Mirroring India’s evolving landscape of omni-channel payment solutions, AGS Transact Technologies has just made some exciting announcements. This includes a major contract-win from SBI, pilot of a contactless fuel payment solution and promising financial results. The group has made significant strides in Q3 of fiscal 2024 under the leadership of the Chairman and Managing Director, Mr. Ravi B. Goyal. Here Mr. Goyal shares his insights into the recent developments and the company’s vision for the future.
AGS Transact Technologies recently won a contract with the State Bank of India. How does this contract align with the company’s drive to develop and enhance banking automation solutions?
We are very proud to have won this order from SBI for the supply, installation and maintenance of over 2,500 ATMs. This 7-year contract is a milestone for us as it further strengthens our ATM Outsourcing business portfolio. Also, it perfectly aligns with the government’s focus on financial inclusion.
This contract comes at a time when cash transactions are expected to increase due to the PM-KISAN scheme. How is AGS positioned to meet this demand?
You’re absolutely right. While digital payments continue to grow, cash remains an important mode of transaction in many parts of India. We have a large network of ATMs & CRMs and the extensive expertise in managing them. In fact, we’ve recently brought 8,000 ATMs under our managed services portfolio, demonstrating our ability to offer comprehensive solutions to major banks like Punjab National Bank and Union Bank of India. It also fits well with the shift in our business model.
You mentioned strategic shifts in your business model. Can you elaborate on how this contract and your Managed Services expansion fit into that strategy?
We’re transitioning towards a service-oriented model and focusing on higher-margin businesses such as managed services. By expanding our ATM/CRM network, we can offer holistic solutions to major banks in India. Additionally, completion of deployment of dedicated cash vans for UBI and Canara Bank strengthens our cash logistics business. With over 78,100 ATMs/CRMs under our care, we’re actively contributing to the nationwide growth and accessibility of banking services.
Innovation is another key driver for AGS Transact Technologies. Tell us about your pilot program with the Ongo app for contactless fuel payments.
We’re excited about this pilot! It’s not only contactless but an open-loop fuel payment solution on our app. It allows Ongo app users to pre-set fuel amounts and pay digitally at select Mumbai outlets via Ongo wallet. This convenience will attract consumers and fleets, while OMCs will benefit from faster and more transparent transactions. This solution offers a seamless and secure contactless payment experience at fuel stations. We have onboarded over 500 fleet vehicles in pilot phase. This is in sync with our digital strategy to strengthen our foothold in the OMC sector. Additionally, we’re issuing NCMC or National Common Mobility Cards for Bangalore metro, further diversifying our digital offerings. We’ve issued over 34,700 NCMC cards for Bangalore Metro.
Financially, Q3 FY24 saw a slight dip in total income. Can you explain the reason and highlight any positive financial aspects?
The income dip resulted from our strategic downsizing of automation businesses to focus on higher-margin services. Proactive cost optimization and disciplined contract servicing kept us on a positive trajectory. Q2FY24 saw a 98 per cent rise in revenue from services, corresponding with our shift from value-dilutive businesses. Additionally, our adjusted EBITDA margin remains healthy at 23.8 per cent.
Looking ahead, how do you see government initiatives like PM-KISAN and RuPay promotion impacting AGS Transact Technologies?
We believe these initiatives will stimulate both cash and digital transactions, creating opportunities for AGS Transact Technologies. We’re continuously adapting to the ever-changing payment landscape and are confident that our focus on prudent growth, major contracts like SBI, and innovative solutions like the Ongo contactless fuel solution, will help us stay ahead of the curve and position us well for the future.
