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

Ladies and gentlemen, good evening, and welcome to Quarter 1 -- Q1, Investor 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 activities as at the date of this presentation. Information in this presentation should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities and does not take into account your particular investment objectives, financial situation or needs. 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. And it's a pleasure once again to connect with our investors. I take this opportunity to present our financials for the first quarter, along with where -- what has happened in the Q1, and also the strategic direction the company is taking. The presentation is already uploaded in our company's website as well as the BSE website. Now we will go to the presentation. We'll start with a brief introduction of the company. So currently, Wall Street has positioned itself as ForEx fintech, which provides foreign exchange services and outward remittances through its 17-branch network and digital platforms. The company is a listed company. It's a 30-plus years heritage. They've been there for the last 30-plus years. We are AD II licensed player, which means we can both sell currencies, prepaid cards and also do outward remittances under LRS purposes. We do these -- these products are launched in association with various banks, like we have a WSFx SmartCurrency card, which is a co-branded card with Yes Bank. We also sell Thomas Cook cards. We process our LRS remittances through various tie-ups with banks like IndusInd Bank, Yes Bank, and also do certain other LRS transactions in association with Axis Bank, SBM, RBL, et cetera. We have a full-fledged tech platform for our corporates and also a specialized platform for lead management for our agent partners. We also have a smart product app for which we specifically focus on students and millennials, and we have recently launched our portal also. In the corporate side, we handle key customers like E&Y, Mphasis, Novartis, Hexaware, L&T. We also are ForEx partners of HDFC Credila and they all relate in WSFx for the ForEx needs, both through our branch network and through our tech platforms. So if you look at it, the last 3 years is significant. Yes, we have been hit by the pandemic. But in these 3 years, we have really worked towards -- worked in our digital journey and today have a complete set of digital solutions for all segments of our customers. Now we get into highlights for Q1. So after -- when we thought the pandemic was over, we had the second wave of the pandemic. Again, we were headed into lockdowns, travel restrictions. So this had a big impact because April, May, June is tourist season, and we thought that will pick up. But unfortunately, the second wave took its toll and naturally we were left with the only business of student remittances. So as a company, we did a lot of cost optimization. We did some salary revisions, reduction in fees, reduction in rent and all, and we were able to bring down the expense to some extent. During this quarter, study abroad was the only segment which sustained, because of university fee remittances. At a broad look at the financials. Our GTO was around INR 406 crores, which is a drop of 20% quarter-on-quarter. Net revenue was down to INR 2.63 crores, which was a drop of 18% over the previous quarter. In fact, expenses, we were able to reduce around 8%. We reduced it to around INR 4.16 crores from a INR 4.8 crores level previous quarter. The PBT was a negative of INR 172, which again, there was a small reduction in PBT, but last quarter, we had a provision because of which our negative was higher. From a digital side, this was the quarter we got our ISO-27001 certification from TUV. Because of the digital company, it's important that we have a strong information security system and also various other protocols, which ensures privacy and safety. We also have participated in RBI Sandbox for cross-border remittances and showcased our product, and feel very positive. We also launched our Smart ForEx portal. We already had an app, but now we have redesigned our website and portal, and there has been -- that's something which we launched last month. One good thing about our digital platform is the corporate side of things, 56% of all transactions are now routed through the corporate platform. So to go deeper into the financial part, now I hand over to Mr. Dipesh, the CFO.

Hello, everyone. Good evening. With regard to the next slide, I would like to mention about quarter-on-quarter results that were there. From the same -- previous year same quarter, our turnover or the revenue from operations was INR 312 lakhs, we grew by INR 85 lakhs, about 87% jump in the revenue. And on the other income portion, it was a minor dip of about 10% from INR 25 lakhs, we grew (sic) [dropped] to 22 lakhs. For profit before tax, that is a loss figure, in the last year's same quarter at Q1 2021, we were at INR 188.5 lakhs against which currently, we are at INR 171.72 lakhs. And profit after tax is INR 130 lakhs on quarter 1, 2021 against INR 118 lakhs in quarter 1, '21/'22. When we compare the previous quarter, that is quarter 4 of 2021 to quarter 1 of '21/'22, there was a marginal dip in the revenue numbers from INR 665 lakhs to INR 585 lakhs. Other income has dropped from INR 1.22 crores. This is basically because of the provision that we had done for UniMoni, which was reversed as part of the other income. So that is that additional figure. With regard to profit before tax, we were negative INR 216 lakhs vis-a-vis this current quarter, we are at INR 172 lakhs. And profit after tax, we went -- in the previous quarter, we were at INR 191 lakhs, and currently, we are at INR 118 lakhs for the current quarter. Moving on to the next slide. This is a quarter-on-quarter picture that we give you for the last 9 quarters. How the company has fared, particularly '19/'20, which was like a pre-COVID era, and post that was post-COVID era. So in that, if you -- I'll just take some deep numbers out of it. If you take -- talk about revenue from every quarter 1, we started with INR 820 lakhs in '19/'20, we dipped down to INR 312 lakhs, and now again, we have grown back to INR 585 lakhs. And when we talk about expenses, basically selling and administrative expense, we were at INR 5 crores plus in quarter 1 of '19/'20. We came down to INR 3.65 crores in quarter 1, and right now, we are at INR 420 lakhs. Of course, there is a reduction from the previous quarter, because of some savings across all parameters. I'll move to the next slide, which talks about the published results quarter on -- as per Regulation 33, which are already published, and are the replicas of what we have already talked about. Further, the next slide shows the graphical representation of the drop in the net revenue, along with selling and administrative expenses. There also is a pictorial and graphical representation where you can see that revenues have been going up and going down, and we are seeing in the market as well as -- and expenses are under control currently now at INR 420 lakhs for the current quarter. With regard to our strategy segment, which mainly is cards and outward remittances. Since the last quarter, because of the pandemic, there was absolutely 0 travel or you can say there was very minimal, the card sale has not happened. And hence, it shows about -- it shows a dip on this count. Hopefully to see better figures from the next quarter onwards. But remittances, of course, has dipped from the previous quarter, but has grown over the year from about 79% from the base year that is -- that is quarter 3 of '17/'18, where we started the ForEx business. Further to elaborate on the digital journey, I'll hand over to Mr. Krishna, who will talk about the digital portion. Thank you.

Yes. Thank you, Dipesh. So coming back, a quick update on the digital journey. So a few things. One is we got our certification of ISO-27001. And also, we launched the Smart ForEx portal and app, completely redesigned portal and app, taking care of various customer segments, which we concentrate on. It has got a separate journey for students, separate journey for personnel. So that is 1 thing, which we have done on the B2C side. As far as other platforms are concerned, we have a smart corporate platform, which is for corporates. Obviously, corporate business is down, but we would like to say that as of today, we have 200-plus corporates, who have adopted to this platform and major ForEx is ordered through this platform. We also have a smart agent platform, which is a complete lead and order management system. We have 300-plus agents onboarded in this, and we expect that all these agents will start doing business once the travel season starts. As far as the Smart Currency Card is concerned, we have a Visa card in collaboration with Yes Bank. In fact, we launched it in 2019 July. It's been doing well, and we are looking for a good growth once season starts, because till last quarter, the travel was down and it was more of a remittance. But with now people traveling, we are seeing -- we are hoping to see a good traction in the -- our own WSFx Smart Currency Card also. With this, I would come to the end of our presentation. Thank you, everyone. I would like to now hand over the -- hand over the conference to the moderator.

[Operator Instructions] The first question is from the line of Vikram Damani from Damani Securities.

Just 1 question. Since the end of the quarter, how are sales looking? How are we doing? Is it better than last quarter? Any sort of guidance that you could provide.

For this current quarter?

That's right. For the current quarter, yes.

Essentially -- so today, I don't want to talk on numbers, but we -- you can say that the student season is on, because the second wave was quite ferocious and everything was impacted, but we could only say that now the students have started traveling, not only as university fee is happening. But the travel in terms of them actually taking a flight and going on campus is also happening. So we are looking forward to a good Q2.

Okay. I guess that's the only thing that we can ask right now, there's not much of [indiscernible].

Yes. Actually, I do agree because corporate and wholesale segment pickup is still a quarter. Because once the regular flight starts, then it is where those 2 segments pick up. But definitely, the key segment, which is a segment which generally is in a normal market contributes 70% of the business has started picking up.

Any indication if you're getting close to maybe even a breakeven level on a pretax basis?

So essentially, as I said, our numbers are good, but breakeven and all, we will tell you at the end of the quarter, right. Because we were expecting good results in Q1, because we thought -- second wave, we didn't expect. We don't want a third wave. So essentially, we would like to keep -- be optimistic, but maybe let's wait for another 30, 40 days, because I think the season is good. We don't want any shocks, and we don't want to be too optimistic, but it's good.

[Operator Instructions] As there are no further questions, I now hand the conference over to Mr. N. Srikrishna and Mr. Dipesh Dharod for his closing comments.

Yes. Thank you. I would like to thank everyone for joining us on this call. I would also like to thank you for the support and understanding. Our business has really been affected due to the pandemic, but we are very optimistic, and we need your support and confidence. In case there is any query, you can visit our website or please reach out to our company secretary. I now request the moderator to conclude the call.

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.