Infibeam’s net profit falls 58.6% to Rs 12 Cr in Q1 FY21

Public-listed company Infibeam Avenues (IA) has announced its financial result for the Q1’ FY21 fiscal year in which it claims to be well-positioned to capture growth from the ongoing digital transformation led by both consumers and enterprises. 

Looking at the absolute figures for the quarter ending June 30, 2020, i.e Q1 FY21, Infibeam has generated operating revenue of Rs 103 crore, a 24% decline as compared to Rs 136 crore in Q4 FY20. While the revenues suffered, net profits after taxes too fell by 58.6% amounting to Rs 12 crore from Rs 29 crore in Q1 FY20. 

In the previous quarter or Q4 FY20, Infibeam had posted a net profit of Rs 19 crore and Rs 120 crore for the entire financial year 2019-2020.

Significantly, the reduction in revenues was despite the increasing number of bill payments and transactions processed through its platforms CCAvenue and Bill Avenue. It registered 2.6 million numbers of bills registered through BillAvenue, a 12% increase quarter-to-quarter. In terms of value, it was up 9% at Rs 168 crore during the same period. 

Highlighting the key reasons for the impacted revenues, the company said that the reduction in the top line was due to low growth in aviation, travel & tourism and hotel industry volumes on travel which has impacted the overall operational and financial performance of the company. The number of payment transactions processed was 36 million, down by 10%.

The company’s operating income (including interest and depreciation) reduced by 24% to Rs 39 crore from Rs 49 crore in Q4 FY 20 because of deterioration in revenue, whereas its EBITDA margin has slightly improved by 190 basis points to 38% during the period. It stood at 29.8% in Q1’20 and 36.1% in Q4’20. registered improved operating margins. 

The revenue impact of the pandemic played out broadly along the lines Infibeam had indicated earlier. Due to ensuing restrictions on travel, entertainment, hospitality, there has been a drop in the volume & value of transactions impacting operational and financial performance during the quarter.

However, by end of June 2020, the average daily payment- volume & value- crossed daily average in March 2020 despite ensuing restrictions and the volume is low in India while in the UAE registered month-on-month growth in volume & value including in the Ramadan month of May.

Apart from the financial growth and trajectories, Infibeam also highlighted few of the major business developments which include the launch of B2Biz for business collections and payments, and white-label solution for businesses and banks, CCAvenue Payment Gateway Services (CPGS); full-stack PG deployment for banks with merchant plug-in, switch, payment network connectivity and more to process card payments and CCAvenue Finance to enable digital lending and card issuance.

Staying bullish on the increasing trend of digital adaptation amidst the pandemic, Vishal Mehta, managing director at  Infibeam said, “We remain focused in driving on the long-term growth strategy which includes new business offerings and expansion to new geographies for creating true value for our consumers, business customers, and stakeholders.”

“Our new business and international expansion will exponentially increase volume and thus earn improvement in take rates, profitability margins, and cash flows”, added Hiren Padhya, the chief financial officer of the company.