Radiant Cash Management Services – Asset Light Play On Cash Logistics

Nov24 : Concall summary

Financial Performance:

H1 FY24:

• Revenue breakdown:
  • BFSI: 21% growth
  • Organized retail: Healthy growth
  • Petroleum: 80% of past peak revenue
  • E-commerce and Others: Churn in touchpoints and competitive pressure
• Profit margin breakdown:
  • Lower profitability in e-commerce and logistics
  • Investments in DBJ and direct sales
  • Churn in some touchpoints

FY24 (Full year target) :

• Revenue:
  • Expected to grow by 20% yoy
  • Driven by consolidation of operations
  • Focus on core business segments
  • Investments in Acemoney and DBJ may contribute to growth in later quarters
• EBIT:
  • Expected to remain stable or grow slightly
  • Investment in new ventures may impact EBIT in the short term
• Profit:
  • Expected to grow in line with revenue
  • Margin pressure from investments may be offset by cost savings in other areas

FY25 and beyond:

• Revenue:
  • Long-term growth target of 20% per annum
  • Expected to be driven by:
    • Strong performance in core business segments
    • Significant contribution from DBJ (20% of total revenue)
    • Potential for further growth in new ventures (Acemoney and fintech solutions)
• EBIT:
  • Expected to expand as a percentage of revenue
  • Cost savings and operational efficiencies will contribute to margin improvement
• Profit:
  • Expected to grow at a faster rate than revenue
  • Margin expansion will lead to higher profitability

Individual Business Lines:

• Retail Cash Management:
  • Expected to remain the largest contributor to revenue
  • Growth driven by increasing demand for cash management services
  • Focus on expanding service offerings and geographic reach
• Cash Van Operations:
  • Expected to see strong growth due to increasing demand for secure cash transportation
  • Expansion of fleet size and service offerings will contribute to growth
• DBJ:
  • Expected to be a key driver of future growth
  • Targeting a 20% share of total revenue by FY25
  • Focus on expanding service offerings and geographic reach
• Fintech Solutions:
  • Expected to be a significant contributor to growth in the long term
  • Acemoney acquisition provides a strong platform for growth
  • Focus on developing new and innovative fintech solutions

Key Positive Points from Management Call:

• Strong financial performance:
  • Double-digit revenue growth despite challenging market conditions
  • Demonstrated resilience and adaptability
• Clear vision and strategy:
  • Well-defined roadmap for future growth
  • Diversification across multiple growth areas
• Commitment to profitability and shareholder returns:
  • Focus on cost efficiency and margin improvement
  • Track record of delivering value to shareholders
• Experienced and capable management team:
  • Proven leadership in cash management industry
  • Strong track record of success
• Significant growth potential:
  • Large and untapped market opportunities
  • Strong brand name and reputation
  • Innovative approach to new business ventures