Infibeam Avenues reports 43% rise in net profit; increases stake in subsidiary

Payment infrastructure company Infibeam Avenues reported a consolidated net profit of Rs 35.81 crore in the third quarter of the current fiscal—43.13% higher than Rs 25.02 crore in the year-ago period.

In an exchange filing, the company said its total revenue rose 4.5% to Rs 414.7 crore from Rs 397 crore, with the payment business contributing Rs 372.96 crore. Revenue from the ecommerce platform business remained stagnant at Rs 41.7 crore. 

Infibeam's payment business includes the payment gateway business (CC Avenue brand) and payment infrastructure business, including CPGS towards banks and credit and lending-related businesses.

On the other hand, the ecommerce platform business includes software framework and infrastructure to enable ecommerce for large enterprises and related services, including domains and advertising.  

Meanwhile, the company's expenses shot up to Rs 383.6 as against Rs 372.89 during the previous quarter ended December 2021.

Its EBITDA of Rs 47.6 crore was 25.9% higher than Rs 37.8 crore annually, and the EBITDA margin rose to 11.5% from 9.5% in the corresponding quarter of the previous year.

Infibeam Avenue claims to have added 1.1 million merchants in the third quarter, with total merchants reaching 8.4 million, up 72% YoY. The retail sector was the largest merchant contributor, followed by grocery, travel and ticketing, education and IT.

Further, its quarterly gross transaction processing value (TPV) stood at Rs 1 lakh crore, up 27% annually.

"The company’s focus on generating higher profitability per transaction to improve unit economics is starting to produce results. Payments net take rate (NTR) increased to 8.9 basis points (bps), up 63% YoY," said Vishal Mehta, Managing Director, Infibeam Avenues.

Net take rate is net earnings from payment business after paying payment processing charges.

"The company is experiencing a quarter-on-quarter increasing trend in net take rate as sectors impacted in the pandemic, and the overall discretionary spends are now increasing," he added.

He continues, "Also, change in payment mix from credit options like credit cards and EMIs to debit options like net banking and debit cards led to favourable net take rate." He said that payments through debit options are more profitable for the company.

The company aims to venture into offline digital payments through the newly launched CCAvenue mobile app with Tappay and grow its payment infrastructure business in international markets.

It is also looking at growing a merchant pipeline for cross-sell opportunities and offering working capital loans and invoice discounting to merchants to boost margins.

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Stake in subsidiary increased 

Infibeam Avenues increased its stake in subsidiary Instant Global Paytech Pvt Ltd (GoPayments) to 54.80% from 52.38% to “grow its existing assisted commerce business and get into the offline merchant acquiring business.”

The company will do this by promoting the physical distribution of the CC Avenue Merchant App, Point of Sale (PoS) devices, and Tappay products. 

The listed fintech firm will invest a sum of not more than Rs 16.25 crore in the same, and the transaction is expected to close within a time period of 30 days through a cash consideration.

Recently, CCAvenue partnered with IDFC Bank to set up its digital infrastructure to provide digital rupee services. The company is also in discussion with a few other banks to become their partner for digital rupee, it said in a statement. 

Shares of Infibeam Avenues ended at Rs 16.55 on Monday, 3.12% higher than the previous close of Rs 16.05.