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Infibeam Avenues’ net-profit falls 65% YoY despite rebound in payments

payments, digital payments

Infibeam Avenues Ltd’s payments business grew by 56% over the past year processing ₹22,780 crore worth of transactions in Q2FY21, compared to ₹14,560 crore in Q2FY20. The full-stack online digital payments and enterprise software company witnessed a “V-shaped recovery” between April and September this year. However, despite the growth in its payments business, Infibeam posted a net profit of ₹9 crore in Q2FY21, down by 65% YoY.

On a consolidated basis, the company’s operating revenue was down by 8.3% YoY to ₹154 crore in Q2FY21 from ₹168 crore in Q2FY20. It posted a net profit of ₹9 crore in Q2FY21, down by 65% YoY, to ₹25.9 crore. On a sequential basis, operating revenues grew by 52% QoQ while net profit was down by 23% QoQ.

Payments business performance

The company processed 44 million payments transactions in Q2FY21, compared to 34 million in Q2FY20. Further, on the bill payments it processed 4.9 million transactions in Q2FY21 compared to 1.8 million transactions in Q2FY20, it said in an investors presentation.

The company structured the pricing in its payment business in order to capture market opportunities in line with the
industry, it said. On an daily basis, the company added over 150 new clients on the payments side, with retailers, education, groceries stores, doctors, advisors, consultants and professionals increasingly adopting its gateway service, it claimed.

The company has over 1 million merchants on its payments gateway platform, CCAvenue, and 33 billers on the bill paymets platform, BillAvenue, at the end of September 2020.

“With the V-shaped recovery during the quarter, we have recorded highest ever payment processing volume. With Q3 being a festive quarter and opening up of the economy fully, including signing of certain strategic deals in the quarter, will further give a fillip to our overall growth and profitability,” Vishal Mehta, managing director, Infibeam Avenues said in a statement.

Strategies going forward

In October, Infibeam tied up with Jio Platforms Ltd and its affiliates to provide its e-commerce software and payments services for the Reliance Industries’ entity. Further, it has also signed an agreement with JPMorgan Chase Bank, India to process the banks’ enterprise clients payments transactions.

The company launched its express settlement platform in September for large clients and plans to extend the same to small-medium-enterprises in the coming months. The platform is essentially a secured lending service for CCAvenue’s clients on a rolling basis. The company offers business loans, corporate credit cards, employee loans, bill discounting, and provides same-day settlements for business expenses.

CCAvenue has tied up with Oman’s BankDhofar to process online card transactions and online payments for merchants in the country, it said.

Further, the company has a neo-banking platform, Grit, for its large corporate and SME clients. It has partnered with ICICI Bank for bank account opening and credit card issuances and plans to add more banks to the network. The company offers clients on the platform to make vendor payments, bill payments and provides access to finance. The aim is to extent Grit to the company’s client base of 1.7 million clients, it said.

The company has invested ₹18 crore for a one-third stake in So Hum Bharat Digital Payments Pvt. Ltd, to apply for a license under the Reserve Bank of India’s framework for new umbrella entity for retail payments.

Download: Financials | Release | Presentation

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