NPST strategy pivots while working capital cycle stretches to 180 days
Management abandoned its 'absolute multiplier' CPaaS plan after a year of failed returns, while shifting its expected receivable cycle to 180 days.
What's new
- Revenue grew to ₹209 cr in FY26, but net profit fell 9.7% year-on-year.
- Management now expects a 180-day receivable cycle, up from 60-90 days.
- The CPaaS vertical is being pivoted after failing to justify investment.
- FY29 targets include ₹850-900 cr revenue at 40-50% EBITDA margins.
Themes from the call
Demand
Growth is shifting toward Reg-tech and international markets as domestic payment processing reaches structural maturity.
Margins
FY26 EBITDA margins fell to 31% from 37% due to a mix shift into lower-margin Transaction Service Provider business.
Capital allocation
Negative operating cash flow in FY26 stems from extended credit terms in the TSP vertical.
Guidance watch
- Targeting 70% revenue CAGR through FY29 to reach ₹850-900 cr.
- Targeting 33-35% EBITDA margins in FY27, reaching 40-50% by FY29.
- International business is expected to scale from 10-15% of the mix in FY27 to 50% by FY29.
Risk flags
- Elevated receivables and negative operating cash flow are the primary hurdles to scaling.
- The pivot away from CPaaS after heavy investment raises questions about the efficacy of current resource allocation.
Key quotes
-
"Honestly, the results versus the effort are not great. That's why we decided that whatever engine we have built, we need to pivot it completely."
— Deepak Chand Thakur, CEO -
"Anything which is 50-70% higher than the margins we are able to get in India is high margin for us."
— Deepak Chand Thakur, CEO
The brief
NPST is in the middle of a complex and costly transition. The company grew revenue 81% over four years, yet net profit declined last year as management flooded the mix with low-margin Transaction Service Provider work to capture scale. This decision created an acute cash flow problem. Receivables have ballooned, and management abandoned their prior guidance of a 60-90 day collection cycle, telling investors to expect 180 days.
The strategic flip-flop is visible in the platform business. Six months ago, leadership pitched their CPaaS platform as an 'absolute multiplier' for future growth. Today, they concede the unit failed to deliver after a year of effort, and they are pivoting the engine toward merchant orchestration. While the Reg-tech and international expansion stories offer a path to higher margins—with international segments theoretically yielding 35-45%—the execution risks are mounting.
Management promised an aggressive 70% CAGR to reach ₹850-900 cr by FY29. This rests on the assumption that international scaling and Reg-tech monetization will offset the ongoing margin dilution from the domestic TSP business. The company expects AI to increase revenue-per-employee 300% over three years. For shareholders, the story has moved from a simple payment processor to a high-beta bet on Reg-tech and international services. Whether cash conversion improves as promised remains the test of whether this strategy shift is working or merely delaying the day of reckoning.
NPST is trading past promises for future ones, but a doubling of the receivables cycle suggests the business is getting harder to run, not easier.