Radiant Cash Management Services – Asset Light Play On Cash Logistics

Stock Opportunities
14

https://www.bseindia.com/xml-data/corpfiling/AttachLive/8e511b79-ab80-42a2-bf66-1611a2b570d7.pdf

Some key points/comments basis the concall of Radiant and CMS:-

  1. As per Radiant mgmt, the revenue de-growth this quarter is mainly because of change in price mechanism from fixed to volume-based for some nbfcs and retail customers and they expect q3 and q4 to be better - kind of expected considering the slowdown in rural economy but the volume based pricing seems a good move
  2. Mgmt expects to clock around 20% topline growth yoy from fy25 onwards
  3. With the low topline and some incremental costs for DBJ segment, the operating deleverage had its fair share in bringing down the margins
  4. The cash movement has increased qoq (5%) and yoy. Also. no clients were lost due to pricing pressure, competition etc.
  5. The recent acquisition of acemoney should bode well for Radiant strategically since it not only opens up serving co-operative societies and banks in the hinterlands but also helps leverage the phydigital and the BC model of operation (inline with the original philosophy of being asset light)
  6. More importantly, with this partnership, I see Radiant getting into the world of neobanking (Bank As A Service) whereas CMS just remains as ATM As A Service as evidenced in its partnership with a Korean company for equipment manufacturing
  7. Moreover, basis my personal experience with fintechs, I tend to agree with Radiant mgmt on the synergies possible across distribution and collection through the phydigital mode that should augur well to replicate Acemoney’s business across the nation
  8. Furthermore, Rajiv (CMS) now looks to focus on retail cash management and also shift towards being more asset light - he wants to be selective in BLA segment and focus more on cash logistics and RMS segments, cites competition only in the cash transit business with growth opportunities in retail cash mgmt to lead in the coming years - largely volume based with some pricing

IMO this acquisition is a game changer for RCMS and is a better investment than CMS.

3 Likes