Thank you very much. Everybody, thank you for joining us on this Q3 earnings call.

Look forward to a good conversation. As I start off and as I had promised in the last earnings call, what I would like to do is, I'm going to focus on what Pine Labs does and some of the products and services that Pine Labs is innovating, building, and taking out to the market.

I've got two product demos for you, one for 2 minutes, the other for 1 minute, but I do want to take you through that. Let me talk about the first one.

If some of you been following Blinkit, you would get to see yesterday Albinder tweeted that on Blinkit, you can go and buy a card which is called Bharat Yatra. Bharat Yatra is a national mobility card entirely powered by Pine Labs platform for prepaid services.

You could go to Blinkit, you could go to Zepto, Flipkart, or for that matter, you could actually go to any of the metros and you could buy that card, load money on it. Then we built a really cool technology where money could get transported from your mobile app onto the card and you could do transactions.

What that does is you don't need to go to the ticketing counter, you can just simply use the card, tap and complete the transaction. That's the video that we are going to show you.

The person running it runs our prepaid business today on the sales side and that is Sam. Ritesh, if you can just start the video, please.

You've probably used prepaid today, maybe without realizing it. A prepaid wallet for a seamless checkout, instant refund for goods returned, a gift card bought using bank loyalty points, a meal card at work, a forex card when you travel abroad, prepaid is programmable money in its simplest form, already embedded in our daily lives.

One experience still hasn't caught up: public transit. What should be a quick ride often starts with waiting.

That's why Government of India introduced National Common Mobility Card, a common payment infrastructure for public travel across the country. The question became simple: how do you make this infra usable everyday for millions of Indians?

This is exactly what Bharat Yatra Card is built for, one contactless transit card for everyday travel across cities in India. We made sure you don't have to stand in line, not to buy the card, not to recharge it, not while you travel.

You can even get it delivered to your doorstep in minutes via all major quick commerce apps like Blinkit and Zepto. Once you have the card, setup is real quick.

Let me just show you. You open the Bharat Yatra app, link your card, activate with your mobile number, load money using any UPI app, and the money is added.

Now watch this. Just tap your card, your balance updates instantaneously through NFC on your Android phone.

No counters, no machines, no waiting. You're ready to travel with just a tap.

Pine Labs Bharat Yatra, this is daily commute simplified for Bharat.

Thank you. Sorry, I've had to just change my position very quickly.

The second demo is another interesting one. As in the online space, we continue to win volumes, we continue to sign on new merchants.

One of the use cases that we've been focused on is in terms of cross-border transaction and being able to capture the DCC opportunity. What we did was, we actually enabled for Apple Pay.

If you're a consumer sitting outside of India want to make a purchase with an Indian merchant, the Indian merchant would want to give capabilities like Apple Pay so that the consumer can easily make that payment transaction. That is something that we have enabled on our onlines platform and we wanted to show you that experience.

What we decided was, instead of showing it from a merchant standpoint, let us show it to you from a consumer standpoint, a foreign consumer coming onto an Indian merchant, how this would be beneficial to the consumer. Obviously, the merchant, who's our client, benefits with this.

We're going to run you that demo, too, now.

I live in Singapore and was planning a trip to India. Was really excited to visit Udaipur, the City of Lakes and Palaces.

I wanted to book a two-night stay at Wyndham Hotel and they sent me a payment link. Here's the thing: normally with international payments, I would worry about whether OTP would be arriving, whether the cards will be working, and whether the site is even trustworthy in the first place.

Now this time round, when I clicked on the payment link, I was so excited to see that they had Apple Pay. I clicked on it.

Here's the funny thing: it was done within seconds and no card, no OTP, there was just facial recognition. Everything was done.

It's as simple and safe as paying at home.

These are two of the products which I wanted to show you today. Every one of these earning release, we will carry some products that we would want to show to you.

With that, I will just move on to the earnings release and the document that we sent out earlier in the day. Ritesh, would you be presenting?

Yeah.

Again, I'm just going to reiterate a few topics out here. We've got a very clear vision statement, which is to build the best payments and commerce platform from Asia for the world.

Next. I also wanted to take this opportunity to again remind everybody that Pine Labs is a multi-product business.

If you actually see out there, we have very strong presence in in-store, online, everything around prepaid issuance. We do credit card processing.

We actually announced some very big deals on the credit card processing side just in recent days. As a company, we want to be a multi-product company.

Second, we also want to be a multi-segment company. If you look at our revenues and the breakdown of our revenues, we have revenues coming from all the three stakeholders, that is merchants, banks and financial institutions, and at the end of the day, corporates and brands.

Finally, we don't want to be just India-centric. We continue to invest heavily to take our products into global markets.

We're showing some very good win. We do want to be a very broad fintech player.

If you see what Stripe is doing, what Adyen is doing, a very similar playbook is being followed here in Pine Labs, and that's what makes us unique. This is a slide which I used last time.

In the market in India, we continue to win with all the large clients. All the top 5 banks has Pine Labs as their number one payments partner.

All the 3 petroleum companies has some sort of a relationship in with Pine Labs. The top 5 retailers, may that be the Tata Group, the Reliance Group, DMart, all of them have Pine Labs as their preferred payments partner.

The same goes when it comes to the top 3 e-commerce companies, all of them have Pine Labs as their payments partner, may that be on the gift card or prepaid or online payment processing, or for that matter, for delivery-related services. A question which was asked to us last time was how are we looking to go international, and I wanted to put a slide to that one.

What we have done is, we've said anytime that we go into a new market, what we will do is we will first go and seed a territory. The first country that we went international was in Malaysia, and that was in about 2019 or 2020.

There what we did was, we first partnered with CIMB. We had a software-led deal with them.

It was a fairly large deal. Over a period of time, we have actually expanded our presence in the Malaysian market.

Now we work with 11 bank issuers in Malaysia. We've got tens of thousands of POS machines deployed in the Malaysian market.

That business has been continuing to grow at about 40%. The idea there is first get a large partnership in place, get our software on the market, then we put boots on the ground, we commit to the market by putting in our sales team, which can go and win merchants also, and that's how we go on increasing that scale.

We started with Malaysia, we've also gone into the Singaporean markets, and also we are now present in the Middle East markets. We are currently present in almost 20 countries around the world, and just reminding everybody in terms of our financials in the international markets only, and that's what you have there at the bottom.

The last piece before I get into the financials and an update in terms of Q3, I wanted to also highlight very specific cases where AI is being used within Pine Labs. I recently commented where about 21% of all code which is written in Pine Labs is now being written using AI.

Where is this being applied? These are the six, seven areas where this AI is being applied.

That's really trying to create new products. Next time maybe I'll show you a demo which is related to payments in AI.

Second, purely from sales effectiveness, we've started to use AI. When it comes to merchant and transaction fraud prevention, we've already brought AI in out there.

On the operational efficiency side, which is a very easy area, what we've done is we've actually opened up the data related to all our SOPs, our product information, and the classic tickets that we get to see, and we've entirely automated using AI. These are very real use cases that we are doing using AI today, and that is ensuring that we really don't need to scale in terms of hiring more engineers.

Again, I'm very clear, at this point of time, we've got enough engineering talent within the company. I don't see Pine Labs increasing the number of engineers going forward.

If any, it could actually go down, but surely not increase. Coming to the financials.

In Q3, I think we had just a powerful, powerful quarter. This is the second time I'm going to say this: I think we crushed it in Q3.

Q3 obviously was a quarter which has a lot of festivities in it, but even within that, I thought Pine Labs performance was very, very strong. One very important fact to share with all of you is, in the Q3 quarter, our technology platforms have to remain up at all points of time, and we literally can't afford a 1-minute downtime, may that be in the offline platforms, online platforms, on the prepaid platforms, or for that matter, on the BBPS and the bill payments infrastructure.

That's what we delivered. We did not even have 1 minute of downtime.

Second, all the major merchants and all the major brands continued to use almost 85% of their transaction throughput on the Pine Labs platform. That was extremely strong.

All of the various services that we drive on top of our platforms, and may that be in terms of affordability, or in terms of DCC, or for that matter, anything which is related to offers, that continue to perform extremely well. We've given some more information about that in the rest of the deck, but I can tell you that we had one of the best, best Q3s in Pine Labs history.

That meant that we actually came in with about ₹744 crore of revenues, which was about 23%, 24% in terms of year-on-year growth. The contribution margin came in at about ₹551 crore.

I think I explained this to you earlier: I'm a firm believer that you run your business from a contribution margin standpoint, and that's the one that I tend to focus on, because from the contribution margin, your EBITDA gets played out. Again, I'm going to reiterate that later on in our presentation.

On an adjusted EBITDA basis, we came in at about ₹171 crore, adjusted only for the ESOP cost, and the PAT came in at about ₹42 crore. There obviously we had to consider for some of the impact related to the recent labor law.

Now while these are numbers and Sameer will go into it detail, I just wanted to give you a flavor of what is happening in the market. In the market, what we are getting to see is that a lot of merchants are coming up with complex payment requirements.

A lot of merchants have started to ask for various services over and above the payments platform that we have built, and our solution is best fitted to deliver this in the fastest possible manner. That is point number one.

Point number two: what we are getting to see is consumers using prepaid cards and prepaid instruments and storing currency on those prepaid instruments continues to rise, and that means number of transactions are also continuing to increase. We are getting to see this not just in terms of gift cards and closed-loop prepaid, but also in terms of open-loop prepaid, may that be in terms of forex prepaid, or for that matter, credit card processing, or what I just explained to you when it comes to the Bharat Yatra product.

Again, our responsibility is to capture all of that into the financials and obviously bring it down to the PAT line. The other piece which I do want to share is we continue to get some very significant wins.

Recently we announced a deal with Wio Bank. Wio Bank is the fastest-growing digital bank in all of Middle East and arguably is one of the fastest-growing digital banks anywhere in the world.

They actually wanted to bring in a next-generation modern payments platform. They went through a very deep evaluation process.

We competed with global companies on that front, and we actually ended up winning there. Just today, coincidentally, along with our earnings release, in the morning we announced another deal in Sri Lanka, where a card-issuing platform has decided to go with us, and we will be actually doing all of the payment processing for them, too.

Through the Q3 process, we continue to win deals. Now unlike these other companies where order value and revenue value, there is a direct correlation ship, we charge by the transaction, we don't charge by the project.

Once the client comes on board, as the transactions go on building, we end up making more money. That's the philosophy that we have captured.

We brought in almost about 120 new brands in Q3 onto our platforms, may that be in terms of offers, affordability, or for that matter, anything related to prepaid services. Our payments platform continues to win.

One important point I do want to talk about, which is not directly linked to the revenues of the business, is we ended up processing about $51 billion of payment volumes on our platform. That takes us past the $200 billion number when it comes to transaction processing on our platforms.

With this, what I'm going to do is I'm going to hand it over to Sameer, and Sameer will go deeper into the numbers.

Thank you, Amrish, and welcome, everyone, to our Q3 earnings call. As Amrish said that typically Q3 is a strong quarter for us and we have come out with stellar set of numbers, given the seasonal impact, etc.

Coming to the next slide on revenue, as you can see clearly, over the last year-on-year basis, we reported a revenue of ₹744 crore, which is a growth of 24% over ₹600 crore we reported a year back. This has been healthily contributed by all our business segments.

We report our business broadly into two segments: the digital payments business, which includes in-store, the online business, the value-added services including affordability, and the fintech infrastructure business; and the second line of business which is issuance, which is the card business, in the first demo we saw during the day, I think. Across both these businesses, we have reported healthy growth rate.

Our digital business grew by about 16% and our issuance business grew to about 42%, contributing to an overall growth of about 24%. The contribution margin has been in a steady state of about 76% on a 9-month basis.

The marginal fluctuation between the quarters you see is largely because of sometimes the mix change you see between the issuance business and the digital payments business. Our digital payments business typically works at about an 82% gross margin given that there is very little direct cost involved with that business other than certain connectivity costs, etc., whereas the issuance business largely is driven into two revenue streams: the processing that we do for all our prepaid cards, and one very critical component of that business is also the distribution strength that we bring to the brand, which becomes a big moat for us as we penetrate new brands and build size and scale for them.

The contribution margins typically of the distribution business, which is a critical moat for us, is lower than that of the processing business because there are partners involved, including resellers, the marketplaces where we list some of the products, and therefore a mix change causes some bit of variations between the quarters. On a steady-state basis for 9 months, we are at about 76%, which is in line with our 76% to 78% guided growth rate.

Our contribution margin has also shown a healthy growth rate at about ₹551 crore of contribution margin. Ritesh, go to the next slide.

As we had indicated in our earlier presentations as well, we believe that there's significant operating leverage and scale in our business. Every incremental ₹100 of contribution will translate between ₹50 to ₹60 of adjusted EBITDA, and a flow-through at PBT will also be of a similar nature, about 40% to 45%.

I think that's held true for this quarter as well. We have seen margins expand from about 16% a year back to about 23% as we had guided earlier as well.

I think this is contributed by a robust top-line growth, effective cost management, and operating scale that we've seen in our businesses. We believe these margins are sustainable going forward as well, and this has translated into a significant flow-through to our PAT as well.

We had reported two quarters of positive PAT for this financial year in Q1 and Q2 at about ₹5 crore and ₹6 crore, respectively. However, this flow-through has come through with a ₹42 crore PAT for this quarter.

This is after factoring in the ₹12 crore exceptional item adjustment, as Amrish said, for the labor code reforms that came in. Had it not been for that one-time impact that we've taken, our reported PAT would have been close to about ₹52 crore.

This is a swing of about almost a ₹100 crore on a year-on-year basis, giving a sense of size, scale, and change that we're seeing with the operating leverage kick in. Going a little deeper into where the operating leverage comes from, I think we've been able, as Amrish said, we're fairly well-staffed, and I think now it's about sweating the sweating the workforce and delivering the throughput through technology, AI, and some of the other initiatives we spoke about earlier on.

Our headcount has marginally gone up by about 6%, and with the same headcount and more or less, I think the wage inflation which is come in, I think our people cost have grown at about 6 6% to 8%, which has translated into a significant operating leverage from about 42% to top line 2 years back. We have shown a steady operating leverage kick in here.

We were about 37% same time last year, and this year we've come to about 31%. I think a steady state of about 34%, 35% is what one should expect through the year, given that Q3 was a strong quarter.

That's one big operating leverage that has played out in the adjusted EBITDA change that you see from about an 18%, 19% in the earlier two quarters to about 23% that we've reported in this quarter. Likewise, as as Amrish said, ESOPs is something we show below the adjusted EBITDA line item before PBT.

Philosophically, as we went into the public market space, one big change we brought about is that new issuances of ESOPs will always happen at closer to FMV, and I think that has translated into a more reasonable P&L impact as far as ESOPs cost is concerned. Adjusted for a one-time reversal that was there in Q3 of last year 2 years back, we are seeing the ESOPs cost, both in absolute terms and as a percentage to top line, show a steady decline.

We're currently at about 4% to top line with a ESOPs cost of about ₹31 crore, and that's a number which will steadily start creeping down both in absolute sense and as a percentage to top line, which results in a better flow-through to from adjusted EBITDA to PBT. As we had indicated earlier, as our businesses build scale, technology will be a big driver.

We have been making a conscious effort to make our business asset-light, which means sometimes directly selling devices to the merchants or to the large banking partners that we have. This makes our balance sheet asset-light, while it may have a short-term impact in terms of the gross realizations as far as the payments business is concerned.

Our overall depreciation line item has been fairly flat with a rising top line, and therefore the percentage as a percentage to top line has seen a steady decline from about 11% 2 years back to about 4%, and this has translated in a higher PBT and a PAT translation for this quarter as well. This is a slide we spoke about.

I think this is a reference point we'll always use to guide through how one should look at the operating leverage with every incremental ₹100 of contribution. As we had said that every incremental ₹100 of contribution results in about a ₹50 to ₹57 of flow-through to adjusted EBITDA, and given the changes we're making in ESOPs and depreciation, a further flow-through will also translate to PBT.

Almost 50% of the incremental contribution margin will actually flow through to the PBT line item. Coming to business-specific details, we have seen a robust growth of about 11% on the digital checkout points, which is a critical variable we look at.

This is one important variable we track within this is how we monetize value-added businesses on top of the rails that we laid out, because we are very well-entrenched across the merchants which are in the enterprise segment and the mid-market. There is significant potential to monetize a lot of these merchants beyond the merchant rental fees that we get, and one variable that we've been tracking and reporting to the Street is the fact that how many of these digital touch points are actually activated for value-added services.

I'm happy to report that that's a number that is continuously trending upward. This number was about 21% a year back, and that's about 28%.

The value-added services, as is clearly reflected in the volume growth of about 41% on a year-on-year basis at about ₹76,000 crore, comprises various things within it. We are market leaders as far as affordability is concerned, and the season brought in a good amount of volumes.

Almost about one-third of that ₹76,000 crore comes from the affordability business where we are powering Buy Now Pay Later across the consumer durable segment, the mobile segment, and we've also seen very healthy high-digit growths across the non-consumer durable segment, which is a category-first for us, which is also driving a lot of these growth. Our margins continue to remain strong, our take rates continue to remain strong, and I think this is a key lever for us.

Overall, I think we have grown at about 25% plus, and I think that's a healthy number to kind of go forward. Fintech infrastructure business: I think we are doing a lot of innovative things in the fintech infrastructure side.

We are one of the largest rail providers for the Bharat Connect, which is the BBPS system, which connects the utilities to the consumer through the BOUs and COUs. I think we process almost about 31 crore transactions.

We monetize it based on number of transactions. We also have a UPI switch and an account aggregator which helps us penetrate deep into the ecosystem as far as identity and some of the other use cases are concerned.

We continue to innovate in this space because we believe there's a lot of potential here. Couple of new innovations that we have done, while we're not showcased it in the product demos, is integrating the bill payment with the ChatGPT equivalent, which helps you make payments through agentic commerce in a very seamless way.

Likewise, we are also in the process of simplifying payments and making it seamless. A couple of initiatives we have done is also to make identity verification, which is otherwise a cumbersome process as far as physical is concerned or for gig workers is concerned, we have made it extremely seamless through Aadhaar integration, through mAadhaar integration, and it makes it absolutely seamless.

I think we continue to work on multiple use cases here. I think there is significant opportunity given the complex workflows we solve and solve it as a solution across our ecosystem to take this to the next level.

Coming to the issuance business, the issuance business registered a very strong growth of transactions at about 28%. We continue to see strong growth across brands that we signed up.

We have added a significant amount of brands across geographies which trust Pine Labs offering for its prepaid solutions, which is a great stored-value platform for attracting customers, for managing refunds, for managing new client acquisition, for actually driving channel loyalty and all of those use cases. We are winning not just in India, but across markets.

We have a large anchor brand in Australia. We have multiple brands across Southeast Asia.

We have won recent mandates with Miniso in US and also with Google Waymo in the US. I think these are markets, as Amrish mentioned early on, where we are making fresh entry, and I think we are able to participate in these markets given the size, scale, and platform capability that we have distributed.

I think one key point I want to bring out here is we are not just a processing platform, but we also provide a holistic solution where we work with the brands and OEMs in not just providing a world-class processing stack, but also customizing use cases to their requirements. Second is, distribution is a big strength.

One of the big growth drivers for this quarter has also been our focus on distribution. We have also said in other quarters that distribution is something that we want to bring in, because when a brand looks at us, they look at us as an integrated provider for not just processing the cards or the virtual cards or prepaid stored-value cards, but also taking it across the hinterland and both in India and also similar tie-ups for global markets to drive that growth.

We've seen a strong distribution, we have led a lot of channel-led programs as well, and across both India and overseas, we've seen strong revenue growth of upward of 40%. I think that's where we are as far as the issuance business is concerned.

I'll take a pause here. I think we have broadly covered the broad highlights of the business.

We've covered some of the key aspects that have driven this quarter's performance. Our business remains to be extremely robust, strong.

Our cash flows remain strong. Given the nature of our business where we process GTV as an account aggregator, we will see some seasonal volatility as far as cash flows are concerned.

On a steady-state basis, I think we have guided earlier as well when we came out with our RHP, that roughly 15% to 16% of our net working capital top line is a guided view we should take. I'll pause here, happy to take questions and any other queries that you had regarding our Q3 performance.

Hi, Kaushik.

Hi. Hi, I hope I am audible?

Yes,

Yes, yes. Please go ahead with the question.

Yeah. Thank you for the opportunity and congratulations on a good set of numbers.

Couple of questions from my side. Firstly, if you can help just decode this 29% GMV growth that we have reported on a Y-o-Y basis in this quarter.

Is it more of a market share play that is playing out in our favor? Because most of the payments instrument you see like credit card spending hasn't been going up so great, even on the UPI side, the growth is broadly in the range of 22% to 25%.

That was one. Second thing I wanted to understand is that has there been any communication from the regulator regarding the PIDF incentive income?

Because there was some media article recently floating around indicating that that scheme will not continue. What would be the proportion of such incentive income as part of our revenue?

Third piece would be your take rates on the affordability VAS side. I did some back-of-the-envelope calculation and noted that the take rates for your affordability VAS business is slightly coming down.

How should one look at it? These were the three things from my side.

Amrish, you want to take it or should I go ahead with it?

Let me address the first part. Yes, what is clear is that we are continuing to win market share, we're continuing to expand our presence in the market.

You also need to remember that when we go out globally and we go into newer market, that effectively always becomes a net new market for us. When we are showing a 29% growth in terms of GTV, that is largely because our payment platform continues to win in the marketplace in India and also because of the global markets that we're opening up, new volumes are coming on board.

Sameer, you can take the next two.

I think coming to a second question, I think the value-added and affordability segment has seen—

Just 1 second.

Now that's good.

You can hear me now? Sorry.

Yeah. Kaushik, coming to your second question, I think affordability we report the total number of ₹74,000 crore, which combines multiple things.

It combines three, four things. Affordability is a one-third of our volumes, but it's roughly about two-third of our revenues.

The take rates there in that segment have remained fairly in the same range. I think we've seen no compression of margins there.

Likewise, there is UPI volumes that we do on our own stack. There is DCC and a lot of other value-added services.

I think sometimes it's a mix change, but intra-segmental, we have not seen any yield, more or less. Even at a headline level, if you see, and if you work out the broad math, I think it's easily possible.

The ranges are more or less in the same level. The third question you've asked me about PIDF, as we have said, that that is not a segment that we are.

We operate in the mid-market and the enterprise segment and not in the villages where typically this incentive was largely for. In our own P&L, the numbers which regard to PIDF for a month is rather for a quarter would be not more than about a crore.

The impact of any change of the government regulation with PIDF will have almost a negligible impact on our top line and our profitability.

I'm just going to add out there by just giving a little bit more specifics. I think what we think the PIDF kind of an impact on our business is less than ₹4 or ₹5 crore on a quarterly basis, it's not that big a number at all for us if any, point number one.

Point number two, I think what will be interesting to see what comes out in the Union Budget, and in the Union Budget, if there is any play to incentivize payment transactions. The way I see this personally is that I don't see there would be any charges which will come on the long-tail merchant base in India.

If there is any charges which were to come, it'll largely come onto the organized sector, and that would generally be the area that we are playing in today. If there's an MDR to come in, I do believe it might come into the space that we are present in and not into the long tail of the market.

This is all speculation. Let us just see what comes out.

I'm just trying to highlight out here is I do generally believe that the Government of India and the regulator continues to be extremely supportive to grow digital payments across the country.

Kaushik, does it answer your questions?

Yeah. That answers my question.

Just one one follow-up. On GTV side, if you can just provide some mix around what would be the mix of domestic and international?

You have given on top-line side, but on GTV, it will be—

Kaushik, we don't have it handy right now.

Sure. No problem.

Thank you.

Hi. Am I audible?

Yes, Khush, go ahead, please.

Yeah. My first question would be, should we think any gateway side as a medium-term opportunity or any internal milestone over the next 12 to 14 months if we are expecting some revenue towards gateway payments?

On the online side, there are two parts of our business. One part of the business is when it comes to online classic payment processing for e-commerce companies.

Other is what happens when it comes to bill payment services. In both of these services, I think we have actually called out here in our earnings report is our online payments platform the volumes have actually grown by more than 50% on a year-on-year basis.

We've already highlighted the fact that today Flipkart, Myntra, Blinkit, not Blinkit, Zepto, BigBasket,

Swiggy,

all of these guys use our services on the online payments platform today.

Online is a clear focus area for us, Khush, and we're seeing growth here. I think we've been sustainably growing there.

We have been adding new products like Apple Pay for internationals, etc. I think it's a business that is showing a very high growth for us.

Fair enough, fair enough. My second question would be on the Japan side international market where there is an UPI pilot roll out.

Is there any slide of any opportunity or we can gauge around key we would be expanding on that region?

Which one? Can you repeat which region you're—

Japan, Japan side. On the Japan side, there is an UPI pilot roll out where—

No, we don't have any presence in Japan. We continue to do some business development work around it, but no, we don't have any presence in Japan as of now.

In coming future, we aren't expecting from Japan side revenue or any—

I wouldn't speculate on that one right now.

Okay.

Khush, we have given a lay of where all we are present and how we are looking at it, I think, earlier in the slide. That gives you a sense of where we're playing right now.

Yeah.

I was just seeing around Japan that UPI rollout is going to be happened, I guess—

I think, Khush, I'm going to take an opportunity to just clarify to you. What we are not just doing is taking Indian payment platforms and going global.

We're actually going into global markets, their own unique payment system. For example, when it comes to Malaysia, Malaysia has their own real-time payments infrastructure.

Singapore has its own real-time infrastructure called PayNow. In UAE, there is a real-time payments infrastructure which is called Aani.

We power all of those payment transactions. Our approach to it is that we want to be a full-stack payments provider in that market.

It's not just that we are following what UPI does and which countries UPI is going to.

Okay. Okay.

My third question would be, from a long-term perspective, how does we access the structural opportunity in the gifting and a prepaid instrument ecosystem in India, as there is not a proper market size to gauge that how big is the market around a gifting side?

In the RHP, we've actually given that information because we have done some market study on that. We also highlighted in some earlier conversations that we continue to process about 3.5 to 4 million transactions on a daily basis when it comes to prepaid.

There is a lot more information in the RHP.

Okay.

Thank you.

Thank you for—

Good evening to the team. My name is Sucrit Patil from Eyesight Fintrade Private Limited.

Am I audible?

Very clearly, Sucrit. Go ahead.

Thank you. I have two forward-looking questions.

My first question is as Pine Labs operates a broad merchant payment infrastructure and fintech platforms spanning POS, online payments, credit, and value-added services amid strong digital adoption, how are you planning the product innovation and monetization across these verticals to strengthen competitive differentiation, especially as merchant expectations evolve and new digital rails emerge across the global front? That's my first question.

I'll ask my second question after this. Thank you.

Sucrit, too broad a question. Honestly, I don't think so I'm going to take that question up at this point of time.

I think we've given a lot of information in the RHP. Today I want to be focused on the Q3 earnings only.

Thank you. Best of luck.

Thank you.

Hi, Srinivas, please go ahead.

Hi. Congratulations, sir, the strong set of numbers.

My question is about the VAS activation that you said it is 28% now. What is the target by FY27?

Are we able

to quantify— See, look,

I think you've seen the trend at which we are moving, Srinivas. I think the idea is we see a lot of potential for enabling merchants.

In fact, we have a large sales force which actually goes and activates merchants across these various. I think the beauty of our business is, as Amrish said earlier, we work with enterprise and mid-market who have complex needs, who have multi-products, and each of our value-added services are actually well-entrenched for doing in each of these areas.

I think we are continuously working on it. We won't give a forward guidance here, but I think if you see on a year-on-year basis from about 21% of a growing base, we moved up to 28%, and that's the reflection of where we are seeing on the VAS business also growing at about 41% as far as the GTV is concerned.

Okay. The next question is about you launched agentic bill payment on LLMs.

How are you going to monetize this? What is the privacy, how much data reaches LLMs and how much stays within your safe loop?

When it comes to the transaction process, the transaction will happen within ChatGPT in this product that we have created. What you could do is you could go into the ChatGPT, you can pretty much give a command or a prompt which says that you want to pay a bill, let know the utility provider and your mobile number, and the transaction will get completed.

The second part in terms of privacy, I don't have that answer for you just now.

Okay. Thank you and best of luck.

Thank you.

Thank you.

Hello, sir. Am I audible?

Vidhin, please go ahead.

Hi, sir. Congratulations on the good set of numbers and thanks for this opportunity.

My first question is, sir, sir, depreciation on DCP as a percentage of revenue fell due to refurbished terminals. Do we expect net CapEx needs to structurally decline henceforth in the coming quarters and in FY27, sir?

I'll ask my second question later, sir.

To answer your question, yes, depreciation, both in absolute terms, will remain range-bound, and as a percentage to top line will reduce because of two, three things. One is the business mix itself, where a lot of international business across issuance, across the fintech infrastructure online does not require device intensity.

Within our own segments, we have realized that we're a tech platform. I think we want to ensure that some of these devices, etc., are directly bought by merchants and by banks.

Therefore, unless we see a strategic reason to sell and lock in a merchant to us, we will not do that. That's a structural shift we have done, and going forward also, you'll see depreciation and CapEx being fairly range-bound and as a percentage to top line coming down.

All right. That's helpful, sir.

Coming to my second question, sir, you disclosed that approximately 50% to 60% of the efficiency gains, and as mentioned by Amrish, sir, earlier, and that the code is written through AI, if I remember correctly, 21%. Can you quantify if possible as to how many OpEx dollars are saved and how much flows to EBITDA versus reinvested?

No, we haven't started to do that as yet. Honestly, the answer related to this is we continue to invest into new products, we continue to invest into new geographies.

No, we don't do that calculation which says that because of this 21% of the code which is being written using AI, what could be the potential saving from an headcount standpoint. What we are very clearly calling out is it's not that we are saying that we will be reducing our team size going forward, because there is enough and more project work, expansion work, product work which is coming our way.

That's where we go ahead and use the existing capabilities from an engineering standpoint. Specific to your questions, no, we don't calculate it in that fashion.

Understood. That'll be all, sir.

Thank you so much and all the best for the future. Thank you.

Thank you, Vidhin.

Thank you very much. Look, again, like last quarter, I started to give some indication of how Q3 is going.

Q3, as I've shown you, has been a terrific quarter, has been a record-breaking quarter, both on the revenue side as well as at a PAT side. Payments is a very interesting business that you can actually get to see almost what's going to come up over the next 9 months or 12 months period.

We are in an environment where we think we are continuing to win businesses. Volume keeps on increasing on our platforms.

We're feeling extremely good, for example, what we are getting to see both at a economy level as well as market level. Hopefully we should be gathering again in Q4 in a similar buoyant mood.

Thank you.

Thank you, everyone. If you have any further questions, feel free to reach out to the investor relations desk.

I think the contact details are given on our website. Thank you and have a good day.

Bye.