Ladies and gentlemen, good day, and welcome to AGS Transact Technologies Limited Q3 FY24 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 guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in a 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 our operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ravi Goyal. Thank you, and over to you, sir. Thank you. Good morning, everyone. On behalf of AGS Transact Technologies Limited, I welcome and thank each one of you for joining our Q3 and nine months FY 2024 earnings call. On this call, I'm joined by our CFO, Mr. Saurabh Lal, our executive directors, Mr. Stanley Johnson and Mr. Vinayak Goyal, and Managing Director of our subsidiary Securevalue India Limited, Mr. Shailesh Shetty. We have uploaded the financial results and investor presentation on the stock exchanges, as well as on the company's website for your reference. Over the past ten years, financial inclusion for all has been one of the key initiatives of the government. In the recent interim budget, finance minister has earmarked INR 60,000 crore for the Pradhan Mantri Kisan Samman Nidhi Yojana. These initiatives are positive for cash transactions in the country. Further, leading banks are expanding their branches with focus on tier three and tier four towns. This will drive expansions of ATMs and CRMs in the country. The Finance Minister in the interim budget also earmarks about INR 1,451 crore for the promotion of RuPay debit cards and low-value BHIM UPI transactions, for person-to-merchant transactions. Further, the RBI has yesterday unveiled a framework for authenticating digital payment transactions, which aims to enhance digital security through a principle-based approach. There are plans to introduce additional functionalities of programmability in CBDC retail payments to facilitate transactions for specific targeted purposes, and allow offline capability to enable these transactions in areas with poor or limited internet connectivity. Together, these initiatives will bolster the adoption of digital payments in our country. Additionally, the successful launch of UPI in France is a global testament to India's digital payment revolution. Across our businesses, we have multiple running contracts in ATM outsourcing, cash management, and other banking solutions with esteemed customers, which gives us annuity business. As a strategy, we are looking to expand our service businesses, and in line with this strategy, we have won three major contracts, which we had announced in the quarter gone by. These brief details of the contracts are as follows: We won an order of about INR 1,100 crore to deploy 2,500+ ATMs in the outsource segment from State Bank of India. This is a seven-year contract under our payment solution business. Our cash management subsidiary, Securevalue, will be servicing significant number of ATMs under this contract. Further, we have received order for 1,350 ATMs from State Bank of India under the banking automation solution segment. This includes the sale of banking automation solutions and long-term annual maintenance contracts. The execution of these orders will begin in Q4 of FY 2024, and its impact is expected to commence during FY 2025. We also recently completed the deployment of 270 dedicated cash vans for UBI and Canara Bank. The order value of this contract would be around INR 250 crore over five-year term. All these orders from the leading public sector banks will help us expand our scale of operation and further solidify our position in the market. With regard to our digital payment initiatives, we recently commenced pilot testing of open loop, contactless fuel payment solution on the Ongo app at select fuel retail outlets of one of the leading OMCs in Mumbai. We have onboarded 580+ fleet vehicles in the pilot phase. This expansion is expected to strengthen our strong foothold in the OMC sector, having a market size of approximately INR 800,000 crore. This is also in line with our overall digital business strategy to provide convenience on the go, which entails issuance of prepaid cards such as NCMC, that is, National Common Mobility Cards, for Bangalore Metro Rail Corporation. We are strategically looking at further issuance to Ongo platform and expect to convert this into next 12 months horizon. So far, we have issued approximately 34,700 NCMC cards for Bangalore Metro, and we have a very big addressable market in Bangalore for this. In terms of revenue for this, we will be earning interest income on spend through these cards. Additionally, we have a growing presence in Southeast Asian countries. We are strategically looking to leverage our expertise in these countries by way of external investments and monetization. With this, I hand over the call to Saurabh, our CFO, to take this further. Thank you. Thank you, Ravi. Good morning, everyone. Let me take you through the financial performance of the company for quarter three and nine months ended FY 2024. In the Q3 of FY 2024, the total income of the group stood at INR 3,814 million, versus INR 4,248 million in the Q3 of FY 2023. This is partially attributable to scaling down of our other automation business. Also, with the reduction of this other automation businesses, there is also a simultaneous reduction in various distributed costs to this business. However, we still have some cost in this business as we continue to service some of our old long-term contracts. There were some one-time expenses also during the period. During the Q3 of FY 2024 and Q2 of FY 2024, we reassessed the recoverability of certain aged receivables and conservatively provided for a loss allowance of INR 346 million and INR 450 million, respectively, in the last quarter. Further, in Q1 of FY 2024, we provisioned about INR 393 million towards one-time commitment fees, of which INR 120 million was reversed in this current quarter. Talking about the EBITDA number, in Q3 of FY 2024, our adjusted EBITDA stood at INR 914 million in Q3 of FY 2024, as compared to INR 1,171 million in Q3 of FY 2023. The adjusted EBITDA margin for Q3 FY 2024 remained at 24% QoQ basis, as against 24% in Q2 FY 2024 also. This was around 28% in Q3 of FY 2023. For the profit of tax perspective, we recorded a loss of INR 154 million, as against loss of INR 609 million previous quarter, and a profit of INR 124 million in Q3 of FY 2023. I would like to highlight that our consolidated debt is reducing on quarter-on-quarter basis. While there have been some exceptional items, we have continuously worked towards to ensure that we optimize all our costs corresponding to our revenue. Our business continue to generate a substantial amount of cash back. Coming to the nine-month numbers of the group, the total income in nine months, FY 2024, stood at rupees, INR 11,520 million, versus INR 12,726 million in nine months, FY 2023. The adjusted EBITDA stood at INR 2,881 million in nine months, FY 2024, versus INR 3,067.5 million in nine months, FY 2023. The profit after tax for nine months, FY 2024, stood at a loss of INR 756 million in nine months of FY 2024, as compared to profit of INR 423 million in nine months, FY 2023. Just to give you a quick update on our subsidiaries' nine-month performance. Securevalue India Limited, which is into cash business, reported a top line of INR 3,367 million, with EBITDA margin of 17%. And its non-AGS business, which is a business coming from the non-AGS customers, stood at INR 1,570 million, approximately. ITSL, our digital payment subsidiary, recorded a top line of INR 1,344 million, with an EBITDA margin of approximately 5%. Global Transact Services Pte. Ltd., our foreign subsidiary, generated a revenue of around INR 354 million in INR terms, with an EBITDA margin of 24%. With this, we'll conclude our presentation and open the floor for further discussions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, press star and one on your telephone. If you wish to remove yourself from the question queue, you will press star and two. Participants are requested to use hands while asking a question. Ladies and gentlemen, we will wait for a moment while the questions are assembled. We have our first question from the line of Ravi Shah from Opal Securities. Please go ahead. Hello, Mr. Ravi. Yeah, am I audible? Yes, now you are audible. Please go ahead. Yeah, sure. Sorry, I was having some issue. Yeah, so I have some questions. So thank you for the opportunity. Can you give some color on the Securevalue performance in terms of revenue and EBITDA, and the breakdown of AGS and non-AGS pipeline for the quarter? ... Sure, Ravi, Saurabh this side. As I said, on Secure value's performance, the Securev alue's total top line for nine months, we ended at INR 3,367 million, with a EBITDA margin of 17% from that position. And out of this INR 3,367 million, INR 1,570 million of revenue we generated from non-AGS customers. Okay, understood, sir. Sir, a follow-up question to that. I just wanted to know if Securevalue has some presence in retail risk management, and how large is the opportunity for us? So, just to circle around, Ravi, when Securevalue was started way back in 2012, definitely the first objective was to support the AGS captive requirement. Over a period of time, as business got expanded, market requirement also got expanded. We expanded our businesses in other segment. So now we have three forms of revenue. One is revenue coming from ATM outsourcing, ATM cash pickup, and ATM cash deposit. Second form of revenue, which Ravi also covered in his speech, is dedicated cash vans that we have deployed for various customers and various banks and various other retailers also, if required. The third business is doorstep banking business, which is, I think you're speaking of that, retail pickup, cash to the bank. This business is also where we're putting our focus, but from a number perspective on a revenue side, that number is small as per this point of time. The company will definitely have a strategy to expand this number over a period of time. Thank you. Before we get to the next question, a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of [Aditi]. Please go ahead. Hello, Ms. [Aditi]? Hello, Ms. [Aditi]? Yeah, hi. Thank you so much for the opportunity. I have two questions. So where are we in terms of execution on the orders that we have announced in the past, and when will this start reflecting in our numbers? That is my first question. And second is, do we need any further organization capabilities to handle these new orders? Aditi, what's the second part, organization? Capabilities to handle these new orders. Yeah, this is Stanley this side. So the two orders which we had spoken about on the SBI front, we expect it to start it in this quarter, but your... The numbers on the reflection will happen in the next financial year across. Executing such large project, we have previously also done in the organization, where we executed Axis Bank and ICICI with such large numbers. So the organization is already geared up and has already a past experience executing such orders. Okay. Thank you, sir, and all the best for upcoming quarters. Regarding the announcement which we've done on the Union Bank and the Canara Bank start on the dedicated cash vans, that is already got executed across from us. Thank you. The next question is from the line of [Yug Mehta from NewBerry Capital]. Please go ahead. Yeah, available? Yeah, we can hear you. Thank you for the opportunity. Sir, in the past, you've spoken about various RFPs being floated by various banks, and we did win some in the last quarter. Do we expect some more RFPs coming our way? Yes, there are two or three RFPs which have got floated, but has not got finally concluded. So, we'll, it depends totally how it gets concluded in this quarter across. Oh, okay. That's all. I'll leave it then. Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Mohsin, an individual investor. Please go ahead. Yeah, good morning. Thank you for giving me a chance. I have a couple of questions around the debt. Does the company have any plans specifically to reduce the debt, which may or may not include raising equity? Because we don't see that debt reduction probably, you know, in the lines of what it should be. That is the first question. Second part of the question is around the verticals of the business. Which are the main pain areas of the verticals of the business, which are, you know, leading to the debt that we are carrying or, you know, are lagging currently because the three IPOs are large road, and now we've seen the debt in the books. Sure, sir. So with respect to the debt reduction plan, we will definitely see that reduction plan also, sir. If you see, most of the debt that we carry on the balance sheet is a term debt, which has a set repayment schedule and its repayment plan out there. The company continues to pay that repayment as per the plan that has been agreed between the financial institutions and the company. So this is where we believe that the debt reduction will keep on happening as we move forward on quarterly basis, and whenever we update the investors and the market on that part. From a business perspective, definitely the debt will keep on coming down without raising any capital from the market. And as I said, we have a-... So we have quoted a loss number, but we have a cash back with us so that cash is available to the company for the repayment and everything. From the business side, I think our business is majority of the business and revenue comes from the payment solution segment. Under payment solution segment, we have a segment called cash payment, which is an ATM outsourcing business. This business requires the capital to invest in the business in the form of ATMs and other assets that deploy on the site. These assets then generate revenue period of contracts, which range between 5, 7, 8, 9, 10, or more than 10 years also some of the contracts that we have. So this, this is a place where we have taken most of the debt of the company, and this is where the term debt has been taken, and this will get paid over a period of next few years, and as per the structure arrangement that we have with the banks. And those debts, as we get paid over a period of time, will automatically help us to generate more and more return on the capital also, and will automatically generate more returns for the business also. So I, I think these are the two things that you asked from a debt perspective and everything. Yes, sir. Sorry, yeah. Yeah. Just finally, is there any revenue guidance for the next couple of quarters, maybe that can, on the next line, the company would want to issue? So, not as a guidance, but as I, as I said, if you see our business segment revenue, large part of our revenue comes from the service business. And as all the service contracts are very long-term contracts, so the kind of annuity-based business that we run, whether it's ATM outsourcing business, or it's a cash business, or whether it's maintenance of contracts for various assets, sorry, automation solution that we sell in the market. So from that basis, we, we, we see a good work visibility of the revenue every quarter or every year-on-year basis. From a potential perspective, I think there are 2, 3 new contracts which Ravi also mentioned, Stanley also covered, like SBI contract from the ATM outsourcing, which is, shows us the visibility of deployment of 2,500 machines in coming quarters in the next year, and which has a potential to add up to approximately around INR 1,100 crore of revenue to the company's top line over a period of next 7 years. Plus, there is the execution of other SBI contract, which is a one-time revenue in the form of sale and then the AMC contracts. Plus, also as Stanley covered, that there are many RFPs which are in the market domain, and everything, and company will definitely work internally with clients, and everyone is working on it to see that wherever the contracts makes good number for us and for the company strategy point of view, we will like to take those opportunities and get those opportunities added to our top line. So in that perspective, I think, I think revenues plus these 2, 3 contracts give us a good visibility of revenues accruing us to in the next couple of years. From another perspective, I think we've also covered, like, we have a presence in market outside India also, where we have expanded our presence through Singapore and other territories. We have also looking for certain more partners to those growth opportunities only and see wherever we can monetize those assets. Any monetization of those assets will immediately lead to the reduction in the debt of the company also. Okay, thank you. We have other questions as well. Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of [Raj Mehta from Visa Capital]. Please go ahead. Hi, thanks for the opportunity. I just wanted to know where do we stand with respect to receivables, given that we have taken a write-off in this quarter? So, Raj, just to... I think, Raj, this is the question or so you have something more, Raj? No, no. Okay. So, so on the write-back side, if you, if you see, Raj, our last three, last quarter's conference call and last quarter's, our investor presentation, as a company, we had a commitment contract with one of the, party, where we have both, both the parties have agreed to capture this product in India and co-market this product in India. This contract has certain minimum commitment from our side, which we have to since it was a last quarter of the contract, which was getting over. As, as a, as a process and a principle of accounting standards and industry standards, we, we, as a management, we agree that since this, this is an obligation for us to pay this amount in a period of time, we took a provision of that much value in this, in the last quarter, approximately INR 285 million. But we are confident at that point of time also, we made a small remark in our presentation also to the board, that we expect that since this conversation has not been concluded with the foreign party, we are in discussion with them, and we will be able to, I'm not saying adjust, but we'll able to portion this cost a period of time, a period of contract, as the contract is getting serviced. So this is at the final agreement that we signed with the party and the final expansion that we have signed with them. We will be able to demonstrate that we can reverse approximately INR 120 million of the commitment charges, which we have charged in the P&L in last two quarters, INR 228.5 million in last quarter, and approximately INR 110 million in last first quarter of this financial year. Got it. Thank you so much, and all the best with your coming quarters. Thanks. Thanks, Raj. Thank you. The next question is from the line of [Amir Dhawan from Blue Star]. Please go ahead. Hi, good morning, everyone. Can you give me some color on unit economics for CRM and what kind of definitions do we see there? So, coming from the ATM outsourcing, the market definitely, as we all know, most of the time and in the history and the past, that ATMs are always used as a machine for dispensing the cash. So in the last few years, what we have seen is that the technology has reached to that level where we have started automatically for the functionality of the CRM also. So we have seen, the deployment of all these CRMs, which is called cash recycler machine, means the machine has an instant capability to accept the cash also, give the instant pay to the customer or the person who is visiting the branch or wherever he's depositing the money in those machine. Plus, this machine has the capability to even dispense the same cash to the next customer. So most of the banks are definitely exploring these options of putting these CRM machines at the branch network, where they can definitely automate their branch operation in the form of getting this cash deposited at the machine directly and giving the instant credit to the customer, and saving a lot of time for branch also and saving some time from the customer's point of view also. And the moment it becomes a process because of automation, the risk of errors and other omissions also get reduced significantly. So this just continues to grow from a unit economics basis. So definitely, this, this is a registered form of revenue to company like us, who manages not only the ATMs for dispensing, but from the deposit also. So various banks are entering into contract with us, where we are charging in the form of per transaction fee for withdrawal and per transaction fee for deposit also. But there are various banks where we are right now deploying these machines, and they're being using maybe as a pilot one, or maybe they are still making people conversant with these machines, as number of deposit transactions are not as big as the withdrawal transaction. But we are entering into a fixed fee contract with them also. So you will find a difference of unit economics when we do a transaction fee-based contract and when we do a fixed fee-based contract. In case if you need more details, we can definitely speak on that part with respect to unit economics and our ROCs. We will request our PR teams and our marketing team to definitely reach out to you and give you details respective with respect to these numbers on the unit economics of the transaction fee-based contract, where we are doing withdrawal and deposit in the same ATM, and unit economics, where we are only doing deposit on the machines and on the fixed fee-based contracts. Sure. That's all. Thank you, sir. Thanks, Amir. Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question is from the line of Amit, from HDFC Securities. Yes, sir, thanks for the opportunity. My question is on the receivable days and how it's going to change over the course of the year. So already we are running at high receivable days, and we have real activity from transaction-based and you know, ATMs from transaction-based ATMs and from outsourcing to cash management services. So with the new contract that we have won, how do you see the receivable days maybe next year or I don't know, any improvement from here that you see with these contracts coming in? I am- Yeah. So, Amit, absolutely, on the receivable days side, I think we've been updating the market also and updating every one of you with respect to the company's process and efforts in on receiving and collecting those receivables. Because of all these delays in receivable collection and everything, we have also taken a big amount of loss allowance in our financials in Q2 of this year and even maybe Q3 of this year also. But having said that, Amit, you know, the balance sheet of the company has not been published since quarter three of this year, quarter three. But if you see on overall basis, you will see a slight improvement in the company's overall debtor days in this quarter, this number. We can share this cash flows numbers and the change in the working capital to this number, but I'm not saying it's, it's a great achievement from the company side. We're still working on getting those receivables getting collected. But yes, on overall basis, there is a slight reduction in the number of debtor working capital that we have seen on a consolidated basis of AGS. With these two new contracts coming from big, customers, which are big customers, and what we have seen in the past is that those two new contracts will add a big amount of revenue to the company's balance sheet and profitability also, definitely. On the working capital side, I think, we were delayed in receivables and collections got delayed, was mostly because of various reconciliations which got delayed in the past. Now, most of the new contracts have automated processes, where the reconciliations happen at much faster pace as compared to the old reconciliations. Especially the new contract that we got, which is similar to the PSU, which we are handling in the past. Now, we have major good understanding of this, but having said that, since this business is long-term in nature, there could be a possibility of that working capital days will get extended by some few days in the start, initial part of the contract, when this contract is getting implemented. As the business and teams are getting to know... getting interacting with the banks and everyone getting to know. But we don't see a major impact of that revenue on the working capital side. We're as a team, we are working on to ensure that we are working capital side, it should shrink from where we are right now. It should not expand, but yes, I think execution of this contract in next quarter and maybe couple of quarter will help both of us on the market participants, how this contract goes and where, where the working capital actually sitting on this because of these two new contracts. Sir, on the, so obviously, you mentioned that, you know, we are working on improving the working capital cycle. So with that improvement coming in, how do you see the, you know, reduction, to come in? You know, whether it is, the first, thing that has to be done or, also, in terms of, the capacity you're planning, to execute this contract. So these are non-kind of ATMs, but still, what is the kind of capacity that we're looking for in the next year? So, Amit, on the debt repayment, as I said, most of the debt is in the form of term debt, which will get paid as per the agreed repayment plan that we have with the lenders as to attached to that loan. So from that perspective, the debt will keep on getting paid. From the execution of the new contract will be new debt for the company, I think. But whatever debt that we have taken in the past also, it's all mostly linked to the revenue potential of these contracts and the assets that need to be deployed from that part. We've been able to demonstrate to the financial institutions and to the connected intermediaries, that these contracts are definitely helpful in the form of overall basis, generating a positive revenue, positive EBITDA, positive contribution, pre-tax IRRs and other things, so that the repayment and everything happens in line with those revenues that getting accrued from this contract over period of time. So from that perspective, I think if this, we talk about specifically this one big contract of 2,500 ATMs, in case the cash of the company is, for X, Y, Z reason, was getting stretched, we definitely have a cap, options available to us to reach out to any of the financial institutions and ask for, to, to some debt on that part, because this contract definitely, generates that much amount of ROC kind of thing, which is sufficient to repay even, the cost of principal and the interest for a time period, time being. Sir, on the cost business, so on the current quarter, you see 80% of the cost is a non-OMC cost right now. And if you see the GTV number, the non-OMC cost on GTV number has been coming down significantly. So how do you see this non-OMC cost? Because there is also pressure that is going on, you know, for the brand new POS machines. So in terms of the unit economics, are these non-OMC costs profitable or making losses? So, Amit, you're absolutely correct. I think as a, as a company, when we started off this ITSL business, our immediate focus was to deploy these POS machines at the retail cost, give them a solution, give them a service, give them a valued services, and definitely cap them and give them a payment as one of their initial way to do that. Over a period of time, so this market got commoditized. A lot of players, whether they, they are institutions or whether they are banks, they have definitely expanded their options available to various small moms and pop stores. And over a period of time, that is how we took a pivot at that point of time and started focusing on the costs which are specifically created for our OMC-based terminals and giving them individual solutions. So I think that pivot has played out very well for us, and we now have a very big market share from a GTV perspective or from a number perspective of servicing those big OMCs and generating a positive revenue. From a, from a retail POS, I think you rightly said, the GTV has gone down a period of time, and we see the overall unit economics with perspective. The unit economics on a cost basis, number basis, percentage basis, looks very promising. But since the value of transaction that gets swiped on those POS machines on a gross basis is very small in value, so percentage-wise, though the revenue looks very good as compared to other businesses that we do for the cost, it's good, but on a, on a value terms, the overall IRR and overall ROCs are quite less. So I think over a period of time, I think OMCs will continue to sort of help us to run this OMC profiling business. And as Ravi also called in his speech, at the same time, we are ensuring and expanding our issuance side also, where we got this contract from Bangalore Metro. We are doing a pilot for OMCs with the government on this Ongo fuel, and we're going to launch a couple of other new products with very big FMCG in the future. I think that is, that is again, you can see a kind of pivot from the company's acquiring to issuance, and I think this is where the market is going forward now, and the issuance is going to be a big, big area for us as we move forward in the next 12 to 18 months of our horizon. Okay. Okay, sir, thank you, and all the best. Thanks. Thanks, Amit. Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments. Over to you, sir. Thank you, everyone, for joining us today on this earnings call. We appreciate your interest in AGS. If you have any further queries, please contact Strategic Growth Advisors, our investor relations advisor. Thank you. Thank you, everyone. On behalf of AGS Transact Technologies Limited, this concludes this conference. Thank you for joining us, and you may disconnect.