Protean eGov Technologies (544021) Q2 24/25 earnings summary

Executive summary

• Revenue from operations grew 12% quarter-on-quarter in Q2 FY25, led by tax and pension services growth and market share gains in tax services; recognized as Best Digital Public Infrastructure Company at Global Fintech Fest 2024.

• Tax services revenue increased 22% QOQ, with PAN market share rising to 55.4% and online PAN issuances surpassing offline for the first time.

• Pension services grew 7% QOQ, adding 3.6 million new subscribers and maintaining a 97% market share; NPS Vatsalya for minors launched.

• Identity services saw a 14% QOQ decline due to last year's Aadhaar-PAN linkage surge and competitive pricing in eSign.

• New business lines in open digital ecosystems, open finance, and agriculture are gaining early traction, with platforms like Protean LIFE and ONDC solutions launched.

Financial highlights

• Consolidated revenue from operations reached ₹220 crore in Q2 FY25, up 12% QOQ but down 7% YoY; H1 FY25 revenue at ₹416 crore, down 9% YoY.

• Adjusted operating profit rose 21% QOQ to ₹32 crore; operating margin improved to 14.4% from 13.3% in Q1 FY25.

• Profit after tax for Q2 FY25 was ₹28.04 crore, up 33% QOQ but down from ₹32.78 crore YoY.

• Normalized EBITDA margin remained stable at 12.2%.

• Cash and cash equivalents, including marketable securities, exceeded ₹750 crore; cash and bank balances at ₹166 crore as of Sept'24.

Outlook and guidance

• Management expects continued growth in tax and pension services due to low penetration and government scheme requirements.

• New businesses are targeted to contribute 25% of revenue within 2–3 years, reducing reliance on core lines.

• Margin improvement anticipated from cost optimization and automation.

• Statutory auditors issued an unqualified limited review report for the quarter and half year.