we are engaged with ONDC on 3 fronts, I would say. One as we always said, we are powering ONDC at the network level. We are the only provider, which is providing the tech to ONDC where we are providing them the gateway and the registry services. Gateway is basically the switch on which the buyers and sellers or the participants discover each other, and registry is the entire architecture on which you are building the directories of buyers and sellers. So this is at an infrastructure -- digital public infrastructure level, and we are the only company which is powering that at this infra layer. Other than that, there are -- I would largely put 2 levels of engagements at the app layer or the application layer. On one side, we are building the buyer and seller applications, which means any buyer aggregators or seller applications are using our tech to create that ecosystem and plug into ONDC, and on the other side are what we term as the extension services. So whether it is reconciliation and settlement or issue and grievance management or back office operations, we did our tech stack on that, and this is what we term as our open commerce stack, where we provide both buyer-seller capability and the underlying services like Catalogue as a Service and so on and so forth. So therefore, there are 3 engagement points with ONDC. At the infra level, we are the only player. And other players, naturally we have competition from the market.

Yes. And so with passage of time, we'll be getting revenues over a period of time from all the 3 lines, which we have provided?

Yes. No. Absolutely, absolutely. So we are already clocking revenues. On the infra layer, naturally, at this stage, considering that it is only for the open ecosystem, ONDC has taken a call that the market participants will not pay. And today, we get reimbursed by ONDC for the infra services or the tech we provide for enabling the infra layer. The other 2 layers are more like a SaaS service. So there's a onetime chart for building the application or designing the application as a tech service provider. And then we have a SaaS model, which is run on a transactional basis. But we are clocking revenues on both fronts. But yes, the scaling up has to come in to make it meaningful.

Okay. Sir, and this will be directly like as ONDC becomes more mature and assume and take growth, we will also -- our revenue share will also increase?

Absolutely.

Fair enough. And sir, one last question about that financial institution who was using our application. Or is that also ONDC only?

Which one are you referring to because I just mentioned...

[indiscernible] announcement, which you had done?

Okay. No, on ONDC, there were 2 parts. On Open Finance, we had actually announced that we are tying up with distribution partners to enable consumption of financial services at the last mile. So this was more [Audio Gap] to an agent point and get a loan on a mutual fund investment, and that is where you're using the account aggregator network to help you support in that.

The next question is from the line of Rohan Mandora from Equirus Securities.

Wish you all a very happy Diwali. Sir, can you please share on the seller tech in ONDC, how many relationships have you entered into, and has monetization started in any of those seller tech relationships yet?

Rohan, Happy Diwali. In terms of the seller tech, we have done quite a few exclusives also with the -- one is on the banking side, where the banks are today looking at enabling their supply chain customers. So we have exclusive arrangements in a manner of speaking with the likes of Citicorp, HSBC, Standard Chartered, which we had announced earlier. Then likewise, we are powering the tech of certain seller apps. We are at, I would say, a very advanced stage of launching a few. And considering the confidentiality, I would not like to name them at this stage. But I would say these are early engagements, and we definitely see in the next quarter, some of them going live and getting monetized.

Sure. And on the seller tech side, any arrangements with any leading domestic financial entities, without naming them?

Yes, we have absolutely.

So sir, by when would we start to start monetizing these relationships?

Rohan, as I mentioned, these are largely working on a SaaS model. And there's naturally in certain cases, depending on whatever the engagement is, we have a onetime fee for building the application. So as far as one time is concerned, naturally, wherever we have that component, it will come through. The other side will be led by transactions. So as I'm saying, as we go to market on these, we see monetization then flowing in as transactions build up.

Sure. Just want to understand to Life. Is it a 2, 3, 4-quarter journey before that monetization on a per transaction basis happens? Or how should one think through on that, please?

Yes. I would put it across in those terms, yes.

Sure. Okay. And sir, second is on the PAN 2.0 project that the government had announced, any updates that you can share there?

So currently, still it's open. I mean bidding date is now around December and then only will there be any progress from there, but it continues to remain the same as we mentioned last time.

Okay. And sir, thirdly, on the cloud, any meaningful project conversion that we have got?

On cloud, Rohan, again, we have engagements with multiple sectors. Focus continues to be one naturally working on government projects where we are trying to position ourselves as a made-in India stack and also look at it from the energy conservation perspective, look at it as a more green cloud, and the other side remains focused on the start-ups and the MSME sector. And we have customers and we have clocking revenues, but definitely looking at more traction and growth in the coming quarters.

And sir, lastly, on the identity services, the de-growth that we have seen this quarter. So even sequentially, we have seen a de-growth in revenues. So probably, one of the reasons that you explained was on the pricing pressure in E-Sign. So if you can share what will be the total revenues that we earned from E-Sign 1Q and 2Q?

The overall this line of business, [Technical Difficulty] we had almost 67% growth in this line of business under identity services and we almost crossed INR 100 crore last year. We are seeing some of this compression coming in the E-Sign space, as I mentioned. But at foundational level, it's basically, you're providing the authentication for E-Sign. And above that is the entire app layer where you build a complete documentation suite like giving it to a corporate or anybody to actually enable E-Sign as part of the work flow. So that is where I was mentioning that for us, naturally, we continue to remain strong in the E-Sign market because we have already dominant market share over there, but we are also doing a vertical integration. Last quarter, we spoke about the fact that we launched a product called E-Sign Pro, which is built on the E-Sign foundational layer and gives you a complete work flow based digital documentation suite, which we are giving to ecosystem players like corporates and all to create a value-added proposition. And that is where it's a multiplier in terms of the revenues also because you are providing a far value-added service than the foundational authentication service. So that is how we are trying to strategically build business on top of the foundational layer.

Right. Sir, that's where I had that query that on a 1Q -- from 1Q FY '25 to 2Q FY '25 also, there's a de-growth, and we have been adding products like [ E-Sign 2 ] and others. So I just wanted to understand other than -- like what is the share of E-Sign in the total revenue within digital? And also, is there a volume decline on the number of transactions that has happened, even on a Q-on-Q basis or is it only due to the pricing pressure that we are seeing in this piece of business?

Largely, it has been the pricing pressure.

[Operator Instructions] The next question is from the line of Abhijit from Kodak Securities.

I had a few clarificatory questions. First one was that across the 3 segments, could you give us some indication of what could be the broad margins -- operating margins?

Across the 3 segments, tech services normally operate at about 40%, 45% margin. Print and services are higher margin businesses. And then identity services are still -- I mean, the new data exchange and identity services are still building up. So that will reveal sometime in the future [indiscernible].

Sorry, your voice was not clear. The new businesses, are they positive on an operating margin basis?

Sir, we are not able to hear you.

Yes, I'll repeat my question. Sir, my question was on the broad operating margin ranges for the 3 businesses and the new business, whether that is positive on an operating margin basis, sir?

Yes. Of course, new businesses will be positive on an operating margin basis once we have a significant uptick in the other 2 businesses. Right now, they're very insignificant. Therefore, we don't see too much margin. It's still hardly about 2%, 3%, 4%, 5% of total revenue. So right now, having a margin indication on new businesses will not be suitable.

Got it. Correct. And sir, second one, was that earlier comment on the 25% share from the new businesses? Any time line that you would like to put on that number?

So generally, we are aiming -- I mean again, I can't make a forward-looking statement, Abhijit. But the aspiration of the company is that we will work towards a 25% and a 75% diversification in the next 2 to 3 years.

Got it. And the last one, sir, is that the growth in the pension services business seems to be much lower than the underlying numbers around the additions of pension subscribers. So if you could just clarify that one.

Interesting that you picked that out because you're right. So growth in pension services, see, the pension revenue is tapped into 3 parts. One is the new account opening. Second is the transactional revenue that we get, which is on every transaction contribution or withdrawal. And third is the annuity where we earn on the total base. So when the new subscribers come in, the actual impact of the underlying annuity revenue only kicks in, in the next quarter. So you generally see a little bit of staggering over there. That is the way the pricing model is designed around it.

Understood. And again, sorry, one follow-up here. But on a broader basis, not just the pension services, is there a way to understand the broader revenue profile between recurring and transactional revenue basis?

So the recurring revenue in pension services will be upward of 95%. I mean the first time revenue will be about INR 5-odd crores. So it is more of a safe type of business for us.

The next question is from the line of Dhruv Shah from Dalal & Broacha.

So just to add on to the previous participant question on the identity services. So 2 quarters of sequential degrowth. So just if you could give us some guidance like what kind of run rate we can expect from this segment. And how do you see this segment scale up going forward?

It's very difficult, Dhruv, in that way to project it, and I'll tell you the reason because this is in line with the largest India digital story. So the consumption of eSign, e-KYC authentication, it is led by account opening. It is online PAN validation. Again, it is utilization of PAN as an identity for various verifications. And we do see that overall, it's a growing market. As I said, that some of our margin compressions are coming in because of competitive pressures. But otherwise, it's definitely a growing market. And last year, we mentioned to you that it was almost a growth of 67%, which we didn't have it projected in our numbers when we got into the year. So -- but I can just say that macro direction remains the same. We see more and more digitization happening in the country, and utilization of all these authentication layers is just increasing. And with a strong thrust on MSME account opening, digital lending, likewise, digital on-boarding, which more and more banks are moving towards to make their KYC processes more efficient, we see this as a growing market, clearly.

Right. So you mentioned about eSign facing some competitive intensity. So last quarter, we launched eSign Pro also do we see the same competitive intensity on that front as well? Or any deal wins that you've been able to do in this quarter?

So when you come to a documentation suite like eSign Pro, we clearly have -- because it's a vertical integration and here you are talking about experience, security layers, workflow management, your ability to differentiate is much more enabled because at a foundational layer, it's the resilience of the PAN platform. It's the uptime, but still the service is very commoditized because all you're doing is an authentication. But when you build a complete application suite on top, so we [indiscernible] competition, but we are very confident in the stack we've created that we'll be able to provide a differentiated and value-added proposition to our corporate customers. We have a few deals which we've already closed in the last couple of months that the product has been up and running, but more to come because definitely for us, it's a B2B business, and we would like to see more acquisition and growth over there.

Right. And my last question is regarding your international expansion. So for the last couple of quarters, we've been guiding for the international expansion as well. So how likely are we going to -- like any contract wins over there? When do you expect it to come through?

So international, clearly, again, the focus is taking the India DPI stack global. As we mentioned earlier, also, we are engaged with multiple countries in Africa, Southeast Asia. We are clearly at a stage in some countries, we are working on POCs to look at use cases where the various use cases built on top of digital public infrastructure like an ID stack or a pension stack or a taxation stack can be enabled. And we have participated in multiple bids because largely, these are government-level initiatives happening in the country. And at this stage, all I can say is that we are shortlisted in a few bids, as I had mentioned last, and we hope to see some very quick results coming out from a timing perspective.

The next question is from the line of Srivathsan from Avendus Spark.

Just quickly, a couple of questions. One was on the whole agri stack and some of the new initiatives. I know most of these are project based. Any further progress towards more meaningful monetization is happening? Just want to get your about.

Sri, basically, from the agri stack perspective, as we mentioned earlier, we were working with the central government. And we were, at that time, getting that entire stack to enable data exchange and build a consent layer for easy exchange between state and central. Being a state subject, the data is largely going to be state centered. And the kind of the project that we've taken first phase, which has gone live and which is where it's integrating with the various states, which have come into play, 13 states are already plugged in, and it's building from there. So that naturally was more like a project -- onetime project. And we build that, and there's more work to do over there. But we definitely are looking forward to more state engagements because states need to build their tech stacks to be able to now leverage the entire agri digital public infrastructure. And that is where further opportunities will be coming down the line.

And then quickly on the eSign Pro digital services, can you just highlight the go-to-market? Cause I was just thinking given the NPS overlap, is there a common sales team? Or how can we -- or how does the go-to-market work for the digital services, identity services will be helpful.

So Sri, go-to-market for us, we have a huge, I would say, competitive advantage because between our pension services and identity, which is at the foundational level, we deal with almost 14,000-plus corporates, right? So when you're looking at pension, these are various POPs or we are enabling their employee pension. And the second big part comes -- is on identity services and which includes the online PAN validation. We today power a lot of fintechs. We power the BFSI sector. So a lot of these players are already engaged or integrated with us to take advantage of the foundation layer of authentication and KYC and all. So one go-to-market approach naturally is to cross-sell and upsell. So if we are dealing with 14,000 corporates, we have, in a way, an accessible market where people are already familiar with Protean, using part of our tech, and we can go in over there. And second naturally comes the credibility that if you are running at a national level, from a DPI perspective, your tech and your risk practices and your controls are naturally well recognized as being the best in class in the industry, eSign Pro and other services like our Protean with rise where we are providing a complete API marketplace, where we enable not just digital onboarding and lending, we are even exposing APIs on the front of agri, on the front of ONDC, on the front of health. So it gives us a multi-API approach to, again, enable the sectors which are relevant to create their digital journeys. For example, we are today even powering RBIH, the ULI which is the Reserve Bank of India Innovation Hub, the credit staff that they have built. So it is basically in a multi-pronged strategy but build like a vertical integration on top of the identity services.

Just one last suggestion. The DRHP KPIs that are published, would be great if it could be integrated to the quarterly investor presentation.

The next question is from the line of Apurva from BugleRock.

I had a few questions. One of the questions was the new PAN initiative that we had spoken about, our reissuance and putting an address on the PAN so that it becomes an all-in-one document. So where are we on those discussions? Or I mean...

Apurva, some of these things naturally are -- or rather all of them are driven at a policy level by the department and by the government. If you remember, we had earlier shared that there was a proposal to see if we can incorporate the address into the PAN card to have even the POA, as we call it, the proof of address in it. Currently, that is not, in a way, being implemented. Or a policy direction on those lines does not come. And the second thing we talked about was, at some stage, there is actually a nudge from the government to say that how PAN can become a single instrument or a onetime -- or a one-stop identity instrument for business or rather nonindividual identification because all of us have Aadhaar. The government is looking at saying can one document or one identity point be enabled likewise for businesses. So that is something which is working on multiple fronts as we know it's -- today, there are multiple identity points which a corporate has. And there is definitely directionally a move to see PAN can become more relevant or play a more relevant play in that place.

So in that, I mean, I was talking about a proposal, say, to reissue PAN card after 10 years as there are a lot of inactive cards in the system, right? So on those lines also, it's same as the policy level still? Or I mean...

We are not familiar with that part about...

Are you talking of Aadhaar pay linkage? Or are you talking about...

No, no, the PAN. So I think there was -- there are a lot of inactive cards in the system, right, PAN cards in the system. So maybe a proposal by the government to maybe reissue PAN card so that the inactive cards are weeded out. Anything on those lines?

We'll check it out, but nothing -- no policy guidance on that as of now.

Not policy. I was just talking about the discussion sort of. Anyways, my next question is we gained a lot...

Sorry to interrupt you, sir. I would request you to rejoin the queue for your follow-up question.

Just one question.

Sir, there are a number of participants. I would request you to rejoin the queue. Sorry. The next question is from the line of Bhargav from Elara Capital.

So my question is on the open financial OMDC. So I want to know a little more about like what's the pain point actually you are solving from both the borrowers' and the lenders' perspective, like from a lender perspective how it is going to be different from other distribution channels and from a borrower perspective how it's going to be different. Like is it better accessibility or better pricing? I just want to know how -- I mean what is the pain point that you're actually trying to solve from both borrower and lender perspective.

Bhargav, excellent question. Ultimately, this is going to the root of problems. Today, the challenge is information asymmetry and discoverability, right? I need a loan. But do I have one place where I can identify and find which are the entities which are able to give me a loan or where my credit is acceptable to them to give a loan? So ONDC being an open network, the whole idea is to get lenders on-boarded onto ONDC like sellers. And on the borrower side, any borrower can go and share the data using the Account Aggregator framework. And then data is largely broadcast on the network. So any lender who feels that as per their risk and credit practice that, that particular information qualifies for a loan offer, that lender will showcase or send back a loan offer that borrower. So it is -- again, it's ultimately just like we talked about digital commerce. Yes, there are platforms today which enable digital commerce. ONDC is today about democratizing access to digital commerce. And here, we are trying to use similar principles as that. And I will add to it. So one part is giving democratic access to every borrower to financial services. And they can use their flow-based transactional data on Account Aggregator to seek loans. The second part we've added to it is that we are enabling distribution networks. For somebody who's not adept at doing it themselves on an application, they can actually go to a touch point. And these are touch points which today are enabling APS or account opening or money transfer. Now these touch points also get the ability to get plugged into an open finance network where they can go and offer loans. So that is what we are trying to address using open finance.

Yes, one follow-up on that. So on the other side of the financial side, the investment and all, so how its' going to be different from other distribution channels. Like from an investor perspective, is it the low commission rates or anything...

So largely, it's going to be one more channel. Let me put it that way. It's not so much about differentiation. It's about the reach and the open architecture of a digital public infrastructure there, right? Because we always say that e-governance services have to be available to every citizen in the country. And some of these initiatives where we are building digital rail enables each and every citizen to have equitable access. Now when you come to the plant of commissions and structures, clearly, let me comment more on the ONDC front because this is a new offering. But clearly, the attempt again is to say how we can offer a superior structure where the cost is different because you are working in an open network. Because the moment you are working in a platform-centric sort of ecosystem, the platform takes a certain amount of commission, which is much higher because they are managing the platform. In this case, the digital public infrastructure is being provided by, let's say, an entity like ONDC, which is a Section 8 not-for-profit company. And therefore, it is not going to be that onerous to be on the network and operate on the network. So you're not about -- you're not just democratizing access. You are democratizing access and providing affordability on an open network.

The next question is from the line of Gurvinder Singh from Fortuna Investment Advisers LLP.

Question was just answered by you on how will this open finance ecosystem work. But continuing on that path, what is the potential revenue model for you in the long run on that open finance picking up? And my second question, sir, is effectively the newer products that you have been launching are not material in your revenue pool as of now. But I mean we all see the potential for those. So your -- some color on your target for those new products becoming 25% of the total revenue in about 2 to 3 years. Just wanted your color because it didn't seem to -- they should possibly be much larger than just 25%. Just wanted your perspective on that aspect as well.

Gurvinder, thanks for the question. So on open finance primarily, the revenue model remains the same. This is, again, a SaaS-led model. So as it happens with whether it's -- if you are discovering a loan and a loan is getting consumed and discovered, there will be a success fee, and a certain transaction-related fee will flow over to us. So that is going to be the design of this model because ultimately, you are enabling company to discover a service, so it will run as a SaaS model. And whatever we are doing at the infra level naturally works well for us because that is where we are seeing largely transactions growing, and therefore, the infrastructure needs to be scaled up. And since we are powering ONDC at a foundational level, you'll see the separate revenue flows coming from there based on higher transactional volumes. So that is the 2-tier sort of revenue accretion we see coming with some of these categories becoming larger. In terms of the new businesses and the new business portfolio mix, as I mentioned, we definitely cannot put across forward-looking statements. And again, this is more, I would say, crystal gazing. But our aspiration is that with the stack of businesses that we've identified, which again have been chosen very, very carefully because there is a strong adjacency to our core strengths, you heard me mention earlier there are businesses we are getting into which are vertical integration. So we are playing on the fact that we have a good market access. We are dealing with those customers. We want to be able to upsell to them. So the lines of business chosen are very carefully chosen. And we are, at this stage, striving to say that we should reach there. And if it becomes better, we all hope for the best.

The next question is from the line of Madhur from MAIQ Capital.

Wishing you are very happy Diwali. So just on the international piece, I just want to understand what the sort of landscape is generally like. What is the sort of pipeline? Who are the competitors? And is it generally us pushing other governments, showing India as an inspirational model? Or is there a natural appetite? So just sort of what that landscape looks like and what our philosophy in approaching it is.

Thanks, Madhur. Happy Diwali to you, too. So on the international business, first of all, our approach has always been that we are a strong DPI player in the country. So those are the credentials, and that's the tech stack which we have, which we have built for India. And our interest in looking at international markets was one driven by that. So that is more about us and what we do and what we feel is relevant. The other area clearly has been an overall realization in a lot of countries, especially with the success that India has had right from the identity stack, which is Aadhaar, moving on to payments and data which includes UPI and Account Aggregator. A lot of countries are really interested in the way India has gone about laying out the digital infra rails. And I would be remiss not to point out that India's journey into building digital public infrastructure started way earlier. Like a company like us was basically created to create capital market infrastructure. Then we went on to create the taxation modernization, the pension ecosystem. So these are DPIs which a lot of countries are interested in, and that is where the interest is coming from overseas markets. There is a strong push naturally by the government of India also. As we saw in G20, there was a clear call-out to say that India will lead the charge in enabling the Global South. The Ministry of External Affairs has done along with maybe multiple international MOUs where we are acting as knowledge partners to countries to explain to them what DPIs can do for them and what sort of use cases can be built. And we are largely working in this environment to see what business opportunities are there and what sort of knowledge transfer expertise we can take to the market as an implementing agency because for us, it's not just knowledge transfer. We are a company which builds the stack, and we can actually implement in these countries. And a lot of countries, as I mentioned earlier, are therefore largely looking at these mandates at the government level. And therefore, RFPs are coming out, which are seeking bid to do this. On the competition front, yes, there is competition. There is competition from international players, domestic players. We strongly believe that the way India's DPIs have been built on open source technology, they are interoperable. Their design principles are very well recognized because we build things at scale using very frugal technology stacks, and that is what is being seen very positively. And that is where I think India has an edge, more from what we have already done and demonstrated in the country. And therefore, companies from India are seen very positively as we are getting evaluated in terms of the tech we are proposing to adopt or deploy in these countries.

And just a second question more from like -- I want to understand your thought process. So there's so many different projects we're working on, all with a lot of optionality and future potential. Just as a leadership point of view, how do you think of devoting resources, devoting sort of human talent? How is that sort of -- what is the thought process when you approach all the different verticals we're in? How to and how much of the resources to devote to each of those projects?

So as I said, Madhur, basically, a lot of the work we are doing is again using very standard fundamental building blocks. And I always give the example that today, for example, we've created gateways for discovery, whether we are doing it in ONDC or we do in health or we do it in agri to enable agri marketplace. It is about using the foundational building blocks. So a lot of the tech that we are developing is very fungible, and it's like LEGO blocks. You put them together and you solve for another sector or another area. So a lot of new businesses come on those lines. Businesses like the data stack, the identity, again, have a very close correlation to what we do at a foundational level. Since we act as an ESP, for example, to CCA, which is an eSign service provider, becoming an application service provider is building on top of that stack. So while we see that we have 6 or 7 businesses as we are calling them out, the tech 2stack is usually fungible. The sales teams are today integrated so that they can leverage cross-sell opportunities. So they are not siloed as one salesperson is selling only one product. He actually looks at the bouquet of products and is able to create a value-added proposition out. And the product and tech teams clearly are looking at building something which is on top of the foundational building blocks. I hope that answers your question.

The next question is from the line of Viraj from Jupiter Financial.

Yes. Happy Diwali, sir. My question is regarding export of data. Can you give some color in terms of what would be the potential revenue size and the margin on those -- hello?

Mr. Viraj, I would request you to please use your handset and repeat your question.

Yes. So my question was on the exporting -- export of data set. What would be the margin in the revenue side of the -- what would be the revenue size and the margins there? Any color there would be helpful.

Viraj, I'm assuming you are talking about the international business, right?

Correct, correct.

Yes. So Viraj, As I mentioned, these are generally RFP-led projects. And since they're RFP led, we basically go in with the bids. And most of these RFPs are QCBS, which means basically they have a technology or tech stack evaluation. So there's a weightage given to tech and there's a weightage given to pricing, which is more the L1 based sort of RFP construct. So we go in with a margin which is upwards of 20% in most of these mandates, and we pitch for them. And that's the way it works out. And then naturally, it's about winning the bids and taking the project forward.

We're talking about EBITDA margin, right?

Yes, margin. I mean operating margin, operating margin.

Okay. And would be in terms of per transaction or ANC-based revenues, more or less?

These will be both implementation as well as long revenue, which is more maintaining the government equity.

Thank you. ladies and gentlemen, due to time constraint, we will take that as the last question. I would now like to hand the conference over to the management for closing comments.

In closing, we would like to thank everyone for joining us today on Diwali. Good to wish happy Diwali to everyone and for your continued support. As mentioned earlier, we continue to show consistent growth in our core businesses. Clearly, a lot of headroom over there. Our new businesses are strongly aligned with what we do at the core, and we are clearly looking at being a part of India's DPI journey and also take the same expertise, experience as an implementing agency, as a technology service provider to international markets. We definitely see strong tailwinds in this space both from an India digitization perspective and from opportunities that we see overseas. Excited about the future and look forward to delivering continued value to our stakeholders. Thank you. And once again, wishing everyone a very happy and prosperous Diwali.

On behalf of Protean eGov Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.