Ladies and gentlemen, good day and welcome to AGS Transact Technologies Limited Q2 FY 2025 Earnings Conference Call. This conference call may contain public statements about the company, which are based on the beliefs, opinions, and expectations of the company presented in 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 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 call is being recorded. I now hand the conference over to Mr. Ravi Goyal, Chairman and Managing Director. Thank you, and over to you, sir. Good afternoon. On behalf of AGS Transact Technologies Limited, I would like to thank you all and extend warm seasonal greetings to each of you joining our Q2 FY 2025 earnings call. Today, on this call, we have Mr. Stanley Johnson and Mr. Vinayak Goyal, our Executive Directors on the board. Vinayak also serves as Managing Director of our Digital Payment Subsidiary, India Transact Services Limited. Mr. Dilesh Shetty, the Managing Director of Secure Value India, our Cash Management Subsidiary, and Mr. Saurabh Lal, our Chief Financial Officer. To your reference, the investor presentation and financial results have been uploaded to our corporate website and stock exchanges. I am pleased to report a consistent performance for Q2 FY 2025 and H1 FY 2025, driven by healthy EBITDA and flat margins. In Q2 FY 2025, our total income stood at INR 3,681,000,000, with an EBITDA of INR 1,057,000,000 and PAT of INR 1,520,000,000. In the first half of the year, our total income was INR 1,197,000,000, EBITDA of INR 2,100,000,000, and PAT of INR 2,900,000,000. This performance reflects our commitment to operational efficiency and strategic initiatives across business segments, particularly within our payment solution portfolio, which includes both cash and digital payment solutions. As India's payment landscape rapidly evolves, AGS Transact Technologies is strategically positioned to lead transformation, especially in the expanding mobility payment ecosystem. This quarter, our digital payment segment accounted for 14% of total revenue, reinforcing our steady growth within digital channels. At the organization level, we have undertaken several initiatives that represent a strategic shift towards establishing a mobility payment ecosystem while strengthening our digital operations. With the daily metro ridership expected to reach about 12 million in the near future, we see significant growth potential for National Common Mobility Cards, that is, NCMCs. In the fleet billing sector, there is an estimated annual market potential of INR 1.6 lakh crores. We view our Ongo app as well positioned to capture market share. Additionally, our co-branded prepaid program aims to provide Ongo users with a safer, more convenient payment experience across travel and retail touchpoints. Having said this, the ATM segment also shows promise with expansion of bank branches and increase in RFPs. In H1 FY 2025, banks have floated RFPs of more than 21,000+ ATMs and CRMs. We expect this trend to persist. Furthermore, as digitalization shapes banking trends like digital banking units, UPI integration, CRMs, that is, cash recycling machines, and card swiping present new revenue streams, enabling us to strengthen our cash payment portfolio. Looking ahead to the second half of FY 2025, our focus is on sustaining the current momentum, which is scaling our digital payment business through an open loop with PCI infrastructure, enhancing ATM services, and driving long-term value for shareholders as we solidify our leadership in omnichannel payment. Now, I would like to request Mr. Stanley Johnson to take us through the business highlights of the ATM segment. Thanks, Ravi. Good afternoon and seasonal greetings to everyone. As part of our company's overall growth strategy, we are committed to optimizing our existing ATM and CRM network through various initiatives such as the introduction of a hybrid model and advancements in efficiency and security. Recently, we enhanced security across more than 26,000 ATMs in our network with GMV's advanced security solution. GMV, which is a Europe-based leader in high-tech solutions, has been a valuable partner in this effort. Additionally, we have implemented UPI QR-based cash withdrawal on ATMs for a significant SBI bank. As of 30th September 2024, we have installed, maintained, and managed a network of approximately 70,000+ ATMs and CRMs. We are servicing about 32,151 ATMs, including 7,230 CRMs under our managed services and outsourcing portfolio. The recent years in the banking sector, especially the public sector, have seen considerable consolidation. With this phase now largely concluded, we are entering a new cycle of branch expansion across the sector. Within this context, ATMs remain a key element of the banking ecosystem, offering both operational efficiency and cost-effectiveness. According to initial data, average monthly cash withdrawals from ATMs increased from 1.35 crore in financial year 2023 to 1.43 crore in financial year 2023-24. Underscoring the continued demand for ATMs and CRMs, cash remains the preferred mode of transactions for many. In today's environment, it is essential for banks to reduce operational costs while expanding their service offerings. A strong partnership with banks, combined with a seamless integration of physical and digital solutions, positions us well to support their evolution in banking services. Now, I request Mr. Vinayak Goyal to take us through the business highlights for the digital payment segment. Thank you, Stanley. Good afternoon, everyone. As part of our company's growth strategy, we expect the digital payment segment to play a pivotal role in expanding the revenue share of our payment solutions portfolio. Our ongoing ecosystem is designed to deliver niche, high-impact solutions, providing users with seamless on-the-go convenience. Ongo is strategically positioned to address the evolving mobility payment landscape. Ongo's prepaid infrastructure supports cutting-edge customer solutions such as National Common Mobility Cards, the contactless fueling solution, and co-branded prepaid options for retail and e-commerce transactions. In August, we launched Ongo Ride, an instant NCMC solution at Chennai Metro stations. These are ready-to-use cards that require zero KYC and can be purchased from dispensers across 13 metro stations in Chennai. We have received a positive response from Chennai Metro commuters and expect to expand this going forward. Ongo Ride was also showcased at the Global Fintech Festival in Mumbai this year. Similarly, we have rolled out zero KYC National Common Mobility Cards across Bangalore Metro in partnership with RBL Bank. This is in addition to the many KYC NCMCs already being issued in Bangalore. It empowers commuters with the flexibility of choosing a travel card that suits their needs. To date, we have issued around 60,000 NCMC cards. The NCMC offers a unified payment solution for various modes of transport, including metro, buses, ferries, as well as parking and toll payments. We are also exploring opportunities in fleet and fueling. Our ongoing pilot of contactless fueling solution on the Ongo app has expanded to over 60 fuel outlets in Mumbai, and we have onboarded about 2,000 fleet vehicles. This is one of a kind, open-loop fueling solutions by Ongo, which is expected to go live very soon and will be followed by a pan-India expansion. Additionally, we are providing end-to-end platform and management services, including prepaid card issuance for Indian Oil Corporation Limited's flagship program, XTRA Power. This prepaid program is expected at 25,000 IOCL fuel retail outlets, accessing annual fueling transactions worth more than INR 60,000 crores. This is a fixed-income contract with an estimated revenue of about INR 58 crores over next quarter. We have also successfully extended contract with Indian Bank for the reconciliation of card and non-card transactions. The projected revenue generation is expected to be about INR 50 crores over the next three years. As we drive these strategic initiatives forward, we are confident in our ability to deliver sustained growth through innovation and customer-centric solutions. Now, handing over to Mr. Dilesh Shetty to take us through the business highlights for Secure Value India, our cash management subsidiary. Thank you, Vinayak. Secure Value India is India's largest cash management company, offering the second largest cash management company offering complete line management with focus on safe transit and management of currency and valuables. We are compliant with the Ministry of Home Affairs (MHA) guidelines dated 8 August 2018 and RBI guidelines dated 6 April 2018. As of 30th September 2024, we have serviced about 31,093 ATM and CRM, replenishing daily average amount of INR 19.33 billion. Secure Value India accounts for 436 hub and spoke locations. We have about 587 pickup and doorstep banking points and a network of 2,370 plus secure cash vans across 1,800 plus cities and towns. As a part of ongoing efforts within the company's cash payment solution segment, we are growing our retail cash pickups to expand our revenue streams and optimize our cash logistics network. Now, I would request Saurabh, the CFO of AGS Transact Technologies, to share the financial highlights of Q2 FY 2025. Saurabh, over to you. Thank you, Dilesh. Good afternoon, everyone. I would like to take you through the financial performance of the company for Q2 FY 2025. In Q2 FY 2025, the total income of AGS Transact Technologies Limited Group stood at INR 3,681,000,000, which is INR 3,886,000,000 in Q2 of FY24. We delivered an EBITDA of INR 1,047,000,000 in Q2 of FY 2025. Q2 FY 2025 represented EBITDA with no non-recurring expenses in the third quarter. The comparison purposes we have considered the adjusted EBITDA for Q2 of FY24. At the PAT level, with the absence of non-recurring, we have seen the cost increased last year. That moved to the cost parities, and we reported a PAT of INR 1,052,000,000 during Q2 FY 2025. The net position of the company stood at INR 6,739,000,000 along with the reverse factoring and INR 6,092,000,000 without reverse factoring. We were quick to update on our subsidiaries' Q2 FY 2025 performance. Secure Value India Limited, which is into the business of cash management, reported a total top line of INR 1,007,000,000, including AGS revenue, with an EBITDA margin of 21.5%. Its non-AGS business, which is business coming from non-AGS business, was close to around 52% from the operations. ITSL, our digital payment subsidiary delivered a total income of INR 256,000,000 with an EBITDA margin of 9%. GTSL of our foreign subsidiary generated a revenue of INR 203,000,000 with an EBITDA margin of 32%. During H1 25, we reported a total income of INR 7,197,000,000 with an EBITDA of 2,100,000,000, representing a 29.2% margin and a PAT of INR 290,000,000. With this, we conclude our presentations and open the floor for further discussions. Thank you. Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchscreen telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question is from the line of Parshil Doshi from InvaAsset. Please go ahead. From? InvaAsset. Yes. Hello. Can you hear me? Yeah, we can hear you. Hi. So firstly, greetings. Good afternoon. Excellent growth in the stats. So the revenues are staying flat to marginally negative. Just wanted to have your view on how we intend to realize the trade receivables as we saw a significant rise in them this quarter. Also, what is the credit risk that we hold on them? Hello. Hello. Can you hear me? Yeah, I can hear you. Can you hear me? Yeah, yeah, we can hear you. So on the trade receivables, if you see, there is an increase in trade receivables, probably on the one or two front. Definitely, we have executed a new order of one of the last publicity events where we have executed and delivered the project, and now the realization will happen in the quarter three. So that is one aspect where we see the receivables will definitely start getting collected in the quarter three onwards. Second, there are certain customers where realization is linked to certain milestones and certain payments linked to certain deliverables. So that is why the receivables got extended. From a credit risk perspective, I think we were dealing with very renowned customers, including banks and public sector undertakings. So we don't see any challenge with respect to credit risk on those customers. I think that answers my question. Thank you. Our next question is from the line of Ankur Kumar from Alpha Capital. Please go ahead. Hello, sir. Thank you for taking my question. Sir, on the first question is on this receivable only. As in last year also, we had this issue where we had to take some provisions, etc. So I hope everything we are improving on this with this year. Sorry, didn't hear, is the last part? Sir, I wanted to ask that last year also we had these provisions, etc., issues because of these receivables. Now this quarter, receivables have risen again. So how should we hope we don't have to? We are taking some precautions on that front because last year also we had issues. So definitely, as you said, the customers and everything, we don't see any challenge with respect to the write-offs and other things which were there in the past. But yes, since these are receivables where there are certain SLAs and everything, we are conscious of that. In case there are any SLAs that are there, definitely we will take care of that. And sir, on the revenue side, it's down year on year. It's improved a little bit quarter on quarter. So how should we look at it going forward? Basically, we had mentioned it in our last calls that there are certain businesses which we are closing down, like non-recurring businesses. And that is why basically the revenues are going down. But these are all, as a strategy, we are focusing more on the three primary businesses, that is the ATM, cash management, and digital. So given this closing of business, do we expect the revenue to improve in the second half or go down from here? So now it should go up only. But whatever was there earlier because of the non-core businesses, like a lot of product businesses which we were there in, Colour retail and other product businesses which we have closed down, which we have strategically decided not to pursue. So those have been closed. Yeah. Got it. And sir, on other income side, there is a good number. So can you comment on that, please? Because in case of other incomes, there are two, three major heads that come. One is definitely since we are having a lot of leases in our books of accounts. We have a lease accounting that happens, and there are write-backs to lease income that comes on those parts. That is one of the major incomes that comes in leasing. Then there are insurance incomes because of various cash losses that are pertaining to our businesses. Any cash loss that is taken to P&L, there is a possibility of insurance income coming into those fronts. And then there are interest income on the cash and everything that we have. Those are the two, three major heads under other incomes. Got it. And sir, on margin side, can you comment? It has been quite good margins. We are around 28% to 30%, 25%, 28%. So how should we look at it going forward? Because our endeavor is to maintain that margin. Got it, sir. Thank you. Thank you. Before we take our next question, we would like to remind participants that you may press star and one to ask a question. Our next question is from the line of Naitik Mody from NV Alpha Fund. Please go ahead. Hi sir. My first question is in terms of the number of ATMs that we own and manage or manage overall, and even in our subsidiary Secure Value, I have seen a consistent decline, the number of ATMs. So I just wanted to ask, when will this stop or will it continue to decline again? So most of the decline what we are looking at is the externalization which banks have done across. A lot of consolidation has been done across in the industry by public sector banks. That's why this decline has happened. But if you look at the commentary, we had said that there is a new 26,000 ATMs which are getting rolled out. So coming in the forthcoming months, you will see those getting into cash management and the number of ATMs getting increased. So what we have seen is there are public sector and private sector banks have done a closure of unviable sites across for them or sites in the same location in the public sector banks. So that is what has brought the number of ATMs down. But with the new deployment which happens, again, we'll get outsourced to cash management company, and you will see the numbers increasing. So this decline should be addressed with your bank receipts from next quarter plus specifically? Looks like once this deployment, which is in progress by the third and the fourth quarter, it should get deployed, and we should see the numbers rising. Got it. And my second question is, sir, on the margins. We have done 25%-26% margins in the cash payment segment. So can you please elaborate on what has led to this increase in margins or any steps that we have taken, and how has these come about? Margins are in line with the nature of the business that we do. Because if we see the margins for last quarter or last last quarter, if you compare it with the last year, year on year, the margins were less because there were certain one-time write-offs that we have taken. So consistently for last two quarters, definitely, since there are no write-offs and no non-recurring entries happening within the P&L, so margins are steady as they were. Okay, sir. Thank you so much. Thank you. so much. Thank you. Thank you. Our next question is from the line of Rohit Mehra from SK Securities. Please go ahead. Yeah, thank you for the opportunity. My question is regarding the P&L management program with the Indian Oil. Can you help us with understanding the details? What is the contract number, and how are we going to earn revenues from it? This is the program where we are managing the prepaid platform, so it's a fixed fee revenue which will be realized over the next five years. Got it. Thank you. That's it from my side. Thank you. A reminder to the participants that you may press star and one to ask a question. Our next question is from the line of Anisha Shah from KQ Advisors. Please go ahead. Thank you for the opportunity. I just have one question. So during the last call, it was mentioned that we plan to reach a target of 25-30 lakhs of NCMC cards in the next two to three years from the current base of around 50,000 cards. So could you please throw some light on how this number will be reached? Right. So thank you for that question. So if you see, the overall market for NCMC cards is massive. So we have all the metros put together have issued more than 7 crore closed-loop cards pan-India. So over a period of time, we expect all of these will be converted to national common mobility cards. We have already started issuing these in Bangalore Metro and Chennai Metro. Given that we have also innovated with the zero KYC solution and a very innovative issuance solution through the dispenser, we expect that these two initiatives will lead to a high growth in users over the next few years. Okay. Got it. Thank you. That's all from my side. Thank you. Our next question is from the line of Aryan Vision from RV Investments. Please go ahead. Hello? Yeah, I can hear you. Sir, in the last conference, you said about debt reduction, but there has not been a significant update on that. Can you tell about that? So, Aryan, on the debt side, definitely, on a net basis, there is a reduction. Basically, if you see our working cycle where we have deployed certain ATMs in the last quarter, which has, I would say, resulted into us to take certain debts so that we can execute that order. But otherwise, most of the debt that we have taken in the past is of the term loans, so which has a confirmed repayment. So we believe over a period of time, it will definitely come down. Thank you. Our next question is from the line of Anant Vasani from AK Advisors. Please go ahead. Hello. Yeah, hi. Good afternoon. Thank you for the opportunity. Sir, I had a couple of questions. So first one is there is a huge opportunity in semi-urban rural India, and the opportunity is huge for ATM services. So how are we going to utilize all these opportunities? So as you rightly said, the opportunity in semi-rural area is huge across. We are seeing a lot of banks who are redeploying their assets from metros and going into this kind of location. So we are in talks with the banks, and we are working with the banks because the main challenge there in those areas is availability of cash and infrastructure. So we are working with the banks and seeing that all the redeployments or new deployments which they are doing are in line with those areas, and we will work with the bank to make ATMs live in that sector. Okay. Got it. And sir, you mentioned about the ATM addition and refresh cycle. So how big is this opportunity for us, and can we capitalize this? And secondly, sir, there was some talk about the division of transition fees. So do we have any updates on that as well? So, on the redeployment of ATMs and the new ATMs, if you look at it, in the H1, we saw that there is coming for around 25,000 new ATMs and CRMs. So most of the deployments are in those regions across. So we normally see an H2 which is higher than H1. So we expect still larger volumes coming onto H2. So once you see tenders in and getting in place across, you will always see a cash management company, and then services required in that services at that locations. So we will follow up with the banks, and we are in line and talks with the banks to get it deployed. Okay. That is what it is from my side. Thank you. Thank you. Our next question is from the line of Ravi Shah from Open Financial Services. Please go ahead. Yeah. Hi, sir. Can I answer? Hi. Yeah, sir. So I just have one question, sir. Can you share the breakup between CMS and from a hybrid model? And can you further provide some details to the team? That is very difficult to give a number immediately, but yeah, definitely, we'll ask our IR team to reach out to you, and we can give the break-up of how much is a hybrid and how much is a non-hybrid. Okay, sir. Thank you, sir. And all the best. Thank you. Thank you. Our next question is from the line of Diya Gujwani from White Whale Partners. Please go ahead. Yeah. Hello? Ms. Deya, your line is open. Please go ahead. Hello. Am I audible? Yeah. Yeah. So my question was on the Secure Value subsidiary bit. How has the growth been H1 this year versus last year? And our data point on the margins bit, if you can share that. So if you see on the number perspective, definitely from a turnover perspective, if you see last six months to six months, the total turnover of Secure Value has almost it's INR 8,223 million last six months, but it's INR 2,113 million. The EBITDA has improved from INR 383 million to INR 429 million, which shows in margin growth from 17.1%-20.1% margin. So I think from that perspective, the numbers are looked at. The rationalization of the portfolio with Secure Value is doing, I think we're getting some results from that. We see that as we move forward, I'm sure the margins should continue to show us or give us the robust growth. Got it. That's helpful. Our second question was on the managed services bit. So have you experienced any slowdown during H1, FY 2025 and your outlook for the remaining year? So, normally on the first, every financial year you will see there is always a slowdown in H1, but there is always a pickup on the H2 across. So we have seen that in this financial year also, there is a slowdown on H1. But we are confident that H2 happens. You will see a lot of SBI managed service and all getting deployed. Got it. But it. But just structurally, just one question. So if you compare the number of transactions, which is the number of withdrawals which have happened through ATM in H1 this year versus H1 last year, so that came off significantly. So do you see this as a structural issue and could impact your BLA business, or you see it bouncing back? So if you look at it in our commentary ahead, we have said that we have converted large contracts from a transaction model to a hybrid model across so that we at least see what transactions which are declined are covered and our costs are covered in the hybrid model across. So the fall in transaction is already compensated with agreements which moves into a hybrid model. Good. That's it from my side. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. Our next question is from the line of Praveen Jadhav, who's an individual investor. Please go ahead. Thank you. So my first question is regarding the hybrid model. Currently, I believe it's 25%. So when you'll be able to take it to almost 100%? This is my first question. So if you look at it, for large contracts which have used transactions, we have still maintained it on transaction model because we are seeing enough traction and transactions because most of them are getting deployed from a metro where transaction density has happened to semi-rural and urban areas. So the transactions in those areas are still quite high to support the transaction-based model. So yes, from a 35%, we will grow on a hybrid model to another figure which we will be able to tell you in a few days. But large contracts which are heavily on transaction model or which give results on transaction model is still continuing across. Okay. So these you believe are beneficial, hence you will not convert them into hybrid, right? Yeah, yeah, yeah, yeah. Okay. And sir, my second question is regarding the Ongo fuel. You had mentioned that you'll be taking it pan-India. I believe in the second half of this year. So is there any update on that, or it's just in the testing phase? We are in the final stage of our pilot. Once we are ready with that, we'll launch in Mumbai. And then the plan is to go for a city-wide rollout pan-India. Okay. And this will take how much months or maybe next year? We expect to rollout city-wise maybe by 500 outlets by the end of the year. Okay. Okay, sir. That's it. Thank you. Thank you. Our next question is from the line of Mohit Agarwal, who's an individual investor. Please go ahead. Hello? Hi, Mohit. Yeah. Yes, sir. I have three questions. So the first one is in this world of digitalization, people go to hybrid has been shifting to the use of net banking, UPI, and mobile banking. Will it be a big setback for us in the long run? Yes, we agree to that. But the transition of digitalization is only constrained to cities and metros. That's what I said across in my response to a query that a lot of redeployment of ATM is happening from metro to semi-urban and rural. There's still transaction or cash is the mode of any payment. So yes, there will be a shift of it from metro to other regions across, but still, if you look at it, the total number of amount withdrawn from an ATM still remains the same. The transactions might have come down, but the amount still remains the same. Yeah, but in the long run, the habit of the non-urban fuel will also shift towards digitalization and UPI, right? So if you look at it, if you follow how banks are deploying, banks are also very conscious on this, and they have also seen that the transactions have not got declined in the semi-urban and rural, and they feel digitalization might take it by there. So if you look at the recent public sector RFP, which came in for 21,000 from a central bank, so they are expecting transactions to be heavy in semi-urban and rural, at least for the next horizon of like three to four years. Okay, okay. And the next question goes like, since microfinance loans have led to pressure among banks, and even the RBI governor accepted that it was his fault to remove the cap of 12%, as you know, which will probably lead to control over their expenditure and expansions, I mean, of the banks. Wouldn't it eventually affect this in the coming quarters? It's very difficult to comprehend this since it's related to lending and everything. Very difficult to comprehend. Should I repeat the question? Yeah, go ahead. Since microfinance loans have been a pressure for the banks since they have started provisioning it back then, as the lending percentage of microfinancing loans has gone up to 20%-25%, and since they have been assuming that the lenders won't be able to pay back the loans and just keep provisioning it, and so there might be a control in the expenditure and expansion of banks in the coming quarters, so wouldn't it eventually affect us in the same quarters? Mohit, since as Stanley also said, most of the banks have already come out with various filters and growth opportunities. They have other avenues to grow their customers and everything. So I'm sure bank has multiple revenue streams and multiple options to get the new customer, get the new customer on board and offer them various other solutions and services. So maybe as you rightly said, one of the areas where RBI has come out heavily and they have said they have to follow certain regulations. I'm sure there will be other avenues for the banks to grow and provide certain other services to grow their customer base and other things, which in turn will definitely help us or help everyone to put more and more effort to support that customer network. Okay. And sir, as you mentioned that H2 is bigger than H1, any particular reason behind it? The comment was that normally deployment of ATMs from a budget perspective, banks always deploy more number of quantities across in H2 than in H1. Because in H1, your budgets are released, then tenders are floated, and deployment happens on average in the H2. So the comment was regarding that, and we expect H2 deployment greater than H1. Okay, sir. That's it from my side. Thank you so much. Thank you. There's no further questions. I would now like to hand the conference over to management for closing comments. With this, we conclude the call. Once again, thank you all for joining us on the earnings call. If you have any further queries, please contact SGA, our investor relations advisors. Thank you. From Ravi of AGS Transact Technologies Limited, this concludes this conference. Thank you for joining us. You may now disconnect your lines.