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

Executive summary

• Revenue from operations grew 12% quarter-on-quarter in Q2 FY25, driven by tax and pension services, with tax services revenue up 22% QOQ and PAN card issuances reaching 1.2 crore; online issuances surpassed offline for the first time.

• Pension services grew 7% QOQ, adding 3.6 million new subscribers and maintaining a 97% market share; NPS Vatsalya was launched and 826+ corporates onboarded.

• New business lines, including open finance and Protean Life, showed early momentum, with strategic investments in digital public infrastructure and ONDC stack.

• Identity services saw a 14% QOQ decline due to high prior-year volumes and competitive pricing in eSign.

• Recognized as Best Digital Public Infrastructure Company at Global Fintech Fest 2024.

Financial highlights

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

• Adjusted operating profit for Q2 FY25 was ₹32 crore, up 21% QOQ but down 15% YoY; PAT at ₹28 crore, up 39% QOQ but down 14% YoY.

• Operating margin for Q2 FY25 was 14.4%, up from 13.3% in Q1 FY25 but down 140 bps YoY; normalized EBITDA margin stable at ~12.2%.

• Cash and equivalents at end of September 2024 were ₹56.68 crore, with total assets at ₹1,256 crore and shareholder equity at ₹949 crore.

• Dividend of ₹28.11 crore paid during H1 FY25; net cash generated from operating activities for H1 FY25 was ₹73.66 crore.

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 top-line revenue within 2–3 years, reducing reliance on core segments.

• Ongoing cost optimization and automation are expected to drive further margin improvements.

• International expansion is progressing, with active bids and POCs in Africa and Southeast Asia.

• Statutory auditors issued an unqualified limited review report for the quarter and half year ended 30 September 2024.