Protean eGov Technologies Limited
Q2 FY26
Call date · August 26, 2025
1 · Management Commentary
Key Positives
- Secured a landmark contract worth Rs. 1,370 crores (inclusive of GST) from UIDAI to establish and operate Aadhaar Seva Kendras (ASKs) in 188 districts across India.
- The project positions Protean as a key player in scaling up two critical national IDs and expands its distribution footprint.
- The engagement is for six years, with revenue recognized on a per-transaction managed services model, providing recurring income.
- Management expects the business to be EBITDA-accretive and to contribute Rs. 180-190 crores in annual revenue.
Key Negatives
- Pricing and minimum revenue commitments are under confidentiality and not disclosed.
- The project requires setting up exclusive new centers, not leveraging existing PAN infrastructure, leading to additional operational complexity.
- Future expansion to additional districts is dependent on UIDAI’s decisions.
Forward Guidance
- Minimal CAPEX expected; the model is largely OPEX-driven with leased real estate and manpower as key costs.
- Revenue from the project will begin contributing from Q3 FY26, with full scale-up in 6–12 months.
- Potential for future expansion exists, as current mandate covers only 188 out of 471 districts (approx. 40%).
- Pricing is regulated by UIDAI, with inflation-linked increases every two years.
- The project is exclusive by district, with only two providers (Protean and BLS International) allocated specific districts.
2 · Q&A Highlights
Q 1 (Composite): How will revenue be recognized, and is there a minimum revenue commitment or upper limit?
A (Management):
• Revenue is recognized per transaction under a managed services model, not as a turnkey project.
• Revenue will be evenly spread post scale-up, with inflation adjustments every two years.
• There is a minimum revenue commitment, but details are confidential.
• The Rs. 1,370 crores figure is based on reasonable assumptions and is not an upper limit; revenue can exceed this if transaction volumes are higher.
Q 2 (Composite): What are the transaction rates and payment terms?
A (Management):
• Transaction rates are regulated and confidential, but blended rates of Rs. 100–106 per transaction are in the right ballpark.
• Payments flow from UIDAI to Protean monthly, based on actual transaction volumes; no significant working capital lock-up is expected.
Q 3 (Composite): What are the cost and margin expectations, and what is the CAPEX/OPEX split?
A (Management):
• Major costs are real estate (leased), hardware, and manpower; minimal CAPEX, mostly OPEX.
• The business is expected to be EBITDA-accretive, contributing Rs. 180–190 crores in annual revenue.
Q 4 (Composite): Is there potential for expansion beyond the current 188 districts?
A (Management):
• Current scope covers 188 out of 471 districts (approx. 40%); expansion to more districts is possible but subject to UIDAI’s future decisions.
Q 5 (Composite): Who are the other players, and how is exclusivity managed?
A (Management):
• Only two providers (Protean and BLS International) have been awarded the mandate, with exclusive district-wise allocation (Protean: 188 districts, BLS: remainder).
• Previous operators (Karvy, IDEMIA) will exit as their mandates end.
Q 6 (Composite): When will revenue start contributing, and what happens after six years?
A (Management):
• Revenue will start from Q3 FY26, with full scale-up in 6–12 months.
• The current contract is for six years; future renewal or rebidding will depend on UIDAI.
Q 7 (Composite): Will existing PAN infrastructure be leveraged?
A (Management):
• No; the 188 ASKs will be exclusive to Aadhaar services and separate from existing PAN centers.
Q 8 (Composite): Are other Aadhaar services (e.g., at post offices, banks) affected?
A (Management):
• Post offices and banks will continue to offer Aadhaar services, but the 471 ASKs will handle the bulk of volumes.
3 · Other Key Numbers
- Total contract value: Rs. 1,370 crores (inclusive of GST)
- Number of districts awarded to Protean: 188
- Total districts under mandate: 471
- Protean’s share: ~40% of districts (BLS International: ~60%)
- Expected annual revenue contribution: Rs. 180–190 crores
- Project duration: 6 years
- Revenue recognition: From Q3 FY26 onwards
- Number of service centers to be set up: 188 exclusive Aadhaar Seva Kendras
- Transaction rates: Not disclosed (management confirmed Rs. 100–106 per transaction is a reasonable estimate)
- Major cost heads: Real estate (leased), hardware, manpower
- Inflation-linked price increase: Every two years
- Previous operators: Karvy, IDEMIA
- Other party awarded: BLS International (Rs. 2,055 crores order value as per Q&A)
- Total Aadhaar holders in India: 140 crore (1.4 billion)