Event Participants
Executives
2 Deepak Chand Thakur (Co-founder, Chairman and Managing Director), Ashish Aggarwal (Co-founder and Joint Managing Director)
Analysts
7 Abhishek Kajal, Akshay Kaila, Ankit Kanodia, Deepak Poddar, Hardik Gandhi, Ketan Pathak, Nishant Joshi, Preet Shah, Sampath Nayak
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹61.42 crore | +75% YoY; QoQ declined ~10% due to project-based revenue mix shift and milestone-based recognition |
| EBITDA | ~₹17 crore (implied) | +66% YoY; margins lower QoQ due to ongoing investments in international expansion, AI, and SaaS infrastructure |
| Net Profit | ₹11.4 crore | +53% YoY; profitability remained strong despite strategic investments |
| EBITDA Margin Guidance | ~30% | Unchanged for FY27; improvement expected as higher-margin global and RegTech revenues scale |
| International Revenue Mix | 10-12% | Contribution from international TSP business; targeting ~50% in 2 years |
| Revenue Growth Guidance | 60-70% YoY | Unchanged for FY27; management reiterates annual view over quarterly fluctuations |
| Payment Platform Revenue | ~5% of mix | Deliberately tapered down to reduce regulatory risk; expected to revive with MDR implementation |
Geographic & Segment Commentary
Domestic TSP Business: Core technology service provider business continues to grow but is expected to see its share decline as other verticals scale faster. Management guides that this business will still see absolute growth, with the revenue mix shifting toward RegTech, international, and direct tech over the next 2-3 years.
International Business: Revenue contribution of 10-12% from international markets, primarily from TSP engagements. Management has secured one global telecom client order for a Super App/digital payments transformation and has two more deals in pipeline expected to close by end of Q2. Implementation cycles range from 4-9 months, with project tenures of 4-5+ years. Targeting ~50% revenue contribution from international within 2 years.
RegTech & AI Risk Intelligence: Established as a separate vertical after 2.5-3 years of investment. AI-based risk intelligence product processed ~650 million transactions with 98% accuracy. Won deals in the cooperative banking segment and secured an order from a large PSU bank. Plans to launch SaaS-based subscription model for mid-to-small banks.
Company-Specific & Strategic Commentary
Business Transformation & De-Risking: Company has deliberately reduced payment platform revenue dependence from 90% to ~5% of mix, pivoting toward technology-led subscription and SaaS-based solutions. This transformation positions NPST as a broader fintech platform across payments, RegTech, banking technology, and international digital financial infrastructure.
MDR on UPI – Key Catalyst: Parliament has approved MDR on UPI transactions. Management is awaiting regulatory guidance from NPCI, banks, and regulators before giving quantitative projections. The MDR revenue opportunity is significant given UPI processes ~23 billion transactions monthly (₹2.7 trillion TPV). Management sees both direct benefits (per-transaction revenue sharing on deployed acquiring platforms) and indirect benefits (increased bank investments in technology). Large merchants (80-90% of top merchants) are expected to fall under the MDR bucket.
AI-Driven Organization: Company is shifting toward AI-based policies and processes across operations. Employee costs are not growing proportionally with revenue due to AI adoption, contributing to margin expansion. Management targets ~30% cost efficiency improvement.
Capital Deployment: IPO funds (received December) are only 10-15% deployed. Three opportunities identified across RegTech, AI solutions, and payment infrastructure segments. Deployment expected to begin in next 2 quarters, focusing on market expansion and international customer access.
TimePay Revival: The B2C product could be revived if MDR implementation creates a shared revenue stream for payer PSPs. Currently on hold pending regulatory clarity.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 60-70% YoY for FY27 | Unchanged; implies ₹322-340 crore based on Q1 run-rate. Milestone-based execution means quarterly comparisons are not indicative; annual targets hold |
| Revenue Growth (Long-term) | 60-70% CAGR for next 2-3 years | Target of ₹850-900 crore by FY29. Excludes inorganic growth contribution |
| EBITDA Margin | ~30% for FY27 | To be achieved as higher-margin international (30-40%) and RegTech revenues scale up |
| EBITDA Margin (2-3 years) | 35%+ | Driven by increasing international revenue mix and AI-led operational efficiency |
| International Revenue Mix | ~50% within 2 years (FY28-FY29) | Current 10-12%; driven by large deals in pipeline (telecom, payments, other segments) |
| IPO Fund Deployment | Deployment begins in next 2 quarters | Three opportunities identified across RegTech, AI, and payment infrastructure |
| MDR Revenue Impact | No quantitative guidance yet | Awaiting written communication from banks, NPCI, and regulators; management positive on direction |
Risks & Constraints
| Risk | Context |
|---|---|
| MDR Implementation Uncertainty | While Parliament approved MDR on UPI, the operating guidelines from NPCI, banks, and the regulator are yet to be communicated. The actual revenue share for NPST depends on how MDR is distributed across acquiring, interchange, and switching components. Management declined to give quantitative projections until formal communication is received |
| Revenue Mix Transformation Risk | The shift from platform (PPaaS) to technology-led subscription and project-based revenue makes quarterly revenue lumpy and difficult to predict. Q1 FY27 saw ~10% QoQ decline despite 75% YoY growth, requiring investors to evaluate on an annual basis |
| International Execution Risk | Implementation cycles of 4-9 months with milestones mean revenue realization can slip. Management acknowledged some anticipated deals may take longer than expected (3 months vs. 5 months), though the overall funnel remains intact |
| IPO Fund Deployment Delay | Only 10-15% of IPO proceeds deployed after 8 months. Management has strict criteria (geographical access, new products, growth trajectory) which has slowed deployment. Expected to begin in next 2 quarters for market expansion and acquisitions |
| Regulatory Landscape Changes | The company's de-risking strategy (reducing PPaaS to ~5% of mix) was driven by regulatory uncertainty in the payments sector. While MDR is a positive development, further regulatory changes could impact the business model |
Q&A Highlights
Revenue Guidance & Growth Trajectory
Question: Revenue declined QoQ despite earlier guidance of 15-20% QoQ growth. Should investors revise full-year expectations? (Akshay Kaila, AK Investment)
Answer: Annual guidance of 60-70% YoY growth remains unchanged. The business has shifted from PPaaS (now ~5% of mix) to technology-led subscription and solution sales, which have milestone-based revenue recognition. Comparing Q4 FY26 to Q1 FY27 is not the right approach; investors should evaluate annual performance. The ₹68 crore highest-quarter revenue will be exceeded in some quarter this year as execution milestones trigger (Deepak Chand Thakur).
Question: Does the 60-70% guidance imply ₹322-340 crore revenue for FY27? (Preet Shah, Blue Star Capital)
Answer: "The range is around that, yeah" – confirming the annual guidance range (Deepak Chand Thakur).
Question: Is the current ~17-18% PAT margin expected to improve to 20% by year-end? (Ketan Pathak, Individual Investor)
Answer: Yes, margins will improve as milestone-based revenue comes in and global revenue share (with 30-40% margins) scales (Deepak Chand Thakur).
MDR on UPI – Direct vs. Indirect Benefits
Question: Will NPST directly benefit from MDR revenue share, or only indirectly through market expansion? (Ankit Kanodia, Zen Nivesh; Sampath Nayak, ZTO Capital)
Answer: There are both direct and indirect avenues. Direct: where NPST has deployed acquiring platforms, the bank's per-transaction MDR revenue will be shared with NPST. Indirect: with MDR flowing into the ecosystem, banks will invest more in technology upgrades, benefiting the TSP business. However, management is awaiting formal communication from banks, NPCI, and regulators before giving numbers (Deepak Chand Thakur).
Question: Given only 4-6% of UPI transactions fall under the MDR bucket, is the opportunity sufficient? (Ankit Kanodia)
Answer: Those 4-6% are large merchants with bigger balance sheets – 80-90% of top merchants will come under the MDR bucket. NPST's acquiring platform covers PSU, private, and cooperative banks, with the top 15-20 banks catering to such merchants being key clients. MDR on UPI will still be much lower than cards, so large merchants will prefer UPI over costlier card transactions (Deepak Chand Thakur).
Question: With UPI at ~23 billion transactions (₹2.7 trillion monthly TPV), what quantum of revenue can NPST expect? (Sampath Nayak)
Answer: Management declined to provide numbers, noting MDR is split across acquiring, interchange, and switching fees. The calculation depends on where NPST sits in the stack (TSP vs. payment platform) and the final guidelines. NPST will definitely receive direct revenue as part of the ecosystem but no numbers yet (Deepak Chand Thakur).
International Business & Margins
Question: What is the international revenue mix and margin differential? (Deepak Poddar, Sapphire Capital; Nishant Joshi, Equisense)
Answer: International contributes 10-12% of revenue, targeting ~50% within 2 years. Margins: India ~15-20%, international ~30-40%. The current quarter's international revenue is majorly from TSP. Management targets overall EBITDA margin of 35%+ in 2-3 years (Deepak Chand Thakur).
Question: What products are being sold internationally, and what is the telecom Super App order? (Akshay Kaila)
Answer: Products include interoperable payment platforms, merchant acquiring platforms, and banking super apps – offered as a bouquet. The telecom order involves transforming the digital landscape and payment for a major telecom provider (similar to Airtel having Airtel Money/Payment Bank). Details on the hero product not disclosed for competitive reasons (Deepak Chand Thakur).
RegTech & AI Risk Intelligence
- Question: How does NPST compete in RegTech, and what is the opportunity from RBI's stance on AI security (June guideline)? (Individual Investor)
- Answer: For established products (EFRM, EWS), competition exists. However, NPST's AI-based risk intelligence is completely new – built by deploying in banking environments and processing ~650 million transactions with 98% accuracy. Currently, there's no direct competition. RBI guidelines on AI (referencing "Methos" – likely DeepSeek or similar AI threat) will drive investments toward AI-based security, creating implementation opportunities over time. The product is moving to a subscription model for mid/small banks (Deepak Chand Thakur).
IPO Fund Deployment & Inorganic Growth
Question: Only 10-15% of IPO funds deployed after 8 months – what's the plan? (Hardik Gandhi, HPMG)
Answer: Three opportunities identified across RegTech, AI solutions, and payment infrastructure. Conditions are strict – looking for geographical access to international markets, new products, and ready customers. Deployment will begin in the next 2 quarters (Deepak Chand Thakur).
Question: Will acquisition targets have similar EBITDA margins? (Ashish Soni, Family Office)
Answer: Margin is not the primary focus criteria. Priorities are geographical access, new products missing from the stack, and the target's growth trajectory. Too early to share specific details. Acquisitions not expected in Q2 but could materialize later (Deepak Chand Thakur).
Other Expense & Employee Cost
- Question: Other expenses jumped to ~₹19 crore vs. ~₹2 crore YoY – what's driving this? (Ashish Soni)
- Answer: This is a grouping issue – the purchase cost of ~₹17 crore was merged into other expenses. The actual other expenses were only ~₹2 crore. Employee costs did not grow proportionally due to AI adoption and efficiency initiatives (Ashish Aggarwal).
Key Takeaway
NPST delivered a strong Q1 FY27 with revenue of ₹61.42 crore (+75% YoY), EBITDA growth of 66%, and net profit of ₹11.4 crore (+53% YoY), though QoQ declined ~10% due to milestone-based revenue recognition from its transformation away from PPaaS toward technology-led subscriptions. Strategic progress includes securing a global telecom Super App order, booking RegTech deals from cooperative banks and a large PSU, and achieving 10-12% international revenue contribution. Management reiterated FY27 guidance of 60-70% revenue growth (implying ₹322-340 crore) and ~30% EBITDA margins, with long-term targets of 60-70% CAGR over 2-3 years and ~50% international mix by FY29. The key catalyst is the approved MDR on UPI, which could revive the tapered PPaaS segment through both direct per-transaction revenue sharing and indirect ecosystem investments, though management awaits regulatory guidelines before quantifying. Watch items include international deal implementation cycles, IPO fund deployment accelerating over the next two quarters, and the AI-driven RegTech vertical scaling via subscription model.