Niyogin Fintech LtdQ2 FY22Finance

Niyogin Fintech Ltd

Q2 FY22 Earnings Call Analysis

Management growth scorecard

Revenue

Category 1

Margin

Category 1

Fundraise

Yes

Order

Yes

Capex

Yes

5 of 5 growth signals are positive — a strong management growth story.

Revenue guidance

Category 1

→Niyogin Fintech aims to become a Rs. 500 crore revenue company by FY 2025.
→Plans to expand Gross Transaction Value (GTV) from roughly Rs. 9,000 crores in FY 2022 to over Rs. 1 lakh crores by FY 2025 (11x growth).
→Intends to grow Business Correspondent (BC) agents or touch points 6-8x from 247,000 to around 1.5-2 million.
→Revenue expected to be primarily transaction-driven with increasing scale of enterprise business.
→EBITDA margin target of 10%-12% while delivering this growth.
→Building product stack and partnerships to drive transaction volume expansion.
→Lending business to be scaled up as experiment yielded encouraging results.
→Enterprise partner transactions and financial inclusion initiatives expected to significantly increase revenue streams in coming quarters.

Category 1

→Niyogin Fintech targets to become a Rs.500 crore revenue company by FY 2025.
→They expect to expand Gross Transaction Value (GTV) from approx. Rs.9,000 crores in FY 2022 to over Rs.1 lakh crores by FY 2025 (11x growth).
→Plan to grow BC agents/touch points 6-8x from around 247,000 to about 1.5-2 million by FY 2025.
→Targeted EBITDA margin is around 10%-12% by FY 2025.
→Company is currently in a build phase with higher operating expenses leading to negative EBITDA but expects significant EBITDA accretion as enterprise business scales.
→Lending business and enterprise contracts with larger gross margins (70%-85%) are expected to contribute to profitability.
→Non-cash ESOP charges presently affect profit but are recognized as part of operational expenses.
→Future quarters expected to show positive impact from enterprise deals and scaling of lending and technology solutions.

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Yes

→No immediate need for further equity fundraising to meet FY 2025 targets, as the company is not currently cash burning due to its B2B model.
→Existing funding includes around Rs.240-250 crores infused since 2017, with Rs.100 crores cash and Rs.55 crores loan book.
→iServeU subsidiary has already received Rs.50 crores investment; potentially another Rs.50 crores may be invested over 18 months with cautious deployment.
→Lending business has Rs.50-80 crores capital available, with plans to scale by potentially taking leverage as an NBFC, though no leverage taken yet.
→Equity raising would be considered mainly for strategic M&A (bolt-on acquisitions) that complement the current API infrastructure business, not for organic growth.
→Overall, the company expects no incremental equity requirement for achieving FY 2025 growth plans unless pursuing acquisitions.

Yes

→Niyogin Fintech has a strong order book for device sales despite chip shortages and supply chain issues.
→The company mentions that the order book for devices is still full, indicating existing pending orders.
→Their revenue, excluding device sales, grew by 52% YoY, driven primarily by transaction activities.
→Several large enterprise contracts (e.g., with India Post, BhaFin, CSC, NSDL, Axis Bank) are in the implementation or early revenue stages.
→Enterprise businesses are starting to scale, with revenues expected to grow significantly in the coming quarters.
→Overall, the company is in a build phase, investing in technology and scaling partners to drive future order growth.
→They expect a significant increase in Gross Transaction Value (GTV) and expansion of BC agents/touchpoints which supports ongoing and future orders.

Yes

→Rs. 50 crores invested in iServeU Technologies as a strategic capital investment to build a universal technology stack for Banking as a Service.
→Potential further Rs. 50 crores infusion planned in iServeU over an 18-month period, with judicious deployment based on returns and scaling.
→Lending business has Rs. 50-80 crores capital available for scaling; potential leverage may be considered in future as NBFC.
→No immediate need for incremental equity capital for meeting FY 2025 targets unless pursuing M&A opportunities.
→Possible future equity raise only if pursuing bolt-on acquisitions adjacent to current API infrastructure business.
→Focus on product build-out and tech development to expand financial services stack and partner network.

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