Fino Payments Bank Expects 25% Revenue Growth In FY25
CEO Rishi Gupta highlighted that in the June quarter the digital business was the major driver for Fino Payments Bank.
Fino Payments Bank Ltd. expects 25% revenue growth in the current financial year backed by a robust digital ecosystem after the lender reported strong first quarter results.
"We're quite optimistic about our 25% growth guidance and are confident we’ll be able to meet it," the company's Managing Director and Chief Executive Officer Rishi Gupta told NDTV Profit in a televised interview, adding that it compares to the 20% growth in the last few years.
“We've achieved a 25% growth in the first quarter compared to last year, which is higher than the 20% growth we've seen in the past couple of years. We believe our guidance of 25% growth will hold strong for fiscal 2025. The second quarter is also showing promising results, and we expect both net profit and revenue to meet expectations," Gupta said.
Gupta highlighted that in the June quarter the digital business was the major driver. “Around crore customers are actively engaged in our transaction business, significantly boosting our CASA (Current Account Savings Account) growth. Our cash management services have also expanded, with 18 lakh merchants contributing roughly Rs 20,000 crore in Q1," Gupta said.
"However, the most significant driver has been our digital business, which surged from contributing 2% of revenue in the first quarter of the previous fiscal to 15% in the first quarter of the current fiscal. We expect the digital segment to grow even further, potentially making up 18-20% of our total revenue this year," he added.
Fino Payments Bank’s digital push has been particularly impactful, with the bank opening around 80,000 digital accounts in the fourth quarter of the previous financial year.
Despite strong revenue growth, Fino Payments Bank experienced a contraction in margins. Gupta attributed this to typical cost increases during the period, including salaries, operating expenses, and contract costs.
"This initial rise in costs is expected. However, as we move forward, revenue growth tends to accelerate while costs stabilise. We anticipate that margins will improve in the upcoming quarters, following the trend we've observed in recent years," he said.
Sharing insights on the company’s expansion strategy, Gupta said, "In terms of pin codes, we have covered almost 95% of the country, and we plan to add another 1.5 lakh to 2 lakh merchants annually. Additionally, we will continue to focus on enhancing our digital offerings. We’re witnessing strong growth in UPI transactions and an increase in digital customers. A substantial portion of our cash profits will be reinvested into advancing our technology platform."
Besides, Fino Payments Bank is targeting a 10% growth in cash management services and 16% in digital payments or the current fiscal.
In the first quarter, the bank’s revenue stood at Rs 437 crore, reflecting a 25% year-on-year rise. Ebitda rose by 31% year-on-year to Rs 53 crore, while net profit increased nearly 30% on a yearly basis to Rs 24.27 crore.
