Network People Services Technologies Ltd:Annual Report 2023-24 Analysis

Network People Services Technologies Ltd. Overview #

About the Company #

Year of Establishment and Founding History #

Network People Services Technologies Ltd. (NPST) was established in 2004. It began as a technology services provider focused on the BFSI sector.

Headquarters Location and Global Presence #

NPST’s headquarters are located in Mumbai, India. While their primary market is India, they also serve clients internationally.

Company Vision and Mission #

NPST’s mission is to transform businesses by providing innovative and customized technology solutions.

Key Milestones in Their Growth Journey #

• Initial focus on BFSI sector technology solutions
• Expansion into newer technologies like AI and ML
• Development of cloud-based solutions
• Growth in client base and market share.

Stock Exchange Listing Details and Market Capitalization #

NPST is listed on the Bombay Stock Exchange (BSE: 538735). As of late 2023, the market capitalization hovers around INR 300-400 Crores. This data is approximate and subject to change.

Recent Financial Performance Highlights #

NPST has demonstrated consistent revenue growth in recent years, driven by demand for digital transformation solutions. Recent financial reports highlight increased profitability and a growing order book. Consult current financial statements for precise figures.

Management Team and Leadership Structure #

NPST is led by a team of experienced professionals with expertise in technology, finance, and management. Key figures include the CEO and other top executives responsible for different functional areas.

Any Notable Awards or Recognitions #

NPST has received awards and recognition for its innovation and contribution to the BFSI sector.

Their Products #

Complete Product Portfolio with Categories #

NPST offers a range of technology solutions categorized into:

• Digital Banking Solutions: Core banking systems, mobile banking apps, internet banking portals.
• Payment Solutions: Payment gateways, digital wallets, UPI integration.
• AI and ML Solutions: Fraud detection, risk management, customer analytics.
• Cloud Solutions: Cloud migration, infrastructure management, application development.
• Cybersecurity Solutions: Threat intelligence, vulnerability assessment, penetration testing.

Flagship or Signature Product Lines #

NPST’s flagship products include its core banking platform and suite of digital payment solutions.

Key Technological Innovations or Patents #

NPST’s technological advantages stem from their expertise in emerging technologies like AI, ML, and blockchain.

Quality Certifications and Standards #

NPST adheres to industry-standard quality certifications such as ISO 27001 for information security management.

Any Unique Selling Propositions or Technological Advantages #

NPST’s USP lies in its ability to provide customized and scalable solutions that address the specific needs of its clients. Their focus on emerging technologies gives them a competitive edge.

Recent Product Launches or R&D Initiatives #

NPST continuously invests in R&D and recently launched enhanced versions of its digital banking and payment platforms with improved security features and user experience.

Primary Customers #

Target Industries and Sectors #

NPST primarily targets the Banking, Financial Services, and Insurance (BFSI) sector.

Geographic Markets (Domestic vs. International) #

While primarily focused on the Indian market, NPST also serves clients in international markets.

Major Client Segments (agricultural, industrial, residential, etc.) #

NPST’s client base consists mainly of banks, financial institutions, and insurance companies.

Distribution Network and Sales Channels #

NPST employs a direct sales force and partners with channel partners to reach its target market.

Major Competitors #

Direct Competitors in India and Globally #

Major competitors include other technology services providers focused on the BFSI sector.

Competitive Advantages and Disadvantages #

NPST’s competitive advantage is its focus on emerging technologies and customized solutions. A potential disadvantage could be the need to compete with larger, more established players.

How They Differentiate From Competitors #

NPST differentiates itself through its customer-centric approach, technological expertise, and ability to deliver innovative solutions.

Industry Challenges and Opportunities #

The BFSI sector faces challenges related to cybersecurity, regulatory compliance, and the need to adapt to changing customer expectations. NPST can capitalize on opportunities related to digital transformation, cloud adoption, and the growing demand for AI-powered solutions.

Future Outlook #

Expansion Plans or Growth Strategy #

NPST plans to expand its product portfolio, target new geographies, and strengthen its partnerships to drive future growth.

Sustainability Initiatives or ESG Commitments #

NPST is increasing their focus on ESG initiatives.

Industry Trends Affecting Their Business #

Industry trends such as the growing adoption of cloud computing, the rise of fintech, and the increasing importance of data analytics are shaping NPST’s business strategy.

Long-Term Vision and Strategic Goals #

NPST’s long-term vision is to be a leading provider of technology solutions for the BFSI sector, empowering businesses to thrive in the digital age.

NPST: Financial Performance Analysis (FY22-FY24) #

Financial Trend Analysis (FY22-FY24) #

The company has demonstrated robust financial performance over the past three fiscal years, achieving record revenue growth for three consecutive years. FY24 marked a significant milestone with annual revenue surpassing INR 1,000 million, reaching INR 1,300 million (INR 130.08 crore on a standalone basis).

• Revenue:
  • FY24 (Standalone): INR 130.08 crore, a 216.27% YoY growth from FY23.
  • FY23 (Standalone): INR 41.13 crore.
  • FY22: The company reported its third consecutive year of record revenue growth, implying strong performance.
• EBITDA:
  • FY24 (Standalone): INR 43.70 crore, a 252.99% YoY growth. EBITDA margin improved to 33.59% from 30.10% in FY23.
  • FY23 (Standalone): INR 12.38 crore.
• Net Profit:
  • FY24 (Standalone): INR 26.71 crore, a 309.66% YoY growth. Net Profit margin improved to 20.53% from 15.85% in FY23.
  • FY23 (Standalone): INR 6.52 crore.
  • Net Profit Growth CAGR (FY22-FY24) is stated as 126%+.
• Earnings Per Share (EPS - Standalone):
  • FY24: INR 13.78, a 310.12% YoY growth.
  • FY23: INR 3.36.

The financial trajectory indicates strong organic growth, efficient cost management leading to margin expansion, and effective utilization of capital raised via the SME IPO in 2021, which catalyzed the first phase of growth. Consolidated financials largely mirror the standalone performance, with FY24 consolidated revenue at INR 127.59 crore and profit after tax (after minority interest) at INR 26.72 crore.

Business Segment Performance #

NPST operates across the financial value chain, serving banks, fintechs, and merchants, organized into two primary lines of business:

Technology Service Provider (TSP) Business #

• Focus: Enabling banks to accelerate digital transformation.
• Offerings: Banking SuperApp (over 20 million user base, 2.5 million merchants on acquiring platform by FY24), UPI platform (Switch, IMPS Switch processing 7 million transactions daily, UPI Switch processing 6% of total UPI financial transactions in India), Online Dispute Resolution (ODR), Instant Merchant Refund, CBDC Switch.
• Performance: Doubled the number of banking clients in FY24. Strong traction for Banking SuperApp among mid-sized and regional rural banks. Successful contracts with SBM, DCB Bank, Bank of Maharashtra, and Jupiter for various solutions. Recognized by Karnataka Gramin Bank and Kerala Gramin Bank for CBS integration expertise.
• Revenue Model: License model (one-time cost, AMC, change requests, manpower support) and SaaS model (per transaction, per month, per user login).

Payment Platform-as-a-Service (PPaaS) Business #

• Focus: Optimized, cost-efficient solutions for payment aggregators (PAs), payment gateways (PGs), and large merchants.
• Offerings:
  • Evok PPaaS: Cloud-native online payments platform simplifying transaction processing, value-added services, fraud monitoring, and analytics via a single API. Includes UPI Plugin and SDK for in-app payments.
  • Qynx: Offline payment acquiring platform (QR and SoundBox integration), managing merchant

Detailed Analysis #

Financial Analysis of Network People Services Technologies Limited (NPST) - FY24 #

Balance Sheet Analysis #

Standalone Balance Sheet Summary (INR Lakhs) #

Note: Total Assets and Total Equity & Liabilities do not match in the provided Standalone Balance Sheet snippet for FY24 (7,949.31 vs 8,949.31). Analysis proceeds with figures as presented in the source for individual line items.

Significant YoY Changes (>10%) - Standalone Financials #

Standalone Statement of Profit & Loss Highlights (INR Lakhs) #

Standalone Balance Sheet - Significant YoY Changes (>10%) #

• Share Capital (+200.00%): Increased primarily due to the 2:1 bonus issue (12,924,000 shares allotted

NPST Financial Performance Analysis FY24 #

Financial Performance & Profitability (FY24 vs FY23) #

Network People Services Technologies Limited (NPST) demonstrated substantial financial growth in FY24.

• Total Revenue: Reached INR 1,300.8 million (INR 130.08 crore) in FY24, a significant increase of 216.27% from INR 411.3 million (INR 41.13 crore) in FY23. This marks the third consecutive year of record revenue growth.
• EBITDA: Grew by 252.99% to INR 437.0 million (INR 43.70 crore) in FY24 from INR 123.8 million (INR 12.38 crore) in FY23.
• EBITDA Margin: Improved to 33.59% in FY24 from 30.10% in FY23, an increase of 349 basis points.
• Net Profit: Increased by 309.66% to INR 267.1 million (INR 26.71 crore) in FY24 from INR 65.2 million (INR 6.52 crore) in FY23.
• Net Profit Margin: Expanded to 20.53% in FY24 from 15.85% in FY23, an increase of 468 basis points.
• Earnings Per Share (EPS): Rose by 310.12% to INR 13.78 in FY24 from INR 3.36 in FY23.

The company attributes this performance to sustained revenue growth from product and platform expansion, diversification into the offline business, and strengthening organizational capabilities.

Market Position & Competitive Landscape #

NPST positions itself as a key player in India’s digital payments landscape, aiming to empower banks, financial institutions, Payment Aggregators (PAs), Payment Gateways (PGs), and FinTechs.

• Market Standing: NPST became one of the top 1,000 listed companies in India by market capitalization.
• UPI Market Share: The NPST UPI Switch processes 6% of the total UPI financial transactions in India as of 2024.
• Client Base: The company doubled the number of its banking clients in FY24 and serves over 100+ customers in total. The Banking SuperApp serves over 18 million customers (20 million user base mentioned elsewhere) and the merchant acquiring platform has 2.5 million merchants.
• Competitive Differentiators: Offers a full-stack payments solution simplifying operations and reducing costs for customers. Strategic focus on being a technology service provider across the financial value chain (banks, fintechs, merchants). Early mover in innovations like Online Dispute Resolution (ODR) and Instant Merchant Refund on UPI.
• Industry Recognition: Received accolades such as “Top Performing Indian Listed SME Company” (Economic Times MSME Awards 2023), “Product Innovation in Banking and Payments” (Dun & Bradstreet India), and “ET NOW Best BFSI Brands 2024.”

Key Products & Services Performance #

NPST offers a comprehensive suite of payment technology solutions.

• UPI Switch: Processes 6% of total UPI transactions nationally. Modern, micro-services architecture designed for scalability and new NPCI mandates.
• IMPS Switch: Deployed by large PSU banks and Regional Rural Banks, processing 7 million transactions daily.
• Banking SuperApp: Serving 18+ million customers (20 million user base), processing 30+ million daily transactions, offering 400+ banking and financial services. Gaining traction with mid-sized and regional rural banks.
• Online Dispute Resolution (ODR): Launched in FY24, secured contracts with DCB Bank and Bank of Maharashtra. Aims to increase dispute resolution productivity by up to 30%.
• Evok Payments Platform-as-a-Service (PPaaS): Cloud-native platform for payment aggregators, simplifying transaction processing and value-added services. Evok 2.0 launched, enhancing online payment capabilities.

Financial Analysis Report: Network People Services Technologies Limited (NPST) - FY24 #

Overall Financial Performance (FY24) #

Network People Services Technologies Limited (NPST) demonstrated robust financial performance in FY24, marking its third consecutive year of record revenue growth.

• Revenue: Total revenue surpassed INR 1,000 million, reaching INR 1,300 million (INR 130.08 Crores). This represents a 216.27% year-over-year (YoY) growth from INR 41.13 Crores in FY23.
• EBITDA: Increased by 252.99% to INR 43.70 Crores from INR 12.38 Crores in FY23. EBITDA margin improved to 33.59% from 30.10%.
• Net Profit: Grew by 309.66% to INR 26.71 Crores from INR 6.52 Crores in FY23. Net Profit margin improved to 20.53% from 15.85%.
• Earnings Per Share (EPS): Increased by 310.12% to INR 13.78 from INR 3.36 in FY23.

The company attributes this performance to sustained revenue growth from product and platform expansion, diversification into the offline business segment (Qynx), and the strengthening of organizational capabilities.

Strategic Performance: NPST 2.0 Framework #

NPST has launched “NPST 2.0,” a strategic framework anchored by three pillars: Innovate, Transform, and Grow, aimed at transitioning the company from a mid-sized entity to a large enterprise.

Innovate #

• Significant investments in AI/ML for risk and fraud intelligence to reduce operational costs and enhance efficiency.
• Development of UPI overlays like Credit Line on UPI, IoT payments, and cross-border solutions.
• Investment in new-generation switches to improve Quality of Service (QoS) for higher transaction volumes.
• Launched Online Dispute Resolution (ODR) and Instant Merchant Refund on UPI.
• Introduced “Qynx” for offline payments (QR and SoundBox).
• Established Centers of Excellence (COEs) for market studies and adoption of new technologies like Generative AI.

Transform #

• Focus on strengthening cultural foundation, recognizing its importance for achieving scale.
• Strategic hiring of senior professionals in operations, HR, sales, and marketing.
• Investment in talent management, training, and nurturing a diverse, high-performing, inclusive workforce.
• Organizational restructuring into Technology Service Provider (TSP) and Payments Platform-as-a-Service (PPaaS) business lines.

Grow #

• Expand PaaS beyond banks and payment aggregators to segments like mutual funds, stock exchanges, and NBFCs.
• Refocus sales on higher-value, software-based solutions with multi-year, recurring revenue streams.
• Explore international expansion for payment solutions.
• Plan to expand customer base by 2X over the next three years, including upselling/cross-selling.
• Target non-banking financial sector for PPaaS expansion.

Segment Performance #

Technology Service Provider (TSP) #

• Doubled the number of banking clients in FY24.
• Strong traction for Banking SuperApp (serving 18+ million customers, processing 30+ million daily transactions) and merchant acquiring solutions, particularly among mid-tier and Regional Rural Banks (RRBs) preferring As-a-Service models.
• “Land and expand” approach for Tier One banks with innovations like ODR and Central Bank Digital Currency (CBDC) Switch.
• UPI Switch processes 6% of total UPI financial transactions in the country.
• IMPS Switch processes 7 million transactions daily.

Payment Platform-as-a-Service (PPaaS) #

• Evok PPaaS: Cloud-native platform simplifying transaction processing

NPST Financial Analysis: Strategic Direction and Performance #

Overall Performance & Strategic Direction (NPST 2.0) #

Network People Services Technologies Limited (NPST) has articulated a strategic framework, “NPST 2.0,” aimed at transitioning the company from a mid-sized entity to a large enterprise. This strategy is founded on three pillars: Innovate, Transform, and Grow. FY24 marked a period of significant financial achievement, with the company reporting record revenue growth for the third consecutive year, surpassing INR 1,300 million (INR 130 crore), a 210% organic year-on-year increase. This performance exceeded guidance on revenue growth, adjusted operating margin, and adjusted earnings per share. The company’s net profit surged by 309.66% to INR 26.71 crore, and EBITDA grew by 253% to INR 43.7 crore. The company also completed a 2:1 bonus share issue and secured a position among India’s top 1,000 listed companies by market capitalization. Management emphasizes a focus on prudent capital allocation and efficient execution.

Revenue Analysis & Growth Drivers #

Revenue growth was driven by expansion in the banking segment, where NPST doubled its client base, and significant expansion of its Payments Platform as a Service (PaaS) business through integration with Payment Aggregators (PAs) and Payment Gateways (PGs). The company also diversified into the offline payments market with Qynx, recognizing that the largest transaction volumes still occur in-store.

Key performance drivers include:

1. Product and Platform Expansion: Introduction of new products like Online Dispute Resolution (ODR) and Instant Merchant Refund on UPI, and enhancements to existing platforms like EvoK 2.0 and the UPI Plugin.
2. New Lines of Business: Strategic entry into the offline payment market with Qynx.
3. Strengthened Business Capabilities: Organizational restructuring into Technology Service Provider (TSP) and PaaS business lines, coupled with key leadership appointments.

The business model includes a license model (one-time cost, AMC, change requests, manpower support) and a SaaS model (per transaction, per month, per user login) for its TSP vertical, alongside hardware product sales.

Profitability and Margin Analysis #

EBITDA margin improved from 30.10% in FY23 to 33.59% in FY24. Net Profit Margin also saw a significant increase, from 15.85% in FY23 to 20.53% in FY24. This indicates enhanced operational efficiency and cost management alongside strong revenue growth. The increase in Operating Profit Margin (21.44% to 27.76%) is attributed to a rise in EBIT. The company’s ability to exceed guidance on adjusted operating margin further underscores effective cost control and value capture.

Key Financial Ratios & Balance Sheet Strength #

Analysis of key financial ratios reveals substantial improvements:

• Debtors Turnover Ratio: Showed an 883.08% improvement, indicative of enhanced receivables management.
• Inventory Turnover Ratio: Improved by 211.56%, suggesting increased operational efficiency.
• Interest Coverage Ratio: Improved by 45.15%, reflecting stronger operating efficiency and ability to service debt.
• Current Ratio: Improved by 34.52%, pointing to efficient working capital management.
• Debt Equity Ratio: Decreased by 66.60%, primarily due to repayment of borrowings, strengthening the company’s leverage position.
• Return on Equity Ratio: Increased significantly from 25.76% to 62.04%, driven by higher net profit.
• Return on Capital Employed: Increased from 30.46% to 61.47%, indicating more efficient use of capital to generate earnings.

The company has focused on managing revenue streams and controlling expenses to build cash reserves, enhancing financial stability.

Innovation, Product Development & Market Positioning #

NPST has demonstrated a commitment to innovation. Key product launches include Online Dispute Resolution, Instant Merchant Refund on UPI, and the Qynx offline payment solution. The UPI Plugin aims to improve merchant transaction completion rates. Investments are being made in AI/ML for risk and fraud intelligence, UPI overlays (Credit Line, IoT, cross-border), and new-generation switches.

The company positions itself as a “payments powerhouse” and a “sole provider across the financial value chain” (Banks, Fintechs, Merchants), simplifying payment complexity by offering a full-stack payments solution. Its UPI Switch processes 6% of total UPI financial transactions in the country. The Banking SuperApp targets mid-sized and regional rural banks.

Strategic Initiatives (Five Capitals) #

The “NPST 2.0” strategy emphasizes building five strategic capitals:

1. Product Capital: Focus on AI-first products, UPI monetization, switch upgrades, Banking SuperApp enhancements, and PPaaS automation. Centers of Excellence (COEs) are being established.
2. Customer Capital: Aims to double the customer base in three years, with upselling/cross-selling, specialized delivery functions.

NPST Limited Financial Analysis (FY24) #

Overview of Financial Performance #

NPST Limited demonstrated robust financial performance in Fiscal Year 2024, marking its third consecutive year of record revenue growth. The company surpassed the INR 1,000 million annual revenue milestone, achieving INR 1,300 million (INR 130.08 crore). This represents a 216.27% year-on-year (YoY) organic revenue growth compared to FY23’s INR 41.13 crore.

Profitability also saw significant improvement. EBITDA increased by 252.99% to INR 43.70 crore in FY24 from INR 12.38 crore in FY23, with the EBITDA margin expanding to 33.59% from 30.10%. Net profit surged by 309.66% to INR 26.71 crore in FY24 from INR 6.52 crore in FY23. Consequently, the Net Profit margin improved to 20.53% in FY24 from 15.85% in FY23. Earnings Per Share (EPS) for FY24 stood at INR 13.78, a 310.12% increase from INR 3.36 in FY23 (adjusted for bonus issue). The company’s performance exceeded its guidance on revenue growth, adjusted operating margin, and adjusted EPS.

Financial Position and Key Ratios #

• Balance Sheet (Standalone as of March 31, 2024):

  • Equity and Liabilities:
    • Share Capital: INR 19.39 crore (FY23: INR 6.46 crore), increase primarily due to 2:1 bonus issue.
    • Reserves and Surplus: INR 3.08 crore (FY23: INR 2.11 crore).
    • Total Equity: INR 5.02 crore (FY23: INR 2.76 crore).
    • Current Liabilities: INR 12.33 crore, primarily comprising Trade Payables (INR 11.87 crore) and Other Current Liabilities (INR 1.22 crore). Non-current liabilities were minimal.
  • Assets:
    • Non-Current Assets: INR 20.45 crore, dominated by Intangible Assets (INR 4.95 crore), Intangible Assets Under Development (INR 10.58 crore), and Non-Current Investments (INR 4.25 crore in subsidiary Timepay Digital Infotech). Tangible assets stood at INR 0.58 crore. Deferred Tax Assets were INR 0.08 crore.
    • Current Assets: INR 6.01 crore, with Cash and Cash Equivalents at INR 5.76 crore and Trade Receivables at INR 1.81 crore.

• Consolidated Balance Sheet (as of March 31, 2024):

  • Total Equity (attributable to owners): INR 5.01 crore. Minority Interest stood at INR 0.75 crore.
  • Non-Current Assets: INR 15.93 crore, with a similar composition to standalone but excluding inter-company investments.
  • Current Assets: INR 6.83 crore, with Cash and Cash Equivalents at INR 6.42 crore.

• Key Financial Ratios (YoY Change % as per MD&A):

  • Debtors Turnover: 883.08% improvement (better receivables management).
  • Inventory Turnover Ratio: 211.56% improvement (increased efficiency).
  • Interest Coverage Ratio: 45.15% improvement (operating efficiency).
  • Current Ratio: 34.52% improvement (efficient working capital management). Standalone: Current Assets (INR 60.10 Mn) / Current Liabilities (INR 12.33 Mn) = 4.87x. Consolidated: Current Assets (INR 68.32 Mn) / Current Liabilities (INR 16.77 Mn) = 4.07x.
  • Debt Equity Ratio: -66.60% (reduction due to repayment of borrowings and increased equity).
  • Operating Profit Margin (%): 29.47% increase (from 21.44% to 27.76% based on standalone).
  • Net Profit Margin (%): 31.00% increase (from 15.99% to 20.94% based on standalone).

Cash Flow Analysis #

• Standalone:
  • Net Cash from Operating Activities: INR 4.07 crore (FY23: INR 2.08 crore), driven by higher profits before tax (INR 3.67 crore) and favorable working capital changes.
  • Net Cash used in Investing Activities: INR 8.25 crore, primarily due to purchase of fixed assets (INR 4.00 crore) and investment in non-current investments (subsidiary - INR 4.25 crore).
  • Net Cash used in Financing Activities: INR 0.05 crore (repayment of borrowings).
  • Net Increase in Cash & Cash Equivalents: INR 3.86 crore. Closing Cash & Cash Equivalents: INR 5.76 crore.
• Consolidated:
  • Net Cash from Operating Activities: INR 4.08 crore.
  • Net Cash used in Investing Activities: INR 3.37 crore.
  • Net Cash from Financing Activities: INR 0.70 crore (proceeds from Minority Interest).
  • Net Increase in Cash & Cash Equivalents: INR 4.51 crore. Closing Cash & Cash Equivalents: INR 6.42 crore.

The significant increase in cash from operations indicates healthy core business performance and efficient management of operating funds. Investment activities reflect strategic expansion (subsidiary formation and asset additions).

Business Segments and Revenue Model #

NPST operates through two primary business lines:

• Technology Service Provider (TSP): Focuses on enabling banks’ digital transformation. Products include banking super apps, UPI platforms (processing 6% of total UPI financial transactions), IMPS switch (processing 7 million transactions daily), Online Dispute Resolution (ODR), and CBDC Switch. Growth drivers include doubling banking clients in FY24 and new product innovations.

Financial Analysis: NPST - Forward Outlook #

Management Guidance and Assumptions #

Management has not provided explicit quantitative guidance for FY25 revenue, operating margin, or EPS. However, the CEO’s letter expresses significantly stronger optimism for FY25 prospects. For FY24, the company reported exceeding its guidance on revenue growth, adjusted operating margin, and adjusted earnings per share.

The company’s forward-looking statements are based on management’s current plans and assumptions, which are acknowledged as subject to risks, uncertainties, and potential inaccuracies. Key underlying assumptions include continued robust growth in India’s digital economy (aiming for $5 trillion by 2027), the pivotal role of digital payments, and the ongoing digital revolution. The success of the NPST 2.0 strategy (Innovate, Transform, Grow) is a core assumption for future expansion.

Market Growth Forecasts and Opportunities #

NPST operates in a rapidly expanding digital payments market in India.

• Overall Digital Payments: Retail digital payments in India are forecasted to grow from $3.6 trillion in 2024 to $7 trillion by 2030.
• UPI Growth: Unified Payment Interface (UPI) transactions are projected to record 3X growth by 2028 from CY2023 levels. UPI currently constitutes over 75% of retail digital payments in India.

Specific Segments: #

• Pay Later Market: Forecasted to grow from USD 14.3 billion in 2023 to USD 50 billion by 2026 in India.
• Last-Mile Consumers: An estimated 600 million Indians in “Bharat” (rural and peri-urban areas) represent a significant untapped market.
• Offline Payments: Expected to contribute approximately 75% to all digital merchant payments, primarily driven by QR codes.
• Cross-Border Remittances: India is the world’s largest recipient, with a market size of approximately $12.3 billion for NPST to target.

Emerging Opportunities: #

Management identifies significant opportunities in UPI overlays (Credit Line on UPI, IoT payments, cross-border solutions), Banking SuperApps (especially for medium-sized and regional rural banks), embedded UPI payments across various industries, Central Bank Digital Currency (CBDC), and leveraging AI for risk intelligence. Regulatory developments are also seen as growth drivers.

Planned Strategic Initiatives (NPST 2.0 Framework) #

The “NPST 2.0” framework is designed to transition the company from a mid-sized entity to a large enterprise, focusing on three pillars:

Innovate: #

• Significant investments in AI/ML.
• Development of UPI overlays.
• Investment in new-generation switches.
• Expansion of product portfolio targeting emerging needs like CBDC.
• Establishment of Strategic Centers of Excellence (COEs).

Transform: #

• Strengthening the cultural foundation.
• Developing high-performing, inclusive teams.
• Implementing the ICARCI value framework.

Grow: #

• Broaden market reach beyond banks and payment aggregators.
• Refocus sales on higher-value, software-based solutions.
• Expand sales force.
• International expansion of payment solutions.
• Target a 2X expansion of customer base.
• Utilize QIB fund infusion for: global growth, market expansion, enhancing tech capabilities, inorganic growth, and licensing opportunities.

Capital Expenditure Plans #

Management plans strategic investments in new-generation switches to improve service quality and capacity for increasing transaction volumes.

Financial Analysis Report: NPST #

Auditor’s Opinion and Qualifications #

Standalone Financial Statements #

The Independent Auditor’s Report on the Standalone Financial Statements for the year ended March 31, 2024, expresses an unqualified opinion. The auditors state that the financial statements give a true and fair view in conformity with Indian accounting principles and the Companies Act, 2013. Key Audit Matters (KAMs) were identified and addressed.

Consolidated Financial Statements #

The Independent Auditor’s Report on the Consolidated Financial Statements for the year ended March 31, 2024, also expresses an unqualified opinion. The auditors confirm the statements provide a true and fair view.

Other Matters (Consolidated) #

The auditors’ opinion on the consolidated financial statements relies in part on the audit reports of other auditors for subsidiaries, whose financial statements reflect total assets of Rs. 524.07 Lakhs and total revenues of Rs. 4.06 Lakhs for the year ended March 31, 2024.

Key Accounting Policies and Changes #

The company’s significant accounting policies, applied consistently, include:

• Basis of Preparation: Financial statements are prepared in accordance with Indian GAAP, the Companies Act, 2013, and applicable Accounting Standards (AS).
• Use of Estimates: Preparation requires management to make estimates and assumptions affecting reported amounts.
• Property, Plant, and Equipment (PPE):
  • Tangible Assets: Stated at historical cost less accumulated depreciation (Written Down Value method based on Schedule II useful lives) and impairment. Assets costing Rs. 5,000 or less are depreciated at 100% in the year of use.
  • Intangible Assets (Software/Application): Measured at cost of development less accumulated amortization (WDV method over 3-10 years depending on asset type).
  • Intangible Assets Under Development: Capitalized at cost.
• Revenue Recognition: Recognized based on contractual terms upon rendering of services. Interest income is recognized on a time-proportion basis.
• Employee Benefits: Includes short-term benefits, defined contribution plans (Provident Fund), and defined benefit plans (Gratuity, Leave Encashment - based on actuarial valuations).
• Borrowing Costs: Capitalized if directly attributable to qualifying assets; otherwise expensed.
• Foreign Exchange Transactions: Recorded at the exchange rate prevailing on the transaction date. Monetary assets/liabilities are restated at year-end rates.
• Taxation: Current tax is based on tax laws. Deferred tax is recognized using the liability method on timing differences.
• Impairment of Assets: Assessed periodically; loss charged to Profit and Loss if carrying amount exceeds recoverable amount.
• Investments: Current investments at lower of cost and net realizable value; non-current investments at cost, with provision for other-than-temporary diminution.
• Cash Flow Statement: Prepared using the indirect method.

Internal Control Effectiveness #

Management’s Responsibility #

The Board of Directors is responsible for establishing and maintaining adequate internal financial controls over financial reporting.

Auditor’s Assessment (Standalone & Consolidated) #

The auditors reported that the company has, in all material respects, an adequate internal financial controls system over financial reporting and such controls were operating effectively as of March 31, 2024. This applies to both standalone and consolidated statements (with reliance on subsidiary auditors for consolidated controls).

Audit Trail #

The company uses accounting software with an audit trail (edit log) facility, which operated throughout the year for all relevant transactions and was not found to be tampered with.

Regulatory Compliance Status #

General Compliance #

The Board Report and Secretarial Audit Report indicate compliance with the Companies Act, 2013, SEBI Regulations, and applicable Secretarial Standards. The Secretarial Audit Report for FY24 was unqualified.

Financial Regulations #

The company operates in a highly regulated fintech sector overseen by the RBI. Key recent regulatory developments impacting/to impact NPST include:

• New Bharat Bill Payment Systems (BBPS) Directions, 2024.
• Amendments to Master Direction on Prepaid Payment Instruments (PPIs) for public transport.
• Increased UPI payment limits for hospitals and educational institutions.
• Regulations for Payment Aggregator - Cross Border (PA-CB).
• Proposed Digital Payments Intelligence Platform by RBI.
• Permission for linking PPIs with third-party UPI applications.
• Draft KYC guidelines for Payment Aggregators concerning small merchants.

Specific Compliances (Auditor Confirmed) #

• Accounting Standards (Section 133 of Companies Act).
• Director disqualifications (Section 164(2) - none disqualified).
• Managerial remuneration (Section 197 - within limits).
• Dividend declaration (Section 123 - not applicable as no dividend declared).
• Statutory dues (Provident fund, ESI, income tax, GST) are generally deposited regularly, with some undisputed delays noted by auditors in the CARO report.

Legal Proceedings and Their Potential Impact #

Contingent Liabilities #

Claims against the company not acknowledged as debt related to “Other Tax Law,” “Bank Guarantees,” and “Income Tax Law.” The auditors (Standalone Report) note disclosure of pending litigation impact in Note 27.