Ladies and gentlemen, good day and Welcome to AGS Transact Technologies Limited Q3 FY23 Earnings Conference Call. This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ravi Goyal, Chairman and Managing Director, AGS Transact Technologies Limited. Thank you, and over to you, sir. Good afternoon everyone. Thank you for joining our earnings call for Q3 FY 23. On this call I am joined by our CFO, Mr. Saurabh Lal, our Executive Director, Mr. Stanley Johnson, Mr. Vinayak Verle, and Managing Director of our subsidiary Securevalue India, Mr. Hrishikesh Shetye. Our overall performance for the quarter gone may have seen marginal growth in terms of top line on sequential basis. Having said that, our core businesses, that is ATMs, outsourcing and cash management delivered a consistent performance. In the said quarter, we serviced more than 479,870 customer touchpoints across 2,200 cities and towns in India. We provided cash management services to 33,200 ATMs through our fully owned subsidiary, Secure Value India Limited, which has a network of approximately 2,500 cash vans across 1,800 cities and towns and about 476 vault and spoke locations. Secure Value has serviced approximately 2,700 pickup and doorstep banking points during the same quarter. As of December 31, 2022, we had installed, maintained or managed a network of approximately 73,719 ATMs and CRMs on a pan-India basis. Our CRM network has expanded from 4,072- 5,071 in the last nine months. The RFPs floated by banks indicate an order book for 17,000 ATMs and CRMs in the current fiscal year. Overall, these orders for new ATMs/CRMs amount to approximately 6.5% of the existing total installed base in the country and more demand is expected to flow. Being one of the leaders in this industry, we are close to finalizing a couple of large order wins, including a large order for 8,000 ATMs and CRMs under managed service portfolio for two leading banks. These two orders will start coming on stream from the next quarter onwards and will be rolled out over the next 12 months. On the macro front, positive regulatory guidelines such as the inauguration of BBUs and increase in interchange rates are paving the way for growth in our top line. Additionally, the value of the currency in circulation stood at INR 31.3 lakh crore as of January 23, according to RBI data, as compared to INR 17.7 lakh crore worth of notes in circulation pre-demonetization. This increase, coupled with the formalization of Indian economy led by the Government of India's continuous commitment towards boosting the digital infrastructure, will collectively propel the growth of overall payment ecosystem. I would like to highlight a couple of points from the Union Budget that are pertinent to us. As reaffirmed by the Honorable Finance Minister in her Budget speech, the economy has become a lot more formalized with INR 7,400 crore digital payments made in 2022. Our industry will get a boost from various financial inclusion initiatives like cash transfer of INR 2.2 lakh crore to over INR 11.4 crore farmers under Pradhan Mantri Kisan Samman Nidhi. Opening of INR 47 crore Pradhan Mantri Jan Dhan Yojana bank accounts. Setting up of Payment Infrastructure Development Fund through which the Reserve Bank of India has incentivized the deployment of POS infrastructure, physical and digital both in tier three to tier six cities and other underserved areas of the country. In the recent notification of MeitY, the government has reintroduced incentivization to the acquiring banks by way of paying a percentage of value of RuPay debit card transactions and low value UPI transactions for financial year 2022/2023. This incentive scheme will promote digital payments by incentivizing banks to build a robust digital payment ecosystem across all sectors and segments of population. The scheme will provide financial incentives to acquiring banks and acquirers for promoting point of sale and e-commerce transactions using RuPay debit cards and UPI and person to merchant transaction of low value. The inauguration of 75 digital banking units, that is, DBUs, and the growing preference for e-Lobbies is set to give an impetus to digital banking. These initiatives will benefit us in the following ways. A CRM offers better economics for payment players like AGS in comparison to the ATMs or cash dispensing machines and also result in overall high cost savings for banks. The idea of DBUs is to mimic a bank branch while minimizing the cost and providing customers 24/7 access to digital banking services. Together, this will aid the growth of our ATM outsourcing and cash management businesses. On the digital side, we are leveraging the growing digital adoption in the country by rolling out POS devices, especially at OMC fuel retail outlets. As on December 31st, 2022, we have installed 246,427 merchant POS terminals across the country, which includes approximate 51,977 POS terminals across leading OMC fuel retail outlets. On the issuance side, we are currently pilot testing the open loop Ongo prepaid card solutions for fueling across fuel retail outlets of a leading OMC. We look forward to replicate our open loop co-branded prepaid cards on our PCI license with other clients as well. These initiatives will add to our already growing revenue streams for the digital payment business. Having said this, we will continue to remain focused on creating one of the largest omnichannel payment platform by providing innovative digital and cash payment solutions to our clients across sectors. The performance for this quarter and nine months year was relatively soft owing to changes in our revenue mix. That is for nine months FY23, our adjusted EBITDA witnessed at INR 3,676 million saw a marginal 1% uptick. However, our margin of 28% was almost 2% higher. Talking about performance in terms of sales mix during nine months FY23, the ATM outsourcing business which works on a transaction and a fixed fee basis contributed approximately 48% of our quarterly revenue from operations. Another 14% of operations came from AMC services and upgrades. Our cash management subsidiary Secure Value, which serves a mix of captive and non-captive ATMs contributed 15% of the revenue from operations. During the period our service revenue is back to 94%, a depiction of our sales revenue mix. The income from these services is recurring in nature and supported by long term contracts. We have further strengthened our overall expense management processes, which include optimization of manpower across business verticals. This has already resulted into substantial cost savings for the company in FY 23. Its further effect will be realized completely in FY 24 onwards. I would request my colleague, Saurabh Lal, CFO of AGS Transact Technologies, to share the financial highlights of Q3 and nine months FY 2023. Saurabh, over to you. Thank you, Rovi. Good afternoon, everyone. Let me now take you through the performance of quarter three FY23. In the quarter just gone by the total income of the group stood back at INR 4,248 million versus INR 4,930 million for quarter three FY22. It was largely due to the delayed order execution under our other automation solutions businesses. Talking about the EBITDA number, the adjusted EBITDA of the group for quarter three FY23 stood at INR 1,171 million as against the INR 1,329 million in quarter three FY22. However, our margin of 27.6% was 60 basis points higher than the last quarter, the quarter-on-quarter. We have made certain adjustments to the EBITDA towards the certain one-off and non-cash item including ESOP expense of INR 14 million, impairment loss on trade receivables for INR 50 million. Forex loss due to devaluation of currency of our one of the foreign subsidiary, Sri Lanka, which is INR 5 million. We saw a reduction of 43% in our finance cost, which stood at INR 349 million in quarter three of FY 23. Updating on our segmental performance for the quarter. Our payment solutions contributed 81% of our revenue in quarter three of FY 23. In this segment, revenue from cash business accounting for 62% of total revenue from operations. This covers ATM and TRM outsourcing and managed services and cash management business. This growth is largely driven by expansion in our cash management network also. Digital solutions which contribute 19% of total revenue from operations. This includes revenue from POS, acquiring machines, switching and other transaction processing services. Our banking automation solutions comprising sale of ATMs, TRM and other currency technology products and self-service terminals and the later services and other upgrades. This segment contributed 11% of our total revenue from operations. The other automation solution business segment which encompasses the sale of machines and related services to the customers in retail, petroleum and color segments. This segment contributed 8% of our total revenue from operations. Coming to the nine-month numbers on some of the same similar parameters. The total income for nine months stood at INR 12,726 million. The adjusted EBITDA for the nine months stood at INR 3,676 million. The PAT for the nine months stood at INR 523 million. On our balance sheet front, the company's consolidated net debt stood at INR 7,000 million as on December 31, 2022. With this, we conclude our presentation and we open the floor for further discussion. Thank you, everyone. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Participants who wish to ask a question may kindly press star one on your touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Kindly press star one to ask a question. The 1st question is from the line of Amit Chandra from HDFC Securities. Kindly proceed. Hi, thanks for the opportunity, sir. My 1st question is on your comment that you made in terms of deals. You mentioned about 8,000 annual additions in terms of ATMs. That is going to accrue over the next 12 months. This, these two, you know, wins is additional of three wins that you announced last quarter. This is the same, you know, deal that we're talking about. Also in terms mainly, you know, same on the interchange rate increase. Has there been an interchange rate increase, you know, after, you know, what we have seen last year? Or, you know, I want clarity on that. Also, you know, as these are contracts are mostly like, you know, PSU-led contracts and, you know, we earlier said that we are focusing on improving our, you know, working capital. Don't you think that, you know, just moving to more managed services PSU, you know, led contracts which will actually elongate our working capital requirement? Thank you, Amit. I'll take one by one these three questions you gave. On the specific point on this 8,000 ATMs, I think, I mean, this is in continuation to what we have updated the investor community and the other analysts in the last call. That these are the 8,000 ATMs which is going to come under in our portfolio under managed services. Those contracts at that point are signed at the very initial stage or I would call the initial stage because the contracts and other things were getting executed. Now, the contract has been executed. It has been awarded to us and now these two contracts are under this takeover stage where we are taking over this contract from the bank. We have mentioned in our statement that we will take another 12 months to close this contract. I think as per the current run rate at which we are adding this to our portfolio. Secondly, as Amit, it's a managed service contract, there is no CapEx required from the company side on this. The takeover is just from existing running contract of the bank or existing running ATM of the bank to us as one of the new MSP for this contract. Takeover will be much faster than what we anticipated at this point of time. Yes, I think as rightly said, it's a dealing with a bank and there are other existing partners who have to hand over the ATMs. Sometimes hand over and other activities take time more than what we expected. Having said that, I would say since these contracts are managed service contracts, there is no capital requirement from the CapEx front on this. The only capital that will be required on this contract to be done on day-to-day basis is the working capital on the account of various costs which we spend to run those operations. I think those will... If you see on the overall bottom line additions or the additional revenue that will go, I think this will be a healthy composition for us to have a major mix where there will be a very less capital employed on these contracts. There is a large number of ATMs will get added to our portfolio. There is a good chunk of revenue which will get accrued on monthly basis. Since this will not, I would say, increase the capital, I would say capital employed because of no CapEx. I think the return ratio from the capital will be better. Yes, there will be a marginal, I would say, increase in the working capital points of the nature of the contract or the nature of the services, which on overall basis, definitely we are trying to correct it with all other customers also, including the PSU banks. [crosstalk] One on the interchange rate. Yeah. I think what was trying to update to everyone, including you and other community in the market, is that from an interchange rate from a banking side, there has not been any change right now from an interchange point of view. Yes, there have been couple of incentives which have been rolled out by MeitY and other regulatory agencies to promote the digital payment. Like, as you said, the MeitY reincentivization on RuPay card and RuPay transaction has been reintroduced. It was. It is effective for April 2022 now. That change has come which will definitely add revenue to both us as acquirers and the issuer and definitely support the market to grow the ADF digital network. Otherwise, from the ATM side, there has not been any change from the interchange per se as such. Okay. Sir, on the, you know, on the transaction side, the transaction with ATM. How, you know, those ATMs have been performing? Because at an aggregate level, the transaction for ATM seems to be stagnant at around 80%-30%. It is not increasing, right? Any update on that front? Amit Chandra, I agree with you. The transaction front on the ATM network has been stagnant or you can say stabilized over a period of time. It has not yet crossed the pre-COVID level. Having said that, if you see over a period of time, that is how we are also trying to change the mix of our revenue, that's not only depending on the transaction fee with revenue, but getting into a more new contract like these two contracts, which is again a fixed fee contract to us. They will be totally different from the transactions ups and downs. Second, we are also focusing on slowly and slowly increasing our CRM base, which is again mostly working on the transaction front also on the fixed pay, fixed fee. Plus wherever there is a transaction fee coming on those CRMs, this is giving us additional revenue in the form of getting a revenue from the withdrawal of the transaction also and the deposits of the transactions also. Over a period of time, which we discussed in the past also, I think with respect of implementation of cassettes where MSA guidelines, those are the additional forms of revenue which is helping us and accruing on those same ATM network that we are running before COVID or before demonetization. Those are the comforting factor for us with respect to the or to, I would say compensating factor for us in case the transactions are still not coming at the pre-COVID level or hovering around the numbers of 88 and 90, so that we should not incur more loss on those fronts. Okay. As of these 8,000 ATMs that you mentioned, you know, we also have the cash management on offer for them. That has included in the managed services contract or that is separate? No. It will have a cash management component also, Amit. Contract comes to the AGS as a managed service provider. This includes various services including maintenance of ATMs, maintenance of sites, maintenance of AMCs, maintenance of upkeep, cash and other things. Cash management is a primary responsibility of the AGS and then subsequently AGS is authorized under the contract to subcontract those activities to the authorized people who certify or qualify to be the cash management company. That is how it will go to secure revenue. Not all of the ATMs will have the cash management services. There is certain proportion of ATM will have a cash management, but that will be a large chunk of revenue from additional revenue coming to secure revenue also. Okay. sir, in terms of your, in terms of digital payment business. I know there has been an increase in, you know, the total transactions at an aggregate level. At an EBITDA level, what has been the performance of the digital business? Are we still, you know, unprofitable there or we are actually at breakeven? Definitely, if you see the KPIs, Amit, there has been definitely considerable change increase in the G2B turnover. It's the turnover from the POS transactions, from the non-OMC POS transaction, I think there has been considerable change. Automatically any increase in G2B automatically flows down as a percentage of revenue in our P&L also. Since these are the variable revenues, any increase in the variable revenue also goes down to the bottom line. Secondly, as I just mentioned that there has been introduction of the MEPI incentive which has been reintroduced by the Government of India. This has also contributed us to additional revenues and to the bottom line of the company. All these factors put together has definitely helped us to have an incremental revenue of ITSL vis-a-vis quarter three and quarter two. If you see on the numbers front, there is an increment of approximately INR 19 million in the revenue of ITSL of quarter one versus quarter two on a standalone basis, which was INR 44 crores. This earlier it has moved to INR 44 crores. Similarly it has a considerable improvement on the bottom line. There is a significant impact on the EBITDA vis-a-vis quarter-on-quarter of ITSL and which has flown down to the bottom line also. On a PBT basis also, ITSL has become positive because of all the development of increase in G2B and the incentivization rolled out by the Government of India. In our own business, don't you think this, you know, UPI, you know, with the UPI gaining traction, a lot of payments there are being, you know, diverted to the UPI channel. The usage of cards as a, or, you know, the cost terminals is like declining at OMCs, at an aggregate level. Do you think that is a bigger risk? Amit, if you see the contracts that have come from OMC, the contract has a very, they are basically ITPS based contract, which is Integrated Terminal Payment Solution. All the merchants have been advised to use only ITPS terminal at their position. What does it actually mean, Amit, is that if we are one of the partners with that, for that retail outlet with this OMC, it will be our terminal where all the acquiring sort of transaction will terminate. If the acquiring transactions happen through the UPI mode or happen through a Visa or Mastercard or any other RuPay card. For Master and Visa, the interchange rate for debit card and credit card are very clear. This is already working on it. With this RuPay card or UPI transactions happening on those retail outlets, if the transaction is terminated or getting concluded on our acquiring terminal, we will get this needy incentive. In case those transactions are not routed through our platform or our acquiring terminal, definitely we'll lose. From, if you see from the intent of Government of India or from the intent of oil marketing company, they want that the OMC retail outlet will only have an Integrated Terminal Payment Solution which will be owned by or run or managed by players like us or some other players. If this becomes holistically get deployed or get, I would say, communicated to them, so we don't see any risk of losing the transactions on specifically either on the RuPay front or UPI front, because if we become the only aggregator or only acquirer to conclude that transaction, we'll get that incentive. That definitely incentive will be or amount will be different if it is a Visa transaction and if it's a RuPay transaction. Okay, sir. I have one last question. On, I get level nine months to nine months by three, we have been almost satisfied top line. With these new additional contracts coming in, what kind of growth, you know, we can see for FY 24 on top line? Also, you know, in terms of our debt, how you're seeing our debt moving because now the incremental contracts that we're getting is mostly, you know, non-CAPEX, right? Can we see some reduction in debt for the next year? Amit, I'll take the debt part 1st. On the debt side, definitely, as we see more and more non-CapEx based contract will get added. Definitely it will not put pressure on us to have more and more capital base debt to secure this deployment plan and everything. Yes, there will be keep on requirement on working capital side with respect to the new contract getting added, incremental revenue getting added. As a business model as we work, there is a working capital cycle that will take time. Having said that, since these are more of the fixed fee contracts that are getting added in our portfolio, the reconciliation process and other approval process are much, much, I would say, simpler than the transaction fee based contracts, where the confirmation usually takes much larger time than this. Having said that, if we continue the same policy that we'll have more of the non-OS CAPEX and the non-MR CAPEX. Sorry, non-MR is not something. Managed service CAPEX and everything. Managed service contracts. Definitely requirement of CAPEX will be there and the debt will ultimately get reducing because we have a confirmed repayment plan of the term debt. If you see the state of the debt of the company, term debt and working capital debt, I think the last portion of the debt is our term debt which will have a secure repayment plan for next one year. With the current EBITDA level and the cash flow, I think it will be question for us to repay this debt and not to relever ourselves unless and until we need some debt for what reason, which can be a working capital requirement. Now coming to your 1st question, Amit, it's a bit difficult for me to or even Ravi also to give you any guidance on FY 24. Instead I think our commentary covers that there are large wins. These are large wins, definitely will have a dispersed revenue. I will, as we said always that our revenues are always a service-based revenue which is more than 90% are recurring in nature. It gives confidence to us also and show to you also that we have a continuous recurring revenue which is very much predictable even for future guidance perspective also. Okay, sir. Thank you and all the best. Thank you. Thanks a lot. Thank you. The next question is from the line of Ankur Joshi from New Delhi Capital. Can you proceed? Hi. Thanks for the opportunity. First, just a clarification. This 8,000 ATMs we would be having, this whole contract is coming to us, this 8,000 ATMs. Is that correct understanding on managed services business? We are getting this 8,000 ATMs contract with us. The number that we are representing in this subject commentary is the ATM which is getting added to in our portfolio. The banks will have more ATMs. There will be multiple partners who will be having this ATM. Definitely 8,000 ATMs are adding in our portfolio of existing ATMs. Understood that. Second point about the cash swap. What's the deadline for this cash swap? I think it was delayed by one year last year, right? Abdul, we have Sandy with us. The way cassette swap is going on across the regulator has been so firm on the 31st March deadline. There is talk with the regulator going across to do some part of it for another six months getting extended. As of now, the regulator has said that 31st March is the hard deadline. This is as of last week, with the regulator has confirmed that 31st March. They have called all the banks and asking them for data and standing firm on the 31st March completion date for all the machines. Okay. This cassette slots will have impact on our employee cost as well. Whether we will see reduction in over there because of the operations we are getting easier because of the cassette, is that understanding correct? Abhish, it will definitely, so at this time now. It will, definitely help us to automate a lot of processes because. Correct. bank's side is that definitely cassette slot is a regulatory requirement. As you know, banks have only outsourced complete end-to-end operational from the ATM to player like us. Even though when the moment bank says we have to implement the cassette slot, banks are totally taking or I would say asking MSPs like us to take the full responsibility of this cassette slot management. Bank says, "We'll continue with the same process of handling the cash to you through the currency cash. You take that cash to your vault and location. You please fill up the cassette, seal the cassette, load the cassette as per the indent and bring back the old cassette, reopen the cassette, recount the cash and do the complete reconciliation. As a process, this will be a complete end-to-end process getting transferred to player like us, MSP and the cash moving company like Securevalue India. That is why they are going to give us additional compensation for this. On overall basis, this complete end-to-end process revenues and everything will definitely have a very good healthy bottom line for us. It will not directly dealing the requirement of manpower us, but I would say other way that it will be other way around. To handle this end-to-end process we may need more people to handle that process. Okay. Understood. Just last question, the employee cost reduction. In the initial remarks, Ravi, sir mentioned about employee cost has substantially reduced. On the how do we look at it going further? Whether it will remain at this level, or on the revenue where now as we have new contracts there? On the revenue percentage-wise, whether it will go up going further, what's the sense on that? That I would like to. Thank you. Ankur, as Ravi has definitely mentioned that there is a substantial optimization of manpower with respect to various businesses that we do. Now, I think this is where I would say the operational efficiencies are coming up. The metrics are getting covered up. Since the operations, whether it's an outsourcing-based business or whether it's a cash moving business as well, all these efficiencies will definitely kick in to us. We believe that with the new addition of ATMs since these are all the manageable ATM or even if it's a cassette ATM, that these operations are working on an automatic mode where if and if we keep on adding those ATMs we will keep on sharing those loads because of the automation that we have. We believe the current run rate at which we are working on it will be a right run rate for us and to any where any incremental revenue in the form of ATM getting added to us or in case of any contract coming from our other payments business segment like banking automation solution or other automation solution or any other segment will not have a culmination or I would say direct impact on our manpower. Plan is to continue with the same run rate and continue to show those, let those actualized savings over a period of time and onwards also. Having said that, there are few businesses like Securevalue which is a purely manpower-driven business. There the cost of manpower will keep on increasing as we increase the number of revenue front points over there. There the mix may not match the same way. On overall basis, I think the plan for the management and whatever discussion we had with our board and even Ravi and other businesses, I think the current run rate will be the ideal run rate to plan it for one year at least. Understood. Thank you. Thank you so much. Thank you. Thank you. Participants, if you wish to ask a question, kindly press star one. The next question is from the line of Deepak Poddar from Sapphire Capital. Kindly proceed. Hello. Hi, Deepak. Yeah. Hi. Hi, sir. Thank you very much, sir, for the opportunity. Sir, I just want understand 1st on the revenue growth part. I mean, in last two, three quarters I think we are seeing revenue decline in the range of about maybe 13%-14% on a YoY basis. If I have to look some of the peers, they are consistently growing at 20%+. Just wanted to understand is there anything that our peers might be doing differently that we are not doing? Some light on that would be quite helpful. And because, you know, if you see the revenue mix of the company over a period of time, that is, Yo Y over a period of last I would say couple of years, the revenue mix of AGS has, even though on a total overall basis the turnover has not grown very rapidly or it on Yo Y basis or quarter on quarter it has sometimes shown the marginal decline also. It's mostly because of the revenue mix that we have. Our most of the revenue over a period of time is getting into a more of service-based business. This is means service and recurring revenue. Whatever is the reductions or major reduction which we have seen either on Yo Y basis or I would say year-on-year basis also is primarily because of reduction in the product sales for us. We used to have around 70% of revenue which used to be service revenue. Now we have already crossed 90%+ on service revenue. If you daily see on specifically on nine month basis you will see our other automation solution business which was primarily a product-based business has actually got delayed in the execution which is again because of the product delivery only. Otherwise on a service revenue basis or other revenue basis I think we have been consistent and we will do. Without having said that it's not that we have not declined. I would say composition of revenues has changed over time. Primarily the year-over-year decline is on the front of the product mix or I would say product sales which has been delayed because of product reservations or I would say the focus of the company is to get more and more recurring service revenue on long-term basis. As we keep on moving on this service-based revenues, which help us to protect the revenues also and it help us to have a long-term visibility of the revenue which again help us to get the right EBITDA margin numbers also. Okay. Also, is there any change in strategy we see going forward, to come back to the growth that idea of the company of like us should see actually? It's a quite a good market to be in, right? I mean, we have lot of scope of growth. Absolutely. That is what the strategy is all about. Mm-hmm. That is what we just covered in our commentary is also that this 8,000 ATMs coming in our portfolio, which will be a non-CapEx-based addition to our portfolio, which will give us the, I would say will become one of the largest player again in the market from the deployment perspective, from the market size perspective. This large size of ATM portfolio adding to ourselves will definitely help us to leverage our existing network of people, network of strategy, network of infrastructure and everything, which will again automatically help us to build up the bottom line. I would say strategy is definitely on the two, three fronts. One is to be definitely continue with the ATM outsourcing business and continue with the CRM deployment. Keep the right mix of fixed and transaction fee-based revenue. Continue to focus on CapEx for our business to make it CapEx apply because it will immediately help not only AGS, but our prospective secure revenue. Third is to get into more and more acquiring side businesses and digital businesses again on the OMC side and on the issuing side also. Like Mr. Ravi Goyal also covered, we are at the pilot stage where we are trying to implement the Ongo strategy on the issuing side for the fueling. Also one now we have got an agreement with one of the largest FMCG conglomerate to launch the co-branded prepaid cards also. I think the strategy is largely focused on digital payment also and cash payment also and largely linked to all these services revenue which is a long-term basis. Okay. Okay. I understand about the strategy part. Now with the lower base, I mean, this last two quarters we have seen a degrowth. On a lower base, at least what sort of growth one can expect next year? I think if you see last four, five years, our revenue has been in the range of INR 1,700-INR 1,800 crores, right? That is the range that we have been hovering around. I agree with you. Because it will be difficult for us to give you any comfortable number or I would say committed number on this now. Yes, as a strategy, as I said, that is revenue. With the new portfolio adding to us, we'll definitely have an incremental delta revenue coming to our portfolio with this either this over 8,000 ATMs, whether it's about maybe incentives getting released by RBI because of this RuPay cards and everything. CapEx are getting implemented in next one year and as Sandy has said, as per regulator, it has to be concluded by March 2023. These are all long-term recurring revenues. I think from next year onwards or from this year onwards, I think we as you rightly said, we have a base of lower number. It will definitely add towards a good growth prospects or potential for the next year. Under you delta revenue will start accruing from what, April? No. Some revenue will start coming in quarter four itself as we keep on takeover. As Ravi mentioned that the takeover does have a timeline for 12 months, but I think from the current stage at which we will be, I think maybe it will get takeover done by much faster pace. Okay. Understood. My last query is on your, I mean, we said in the last call that this FY23 will achieve highest ever PAT in FY23, right? Is there any change to that statement that we have made in the last quarter? So far I think I also covered in my commentary that we have achieved the total PAT of INR 535 million on nine month basis. Mm-hmm. With the run rate of contracts, with the current run rate, I think we will still continue to hold that statement. Continue to hold. Because I think in FY20 we achieved about 83 crores of PAT, right? Ideally that leaves us for INR 30 crores of PAT in the 4th quarter to achieve that. I agree with you. Yeah. Okay. Fair enough. Okay. Yeah. That's it from my side. All the very best, sir. Thank you. Thank you. Thank you, Deepak. Thank you. Participants are requested to restrict your questions to two per participant. The next question is from the line of [Raj] from [Arseno Partners]. Can we proceed? Thank you. Everything is answered. Thanks. Thanks. Thanks, Raj. Thank you. The next question is from the line of Achal Lohade from JM Financial. Can we proceed? Good afternoon, sir. Thank you for the opportunity. In the opening comments you did mention about the cost saving initiatives. Can you elaborate a little bit on that as to what is the extent of cost savings and how much have we achieved and any targets you're having for FY 24? [guess], as Ravi has also mentioned that we have optimized our cost because of the revenues and everything. As we've been consistently also updating everyone is that our revenue is largely into the recurring revenue or service-based revenue which will keep on either stabilizing or keep on increasing. With the help of this getting automated over a period of time, stabilization over a period of time, I think it has helped us to automate a lot of processes internally. It helped us to rationalize our cost internally. It helped us to optimize our cost internally. If you see on the manpower front year-over-year basis, you will be able to see a significant reduction in our cost of two main sectors. If you see our consolidated financial, our employee benefits, which is, which used to be INR 201 crore, I would say INR 2,017 million in FY[guess] nine months, December 2021. It has come down to INR 1,818 million in December Yo Y 2022. There is a almost saving of INR 20 crore on employment cost on that front. Similarly, if you see a 2nd head which is called subcontracting expense, which is again is a indirect manpower that we have in our business, which was INR 1,968 million in December 2021. It has come down to INR 1,859 million and INR 0.68 lakhs in December 2022. Again, there is a reduction of approximately INR 990 million in that number also. These are the numbers on which the current run rate at which we are working on. If you analyze those numbers, I think there's a substantial saving which Ravi was referring also. This saving will continue. Having said that, I think I'll answer. This saving will continue even though we get added more ATMs in our portfolio. Having said that, except for one business which is Securevalue India, which is directly linked to the manpower, as we add more ATMs and more routes, it will have certain percentage of cost, but that is directly linked to the revenue. If there is increase in revenue, then there will be cost of manpower. If for whatever reason the revenue remains stable or same, there will not be any incremental revenue. This is what the saving we are talking about and we believe that at this current run rate of manpower, we will be comfortable executing the current run rate of business and whatever expected and confirmed business that we have in our hand. Understood. The 2nd question I had was with respect to compliance. If you could elaborate where are we in terms of some our preparedness for the cassette swap and the route compliance? Sorry. Cash swap. On the cash swap across, we are committed to have all our banks to complete by March 31st and of this year and we are on road to that. You will see in numbers. We have done a large portion in the month of January. You will see a large portion of our ATMs getting converted into cash swap. Sorry. You're suggesting that we will be 100% compliant or re-ready for compliance for these cassette swaps by March 2023? As on readiness, we are ready across. Also compliant. We are compliant. We have started doing cash swap across for the banks which have come forward and has asked us to complete. As a whole, we will have to wait and see how much banks' readiness is there to complete it across. As of our readiness, we have done and we have already rolled it out there. With respect to route compliance, how many of our customers or ATMs are already compliant under route compliance norm? I think I have Suresh also here. Route compliance- You're talking about the route compliance, right? Route. Route compliance. Yeah, route compliance. Yeah. I am Suresh. I'm representing Securevalue. As far as our routes are there, we are 100% compliant on all the routes wherever we are manning ATMs. How many of our customers are already paying up for, the compliance... We are incurring additional cost, right? Yes. I think, since, as you, as we always mentioned also earlier also that when Securevalue was formulated earlier in 2012, we always started off with all the guidelines which were recommended in nature. That is why we from the day one under this MHA guidelines which I think you were referring or the RuPay compliance guidelines came into picture, we were the 1st company who was compliant on all India basis for all these compliances. A lot of banks have started, a lot of customers have started paying us because Securevalue serves the MSPs like AGS and other MSPs. MSP in turn, service bank and they get paid from the banks to the MSPs and MSP to Securevalue. Securevalue revenues, if you see year-over-year growth, quarter-over-quarter growth, all those sectors have definitely helped Securevalue to increase their profitability and margin profile. On a number perspective, I think most of the customers have started paying off. The exact number may not be available with me or Suresh, but most of the customers have already started paying off. There is a committee formed by CLA, which is Cash Logistics Association, who is handling this compliance and ensuring this compliance gets implemented on all-India basis and negotiating or representing all cash companies to banks and to MSPs. As and when banks are getting comfortable, banks are getting reports and confirmations from the agency, they have started paying us on all those ATMs. Few of the ATMs may be some cities may be pending, even though we are compliant. We are incurring that cost from day one. The revenue may not be coming up because since we are part of this association and agency and network, we get this data from the banks and the CLAs and start billing them. I think from the compliance angle, we are compliant from all India routes. From the implementation perspective, I think since these guidelines came, I think more than couple years back, most of the routes and most of the banks and most of the vans are compliant as of now. Got it. Thank you so much, sir. Thank you. Thank you. Thank you. The next question is from the line of Ketan Athavale from RoboCapital. Can we proceed? Hello. Hi, Ketan. Thank you for the opportunity. I have just recently started following the company. I wanted to know on ATM side, do you just have assembly or do you have enough software for these ATMs? What is it? As we have our factory and where we manufacture our ATMs, we have an assembly line where we buy the ATM kits in the form of CKDs and SKDs. We have assembly line which has been developed, I would say, and it's created as per the German standards that are followed. Based on that assembly line, we manufacture those ATMs. Whatever applications or software are required for that ATM, we buy those software and applications along with those kits and assemble those ATMs. Okay. About software, do you have enough software for that? Yeah. Absolutely. Because for Ketan, if you compare the ATMs are nothing but computer itself, which takes all those commands, process those commands and act on those commands in the form of. All those softwares and applications are required to run on computer machines like Windows OS and other stuff, and certain other very specifically proprietary softwares to handle our internal hardware purpose. Those softwares come bundled with those SKDs and CKDs. In case we need to buy those upgrades like Windows 7 to Windows 10, Windows XP to Windows 7, we buy those softwares from the normal OEMs or other service providers or other sellers. Okay. Okay. How is the outlook on this ATM business, especially with, you know, online transactions and everything? from it, Ketan from the outlook perspective from the ATM business, I think this ATM business continues to be one of the largest contributor of our revenue in the past and future and present. It was always our largest contributor to our bottom line in the past, present and continue in the future also. It is the business which has achieved generating the cash and helping us to grow our other strategies in the form of digital business and everything. our primary focus will continue to stay there. We are one of the largest player in the market also. we believe like banks like ICICI, Axis, all those banks have, they continue to be our preferred partners. We are one of the largest deployers. I think we believe that this focus will continue to be there. I request Ravi to just give you more. No. Just to add to what Saurabh said, the ATM future, I mean, is going to be absolutely great as long as the physical branches also keep on increasing. I mean, we see that actually from the banking perspective, you can do physically, you can do actually all the transactions using mobile or internet. Even then, we find that there are a lot of physical branches which are getting added by all the major banks. When you increase your physical branches, it necessarily means at least minimum on the minimum side, 2-3 ATMs per branches. We are also seeing lot of shifts coming from banks to deploy more and more CRMs and, you know, provide an additional CRMs at the ATM sites to ensure that the deposit functionality is 24/ 7 available to the customers. At the same time, it reduces their operating costs significantly. We continue to see a growth in ATM. There was definitely a little bit less during the COVID time and the demonetization time, but we see the growth continuing in the ATM business. Okay. Can you like give any guidance on EBITDA margin? Ketan, I think from the business perspective, again, we come back to that same point that we have a long-term recurring revenues coming from the existing long-term contracts. We continue to sustain and maintain that good EBITDA margins, which will be in the range of at least minimum 25% over a period of time. This is what we have achieved in the past also. We believe that that EBITDA margin will sustain even though the transactions which have come in, as we discussed, there are multiple other forms of revenues which are getting added to the same ATM network like cash extract, MSA guidelines, route optimization, route logic and other stuff are getting CRM deployment which gives us additional. As of, as Ravi just mentioned, that we are still covered ATM transactions from the withdrawal side. With the CRM getting implemented and getting deployed at all the branches and banks, where banks are trying to cover up and ensure that each branch will have a CRM so that they can direct people to deposit the cash at these machines instead of waiting for their turn with the teller. This will automate their process also, which will dislike their branch network also, and it gives us additional revenues in the form of getting money paid for the deposit transaction, because end of the day we are machines for processing those transactions. We believe with this all these new initiatives and new stuff coming up, we will continue to maintain this healthy margin. Just one last question. You mentioned you have debt requirement only for OpEx and will that be the case for next 2-3 years also? Is there any specific plan for, you know, reduction of debt? Thank you. Ketan as I said, our debts is largely or primarily consist of term debts which have a defined repayment plan. As we keep on growing our businesses, which is largely services business and there is not a significant CapEx that needs to be required to be implemented, depending on the contracts that we get. Having said that, if outsourcing externally comes back and basically there is a contract which will give us a CapEx requirement and it's a good long-term contract, we may require some more debt. Having said that, fixed contract, fixed repayment will help us to reduce the debt and whatever incremental revenue that is required or companies when they change will help us, which can be funded either through internal flows but in case the internal flows are being utilized for some other internal CapEx or other CapEx for which we don't need debt, we may need a working capital debt. That's it. Okay. Thank you. Thank you very much. That's it from my side. Thank you. Thank you, Ketan. Thank you. Ladies and gentlemen, due to time constraints, that was the last question. I now hand the conference over to the management for closing comments. Thank you everyone for joining us today on the earnings call. We appreciate your interest in AGS. If you have any further queries, please contact SGA, our investor relations advisor. Thank you so much. Thank you. On behalf of AGS Transact Technologies Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.