Protean Egov Technologies (NSE:PROTEAN) Q2 2027 Earnings Call

0:01 Ladies and gentlemen, good day, and welcome to Q2 and H1 FY 'twenty seven Earnings Conference Call hosted by Protean eGov Technologies Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this call is being recorded. I now hand the conference over to Ms. Pushpa Mani, Head Investor Relations, ESG and CSR from Protean eGov Technologies Limited. Thank you, and over to you, ma'am.

0:47 Thanks, Ashi. Good evening, everyone. I welcome you all to the Q2 and H1 FY 'twenty seven results discussion. You must have received the results, press release and investor deck of the company, which is available on BSC, MSC and as well as on the company's website. As usual, we will start the forum with the opening remarks by our MD and CEO, followed by CFO, and then we'll open the floor for the question and answer session. If any of your questions remain unanswered, you may reach out to us afterwards. The management on today's call would be represented by Mr. Ajay Rajan, MD and CEO Mr. V. Ishwaran, Full Time Director and COO Mr. Akesh Doshi, Chief Business and Products Officer Mr. Sandeep Mantri, CFO and myself. Before we begin, I would like to mention that some of the statements in today's discussion may be forward looking in nature, and we believe that the expectations contained in these statements are reasonable.

1:43 However, these statements involve a number of risks and uncertainties that may lead to different results. With this, I invite our MD, Mr. Ajay Rajan. Thank you, and over to you. Thank you, Kushpa, and good evening, everyone, and thank you for joining us for our Q2 FY 'twenty seven earnings call. This quarter marks an important milestone for Protean. The two large RFP mandates where we invested a lot of our bandwidth and capital over the year, the Sarsay's CKYCRR 2.0 and the UIDAI Adha Seva Kendra project, both are now nearing implementation completion. The investments required to deliver them are largely behind us, and we will have better predictability on both revenue and margins in the quarter ahead.

2:32 I had also set out in my first interaction with you last quarter, how I see Protean's next chapter, our three pillars, which is deepening our core DPI franchise, bundling solutions for enterprises in addition to selling bespoke products and taking the India's DPI model to the world. Over the quarter, we have moved from articulating that strategy to starting to execute it, and I will spend the second half of my remarks on what that execution looks like on the ground. But first, let me take you through the numbers. So in terms of financial performance, Protean delivered a steady and resilient performance in Q2 FY twenty twenty seven. Revenue from operations grew 8% year on year to INR $2.71 crores, driven by continued momentum across our core and new businesses and led by market share gains across all our key offerings.

3:28 Our EBITDA stood at INR 43 crores in Q2 'twenty seven with EBITDA margin of 15%. Similar to last quarter, the margin for this quarter also factored some upfront investments of INR 10 crores towards implementation of our strategic RFP project. Excluding these investments, the EBITDA would have been INR 53 crores, which is an increase of 22% year on year and EBITDA margin of 18%. The profit after tax stood at INR16 crores in Q2 FY 'twenty seven. Excluding the impact of the investments, which I mentioned about towards the RFP project, normalized PAT would have been INR24 crores. I would also like to reiterate from last year that we will see over a few quarters a timing gap between cost and revenue pertaining to our Adhaar Seva Kendra project since we had to spend first to build the capability and the revenue would follow as the service volume expands.

4:22 But with 150 other Seva Kindas open till September and 187 out of the mandated 192 ASK centers live as of October 26, the major investments are all behind us. And as the network matures, we expect the related revenue to exceed the cost over the next couple of quarters and continued momentum thereafter. The early signs that we are seeing are alluding towards this direction. From a balance sheet perspective, we remain in strong financial position, zero debt and approximately INR750 crores of cash and marketable securities as of 09/30/2026. This gives us the flexibility to not only invest in our products and systems upgradations, but also pursue business growth, which we will do while maintaining fiscal discipline.

5:14 Our approach to capital allocation will remain rigorous. We will continue to evaluate our portfolio and prioritize investments and opportunities where we see the strongest potential for revenue growth, margin improvement and long term value creation. Let me run you through the business performance. Our tax service business, which is a source of transactional revenue, grew 13% year on year to INR 121 crores. In a de growing market, we have cemented our dominance by increasing our market share to 65.8%, an increase of three thirty basis points sequentially and seven eighty basis points on a year on year basis. We issued 1.3 crore PAN cards this quarter, of which 70% of the applications came through the assisted mode via our vast network spread across 18,000 PIN codes in India.

6:11 The strength of this distribution network is a key USP and differentiator for us, which is very hard to replicate, and it matters for assisted delivery model like pan issuance and other G2C services that we plan to offer through that. Our CRA service business, which comprises majorly annuity revenue, continues to present a significant long term opportunity. We onboarded 4,700,000 new subscribers during the quarter, up 15% year on year, which is 95% of all new subscribers in the CRE ecosystem. We also onboarded more than 1,400 new corporates, our highest ever corporate onboarding in a single quarter and a clear proof of our focus on the non government segment where the penetration is low, but the annuity opportunity is the largest.

7:03 Our combined market share across NPS, APY, UPS stands at 97% And under NPS, Australia, we added around 1.5 lakh subscribers, which is the highest ever quarterly addition under the scheme. We continue to do well on the government segment. On the revenue side, CRA grew 2% year on year to 80 crores, given some of the regulatory pricing impact we had. And as informed in the previous quarter, the charge structure now also includes AUM linked fee, which means our revenue per subscriber rises as the assets in each account grow. This growth will be market led and compounds over time. So the subscribers that we add today will become a growing annuity like income stream in the coming years as the ecosystem grows.

7:53 And I believe strongly as much as the pension regulator and the pension ecosystem that the opportunity ahead of us is very, very substantial. We expect pension coverage and the AUM to witness significantly high growth in the years to come, in line with the government's vision of taking pension to all. Pension coverage in India is still below 7% compared to 70% in economies such as U. S. And Europe. And with the concentrated efforts of PFRDA and the ecosystem, that gap is set to narrow with the NPS ecosystem projected to reach INR 40 crores subscribers over the next five years, and the private sector employees will be the key driver to complement the government sector base.

8:39 The regulator also expects the AUM to reach INR 100 lakh crores by 2040. There is also renewed push from the regulator, which is widening the product funnel by launching multiple new schemes. NPS Swastrale for miners, eGov's for gig and platform workers, NPS Sanjay for the informal sector, NPS Swast, which links retirement savings with health cover and NPS Central, a unified digital platform. And as a dominant CRA in each of these various schemes expands our addressable base. Our Identity Service business, which is a strong source of transactional revenue, also delivered robust growth. With revenue up 24% year on year to INR27 crores, it is driven by 26% combined volume growth across all the four facets of digital identity.

9:31 We remain the only company in the country offering all four foundational identity services under one roof, and the increase in volumes is a direct validation of our strategy of moving towards a bundled approach where our customers adopt our solutions as an integrated suite rather than as a standalone product. We'll talk more about it as we go. We are already seeing encouraging traction across all our new offerings. RISE with Protean, our API stack processed 3.3 growth transactions through the quarter. ESign Pro, which is our digital documentation suite, signed up more than 25 new enterprise customers in its first quarter of full monetization. This includes some very marquee BFSI and telecom companies.

10:18 I had called out last quarter that eSign Pro, which is a complete workflow to stamping to signing solution, is a very unique mode for Protean and a very massively scalable opportunity, both domestic as well as internationally. The early response confirms that view. Given the scale and growth of our Identity three sixty API stack, digital documentation and eSign requirements, we are very confident that this momentum will sustain and that Identity Services will remain a key growth engine for Protean. Our new initiatives in line with our strategy contributed 16% of total revenue in H1 twenty seven compared to 12% in H1 twenty six, growing 56% year on year. This is in line with our stated objective to diversify our business and revenue line and it will remain a key focus area.

11:14 Now coming to our strategic priorities. I had outlined three pillars last quarter as strategic priority for Protean. The first, deepen our core DPI capabilities. India's digital public infrastructure is fast evolving and Protean has been and should continue to be at the center of that evolution. Secondly, we drive better margin enterprise growth through AI led bundled solutioning approach. We are moving from only selling individual products to solving complete problems for enterprises, which deepens relationships and also improves economics. Third is taking India's DPI model to global markets.

11:59 Protean has been at the heart of India's DPI journey, and this gives us a credible right to win in the high revenue, high margin global DPI opportunity. Getting into a bit of detailing, on pillar one, which is deepening the core, the early chapter of India's DPI story was about building the foundational rails, identity, payments, data, and Protean actually helped in building several of them. The country is now entering its second chapter, which is all about value added sectoral services and AI driven intelligence that drives on those rails. Our first priority is to strengthen the trusted platforms that has defined Protean's legacy, which is tax, pension, identity and to extend the newer foundational rails across sectors such as insurance, agriculture, health, education, so that we remain at the center of this evolution.

12:55 The market share gains that you have seen this quarter across PAN, CRA, Identity are the most direct evidence that the core franchise is not only holding, but also extending its leadership. The sectoral DPI's will also start reflecting in our numbers as the mandates go live and begin to scale. Continuing from my opening statement, I want to elaborate a little more on the newer national infrastructure mandates that we've been building over the past few quarters, and these are not routine implementations. The Aadhaar Seva Indra has placed Protean at the frontline of how citizens access and update their digital identity. They give us a recurring transaction based revenue stream with a physical footprint across the country.

13:42 The CKYC mandate modernizes the sovereign record of financial identity in support of the vision for proving KYC once and with consent carrying the trust everywhere. The central agri stack that we built for the Ministry of Agriculture has also gained significant momentum. INR 11 crore farmer IDs have been created ahead of schedule. The platform brings together farmer, land, soil and crop records to create a trusted digital identity for farmers. The integrated registry is designed to make access to government benefits, formal credit, crop insurance and other financial and inclusion services more transparent, efficient and targeted, while strengthening the digital public infra for the India's agricultural ecosystem.

14:33 Mandates of such nature are interested to partners who have earned trust over a long period of time and all these mandates demanded a significant upfront commitment of capital and talent on our part. A bit of detailing on pillar two, which is our bundling approach from products to solutions. Historically, we have sold individual products and APIs, which is PAN verification, e KYC, Aadhaar authentication, eSign, each of it was sold on its own, integrated on its own and price per call. That model built scale, but volume on its own is not value. If you simply chase more transactions of the same kind, we will grow revenue but not margins, and we have changed that model.

15:22 Now let's take a couple of examples here. Consider how a bank onboards a customer digitally. It takes e KYC from partner one, document verification from partner two, fraud AML screening from partner three, bank statement analysis from partner four and before that, actually account aggregator services from an account aggregator, e signing and stamping from a fifth partner, CKIC reporting from a sixth partner, and it then builds and maintains the plumbing between all of them. That fragmentation is expensive, it is fragile and every handoff between systems is a point at which customer can drop off.

16:07 Our clients, particularly in BFSI, are no longer looking for a product. They are looking for a complete outcome. So we are moving from an API led stack to a journey led solution. We now bring together identity, verification, consent, data analytics, customer perform notification, credit analysis, documentation, ongoing compliance, servicing, everything into one integrated flow, which covers the full journey from application to activation. Last time, we also discussed the retail lending example. The customer today applies for a personal loan on a lender's app. Our SeekMIC solution with Anar authentication establishes the identity in seconds.

16:53 With the customer consent, our account aggregator pulls the bank statements, which the analyzer of Protean converts into an income and cash flow statement for the underwriter. Through eSign Pro, the sanction letter, loan agreement, they are all generated from a template, stamped with the correct state e stamp and signed with Araar. And the lender is ready to disperse. One journey, one contract, one integration, replacing what was previously multiple vendors and multi month integration program. The building blocks do not change, the configuration does. As stated, this model is relevant and applicable across all asset and liability products, be it digital lending, insurance, wealth, investments, SME onboarding or CASA account opening.

17:43 This itself could give you a sense of the overall TAM for this product. For the BFSI client, it means faster onboarding, fewer vendors to manage, simpler path to compliance. For Protean, it means deeper relationship, larger share of each client spend and a scaled durable revenue base. We moved from being priced per API call to being priced per journey and per outcome, which is a fundamentally different conversation on value. Our mix shifts towards better margin, value added services and away from pure pass through volumes. And because the orchestrated journey becomes embedded in the client's own origination system, stickiness improves significantly.

18:30 We are uniquely positioned to do this because we own or operate almost every component required, identity, verification, consent, signing, registries, end to end Protean has the relevant regulatory licenses directly. Further, the DPA mandates that we build will also follow a similar monetization model. And I want to emphasize this with the example of the Surfside mandate. The CKYCRR mandate itself is one side of the equation. Once the registry is modernized, every regulated entity in the country, almost 9,000 REs will need to connect to it to search, download, report and build compliant onboarding journeys on top of it. We are not just building the registry, we have also built the on ramps to it. The API stacks, which will integrate with it and bundle those on ramps with the broader API stack into a comprehensive proposition for our BFSI customers.

19:35 And I'm very happy to share here that this approach has also started translating into tangible business. We signed 20 plus mandates, key mandates already and 30 plus in the immediate pipeline on these adjacent value added offerings for BFSI customers. So while the DPA registry itself was a fee based mandate, the API on ramps are a recurring annuity opportunity across thousands of regulated entities. And this is exactly the renewed approach and strategy model that I've spoken about earlier. Build the core DPI mandate and open up adjacent commercial opportunities and this is the model and success we intend to replicate aggressively across most of our DPI assets.

20:23 The 26% volume growth in identity services, the 25 plus enterprise customers signed by eSign Pro and the CQIC 30 plus in CQIC mandate and the pipeline building around all of these products are early signals that clients are responding to our approach and to this proposition. And we believe that this solution led bundled approach is how we will grow our enterprise business from here, not just in volume, but as value creation with better margins, deeper and longer lasting customer relationship and a business that is more profitable by design. We are very encouraged at the early success and we are looking forward to sharing news of larger successes and tangible progress in the coming quarters.

21:10 Now detailing on the Pillar three and the one of the most critical pillar for us from a revenue and margin perspective, which is taking India's DPI to the world. Now Protean has been at the heart of India's ZPI journey from taxation to pension to identity and to sectoral innovation. Over three decades, we have built nearly every building block a country needs, Digital identity systems, citizen registries, consent based data sharing, real time verification, secure data exchange, pension system, tax administration platforms, grievance reversals, all of these have been built with security and compliance by design. Very few organizations anywhere in the world have this depth of hands on experience in building and operating these systems at population scale and at the cost of reputation India's population scale.

22:08 And that is what gives us the credible right to build for the global DPI opportunity. Our most scalable expression of this is what we call DPI in a box, modular, interoperable, configurable and most importantly, ready to deploy stack that allows any government to adopt proven DPI components faster while retaining the flexibility and ownership rather than commissioning a bespoke build from scratch model. This is a bundled solution approach that I described a moment ago, but this we have applied at a level of the nation. So the intent here is to offer a ready to deploy digital foundation rather than a multiyear integration program.

22:58 And this is something which is a unique mode for a company like Protean. And to pursue this seriously, we have restructured our organization and we have given our international business more dedicated focus and leadership. So our approach will be partnership led, it will be capital light and we will prioritize geographies where the need is real, the funding is ready and identifiable and where our reference credentials travel well in terms of geopolitical relationships and partnerships as well. So towards this endeavor, we have already started working with multilateral institutions, consultants, local system integrators and sovereign counterparts. So our recent international visits have also validated that there is a very strong interest in the DPI in a Box approach.

23:48 We are very encouraged by these conversations and we expect to share tangible progress in the coming quarters. The export of India's model of inclusive and trusted digital infrastructure is a generational opportunity and India's and as India's national trust architect, Protean would be one of its most natural carriers. I also while we've spoken about the business, I also want to talk about execution and capital discipline. And here, I would like to reiterate that while doing all of the above, we will stay focused on commercial execution and be very disciplined on capital allocation. So we are reviewing our portfolio through a very clear capital allocation lens. Some of our businesses depend on the pace at which a wider ecosystem matures.

24:37 So while we will stay invested in them, we will calibrate any incremental energy or investment towards the initiatives and move it towards initiatives where we see clearest path to revenue and profitability. Let me also give you a brief update about the cost discipline, because last quarter I had said we would relook at our cost structure and use AI to drive efficiency across the organization. We've already started optimizing our business operations and a large share of back office effort where it sits, we have started deploying a lot of AI there. Over the past few months, the team has deployed automation and advanced validation tools across all operations and these initiatives have reduced our dependency on external partners and have allowed us to redeploy resources towards new projects, which have resulted in immediate cost savings.

25:31 And this is only the first step. We are also exploring AI in every function of the organization with very clear objectives. One, improve productivity two, rationalize cost and three, upgrade the skills of our people for more product innovation. The toolkit ranges from automation of routine task into agentic AI that we can plan and progress multi step workflows within defined controls and there's a human in the loop. And we're also training the entire organization on AI tools so that this becomes a capability across Protean rather than a project in one department. And I want to be very clear here that we are not doing this for the sake of doing it. We are deploying AI very demonstrably, helps us rationalize costs and serve our customers better through more innovative products.

26:24 We have a strong team. We have a refreshed product and client approach. We have a balance sheet that gives us flexibility to invest in the right technology. It is our time to carpet in. To conclude, this quarter has marked the milestone in Protean's journey, a changed business model approach with early traction in international business, two key RFP mandates nearing completion, core franchises continuing to extend leadership and our new businesses contributing a higher share of revenue. Different as these trends are, but they rest on the same foundation, the trust that Protean has earned over thirty years transaction by transaction. And my commitment to you is to pair that trust with sharper execution, stronger profitability and most importantly, bolder ambition, so that we create a durable long term value for our shareholders and position Protean as a global market leader in building digital public infrastructure and enterprise digital solutions.

27:28 So thank you for your continued trust in Protean and I will now hand it over to our CFO, Mr. Sandeep Mathri to take you through the financials. Thank you, Ajay. Good evening, everyone. Thank you for joining us today. I wish you and your family a very happy and prosperous Diwali. To save the content for quarter two FY twenty twenty seven, I would like to start by sharing some macro development. India's digital public infrastructure landscape continues to demonstrate its strong structural tailwinds reinforced by TD policy support from government and accelerating digital adoption across both government and regulated enterprises. As we advance through what we view as Chapter two of India's CPI evolution, the industry is rapidly transitioning from foundational transaction processing rails to interoperable API led platform ecosystems that integrate identity, consent, authentication and data exchange at scale.

28:30 We are observing a significant shift among financial institutions, enterprises and public bodies toward an AI driven predictive digital infrastructure and bundled value added sectoral solutions spanning across tax, pension, open finance, insurance and agriculture. This continuous expansion of population scale digital registries both domestically and through increasing demand for India's stake template across emerging international market presents an expanding addressable footprint for a trusted technology infrastructure partner like Protean. Now coming to quarterly financials, quarter two FY twenty twenty seven revenues from operation stood at INR $2.71 crores, registering a growth of 8% sequentially and quarter and year on year as well. For half year ended FY twenty twenty seven, revenue from operation stood at INR $5.22 crores, which is 13% growth on a year on year basis.

29:37 Looking at quarter two, FY twenty twenty seven vertical performance, tax services contributed INR 121 crore, which is 13% Y o Y growth and 22% sequential growth and with market share gain of seven seventy seven bps on a Y o Y basis and three thirty two bps on a quarter on quarter basis. CRS services contributed INR 80 crores, which is 2% growth on a Y o Y basis. As Ajay explained, does this reflect our transition to an AUM linked chart structure, which should lift revenue per subscriber as corporate in the investment group. Identity Services, our fastest growing segment with 24% Y o Y growth in revenue led by 26% growth in volume across all the core assets of Digital Identity.

30:33 When you talk about new initiatives, they contributed 42 this quarter, about 16% of the revenue for the half year ended FY 2027. Revenue from new initiatives grew 56% and contributed 16% to the revenue. One thing to keep in mind is that revenue here is project led and project led often length in a single quarter that makes quarter number lumpy on a quarter on quarter and year on year comparison for any single product in this fleet. We believe the right way to take this business is on a full year basis and we advise you to do the same. Consolidated EBITDA core quarter two FY twenty twenty seven is 243 crore against INR 44 crore in quarter two FY twenty twenty six with an EBITDA margin of 15%.

31:21 H1 EBITDA stood at INR 71 crore versus INR 89 crore in H1 of last year with an EBITDA margin of 12.8%. The quarter two and H1 EBITDA number carries INR10 crore and INR28 crore respectively of upfront expense and cost inflation on our RFP project as reflected in increase in employee cost and other expenses, which is spent ahead of the full scale revenue accrual from these projects. Excluding these, quarter two FY twenty twenty seven EBITDA is 203 crore, which is 22% up on a Y o Y basis with an EBITDA margin of 18% margin of 18% growth of 187 bps on a Y o Y basis. And in H1 FY twenty seven, EBITDA is 299 crore, which is 12% upon a Y o Y basis and EBITDA margin of 18%.

32:14 With most of these projects going live and the major investment now largely behind us, we expect reported margins to move closer to the underlying run rate in the coming quarter. Profit after tax stood at INR 16 crore with a paid margin of 6% compared to INR 24 crore last year. For the half year, the paid stood at INR 22 crore with paid margin of 4%. Normalized paid excluding upfront investment for the RFP project stood at INR 24 crore for quarter two and INR 44 crore for the first half with paid margin of 8% for quarter two FY twenty twenty seven and H1 FY twenty twenty seven. This was all about our income statement in P and L. Now coming to our balance sheet and cash position. Our balance sheet remains strong. We have zero debt and approximately INR $7.50 crore of cash and marketable securities as of 09/30/2026.

33:11 Growth in property, plant and equipment from INR 63 crore in March 26 to INR 150 crore in September 2026 reflect investment of investment in our project. Also DSO increased from sixty four days to ninety three days primarily due to project receivables. To sum up, Protean revenue is growing, our core businesses are gaining market share and the heaviest part of our project investment phase is behind us. We enter the second half with a stronger base, better visibility on revenue and margin and the balance sheet that support our strategy ahead. With that, I will hand it back to the moderator for opening the call for our Q and A session. If you wish to remove yourself from the question queue, you may press star and two.

34:10 I repeat, if you wish to ask a question, you may press star and one. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Parimal Mitani from Credential Investments. Good evening, sir, and thanks for the update. So I just wanted to know in your CRA and you mentioned that you'll be getting recurring revenue. Can you explain further how does the pension work there?

35:01 Sorry. Could you repeat your question, please? Opening remarks, you mentioned that, you know, in the PR, the pension side of the business, you you... You've got a customer with recurring revenue. So can you highlight how does... Because of the new guidelines which are given by the PR... PRFDA? PFRDA, you mean. So what... So do we get the revenues in terms of where opening of any transaction happens or how does it work? Yes. So NPS, the revenue is per subscriber. So there are two or three parts of NPS. One part is AUM link and another part is APY, which is fixed per subscriber and then there is a government, which is also fixed per subscriber. So as you know, in NPS as AUM increases, the revenue also increases based on the claims defined by the FRP. But yes, so Parul just to summarize your question, so there will be two types of revenues which come here. One is revenue per subscriber, which you will get and the other is the AUM linked revenue, which will be dependent on the growth of the Okay.

36:12 And sir, secondly, your account aggregator, you already have a license, if I'm not mistaken. And there's a guideline which you come by as a urban site also. Does that also help in your scheme of things which you there? Yes. So absolutely, it helps. Yeah. Parvitsu, the account aggregator interoperability is, I believe, what you're talking about, which is where the RBI has listed on the interoperability part. So if you're linking to that, then yes, the interoperability would help the account aggregator industry. And there's work going on, on that perspective. In the journey discussions, aspects that are shared on the entire enterprise side, there also it will help and stand alone on the account aggregator point of view also, this would help.

37:05 And here, Protean has will actually stand to gain from this guideline on interoperability. The reason being we were initially one of the smaller players in this business. And so hence, the bigger players actually garnered a lot of business at that point of time. But now with the interoperability coming into place, the stage is now equal for everyone. And hence now as account aggregator for us becomes part of our bundled approach, we expect to see good volumes coming on the account aggregator side, especially given interoperability will now kick in. So my question is in terms of, you know, you have something that I can send through, which I know. So this account, I think, does it integrate into the entire bundle in terms of, you know, fetching data, in terms of, you know... Does it help us in that way, or how does it work into? Yes. It does. And actually, when I when I spoke about the example during my speech, we did mention that when you look at the asset side, which is the credit side or even the liability side, when you want to have a persona of the customer that whether they should give them assets or whether you should offer them asset or you should offer them investments, the one way that you do that is by using consent via an account aggregator model to get information

38:35 about the customer. And that is where Protean's account aggregator will kick in. And as part of our overall bundle journey that we will give to the BFSI segment, the account aggregator will become a very critical first step which we will offer to the BFSI and they will use our services to to extract information and then analyze that information. So yes, it is a big positive for us from an interoperability perspective. And for any revenue in terms of this, how does it work out, basically for search or how does it... The model has been worked out or it's still too early to say? It's still too early because the interoperable... The commercial around the interoperable structure is still under discussion.

39:20 And once that happens, we will have clarity in terms of how much it would mean for us from a revenue standpoint. And volumes, of course, will be dependent on how many of BFSI customers are we able to onboard as part of our bundle journey and the volumes that which comes through us. So yes, it is a bit early, but I think what we can take from your question is that it will be positive accretion for Protean. The next question is from the line of Mr. Bajrang Bhavna from Suneeti Securities. Congratulations for sequential recovery.

40:07 So just want to make one point here. You normalized profit, though the reported number is INR 16 crores, but the one off item, if I heard it correctly, 10 crores, if we adjust with taxation, the normalized profit is INR 24 crores for this quarter. That number is right, sir? Yes, that's correct. Okay. And the second to Rajan, sir, your cost of... So a reported perspective, it is... It still remains INR16 crores only. It's okay. Yes. I'm just saying adjusted profit for this one off item of INR10 crores, it is about INR24 crores. So that's worth confirming if I heard it correctly. Yes. And second is on the MOUs front, which you talked about, that 20 has already been signed and 30 are in pipeline.

40:57 So if you could elaborate a bit that what sort of these MOUs are and how the revenue potential or maybe the margin profile it can bring to the company? So, see, these specific details will obviously not be able to share. But as I mentioned in the call, the mandates that we have announced have been we've announced around two broad products. One is the eSign Pro, which is our entire digital documentation stamping and signing stack. And the other is in terms of the bundled approach on CQIC, So which again is where we are helping not only the institutions to integrate with site, but also reimagine their onboarding journeys using CQIC and the fulcrum.

41:56 So both of these would be good businesses and again a foot in the door for us within these large organizations to embed ourselves into the bundle journey that I spoke about. Okay, great. And third is, recently we have also heard about this INR 11 crore farmers' IT has been issued where Protean has played a major role. So what sort of potential that this pharma stake can bring for Protean in terms of journey forward in terms of revenues or maybe some sort of clarity will be really helpful, sir? Thank you, Vikram. That's an excellent question. You actually touched upon one of my topic which is closest to my heart having come from a bank who faces the biggest brand of not adhering to priority sector lending requirements and most more especially the small and marginal farmer lending.

43:01 So actually that is actually the time for this agri lending. So just to give you some sense, banks spend between INR 9,000 crores to INR 11,000 crores annually on buying priority sector lending certificates. And the reason that they spend this money, this kind of money is because they are unable to lend to the small and marginal farmers. This agri stack that we spoke about, which is what Protean is very, very proud to have built and where there are these registries which are part of the stack, which is farmer registry, land registry, swine registry and the crop registry.

43:47 Now this API is when it is exposed to the VFSI ecosystem to use, becomes a very, very valuable source of information for banks or even in the lenders to use for evaluation of a small and marginal farmer. So you are actually able to get a very fact based and database information about the credit worthiness of the farmer. You're also able to assess from an insurance perspective, for example, whether how much crop insurance you can give to the farmers. So these are very fact based tangible information which is available in the stack. And we do believe that, you know, we we can help work with lenders, insurance companies that a cost item for them, which is this INR 9,000 to INR 11,000 crores today is a cost item for the bank. We can actually work with them collectively and convert this cost item into a revenue item. So that is how I would like to believe the value of the AgriStack is and we are quite excited with what we can do on this.

45:00 Great. And thank you for this detailed explanation and hope and wish you all the very best for your future endeavors. Thank you. Thank you. The next question is from the line of Mr. Deepak Agarwal from Param Capital. Please go ahead. Yes. Hello, sir. Am I audible? Yes, you are. Yes. Yes. So my first question was on the tax services. So can you help us understand now how we should look at this? So we have grown 13% year on year in this quarter. Now for the full year and the next year FY '28, do we continue to expect growth similar to what we have achieved Q2 or there would be some decline within?

45:53 Anything you can share on this? So for full year, I think we should expect same kind of market share which we have in tech services. And the growth would depend upon the total volume, which get delivered in the S2. But we expect it is on similar lines like we have in H1. So that answers your FY twenty twenty seven question. For FY 2028, I think we need to have more visibility by the end of the year, how will tax revenues or tax system will fall into play after the PAN 2.0, it is taken implemented sometime next year. So then only we'll be able to figure out what kind of growth or revenue it will bring into our city.

46:43 Sir, because one thing... So we have been talking a lot of the new initiatives we are taking. But when we look at the numbers, so although there is a reasonable top line growth, but somehow we used to be... If we go back in the past, it used to be a 20% plus EBITDA margin business, which has declined now more closer to about 10, 11, 12%. So first of all, structurally, as a company, you think once you get the things in place, can we grow materially higher than the past of that 10, 15% revenue growth? And second is where do you see the steady state margins in the longer run where you would want to take the company?

47:31 So, Deepak, it's a very, very good question and a very fair question. And you're absolutely right that we have seen margins declining over a period of time and which has predominantly been because we have been overly dependent on digital public infrastructure as a business. And which is, if you note, will be major constituent of our business. While that is obviously a very good business to do and we we have a long track record and that is our moat. We are known as the National Trust Architect of the country and a player with dominance in BPI. But the margins on that have also been kind of have been falling, right? So which is the reason why we have consciously decided on diversifying our strategy.

48:20 And if you look at our even Investor Day and also the call where I articulated the three pillars, the strategic business pillars for us. We will continue to double down on our DPI, which however will not deliver very high margins, but it is very important because that's foundational for Protean and it's a business that we do the best. Now but in to order to make sure the to elevate the concern that you also raise, which is how do I increase the margins. And that is why the pillar two and pillar three, which is the enterprise business and the international business expansion becomes very, very critical. Now both of these pillars, as you would appreciate, actually high margin businesses and the more successes that we deliver in pillar two and pillar three will on a weighted basis significantly enhance the net overall margin of the company. Now a lot of focus and efforts are being made to proliferate our DPI strength globally, and I spoke about the DPI in the Box approach.

49:32 And on the second part, which is the enterprise stack, the whole proposition of bundling these services and delivering to our customers in a high margin model is also seeing successes. And I would like to believe and assure that over the next few quarters, you will start seeing tangible reflection of that in the both the revenue profile and the margin profile for the company. So we've got one more question. Didn't give a guidance, Deepak, but in terms of actual numbers, because it's very nascent for us to have changed this whole strategy.

50:17 But again, as I mentioned very clearly in the call, the early successes in terms of both the mandate wins and also the pipeline that we have. And hopefully, we should announce be able to announce certain good successes to all of you. We believe that we would be on track to meet what I have articulated as a strategy into sharper execution. Okay. So because the one question what everybody has in mind is, so under PAN two, you did mention. So this year, we are largely growing in line with our market share and actually improving our market share. But under plan two, is there a risk that this line item would be grow and the growth from the other segments will be able to cover that up starting FY twenty eight onwards. I understand it's difficult because I just said how the transition happens in time too.

51:15 But any thoughts there that you think it could see a decline or you should be able to raise the decline with the growth in other line item? See, So first of PAN 2.0 itself, while the 2.0 will kind of the online mandate is already scheduled that will transition out. But I think we also have to appreciate that bulk of our revenue actually comes from the assisted model. So 70% of PAN is done through the assisted model, which was never part of the PAN 2.0 mandate, right? So but having said which, are yet pending clarity with the ITD in terms of how the thought process is for handling that part. So very difficult for us to comment at this stage as to what the revenue model how the revenue model on the PAN will evolve in next year. I think over the next quarter or so, we should be able to get clarity and we will be obviously share that with you in full transparency.

52:24 To your other question, whether we will be able to see execution of pillar two and pillar three, yes, very confident that we should be able to show tangible success on both pillar two and pillar three. And as I mentioned, both of these are much better than So we do believe that in both in terms of and also bring these are all scale businesses also, The international mandate, what I get for say INR100 crores here could easily be a 100,000,000 mandate overseas. So in terms of scale also it provides good potential. So yes, we are working very hard towards actualizing some of those efforts. And we do believe that we should be able to show successes in a fair bit of time, yes.

53:19 Sir, my next question was on the mandates you mentioned on the eSign Pro and eKYP. For us to understand better, so you are helping banks on their digital journeys when they are originating online growth. Right? It could be personal loans, small ticket loans, or maybe basic KYC. How much value add you do in this, and what is the kind of do you get that your yields or do your revenues is for a successful KYC? How does the pricing work there, sir? Just to understand how big is the opportunity and where are you based? See the... So you're talking about only eSign, bro? You're talking about the overall bundled approach?

54:08 Sir, bundled approach. So I would love to hear because this So see the bundled approach is not only for banks. It is for BFSI segment as a whole. So like I was mentioning in my call, there are two sides to BFSI, right? There will be a asset side business and there will be a liability side business. Now full banks and NPSCs or credit card companies would come on the asset side. And again banks or mutual funds, PMS, AIF, insurance companies, all of these capital market brokerages, all of these would come on the liability side. Now for every customer, every entity, they have a need for onboarding their customer and maintaining their customer.

54:57 Now at the steps of onboarding the customer, like I had mentioned in the example, you know, there are account aggregator services that they will need for getting information about the customer, Then they will have validation services that they will need for validating that, okay, Deepak is Deepak. So they might do a fan validation, ARA authentication, ARA verification or CQIC validation. So these are validation services. Then they will need analytics to say, okay, Deepak is good for a loan or investment or so on so forth. So this is third part. Then there is the documentation part which you alluded to the eSign growth that okay, now that Deepak is good for investment, so should I send in the PMS application form or if it's a loan, can I send in the loan of a letter or if it's simply opening a savings account or a current account, then sending this account opening form? Now all this journey of account opening form and the stamping or the signing is what is part of eSign Pro. So now if you look at... If you put all of these together, so I spoke about some seven eight steps and the aggregation of all these seven eight steps is the journey that we build for the BFSI sector.

56:20 And today, you know, we would be probably playing some part of, you know, the journey for the BFSI. The aspiration is that we bundle all of this, give a single API to the BFSI so that I I... With a single API, they're able to extract all the eight points that I spoke, the value out of all those eight. So in terms of pricing now, you know, there are various models of pricing. You know, there could be some institutions who could... Who would want this whole bundle of eight APIs, you know, given to them as a single API. There will be some which may still say that, okay, we may go up. Give me only two, three, and four. There may be some who can say only... I I need only one. Now various institutions depending on their evolution and partnership model will come and take these bundled services to us.

57:12 But we believe that when we offer the bundled eight, we will anyway end up being giving more than today going and selling product by product. So that's the approach that we are looking at. So today if I'm making X, the opportunity could be to make 3X, 5X or 20X. So that is actually the range depending on what we are solving for the organization and what strategic value we become on their overall product journey. So that it's a bit difficult for us to give overall monetary sense of it, but you can easily look at banks' technology spends. Onboarding is a very key factor for any fintech, any NBFC or any bank. So that big chunk of money that they spend on building and managing their onboarding journeys is what becomes TAM for us. And also we believe that we have the vote because we are the source provider for all of that. So a large TAM, a source provider, more a company with three decades of excellence, having built the DTIs and having bringing the bundle story, I believe that we have a very good right to win in this overall time that I spoke about.

58:38 Got it. Got it. And so my last question was on the... So in terms of capital allocation, so we have about INR $7.50 crores of surplus cash sitting on the books. Now, obviously, some part of that, you want to keep it for working capital and fixed assets. So your thoughts of... So even if you adjust for a reasonably large, if you get some of the mandates and each of them requires their 100 crore, 200 crore kind of working capital, still that you are sitting a lot of cash. So one suggestion would be the... As a company, you should seriously consider buyback because that also tells investors that we would want to create value. Because if you pay dividends, which is good, but I think buyback...

59:27 Because that INR 1,500 crores a year adds a lot of value from shareholder perspective. So Deepak, I'd just like to clarify here that today, while yes, we have cash on our books and we have the flexibility to deploy this for strategic growth, there are various areas where right now as we speak, there are avenues where we need to deploy or we'll be deploying this cash, right? A, we are doing technology upgrades on our existing DPI's. So there'll be money which is being spent on that. And this is required because these are the same stacks that we are taking global. Right? So there is technology spend order required in order to a, do this.

1:00:23 B, some of these ask mandate, for example, like we mentioned, some of these mandates do require capital to be deployed here. B, of these product journeys that we are building that will also require cash to be spent. Most importantly, as we want to really double down on international and make it a very significant portion of our revenue model, there will be money which will be required for A, setting up JVs or branches in those domicile and then building infrastructure and deploying there and managing scale there, right. So all of these are investments that we will need to make to grow our international business.

1:01:11 And of course, we always remain open for any inorganic acquisition, which we believe could be strategic to us, which will either help our product line, revenue line, customer line, international expansion. So depending on some of these requirements, we do believe that this cash would be required if the company has to accelerate itself to the next level of growth. But in the meanwhile, of course, we continue to give our shareholders dividends and we will hope to and aspire to keep continuing on that. The next question is from the line of Mr. Vinil Shah from Dalal and Broja. Please go ahead.

1:02:07 Thank you for taking my question. So my first question is with respect to our VP and MOs. So based on our discussions with the customer... Your voice is not clear. Vinil, can you please... Hello. Hello. Yes, Vinil. Yes. So sir, I was asking that if you could just describe how our discussions with the customers, maybe a bank or insurance company with respect to VPN about how they are progressing, like what are the feedbacks or what are the response from the customers that we are looking at right now? Didn't we... We discussed so much in detail on this. Are you talking about the bundling journey or detail in a box? Detail in a box, sir. Like, what are what are the customers' feedback right now?

1:02:53 No. No. So DPA in a box is an approach that we are taking to our international markets. Right? So in a very simplistic manner, what does it mean? See, in India, we have built various DPI's which are deployed at India's population scale, right? So we if you look at our investor deck as well, has actually graphic representation of the DPI in a box. So we have the PAN services, PAN network or the tax information network. We have the pension business. We have the AGRI stack. We have the CKIC stack. We have all of these VPIs which we have built in India and tested in India and ready to deploy, right? What we are doing is that we are taking this in a composite approach and we are nomenclature wise calling it DPI in a box, where when we go to a government, say for example, when I go for an international trip and when we are meeting the government in that particular country, what we are telling them is that these are the DPI's or the bunch of DPI's that we have built in a country like India, we're at that scale and these are the stacks that we can help you build and develop in your country. So let me take an example, right? So there could be... And I will not name the countries, but let's say company A or company B, which is a developing country. Now they may have...

1:04:17 They may be in a situation where India was maybe a decade back. Right? So they will have very basic needs key. I need a a social ID or digital ID solution or I need a tax information network digitization. So their needs will be quite basic. So we have already experienced in building all of that in India. We can simply work with them and expand the stack or execute the stack for them in that country. Now there could be countries which are more evolved. So say the developed countries for example, so they already have multiple digital IDs. Now they could be very keen on the CKYC stack because what the CKYC stack does is it becomes a cover on top of the multiple IDs that you have and that becomes a central KYC number for that particular citizen.

1:05:07 So when they go and so you basically have proven yourself one and you can go and avail any kind of services in that country just quoting that one number instead of sharing multiple IDs. Right? So in a developed country, that CKYC stack becomes very, very relevant. Now which country... Which company in any country has built a registry so large, you know, other than Protean. Right? So it becomes... It gives us the right to win in a product like a CQIC. Look at the pension system. Now, you know, we are running the lead CRA for probably one of the largest pension ecosystem in world, right, in terms of subscribers. Now this is the kind of stack which countries would be happy to explore. So amelgamation of all of these VPIs as a composite offering is what we call it as VPI in a Box. And yes, the countries are very, very excited when they hear us talk about it. And of course, we hope to see this traction converting to execution as the time goes.

1:06:17 And sir, the second one on the bundled services. So I just wanted to understand that we are already present in the value chain. We are providing a couple of services to the banks or the insurance sector. So now what will be the incremental proposition? Like, if you are to contact her, if earlier providing three of the services, and now when we are selling the money services and we provide another two orders, three services, so if you could just give a a how much percentage growth can we see in a pro plan or a EBITDA margin layer, How much can it attribute to our financials, P and L statement? P and L, I've already spoken about it at very, very high length in my speech as well as in the previous question.

1:07:05 And as I mentioned, don't think it's possible to give a growth percentage in terms of EBITDA and all that, but as I already clarified, it is going to be accretive in terms of both revenue, number of products that we will be able to penetrate and the margin accretion which will happen to the company. Okay, sir. Thank you very much. Thank you. The next question is from the line of Mr. Saurabh Jain from Sumiti Securities. Please go ahead. Hello. Yes. Congratulations team for a better quarter than the previous one. I just had very exciting opening remarks and quite a convincing one.

1:07:50 So, sir, my question, I just wanted to touch upon the FRDA thing once again. You mentioned in your opening remarks that the FRDA is now from, you know, NPS subscriber growth to reach... To take it to almost 40 crores, which is currently must be around $3.3.5 crores. So I just wanted to understand the revenue trajectory. What kind of absolute revenue can this particular road driver can add to Protean? Not getting into the number game, whether we reach 20 crore number or 40 crore in the next three to five years. But if you can, you know, explain through one example that if we add one crew subscribers, what kind of revenue with, you know, per subscriber base and the base, what can Protean add? And, also, I understand that since the infrastructure layer is already established in this vertical, so margins must be quite high in this.

1:09:03 Yeah. So excellent question, Saurabh. And I'll defer it to Sandeep for the number part, but let me address at least from a strategic perspective the response to your question. So as I mentioned in my remark as well, we are supremely excited with the momentum which has not created in the whole NPS pension business. And we're very blessed that we have a regulator who is so progressive and who has really pushed aggressively the overall ecosystem to have higher ambition and work towards achieving that higher ambition. So today, from the base that we have, it's almost like a 20x growth, which is being anticipated over the next few years.

1:09:58 And even in terms of AUM, I think today, if I'm not mistaken, MPS ecosystem would be around INR18 lakh crores of AUM. There is an aspiration to reach INR100 lakh crores by 2040, which was very recently stated by the FID as well. So very, very strong momentum in terms of and supported by products also, So it's not only here say there is a lot of product innovation which is happening to support. So yes, it is very exciting space to be in. Protean again is very blessed to be playing a major part of this being a major part of this ecosystem and helping to drive a lot of these initiatives.

1:10:48 Of course, remain very, very bullish that we will continue to have good market share like we are having currently in terms of this future growth which will come. And we do believe that we will continue to be a major player in the MKC ecosystem. So I will leave it to Sandeep to give some tangibility of numbers or assumptions and hopefully that will answer your question. Thanks Ajay for talking about this. So, Saurabh, in terms of per subscriber revenue, it can range for each NPS subscriber based on the corpus they are maintaining from 100 to 500.

1:11:35 So you can imagine if you have INR 1 crore of additional subscriber, what kind of revenue it will bring into. Second, on the question on margin, yes, these are platform businesses. So it will always have high margins and it will be accretive to margins always. So that 100 to 500 would be AUM based. Apart from that, for every account opening also, get some. Right? 40... Yeah. That is 40 rupees. Okay. What would be the gross margin, sir? Can't... Ballpark number, some range. As I'm telling you, these are platform businesses always have high margin in these businesses.

1:12:22 Above 50%? I can't give the number both. Sir, my next question, since the management said one offs with respect to Adaativa, King Raj are broadly over, so we should be growing on the base of this adjusted net profit of INR 24 crores in the coming quarters. Would that understanding be right? Sorry, could you repeat your could you elaborate your question? So one offs with respect to Aadha, Siva, King are broadly over, as you had mentioned earlier. So we should be now growing on the base of this quarter's adjusted profit of INR 24 crores, right? Adha Seva Kingda is not a one off. These are like managed projects, wherein you will have both revenues and cost coming in next quarter.

1:13:13 So what we said that upfront investment with respect to Aadhaar Seva Kendra is now over and we will see amortization of those costs as well as revenue picking up in the next quarter three and quarter four. So you would see some sort of revenue accretion on Aadhaar Devakind going forward. The exceptional cost was on a different strategic RFP mandate. And yes, that cost should now largely be over. We don't expect more incremental cost coming on that. Sorry? So this while responding to another participant's question, you had said that adjusted net profit would be around INR 24 crores.

1:14:09 So can we assume this as a base now for the coming quarters? Ideally, yes. Okay. Just one small thing on follow-up on my AgriStack since you had mentioned a huge opportunity with respect to every credit target of the government. So Ajay said, can you give us some timeline when can we start seeing meaningful contribution from this particular vertical? See, for that, the stack has to be opened up, for the ecosystem to use, which is something that the ministry will have to kind of decide.

1:14:54 But from our perspective, the stack is ready and has been delivered. A lot of or most of the farmers have been on boarded and their respective land records have also been added. It is obviously going to be an ongoing process where more farmers will get added, but I would be quite hopeful that the government now that the data is in place, we've seen statements made by the Honorable Minister and a lot of bureaucrats as well. So we do believe that over the next maybe months or quarter, we should see this agri stack being open to for the ecosystem to use.

1:15:39 So I I have the time line to be frank, like something that is in the government hand, but I do believe that the time should be quite soon. So since the broader network is all established, the ecosystem is already in place. So next year, at least, we can, you know, expect some good number. Right? Next system. I would absolutely be hoping for that. That's good. Thank you. That's all from my side, and wish you all the best. And the good wishes will be quite required for that. Wish you all the best, sir. Thank you. Thank you so much, sir. Thank you. The next question is from the line of from Family Office.

1:16:29 Please go ahead. Good evening, sir, and thank you for taking my question. My first question is on the quality of revenue from these new initiatives. So in new initiatives contributed around like crores in second quarter revenue accounting for around, I think, percent of total. So could you help us understand how much of this contribution came from recurring operations such as ongoing platform service and maintenance or system implementation related or project based revenue? And as this business scale, how do you expect this revenue mix to change? Okay. So but actually, we can't be giving this composition of revenue. But what we can say is that going forward on a quarter on quarter basis, the recurring revenue share is to grow and the project based revenue would be similar or grow in a smaller fashion.

1:17:46 Okay. Okay. Got it. And my second question is on economic of the large mandate. So in the 2Q twenty seven presentation, company mentioned that the investment towards two major RFP mandates are largely behind the company with improved operating leverage expected going forward. At the same time, AI enabled operating efficiency and cost rationalization are key strategic priorities. As this mandate moves into the steady state operation, so what are the key factors that will drive sustainable margin improvement? And how should investor assess the return on capital already invested in this project? Explained by Ajay in his speed as well as in some of the questions as well.

1:18:48 The investment paid for this project, think, is largely over and we don't see more spend on this project ideally going forward. We should see more recurring revenue coming out of the adjacencies which we are creating from these projects. So the revenue from both these projects is already underway. So our Aadhaarj, Jiva, Kindras are already operational and they are already generating revenue. And as I mentioned, almost 187 out of 192 as of October is already in place. So these are have started already generating revenue and over the next coming months, we will see this number will be increasing and then kind of being more than the cost, the revenue will be there, right? On the Sasi mandate, we already again spoken about it that we have received multiple mandates already, which are helping integrate banks into the such site, so that those mandates are already implemented and started generating revenue.

1:19:59 And there is a good healthy pipeline, which will help us generate revenue over the subsequent quarters as well. So to your question, cost largely done, revenues already started accreting and this revenues will only grow up grow ahead in terms of its momentum. Okay. Got it. Got it. Okay. Thank you for answering my both questions. Yes. Thank you. You. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to Ms. Pushpa for closing comments. Over to you. Before the closing comments, deepest sense of gratitude from all of us at Protean for being patient investors with us.

1:20:48 And we can only assure you that given all the strategic initiatives that we are working we should make it worth your while. And before we kind of shut the call, I would like to also take this opportunity to wish all of you and your families a very, very happy, healthy and prosperous Diwali. Over to you. Thanks, everyone. If there are any questions which were not answered during the call, please feel free to reach out to me. Thank you and wish you all a very happy Diwali. Thank you. On behalf of Protean eGov Technologies Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.