Financial Performance Highlights

Q2 FY27 Performance:

  • Revenue from operations: ₹4,053.1 million, up 15% YoY and 7.7% sequentially
  • Total income: ₹4,112.5 million, up 16.4% YoY and 7.2% sequentially
  • Gross profit: ₹1,724.4 million with gross margin at 42.5% (89 bps sequential improvement)
  • EBITDA: ₹1,065.6 million, up 12% YoY and 12.9% sequentially
  • EBITDA margin: 26.3% (121 bps improvement over Q1 FY27)
  • Operating EBITDA (excluding other income): ₹1,006.2 million with margin of 24.8%
  • Profit after tax: ₹697.3 million, up 21% YoY and 15.6% sequentially
  • PAT margin: 17.2%
  • Finance costs declined 74.9% YoY due to debt repayment

H1 FY27 Performance:

  • Revenue from operations: ₹7,817.8 million, up 17.9% YoY
  • EBITDA: ₹2,009.7 million
  • Profit after tax: ₹1,300.7 million
  • EBITDA margin: 25.7%
  • PAT margin: 16.6%

Segment-wise Performance

Payment Solutions:

  • Revenue: ₹2,182.6 million, up 21.7% YoY and 38% sequentially
  • Growth drivers: Payment cards across banks, metal cards growth, mass transit programs, payment card exports
  • Won one multi-year tender during the quarter
  • Export revenue contributed approximately 5% of total payment card business in H1
  • Markets: Europe and Africa

Communication and Fulfillment Solutions:

  • Revenue: ₹1,290.1 million, broadly stable YoY
  • Added one new enterprise account
  • Renewed 3-year contract with leading PSU bank for fulfillment solutions
  • Renewed 3-year contract with leading PSU life insurer

IoT Solutions:

  • Revenue: ₹551.9 million, up 45.6% YoY
  • Sequential moderation from high Q1 base due to retail sector seasonality
  • Growth areas: RFID across retail, logistics, pharmaceuticals, and manufacturing
  • Product qualification underway for SIM card supplies to another large telecom operator

Operational and Strategic Updates

Intellectual Property:

  • Filed 2 new patent applications in Q2, taking cumulative filings to 21 (5 granted)
  • Subsidiary Atoll Solutions filed 4 new patent applications, cumulative filings at 7 (2 granted)

Cash Position and IPO Proceeds Utilization:

  • Cash and liquid investments: ₹3,144 million
  • Net cash: ₹2,407 million
  • Unutilized IPO proceeds: ₹1,196.1 million
  • Cumulative IPO utilization: ₹4,803.9 million
  • Capital expenditure: ₹849.2 million
  • Repayment of borrowings: ₹3,000 million
  • Issue expenses: ₹343.7 million
  • General corporate purposes: ₹611 million

Capacity Expansion:

  • New metal card facility with 3x current capacity being set up
  • Expected to be operational soon

SIM Card Business:

  • Current utilization: Expected to reach 70-75% capacity
  • eSIM qualification in process with one telco
  • No eSIM revenue factored into FY27 business plan
  • Expect to begin eSIM business by turn of the year

Market Environment and Challenges

  • USD-INR remaining elevated
  • Higher fuel prices impacting logistics and input material costs
  • Cost of materials increased faster than revenue YoY
  • Semiconductor supply chain challenges with high lead times
  • Memory chip prices increasing due to AI boom

Business Outlook

  • Expect H2 to be better than H1, maintaining historical pattern
  • Focus on deepening wallet share with existing customers
  • Scaling premium and metal card offerings
  • Strengthening IoT portfolio across RFID, SIM and eSIM solutions
  • Expanding export business
  • Continued investment in R&D innovation, manufacturing capabilities, and strategic partnerships

Q&A Session Highlights

  • Metal card quality benchmarked to international standards
  • Export strategy focuses on working with system integrator partners and large direct consumers
  • RFID adoption expanding beyond retail to renewable space, eyewear, FMCG, pharmaceuticals, jewelry, and cosmetics
  • Inventory buildup due to semiconductor supply chain concerns and holiday season preparations
  • MDR changes on UPI transactions viewed as favorable for card business