WSFx Global Pay Limited (511147) Earnings Call Transcript & Summary

Ladies and gentlemen, good evening, and welcome to Q3 FY 2020 investors conference call of Wall Street Finance Limited. [Operator Instructions] Please note that this conference is being recorded. Material and information in this conference call is general background about the company's activity as at the date of this presentation. Information in this presentation should not be considered as advice or recommendation to investors or potential investors in relation to holding, purchasing or selling securities and does not take into account your particular investment objectivities, financial situations or need. This information is given in summary form and does not purport to be complete. I now hand the conference over to Mr. N. Srikrishna, Executive Director and CEO; and Mr. Dipesh Dharod, Chief Financial Officer. Thank you, and over to you, sir.

Thank you. Good evening. This is Srikrishna here along with my colleague, Dipesh. It's a pleasure to connect once again with our esteemed investors and present our Q3 results. We are presenting the Q3 performance and also the 9 months ended performance. We'll start with a small presentation of the company and where are the results and the other company's strategic direction. We've uploaded the presentation on the company's website as well as the BSE website. Now we'll go to the presentation part. So for the benefit of those who joined newly in the call, we'll give a brief about the company. So the -- you have a time line of the company. The company was incorporated in '86, has a long and illustrious history of being in ForEx and the MTSS space. In the last 2 years, the company has been focused on the ForEx business. One of the major milestones post the sale of our MTSS business has been our concentration on the ForEx business and our launch of our own Smart Currency Card in July 2019. So as a company, we have been focused on the ForEx space. We are an authorized dealer, Category II. We are partnered with banks to provide remittance solutions and also prepaid cards. We facilitate travel insurance. We have a network of 22 branches pan-India. So we have -- we focus on both corporate and retail segment as well as the wholesale segment. We cater to leading corporates like E&Y, Schindler, Siemens, Synopsys. We also are partners of HDFC Credila for the students and provide them outward remittance solutions. So at a product level, we deal in foreign currency notes, ForEx prepaid cards. We are tied up with Thomas Cook for the Thomas Cook cards, and we also launched our own Smart Currency Card with that in July, which is doing -- where we can say we are really growing in our own card space. Outward remittance is a big business for the company. We are dealing with multiple banks to provide outward remittance solutions for students to remittances, integration, et cetera. Now quickly, I go through the key highlights of Q3. Generally, ForEx business has seasonality. So Q3 is generally considered a lean period for us because, generally, after a high of Q2, where we have peak students traffic, Q3 is relatively lighter. And also December, we do have a slump in corporate business also. Considering the 4 quarters, Q3 is generally a leaner period as far as ForEx business is concerned. So when you look at performance, we have done a comparison between where we were -- what is the performance for this quarter, this year and where we were during last year same time. So we have grown 61% in our revenue. This quarter, we had a revenue from operations of INR 873.67 lakhs. As against the last year same period, we were at INR 543.83 lakhs. From an PBT perspective, we are at INR 10.86 lakhs as against INR 2.84 lakhs during the same period in the previous year. So if I look at 9-month period, that is April to December, for this year, we were at INR 2,682 lakhs as against INR 1,699.71 lakhs on the previous year, same period. So that's a 58% growth in revenue from operations. And we are at a PBT of INR 111.22 lakhs as against a negative of INR 36 lakhs during the same period for the cumulative period. So we have -- if you look at it, we have grown substantially over the last year's performance. When we look at a quarter-to-quarter comparison, where we are from Q3 to Q2, there is a small degrowth of 12% because, as I mentioned earlier, the Q2 is a high season for us, where we have a huge amount of students remittance business. So this revenue from operations for this quarter was INR 873.67 lakhs as against INR 988.64 lakhs, and our PBT was INR 10.86 lakhs against last quarter's PBT of INR 68.01 lakhs. So what is a highlight in this quarter also is that we were able to sustain our growth in the remittance segment. We have been growing consistently in one of the key areas, which is the remittance segment. Our Smart Currency Card we launched in July. So in July, we launched the product, but we can successfully say that we are now doubling our numbers. So there has been a significant growth in our own WSFx Smart Currency Card, which also comes with an app and it has been well received by the customers. And we are confident that it will be a key growth driver for us for the coming year. As far as digital transformation is concerned, both of our platforms are up and running, and we are onboarding more customers, increasing our market share. Our Smart Currency and app adoption has been pretty good. So that sums up about the highlights. Now to run through some of the reference, I hand over to Dipesh.

Good afternoon, everyone. With regard to the results, as mentioned in the presentation, we have given you 9 quarter of ForEx business that we have done right from December '17 quarter to December '19 quarter. From revenue from operations, if you see December '19 quarter, we are at INR 873.67 lakhs against INR 988.64 lakhs for the previous quarter. Same quarter previous year, we were at INR 543.83 lakhs. A year back -- rather, 2 years back, December '17, we were at INR 412.61 lakhs. So that shows a good growth with regard to December '17 to December '18 to December '19 quarter. With regards to the total revenue, company has clocked INR 599.87 lakhs. That is net revenue plus other income, vis-?-vis that figure was INR 690.12 lakhs for September quarter and was INR 438.59 lakhs for December '18 quarter. Selling and distribution expenses are lower than the previous quarter. September quarter, we had INR 554.10 lakhs against INR 534 lakhs for this current quarter, resulting into an EBITDA of INR 65.87 lakhs for the current quarter against INR 136.02 lakhs for the previous quarter. Company has spent about INR 36.13 lakhs for finance cost and a depreciation of INR 18.88 lakhs for the current quarter, resulting into a PBT of INR 10.86 lakhs for the current quarter, that is December '19, against INR 68 lakhs for the previous quarter and INR 2.84 lakhs for quarter ended December '18. PAT -- general tax expenses, majorly being accounting for provisioning of tax and deferred tax, is about INR 9.77 lakhs for the current quarter, resulting into a PAT of INR 1.09 lakhs for the current quarter, that is December '19, as against INR 33 lakhs for September '19 and a positive INR 8.14 lakhs for December '18. When we are talking about revenue from operations, the company started its journey, pure-play ForEx, from practically 1st October '17. So the quarter ended December was the first quarter in the year '17, '18. We grew from INR 413 lakhs to INR 460 lakhs to INR 566 lakhs to INR 590 lakhs to INR 544 lakhs to INR 688 lakhs, INR 820 lakhs, peaked at INR 989 lakhs and for the current quarter at INR 874 lakhs. So there has been a constant growth. Of course, the dips are because of the seasonality, as Mr. Krishna had already mentioned in his text. With regard to selling and general admin expenses, which are more in line with and have been constant, marginal improvements on certain expenses have also been there, which started at INR 613 lakhs for quarter '17, '18 and has ended at INR 534 lakhs for the current quarter, that is Q3 '19, '20. As Mr. Krishna has also mentioned to you, our priority segments with regard to the prepaid card segment and the outward remittance segment, taking a base of quarter 3 '17, '18, we are -- we have right now grown at 51% over the same quarter for quarter 3 '19, '20 as against outward remittance, taking the base at Q3 '17, '18, we have grown 235% for quarter 3 '19, '20. With regard to our -- sorry, with regard to our digital front play, Mr. Krishna will now take over the conversation.

Yes. Thank you, Dipesh. So a brief update on our digital journey. So the company is trying to project itself as a digital ForEx company. We have really worked hard in bringing out various products. And also we have got 2 platforms. One is the corporate platform. We have more than 100-plus corporates onboarded in the platform. And slowly, we are increasing the throughput through the corporate platform. It is well received. The GTO is increasing. We've got some large customers onboarded in our corporate platform. As far as the agent platform is concerned, that has also started gaining traction. Today, we have some x percentage of business, which is gradually moving towards the agent platform with good adoption from travel agents and moneychangers. Consumer platform, that is a B2C platform, we have been working on for the last 2 quarters. We are expecting to have it launched before the end of this quarter. So we feel that we'll ensure that we have a edge in the leisure business. Wholesale platform work is under progress. A quick update on Smart Currency Card. Smart Currency Card, where we have built the entire product and also the app, there has been a very good reception from the customers. The app has been well appreciated. We are bringing in more and more features into that. In fact, our INR wallet is active. And hopefully, before the end of this quarter, we may add 5 more currencies to our Smart Currency Card multicurrency wallet. So with this, I would like to come to the end of the presentation. Now I'd like to thank you -- thank everyone, and I would like to hand over the conference to the moderator. Thank you.

[Operator Instructions] The first question is from the line of Imran Contractor from Quantum Investments.

Can you give us some light on the overdue amount, which you've shown as notes to accounts?

Yes?

Can you show -- throw more light on it, which counterparty it is and what is the status?

Yes. Regarding the counterparty, right now, you may get back to us. We'll apprise you. And I think it is a bit overdue, and we are having our all efforts to regularize the over debt that is there. Company is confident of getting this amount back in the current quarter.

Okay. I hope it's not Cox & Kings or something.

No, no, no.

No.

Okay, okay, okay. And what is the cash now in [Foreign Language] balance sheet?

It's the same distinct. It has been constant at INR 24 crores, which was there even in the last quarter.

Okay. And we have some working capital loans also.

Definitely. So yes, absolutely. Yes.

[Operator Instructions] As there are no further questions, I now hand the conference over to the management for the closing comments.

Yes. Thank you. Thank you, dear investors, for joining us on the call. If you have any queries -- further queries, please visit our website or you can reach out to our company secretary. I now request the moderator to conclude this call. Thank you.

Ladies and gentlemen, on behalf of Wall Street Finance Limited, we thank you for joining us, and you may now disconnect your lines.

Thank you.