Network People Services Technologies Limited (NPST) is an India-based fintech company specializing in digital payment solutions, including Unified Payments Interface (UPI), Immediate Payment Service (IMPS), mobile banking, and wallets for banks and payment companies. The company operates as an NPCI-approved Merchant PSP under the brand name TimePay and serves as both a Technology Service Provider (TSP) and a Third-Party Application Provider (TPAP). 

India

NETWORK PEOPLE SRV TECH L

Technology

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

NPST-SM.NS reported revenue of INR 1 276mn in the last 12 months, up 212% from FY23. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS grew 308% from FY23 to INR 13.76.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 1ppts and its growth decelerated by 13ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 33.2% in the last 12 months, up from 27.7% in FY23. 

Historically, NPST-SM.NS has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 25.7%, a growth from 19.5% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 127.2% in the last 12 months, an increase from 35.4% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 162.7%, above the peers. 

NETWORK PEOPLE SRV TECH L reported a return on equity (RoE) of 64.9% in the last 12 months, up from 47.6% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 12.1 in the past several years. This ratio implies a excellent shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

NPST-SM.NS has very poor trading liquidity. It will take at least a day or two for the average private investor to sell a common position under normal market conditions. Liquidity is usually stable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, robust profitability, solid return on capital, strong debt servicing capacity, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, excessive margin volatility, and poor working capital management.

In highly turbulent market conditions, NPST-SM.NS is moderately volatile. In other words, the stock will fall more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be moderate. 

In normal market circumstances, NPST-SM.NS is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to substantial. 

From both historical and forecast perspectives, the stock is considerably overpriced compared to similar stocks. Specifically, the stock is 'expensive' on P/E, overvalued on EV/EBITD. 

NETWORK PEOPLE SRV TECH L

₹ 2063

3

NETWORK PEOPLE SRV TECH L

₹ 2063

3

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₹ 2063

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