Earnings Conference Call Summary - July 19, 2024
Company Overview
• Date of Call: July 19, 2024
• Company: One 97 Communications Limited
• CEO: Vijay Shekhar Sharma
• Focus: Financial results for the quarter ending June 30, 2024
Key Highlights
• Profitability Goals:
• Commitment to achieving profitability within the fiscal year.
• Targeting EBITDA break-even, excluding extraordinary items.
• Core Services:
• Emphasis on core payment services and cross-selling financial products.
• Anticipation of a lump sum UPI incentive contributing to profitability.
User Acquisition and Lending
• UPI User Acquisition:
• Nearing completion of technology and consumer migration for new customer approvals.
• Lending Strategy:
• Cautious approach to credit disbursement due to prudent lending policies.
• Gradual growth expected in user and merchant additions.
Financial Insights
• Indirect Expenses:
• Increase from Rs 1200 to Rs 1300 crores attributed to one-off expenses.
• Anticipated reduction in indirect expenses moving forward.
• Employee Expenses:
• Decline due to reduction in the sales team; workforce adjustments expected as needed.
Growth Areas
• Future Growth Drivers:
• Focus on credit, insurance, and wealth management.
• Challenges in credit card issuance linked to UPI.
• Merchant Engagement:
• Optimistic about device deployment and potential growth during festive periods.
• Targeting a 30-40% growth in loan distribution.
Revenue Trends
• Consumer Payment Revenue:
• Decline attributed to the discontinuation of profitable products.
• Hope for the return of wallet services to stabilize revenue.
• Cost-Cutting Measures:
• Targeting a reduction of Rs 400 to Rs 500 crores in annual employee expenses.
Market Positioning
• Growth Projections:
• Potential for over 35% growth on a smaller base in the coming years.
• Medium-term EBITDA margin target of 15-20% by fiscal years 2027-2028.
Conclusion
• Overall Sentiment:
• Management expressed confidence in growth strategies and market positioning.
• Focus on enhancing customer engagement and optimizing service offerings.

Earnings Call Overview
• Date: May 22, 2024
• Focus: Financial results for the quarter and year ending March 31, 2024
• Participants: Management team including CEO Vijay Shekhar Sharma
• Audience: Shareholders, potential investors, analysts
• Disclaimer: Forward-looking statements made during the call
Key Financial Highlights
• EBITDA Profitability: First full year of EBITDA profitability since IPO, with EBITDA of Rs 559 crores and revenue nearing Rs 10,000 crores.
• Quarterly Revenue: Q1 revenue dropped to Rs 2,267 crores due to business transitions.
• Merchant Business Recovery: Signs of recovery in April and May, focusing on reactivating inactive merchants.
Financial Impacts on EBITDA
• Projected Impact: Total EBITDA impact for Q1 estimated between Rs 500 to 600 crores.
• Contributing Factors:
• Embargo on PPBL products: Annualized loss of Rs 500 crores.
• Decline in monthly transacting users (MTUs) and active merchants: Incremental impact of Rs 100 to 150 crores.
• Paused businesses in Q4: Estimated impact of Rs 75 to 100 crores.
• Cost Management: Targeting annualized savings of Rs 400 to 500 crores in personnel costs.
Governance and Compliance
• Commitment to Governance: Plans to enhance board independence and review internal processes.
• Core Business Focus: Emphasis on recovering and growing the consumer and merchant base.
Marketing Services and Payment Aggregator License
• Marketing Services: Growth flat due to a smaller consumer base; remains supportive of payments business.
• Payment Aggregator License: Ongoing approval process with no immediate risks to customer relationships.
Loan Distribution Strategy
• Shift in Approach: Moving from collection-centric to distribution-only model for personal loans.
• Market Caution: Partners remain cautious but have not exited.
Cash Reserves and Investment Plans
• Significant Cash Reserves: Plans to invest in customer acquisition and consider returning cash to shareholders.
Recovery Trajectory and EBITDA Guidance
• Merchant Loan Collections: Significant recovery noted, with cautious monitoring of asset quality.
• Marketing Costs: Expected increase in the upcoming quarter after reductions in Q4.
Business Growth Drivers
• Gross Merchandise Value (GMV): Recovery positively impacting payment processing margins.
• Inactive Merchants: Reactivation contributes additional subscription revenue.
• Opportunities: Focus on personal loans, merchant loans, insurance, and wealth management.
Operational Efficiency and Cost Management
• User Growth Spending: Increase planned while maintaining cost discipline.
• Employee Costs: Commitment to increase sales personnel while optimizing operations.
Conclusion
• Outlook: Cautious yet optimistic about growth opportunities across business segments, emphasizing cost management and operational efficiency.

Conference Call Overview
• Date: February 1, 2024
• Participants: CEO Vijay Shekhar Sharma, Group CFO Madhur Deora, and other key management members.
• Focus: Updates on RBI's direction to Paytm Payments Bank Limited (PPBL) and the relationship with PPBL.
• Confidentiality: Information shared was confidential and not to be recorded or distributed.
Key Updates from the Call
• RBI Directive Impact
• Paytm Payments Bank must comply with RBI's restrictions on user fund additions after February 29.
• Paytm's payment aggregator, OCL, will collaborate with other banks, reducing reliance on PPBL.
• Transition to new banking partners is already underway with support from large banks.
• Financial Implications
• Potential annual EBITDA impact estimated between INR 300 crore to INR 500 crore due to loss of wallet and merchant service revenue.
• Optimism about offsetting impacts through partnerships with other banks.
• Operational Changes
• Transitioning payment services from PPBL to other banks for merchants.
• Changes to Virtual Payment Admin (VPA) for Paytm QR codes to facilitate transactions.
• Assurance that terms with new banks will be similar to those with PPBL.
• Lending Operations
• Existing loans linked to PPBL will transition to other banks, but overall lending business remains unaffected.
• Temporary pause on new loan origination may occur during the transition.
Customer and Merchant Transition
• Migration Process
• Focus on providing options to merchants rather than retention issues.
• Past UPI migration experiences provide a precedent for the current transition.
• Assurance of continued functionality of payment systems during the transition.
• Communication and Customer Assurance
• Active communication with customers and merchants about the situation.
• Confidence in restoring integrated product offerings through partnerships with other banks.
Regulatory Compliance and Governance
• Compliance Improvements
• Enhanced governance and compliance measures since 2019.
• Establishment of a Group Compliance Officer role to improve operational risk management.
• Cost Management Strategies
• Focus on capping sales and marketing expenses while improving operational efficiency.
• Emphasis on EBITDA expansion through improved operating leverage and cost management.
Future Outlook
• Partnerships and User Experience
• Plans to collaborate with third-party banks for wallet services and UPI transactions.
• Assurance that user experience will remain consistent during the transition of nodal accounts.
• Market Positioning
• Commitment to learning from past regulatory challenges and improving governance practices.
• Anticipation of regaining and growing the user base through new partnerships.
Conclusion
• The call concluded with gratitude to participants, emphasizing the company's commitment to a smooth transition while adhering to regulatory guidance.

Earnings Call Overview
• Date: January 20, 2024
• Focus: Financial results for the quarter and nine months ending December 31, 2023
• Key Executives: CEO Vijay Shekhar Sharma, Madhur Deora, Bhavesh Gupta
• Format: Presentation followed by Q&A
• Transcript available on the company's website
Financial Highlights
• Revenue Growth: 38% year-on-year increase
• Contribution Profit: 45% growth, contribution margin at 51%
• EBITDA: Increased to INR 219 crores
• Payments Business: 63% year-on-year growth in net payment margin
• Loans Distributed: 56% growth in financial services segment
• Marketing Services: 22% year-on-year growth, revenue exceeding INR 500 crores
AI Integration
• Operational Efficiency: AI used for deployment acceleration and task automation
• User Growth: Surpassed 100 million monthly transacting users
• Merchant Network Expansion: Innovative devices introduced
Risk Management
• Postpaid Offerings: 15% reduction in whitelisted customers to mitigate risk
• Loan Performance: Slight improvement in personal loan bounce rates; cautious growth in non-high ticket segments
Business Strategy
• High-Ticket Loans: Positive trends expected; cautious scaling of postpaid products
• Credit Card Adoption: Early positive trends noted, particularly with RuPay cards
• BNPL Segment: Expected downward trend in the next two quarters
Customer Insights
• Device Merchants: Focus on those demonstrating better credit quality
• Customer Transfer: Possible between lenders with consent
Growth Potential
• Mutual Funds and Equity Trading: New business line for daily/monthly SIPs; rapid growth anticipated
• Credit Offerings: Focus on improving portfolio quality over volume
Competitive Advantages
• Sound Box Product: Superior features and strong customer loyalty; plans to scale up device deployment
• Credit Access: Unique position to provide loans to 10 crore users
Future Outlook
• Profitability: Expectation of positive profit after tax soon
• Market Position: Optimism about growth potential and product differentiation in the market

Call Overview
• Date: December 6, 2023
• Participants: Key executives including Founder and CEO Vijay Shekhar Sharma
• Audience: Existing shareholders, potential investors, and research analysts
• Purpose: Provide updates on loan distribution business amidst macroeconomic changes
• Confidentiality: Information shared was confidential and may include forward-looking statements
• Transcript Availability: Accessible on the company's investor relations website
Loan Distribution Business Updates
• Expansion to High-Ticket Loans
• Driven by mature customer base and demand for larger loans at lower interest rates
• Nearly 1 million personal loans and 500,000 merchant loans issued
• Scaling Down of Small Loans
• Focus shifting from loans below Rs. 50,000 to personal and high-ticket loans
• Postpaid loans will still be offered selectively
• Merchant Loan Segment
• Unaffected by regulatory changes; expected growth
Strategic Focus
• Recalibration Towards High-Ticket Loans
• Enhancing cross-selling opportunities
• Over 60% of new disbursals to existing customers with strong repayment records
• Cohort-Based Strategy
• Targeting areas with better economic and payment growth
• Plans to onboard two large NBFCs and one bank to diversify partnerships
Analyst Inquiries and Responses
• Postpaid Product Scaling Down
• Reduction in disbursements by 40-50% due to conservative management approach
• Quality of credit remains strong; personal loan growth may stabilize
• Impact on User Acquisition
• New account origination for Paytm Postpaid expected to decrease by 50%
• High-quality Postpaid customers remain viable for cross-selling
• Lending Partnerships Stability
• Existing partners will continue to support loans despite market conditions
Financial Projections and Market Adaptation
• Short-Term Revenue Impact
• Temporary decline in overall loan disbursements expected
• Growth in personal and merchant loans anticipated to offset impacts
• Future Lending Strategy
• Potential reconsideration of lending strategy if macroeconomic conditions improve
• Plans to expand personal loan offerings with competitive interest rates
Additional Insights
• New Personal Loan Product
• Take rate for new personal loans expected to be lower than current rates
• Overall net margin to remain largely unaffected despite payment revenue reduction
• Partnerships and Growth Prospects
• Ongoing discussions with HDFC Bank for credit card integration
• Projected growth for merchant loans between 30-45% and personal loans between 15-20% year-over-year
• Opportunities with RuPay Cards
• Significant potential through QR-led payments with UPI credit cards
Conclusion
• The call concluded with expressions of gratitude from the speakers, emphasizing the company's commitment to adapting to market conditions while focusing on growth across various business lines.

Call Overview
• Date: October 21, 2023
• Focus: Financial results for the quarter ending September 30, 2023
• Key Executives: Vijay Shekhar Sharma (CEO), Madhur Deora (CFO), Bhavesh Gupta (Lending Business)
Financial Highlights
• Revenue: Rs. 2,500 crores (annualized over Rs. 10,000 crores)
• EBITDA: Rs. 153 crores (6% of revenue)
• Year-on-Year Revenue Growth: 32%
• Contribution Margin: Improved by 69% YoY to Rs. 1,426 crores
• Average Monthly Transacting Users: Grew by 19% YoY to 9.5 crore
• Merchant Subscriptions: Increased by 91%
• Net Payment Margin: Rose by 60% YoY to Rs. 700 crores
Business Segments
• Payments Sector: Positive growth in user base and merchant subscriptions.
• Lending Business: 122% YoY growth; focus on portfolio performance and loan entry rates.
• Commerce and Cloud: 39% YoY growth in GMV to Rs. 2,900 crores; 31% revenue growth.
Strategic Insights
• Personal Loans: Cautious optimism for growth despite previous portfolio reductions; focus on upselling to existing users.
• Partnerships: Ongoing collaborations with Shriram and Tata Capital; pilot phase for new partnerships.
• Competition: New entrants like Google and Jio Financial Services viewed as market validators.
Operational Challenges
• RBI Restrictions: Discussed impact on e-KYC and personal loan growth; no definitive future strategies provided.
• Employee Costs: Rising due to investments in device space and financial services; expected to stabilize.
Future Outlook
• Device Installations: Aspiration to increase quarterly run rate to 1.5 million devices.
• Credit Lines on UPI: Optimism about future acceptance and willingness to pay MDR among merchants.
• Cash Balance: Current cash balance at Rs. 8,750 crores, reflecting Q-o-Q growth.
Conclusion
• The call concluded with an invitation for further questions and a festive greeting from the CEO.

Earnings Overview
• Date of Call: July 22, 2023
• Quarter Ending: June 30, 2023
• Key Highlights:
• 39% year-on-year revenue growth.
• Profit contribution margin increased from 51% to 56%.
• Significant improvement in EBITDA before ESOP.
• On track for free cash flow positivity by year-end.
Payments Business Update
• Monthly Transacting Users: Increased by 23% year-on-year.
• Merchant Subscriptions: Doubled, contributing to a 69% rise in net payment margin.
• Loan Distribution: Nearly INR 15,000 crores distributed with improved credit quality.
Regulatory Environment and Partnerships
• FLDG Norms: Positive impact on digital lending; no plans to adopt FLDG models.
• New Partnerships: Plans to add 3-4 partners in FY 24-25, including banks.
Cost Management
• Cloud Data Center Expenses: Declined due to exiting an old platform.
• Indirect Expenses: Expected to decrease over time.
Growth and Market Strategy
• Loan Disbursement Growth: Focus on quality over quantity; calibrating growth based on macroeconomic conditions.
• Market Share: Emphasis on success rates and offering diverse payment options.
Employee and Operational Insights
• Workforce Management: Plans to optimize workforce as needed; exploring new revenue streams.
• Geographical Expansion: Sales staff expanded to around 500 locations.
Financial Services Revenue
• Revenue Decline: Financial services revenue as a percentage of loans disbursed decreased to 3.5%.
• Take Rates: Expected to stabilize between 3.5% and 3.75%.
Future Expectations
• Profitability: Anticipated improvements in EBITDA and cost management.
• Device Deployment: Increase in merchant devices from 1 million to 1.1 million per quarter.
Conclusion
• Strategic Focus: Sustainable growth and risk management in financial services.
• Further Inquiries: Participants encouraged to submit additional questions via email.

Compliance and Overview
• Earnings call transcript submitted to BSE and NSE on May 11, 2023.
• Discussed financial results for the fiscal year ending March 31, 2023.
• Key participants included CEO Vijay Shekhar Sharma and Group CFO Madhur Deora.
• Aimed at shareholders, potential investors, and analysts with forward-looking statements.
Financial Highlights
• Vijay Shekhar Sharma's Remarks:
• Expressed gratitude to shareholders.
• Achieved second consecutive quarter of EBITDA profitability before ESOPs.
• Revenue growth of 61% year-on-year, driven by payments and credit sectors.
• Payments business revenue increased from Rs. 2,000 crores to Rs. 4,930 crores over two years.
• Optimistic about future EBITDA growth.
• Madhur Deora's Financial Report:
• 51% year-on-year revenue increase to Rs. 2,334 crores.
• Contribution margin rose by 20% to Rs. 1,283 crores.
• EBITDA improved from negative Rs. 368 crores to positive Rs. 234 crores.
User and Loan Growth
• Average monthly transacting users grew by 27% to 9 crores.
• Merchant subscriptions reached 6.8 million.
• Loan disbursements totaled Rs. 12,500 crores, with a focus on portfolio quality.
Commerce and Cloud Performance
• Commerce segment achieved Rs. 2,185 crores in Gross Merchandise Value (GMV), a 22% increase.
• Cloud segment faced challenges, contributing less than 3% to overall revenue.
Technology and Product Updates
• Introduction of RuPay credit card on UPI rails and improved payment devices.
• Launch of UPI Lite for small transactions without a PIN.
• Emphasis on new technology platform for increased transaction capacity and fraud protection.
Analyst Inquiries and Responses
• Discussions on muted effective take rates and their impact on revenue.
• Clarifications on lending partners and diversification of loan types.
• Insights on operating expenses and seasonal variations in promotional costs.
Strategic Focus and Future Outlook
• Emphasis on maintaining portfolio quality amid rising interest rates.
• Plans for expanding the total addressable market (TAM) through partnerships.
• Ongoing efforts to enhance productivity and meet device deployment targets.
Conclusion
• The call concluded with gratitude from participants, highlighting the company's focus on growth, profitability, and strategic responses to market conditions.

Earnings Call Overview
• Date: February 6, 2023
• Participants: CEO Vijay Shekhar Sharma, Group CFO Madhur Deora
• Audience: Existing shareholders, potential investors, research analysts (media excluded)
• Content: Presentation followed by Q&A; information shared was confidential and may include forward-looking statements.
Key Highlights from the Call
Financial Performance
• Profitability Milestone: Achieved profitability and free cash flow.
• Revenue Growth:
• 42% year-on-year growth overall.
• Payments revenue up 21% (34% including UPI incentives).
• Financial services revenue surged 257%, now 22% of total revenue.
• Commerce and cloud business grew 24%.
• Contribution Margin: Improved from 31% to 51%.
• EBITDA: Transitioned from -27% to +2% of revenue.
Lending Business Growth
• Paytm Postpaid: Largest lending product with 17 million merchants; 300% year-on-year growth.
• Personal Loans: 500% year-on-year growth; 40% of disbursements to existing Postpaid customers.
• Merchant Lending: Accelerating as merchants recover post-COVID.
Commerce and Cloud Segment
• Revenue: Rs. 420 crores, driven by credit cards and commerce.
• Credit Card Growth: Activated base reached 450,000 with 150,000 new activations last quarter.
Q&A Session Insights
• Free Cash Flow: Clarified that Q4 UPI incentives may lead to positive cash flow but are not indicative of sustained results.
• Regulatory Timelines: Uncertainty regarding Paytm Payment Bank decisions.
• Merchant Cleanup Strategy: Focus on profitable merchants has improved net payment margins.
• Cash Flow Transparency: Clarified cash balance reconciliation and capital allocation.
Additional Discussions
• Promotional Strategies: MTU growth driven by product initiatives rather than cashback.
• Payment Transaction Profitability: Overall payments segment is profitable with a gross profit margin above 50%.
• Sales Force and Growth: Plans to enhance sales force to support merchant acquisition and device run rates.
Future Outlook
• Credit Card Goals: Aim to issue one million cards in the next 12-18 months.
• Lending Metrics: 8.1 million users accessed credit; significant growth potential in BNPL and personal loans.
• Sustainability of Growth: Confidence in maintaining net payment margins despite fluctuations.
Conclusion
• The call concluded with an invitation for further questions and appreciation for participant engagement.