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Hi and welcome to the Core Report Special Edition. I'm joined by Rajiv Kaul of CMS InfoTech. Rajiv, thank you so much for joining me.

So let me pick up a data point from which we can hopefully build our conversation. So I was seeing that currency in circulation hit about 40 lakh crore rupees in January, which is up 11% year on year. Cash to GDP has fallen slightly.

But the more interesting thing is that in the last 10 years, even as everything else has grown, digitisation, India's stack, UPI, the amount of money that's rotating in the economy or currency in circulation has gone from about 11.8 lakh crores in March 13 to about 40 lakh crore. But even after COVID, the number has steadily risen. So in a very broad sense, why is this happening?

I think, Govind, you know economics and business economics more than me. But I'm first of all glad for the question. Thank you for having us here.

I think in this business, I've been constantly faced by questions about the death of cash. I think a couple of years after IPO, I just went frustrated and said, how many times will you kill cash? Cash will die, cash will die.

And yeah, sure, please go ahead and do whatever you have to do. But what this reflects in my mind is a couple of things. One is the fact that the economy is growing more, right?

And the formal part of the economy is growing faster. And the formal part of the economy has got a kicker with demonetisation first, then GST 1. And I think recently GST 2, I think the way we are seeing Q4 trends, I think there's been a reasonably decent boost.

Now, all elements of PFC have, at the rate they've grown, UPI obviously led the growth, cannibalising volumes of other forms of payment, cash, credit, and debit card, right, to some level at POS. But we are now seeing that sort of slow down. The cash in circulation also reflects the deeper penetration of the country.

And where cash is being used. I think earlier, the share of informal economy in India would have been much higher. Today is estimated, I don't know, at 25%.

And that's what I've been saying since, even when we listed, saying CMS is a play on multiple drivers, including outsourcing from banks, but also formalisation of India. And that sort of reflects in our own growth story, because we're like, how are you growing? Why are you going 20%?

You're in cash dying, aren't ATMs over? But I think we are a play on formalisation of the economy more than the amount of currency being used, which also has also grown. And also inflation, right? Just GDP growth with inflation, we sort of think that's the motor motor metric for CIC growth.e

And you're also growing in ATMs, because you also acquired another company with ATMs. But I'll come back to ATMs in a moment. Give us a little history about CMS, because it's gone through its own iterations over...

Like any company, right.

Including before your time. Right.

So, you know, CMS is something we, I partnered with Blackstone Group in 2009 to acquire a majority. That time, predominantly, the business actually did IT services in India, infrastructure. There was a cash management business.

And there were hopes and dreams of what we could do with the IT play there. There was an exports business in software, some sort of mishmash of businesses. Long story short, I think we realised that really the jewel of the piece was actually the cash management business at that time, which I had no background at, right?

I really didn't have a...

Because you came from Microsoft.

I came from Microsoft. I came from a global technology and PE background. And we thought that's the opportunity in India as India would grow.

And, you know, the first phase 2009, 10 to 2015, we sort of charged that up. Built it to be the undisputed leader brand in India at that time. And then I think when Blackstone exited its investment, new investors came in.

We ran into demonetisation. And our strategy was to become an Asia-wide leader for cash logistics at that time. So, those dreams sort of got shattered.

They are rethinking and pivoting, whatever you're wanting to do. And we expanded more in the technology and managed services space, which sort of took the next five, seven years. So, the company sort of pivoted and changed bases, both, you know, macro drivers and crisis.

Come out stronger each of these times. Today, when we actually just launched the new branding and positioned the company of a unified platform, where we have sort of built three platforms today. The ATM piece, everything from the automation to logistics of it.

The retail piece, which is retail consumption orientated and physical currency movement in the country between banks. And third, on the technology and payment side. Starting from, if you would think of a company, you know, the cash logistics business 2009 was 200 crores, roughly.

Today, we are at 12,000 crore company. But if you took a checkpoint in 2015, almost 100% cash management. Today, I would say the ATM piece is about 60%.

The retail piece is about 25%. And the technology and payment side is getting to be closer to 15%. So, the business is pivoting and transforming, but still has grown in this entire journey at almost a category of 15% revenue.

So, I'll come to the managed services and technology bit and how that's changed. So, tell us about the ATM network and what does it take to move cash around every day? And how do you track what's happening?

And what does the cockpit view look like?

Well, I think jocularly, I think that's the only real value I bring to a business like that because I don't have a logistics background. But I think of the humongous amount of technology we've built in-house to run this. I'm going to explain this to you, try and visualise this, right?

And India has got about roughly 250,000 ATMs, don't have black ATMs. Almost half of them are at a bank branch. So, within a branch, it has its own complexity within a branch. Half of them are outside, about 125,000 ATMs. CMS handles 70,000 of the 125,000 ATMs. So, for any Indian citizen who's touching an ATM outside a branch network, we are invariably a large part of that. Now, 70,000 ATMs, we are talking about almost everything from forecasting the need of the currency in that ATM on a given day, because currency is always never available because cost of cash is high. And therefore, how much currency do you need to fill it? And have we just in time, just right?

Otherwise, there's a higher cost. And you're almost going alternate days to replenish. And that frequency, you go to the US every once in a week.

In India, it's every two days. You get a trip sheet, sort of trip sheet in the morning. And 35,000 ATMs across a length of the country have to be forecasted, currency sourced, transported, counted, filled, closed by the day, Indian conditions, climate, traffic, whatever you want to think of it.

So, the amount of tech, which goes into running this network, because also what you're carrying is very valuable, there's not a 1000, 2000 rupee grocery order. At the price point we deliver this at, I think it's a humongous tech play, which makes us run. And of course, the 20,000 people, the 4000 vans, which are on the ground, enabling this to work.

Your average, I mean, your average, let's say, dispersal per ATM per month is about a crore, or crore to crore 0.3, 1 to 1.3. So, the daily would be divided by 30, roughly?

Yeah, I mean, peaks during salary, first 10 days, last five days, those are peaks. But yes, I think you should take a sort of just split it by 25, 30 days.

Right. And therefore, and you're filling it every two days, you're saying, is that?

And you know, this is interesting. Pre demonetisation, we used to have about 12 fills a month. Post demonetisation, now we're 10 years away, 10 years after, we are still filling this about 11 and a half times a day, a month.

So, the frequency, and again, I tell people, the business moral depends on many factors, number of ATMs, how many of them outsource, how many of them are with us, the price per trip, but most importantly, also the velocity of cash. And, you know, to borrow money, it costs 4, 5, 6% minimum. And therefore, our trip has to be cheap enough that you want to do just in time, right?

Rather than say, you know what, this is too expensive, let me just fill it up for the next two weeks and forget about it. It happens in the US because cost of cash till recently was maybe 2%.

So, you know, they would fill it up for a week and let go. And is it, when you say fill up, is it actually filled up or is it? Well, never really fully filled up.

Yeah, I mean, unless there's a very high transacting location, then of course, the forecasters, they fill it up because then you're actually going almost every day. But effectively, when they're going once every two days, you're filling it up roughly half.

And obviously, at some central kind of console, you're able to see how much is being used every day. And do they normally follow previous patterns or prior patterns? Or do you see?

Well, I think initially they were, but things have been far more volatile in the last four to six quarters. I just think the climatic patterns have been more unpredictable, right? And therefore, we are seeing a lot more and you'll see this in commentary quarterly where consumption is getting suddenly impacted due to either heat waves or monsoons and extended rains, because mobility comes down, right?

So I think we've seen, I have noticed there being more disruption and patterns in the last four to six quarters. And I think we're embracing that as the new volatility in life, right?

And that's both ways. I mean, people may not turn up at an ATM at all for some days versus...

Well, they do. I don't think that happens really, unless the ATM isn't working, but the frequency of what happens. So there are patterns, right?

When you're getting salary credit cycles, there are patterns around festivals, which are very easy to predict and model on. There are patterns around election time, right? We'll see.

So I think there are those macro led events, which we sort of understand, but climate related, I think it still has a little bit of a lag. And also keep in mind that either basis of contract or basis of responsibility, we want to make sure the ATM doesn't shut down. It can shut down for many reasons, but it shouldn't shut down for cash being out.

That's a fundamental responsibility. So how do you do just in time and just right is where we deploy a lot of our tech and forecasting patterns.

Right. So tell us about the banking side of it. I mean, who all do you partner with on...

I put it the other way. Well, I'm sure there are a few smaller banks, but any bank with a geographical presence in India will need CMS to work with them, right? And CMS vice versa.

We will serve almost every bank you can name and think about. There still may be a small corporate bank, which we don't maybe work with directly, but I think we work with almost all the banks today in the country.

Right. And in terms of payment networks, you're obviously the Visa, MasterCard, for example, for travellers or international travellers who are coming in, that's all plugged through?

Well, the ATM networks will do that, right? Yeah. I mean, if you're using those cards from a credit card being used on ATM or whatever, but primarily for us, I think what we run as a national infrastructure is really just a fact that these by bank, right?

We're not doing it for the country, we're doing it by bank. And therefore, everything to do with that, the site, the ATM, the uptime, the software, the hardware, the connectivity, all becomes our responsibility. And that's something we took as a philosophy in our first to second phase.

We're initially very happy to be a cash company. I think this is good enough for us. And I think two things happened.

One, we said, I was pitching to investors when the transition from Blackstone was happening. I was saying, it's a 2,000 crore TAM, and we have 1,200 crores of it. I mean, we were very proud of being 60% market share and revenue.

And then somebody said, but then how are you going to grow? And we realised, you know, this is a small pond, right? We've got to think about a bigger pond.

And then more importantly, we said, outsourcing patterns in India will change where many banks are doing piecemeal. Like I guess from tech, right? You have to look at what IBM did.

It will integrate at some point. So we made a bet and said, banks will see value in outsourcing end to end and getting lock, rid of it loc, stock battle. We just want to build the capability, both from tech and logistics to be able to offer it.

I think it took some time for people to warm up to the proposition. But today, I think that's what has led to a large part of our growth, where we deliver end to end solutions to banks. But the core being the moat and the market share we have around managing that ATM network.

And you've recently done a big deal with State Bank of India for outsourcing. So tell us about that and how that fits into this outsourcing.

Well, so I think handling cash is cumbersome and tough and very, very difficult. There is risk, there is complexity and whatnot. So we are still, I think 40% of India's ATMs are still managed in-house by a bank.

Including inside branches.

Inside branches. But it doesn't make really sense because, you know, they don't have the core capabilities. They don't have a scale.

We would be much, much cheaper. We or anybody in our ecosystem would be much cheaper. We would deliver a higher uptime.

But for various reasons, outsourcing trends on these take some time. And I'm happy. Let them take time.

If they happen in a rush, it's never good because it attracts too much competition at that time. But the State Bank of India is a classic case of what we keep talking about, saying these ATMs, these 100,000 ATMs, will get outsourced over time. So when people say, how much can ATMs grow?

I don't know. You know, two and a half lakh ATMs can be, we are the world's third largest ATM country, after China and the US population, all of that. But I'm saying, if two and a half lakh ATMs do not grow, there are 100,000 ATMs, which are not yet outsourced.

Assume it'll take 10 years to get outsourced. That itself gives us a phenomenal growth opportunity. Assuming we keep our 60% market share, it gives a phenomenal growth opportunity to do it.

So the SBI contract is one of those, right? Now, all PSU banks don't operate that way. And largely, when you talk in-house branch ATMs, majority of this is public sector banks.

But SBI has taken a stab at this, right? Some of them are outside, some of them are inside. Other banks will evaluate it basis, both cost benefit and how they, you know, how they think of their outsourcing needs and also the cost, right?

Because what is being borne internally, doesn't get counted as a cost bucket. As soon as you are outsourcing, you notice the cost. But every time this has happened, efficiencies have been created.

So let me ask you a few questions about the ATM itself, the machine. So what's changed in that in the last, let's say, decade or so, if anything, and do you own all the ATMs that you operate?

So, I mean, the ATMs today, right, depending on what banks are buying or specific banks are buying, are far more intelligent machines than they were earlier. They were just a cash dispense. Today, in fact, today, I think this year, most banks, when they go in for any refresh or expansion, they'll buy what we call in the trade currency recycler, which is where you can deposit cash.

Now, I don't know how many times you're going to deposit cash, but there's a big need for small traders or merchants. Because for them, when they get end of the day cash, they have to keep it locked up in the store to take it home and get it back, earning nothing on it. So they can go back and deposit into a bank till, but by four o'clock, banks are shut.

But a recycler in the lobby is up, so you can go dump the 10, 20,000 bucks, it gives you credit. So I think we're seeing a big shift to that. Doing this accurately, earlier, I mean, I remember the first time I tried this, the money never came credit to my account on a standard chart or some other bank.

I'm like, where did the money go? Then I'll go fight it out and figure this out. But today, this works like clockwork, there aren't any issues around it.

Secondly, many good banks, many banks have deployed software on the machines, which will predict as soon as you put in your card or your UPI ID, and it's able to say go in or Rajiv is here, it'll track this is your last three or four transactions, what the trend are you withdrawing 3,000, 5,000, 8,000. So the prompt is specific to you, it should, and it can, it doesn't necessarily do it today. Pitch and market to your solution could be an instant credit, it could be a loan, it could be a new future, it could be a new credit card.

They could become marketing acquisitions, sort of semi branch machines. So a lot of the DBUs the government talks about, I mean, effectively will be built around ATM shell. And that's what the machine can offer to you today.

You don't need to put in a card anymore, you can just go with your UPI ID and withdraw. So many people are like, yeah, I don't have a debit card anymore in my pocket. But you take a UPI, you're using UPI every year, you can take a UPI and withdraw money.

All ATMs may not have been fully enabled, and all consumers may not be aware of it. But I think that next big shift in ATM usage comes from UPI led transaction instead of a debit card transaction on a machine. Like I've stopped carrying a debit card for the last three or four years.

Got it. And you were saying about the asset model.

So asset model, we've stayed asset light historically. I, you know, I'm a first principles guy, I was like, you know, banks cost of capital is 4%. Our cost of capital is 6, 7, 8, 9%.

What sense does it make for us to hold an asset on behalf of a bank? However, there were many industry companies and competitors and who actually deployed this and banks really loved it. And therefore, there was a clear trend to banks wanting to get rid of the whole headache saying, you said it, you handle it.

We stayed away from it till almost 21, 22. Post COVID, we saw dislocation where we saw competitor balance sheets impaired. We had a very strong balance sheet.

At the company, we never raised capital. I like never. I think 2011, Blackstone put in about 100, 110 crores.

After that, never raised capital. Everything was generated. So I think we are a little more stingy where we spend money.

And we saw an opportunity where we could get a pricing where it made sense from IRR. So we went in and deployed. Today, I think 100,000 ATMs in India are not owned by a bank.

We have maybe 5 or 6,000. So our share there is 5, 6%. Basically with the high transacting banks, our strategy will not usually not be to go and deploy capital for owning an asset like that.

I think it is rightfully owned by a bank or a third party. We are the best at doing the services around it.

Right. And if I look at the non-ATM or the non-cash management part, which is also growing what you call managed services, tell us about that and how does that stack up against the cash? I mean, in a way, one is fighting against the other, at least in theory.

Yeah, no, actually it is not fighting at all. It is enabling it for us. So I think there is enough cannibalisation from outside that we do it ourselves.

And for us, one part of managed services is a very straight line, which is about saying an ATM needs to be managed, both technically managed services, vendor management, forecasting of cash, all of that. We will do all that services. So we enable that so that the customer does not have to go to different people to manage it.

The second part of it goes into when you go into retail. So we talk about 75, 70,000 ATMs. We have roughly about 65,000 retail points in India, where a CMS team member is going every day, not alternate, every day to pick up, collect, process, account, credit. That is a humongous thing, right?

This is like a commerce thing in a way, right? So that is massive volume. So these are people who are collecting from small Kirana stores?

No, no, no, Kirana stores are a lot of outsourcers. This will be from a Reliance Retail. This could be from a Blinket Darkstore.

But collect cash? Cash, because cash is used every year, right? There is some amount of cash was additional.

And bring it back into the ATM?

No, not in the ATM. We'll bring it back to a wall, process it, check for accuracy, check for counterfeit, and then account because the retailer, which retail works on very low margins, they want to account and have the cash in their account same day if possible, if not next morning. So we try and enable that.

So we cut down the working capital cycle of cash for retail. Having said that, how do we do it? We've integrated our apps into the retail ERP system so that if I was coming to a cafe coffee day or a Starbucks store, picking up $30,000, that would automatically go and update their central financial systems.

Digital, they know. Cash, they have no idea, right? The store guy says, I got $20,000 cash.

How do they know it's $20,000 cash? There is no way to check. Accuracy and information, money goes cash, anywhere, you know, will go missing.

So we become sort of the karta dharta to make sure that this is accountable, right, and image it in a way. So we build IT systems to enable integrated retailers. For large retailers, hospital chains, where there's a humongous amount of cash being used, we'll put a recycler machine saying, you know what, put the money in here, petrol pounds.

Just the counter person will just automatically get counted. His or her shift is done. The money reflects in Rajiv as a teller in that system, and we know the cash is safe in the machine.

We can go tonight, we can go tomorrow, we can go day after, doesn't matter when to go collect it. Unless the machine is getting full, we don't need to go every day then. Again, bringing that entire network into play, enabling the apps into the retail or the customer's software is what we do.

So that becomes managed services.

As cash continues to grow, what's the infra build out that you're seeing there? I mean, do you see more machines coming or bigger machines or what's changing there?

Well, I think first, if you take just the ATM side, the oldest business, the quality and the type of machine is changing from just a dispense into accept. Now, I remember 2016, 17, when these machines came first, people said, oh, this is going to kill your business. Because the money will be deposited, it will issue, what will happen to your work?

And you know, we said, yes, possible. And what we said at the team, let's accept this change and not fight it. So that's one good thing we've done.

We said, let's just go and sell these machines. We'll see what comes out of it, right? Let's at least sell the shovel and see what comes out of it.

What we realise is that these machines are accepting so much money that they don't have time to dispense. And the intake is far more than the output. And therefore, you are mostly going far more often to evacuate the cash, which is a more cumbersome exercise than filling in the cash.

And it actually becomes a better business model for us. Then you look at the retail side, I think it's an upsell saying, instead of just going in a single bag, collecting cash, if you have high transacting, we'll instal machines, have a longer term contract with software, hardware, and cash for you. The third business we haven't talked about is really something we incubated in 21, right in COVID.

So the business is an AI-led, it's a cloud-based AI platform, where we are monitoring and handling the security at today 50,000 sites in India. They start from the most obvious, an ATM site, it goes to a bank branch, it goes to a gold loan branch, it goes into a blanket dark store. So the software's job is to predict and figure out if there's an intrusion, which is going wrong.

This generates almost two to three lakh alerts every day. Our AI software is able to handle 80 to 85% alerts real time. The rest gets escalated to a human being to look into saying, is this an attack?

Do we need to call the cops? Do we need to do something else? And that's a massive platform, which is totally tech-led we've started.

Supported by the same as logistics infrastructure, because when something goes wrong at a site, we have somebody close to check. And this has now become almost like a, it's almost 8% to 10% of revenue. We started this four years ago.

You should put this separately. This is a very cool SaaS tech platform, but in the CMS size and scale, it sort of doesn't get highlighted so much, but this is totally a tech-led business for us.

And the AI is looking for aberrations in the...

You train the AI, right? So if you ask me, when we started, our hit rate was maybe 50%. Now we're at 85%.

That's 85% AI. So it'll look for aberrations, it'll look for intruder alert, three people coming in, masks, helmets, and a branch of somebody carrying a gun. Is there a fire happening?

Hopefully, some human being is looking at it, but if you want command and control systems at high-risk sites, right? I'm still not talking airports and I'm talking about things we know, NBFCs, Gordon branches, bank branches. So the software is going to sort of predict it.

Now, ATMs get robbed, right? They didn't get robbed middle of the night. People are coming and yank the ATM out, right?

Earlier, they would go and start cutting it. Now they just yank the put a tractor, yank and go. So the reaction time to control it, right?

So you've got to be fully on the guard and I'm going to be able to do it.

So that's... Have there been instances where something like that has happened and you've been able to respond?

Massive. I think we are able to... Sorry, every month.

Every month, we are able to prevent any of them 50 to 100 serious incidents from happening. I'm not on threat of life. I'm systems go down, right?

Everything is blown up. You don't have any feed down there, but 50 to 100 incidents a month, we are able to predict... It's not predict, we are able to stop from happening.

Interesting. Just to come back, you talked about hospitals as one category. What are the two or three biggest categories where you see...

It changes. It used to be jewellery stores. It is quick commerce.

It is e-commerce because when they go to the dark store, there is a cash being collected there. Public utilities could be railways where large amounts of cash will come in. And so I think it changes, but we've been surprised in the last one year itself just by consumption, FMCG, physical retail in terms of more day-to-day retail where cash usage or the cash has gone up.

Now, I'm not saying of the share. The amount of currency you're collecting has actually gone up, which sort of gives us indication of consumption has had a boost.

And I saw your...

Petrol bunks, right?

Many such cases. Petrol bunks, yeah. So I saw your consumption story report.

That's for 25. What's likely to change between now and the next year or the current financial year? Essentially, my question is, what are the kind of trends that you're seeing as you look ahead that affect you?

Well, so yes, I think for us, what... So we always like to worry about what can go wrong. And I think each year teaches you many more things which can go wrong.

So you start planning and predicting for it. For us, it is about the upcoming April, May, June heat cycles. It's generally a lesser consumption quarter.

And what happens, we'll have to see. We have surprisingly seen cash usage very robust across categories when you looked at Jan, Feb, March. And I think that's reflective of the overall economic consumption out there.

So I think consumption doesn't sort of worry us. We're actually seeing more retail points being added. Physically, retail is adding more stores out there.

The ATM usage has come to some sort of a stabilised... There was a drop last year. Number of transactions per ATM dropped on April, May when the RBI interchange went up.

I think that's stabilised to roughly about 70, 75 transactions a day. So I think for us, the idea is that to see how do these trends impact us, for us to build a diversified business around it is more important. I think organic growth for us has been good.

Consolidation has helped. We talked about a couple of companies. We acquired a company in Hawkeye sector in the remote monitoring business.

We acquired a managed services player in the ATM side. So I think consolidation is definitely a part of this industry. And we are not a top pay master in this.

We will get a share unless there's a deal at a very good value and it is accretive to us and to the customer. I think then only we look at it.

So let me ask the same question a little differently. When you look at international markets, including China, which you said has the highest number of ATMs, how are we different today from them? And to what extent could we maybe converge with the way ATMs are used or cash is managed or other points of transactions?

So I think for a long time, we would analyse ourselves to China where not enough information is sort of available in this particular sector. Or any larger market, yeah. US, we look at US, we look at Europe.

And if you think of US, we look at trends. How are the ATMs doing? Are they shutting down?

Are they increasing? Then we look at companies in our sector and see what is the business strategy and how are they growing? We look at the valuations, we look at revenue, we look at all of that.

But if I look at it, the US has, the usage of cash has been very robust. Almost 20%, I think 20% of the economy is still in cash now. The number of transactions in the ATM have been very steady, lesser than India, but 20, 25 transactions a day.

In India, you said about 70 to 75 transactions per day. 70 to 75 transactions per day.

But in India, let's say, I don't know, 90 or 95 has come down to 70, 35. Now, again, the point is, does that per transaction impact me? I would like to say no, because first of all, inflation, you need to put more money.

The number of trips impact us. And if the number of ATMs overall shrank, I think we still can counter it with the number of funds which are not outsourced. I think we have enough runway of growth for a modest increase in our ATM business for the next seven, ten years.

It's maturing, but it's not top tier. Our retail business is growing at double the rate, because that's just linked to consumption and formalisation. Our tech business will grow.

And when you say retail, you mean the picking up of...

That, and also we physically move currency between bank branch to bank branch, because there are banks hold currency in a chest. And then they need to disperse it just in time to each branch, business needs. You can't have a customer walking to a branch and saying, paisa nahi hai.

So getting this in and out, the fluidity of this motion is very critical. And that's business growing about 12, 14, 15% for us. I think long-term growth, because people are still adding branches.

Long-term growth because more retail penetration and formalisation happening. Then the tech side of it, tech and payments, that's a business which is now at roughly a 200 crore revenue growing to 300 crores. Now, 300 crores sounds small, but I think 300 crores on 2500 is 15%.

Growing at 25, 30% a year, it may go 20, it may go 30, but that business could double in three years. And certainly the proportion of our revenue from there becomes really meaningful at 20, 25% hopefully.

Right. I mean, and you talk about bank branches, right? Almost every major bank is adding 500 plus branches every year, even as we speak.

Well, one more point, sorry, I'm interrupting you, which I started talking to analysts a year and a half ago. You go to a large country, any large country, and I think India is a large country. If you go to JPMorgan Chase, you know, bank branch in New York City anywhere, that branch lobby will have six, seven machines.

India, when you go to a bank branch, mostly has one. Now it's getting to two. Some of the higher quality banks are already moving to three machines, automation, better consumer experience.

They don't want the tellers desk to be crowded. And you don't need a human interface for really a transaction. You don't need to have a...

So I think that we will see more of that happening. So there may be more offsites getting off into onsites. And so there are different trends, which I think we will mirror, countries like the US.

Right. So you said one is, are you seeing anything else in the, either the quantity, I mean, or the size of transactions, or the frequency, which you said is less right now in...

No, but the transactions, the amounts are going up, right?

In the US.

No, I'm saying here first, right? In India, what you are dispensing per transaction ATM is today, roughly 5,500 rupees. This was 3,000 rupees before demonetisation.

Now I can say simply it's inflation, maybe, I don't know, right? Or people are making lesser trips, possibly. But so I think the relevance of the channel remains.

I think the penetration levels of UPI have hit a very good number. I personally think that will now not slow down, but the growth will slow down because you already got 400 million users.

All projections are pointing to that.

Again, projections are projections, right? We don't know, we could be surprised. But I think UPI has opportunity from things, new things, like the most coolest things we all have faced, experienced, UPI and credit, right?

I think that could be a massive game changer. I can see the focus of NPCI and the government towards that. And I think UPI attacks everything, right?

It attacks a Visa through NPCI, I mean, Rupee, right? It attacks a MasterCard, attacks cash to some level. And these are interesting times.

Last question. So as you look ahead, how would you, you took us through the history of CMS and its transition.

Transformation, I would call it.

Transition and transformation. What does it look like a couple of years from now, when you look at it from the top? Because you talked about cash management, you also talked about the transaction part.

You also talked about the security, which is a new thing. And that itself is growing as I guess it will grow. So what does CMS look like or what a company like CMS look like?

Well, I fundamentally would love to do, make this a business platform, which is able to do a variety of things for BFSI, banks and BFCs. We chose a sector for a particular reason. Every large outsourcing company chooses BFSI because it's the largest, most, in my mind, it's also simple.

It's a counterparty, has credit risk worth, they will pay you money, right? And many times you don't even get paid. So for us, we would love to do new things.

We have our eyes set on some areas, I mean, broadly in payments. But in payments, you don't end up making money. So we always look at a deal and walk away.

But I think software, I think technology and software, there aren't any big brands, which are, I mean, there will be an Infosys doing a little bit of work, there'll be TCS doing a little bit, but otherwise it's very fragmented, right? And HGFC and ICICI will have tens of vendors doing... I think there's opportunity there for us for the next decade.

We have shied away from it simply because there wasn't a clear core part in which you could see market leadership. And for us, if you can't be market leader, don't get into it. And secondly, everyone's working at 10% EBITDA margin.

I'm like, what sense does it make? If you don't see a 15, 20% EBITDA margin business, stay out of it. We don't need to go there.

But I do think, I don't know if we'll be able to crack it or not. I think for us, when I think of TAM, it was a 2,000 crore TAM we looked at in 2015. Today, we'll be at a 10, 12,000 crore TAM.

I think by 2030, in our current three platforms, we'll be targeting at 20,000 crore TAM. And therefore, the opportunity for us to be a 4,000, 5,000 crore company is real if we can execute well. But how do you make it at 30, 40,000 crore TAM?

And for me, personally also, because there are some of the routes I come from, I feel the software would be tougher, but an exciting opportunity for us to be working in this category. AI makes it easier. It makes it easier for us, right?

Incumbents have a different, but I think new companies can come in. I mean, we'll have to think of acquisitions, but I think we can leapfrog that. We have a 150-member tech team internally.

We spent close to 2% revenue in tech last year, which in India, you don't have people spending 1.5%, 2% of revenue on tech. And I think that could be a new thing if we succeed in the next, not two years, but next four to five years.

Right. Actually, that's a good note to end on. Thank you so much for joining.

Pleasure to have you.