Whalesbook
AvenuesAI Charts New Course with AI-Native Platform, Boosts Guidance
AvenuesAI Limited, formerly known as Infibeam Avenues Limited, has announced a remarkable Q3 FY26 performance, signaling a significant inflection point following its strategic transformation into an AI-native transaction infrastructure platform. The company reported a staggering 122% year-on-year growth in gross revenue, reaching ₹2,381 crore for the quarter ending December 31, 2025. This surge, coupled with a 59% year-on-year increase in adjusted Profit After Tax (PAT) to ₹86 crore, has prompted management to upwardly revise its full-year FY26 guidance.
Financial Deep Dive: Numbers and Nuances
The company's top-line growth was driven by higher payment volumes and a stronger contribution from enterprise merchants, alongside international expansion. However, it's crucial to note the significant difference between gross revenue growth and net revenue growth, which stood at a more modest 6% year-on-year, reaching ₹149 crore. This suggests that a substantial portion of the gross revenue represents funds processed on behalf of clients rather than the company's direct earnings.
Despite this, adjusted EBITDA margins improved significantly to 66% from 56% in the prior year, indicating better operating leverage as volumes scaled. The adjusted PAT margin also expanded to 58% from 39% year-on-year. Management attributed this improvement to cost control measures and the scaling of higher-value services.
The AI Transformation: Building a 'Compounding Flywheel'
AvenuesAI is aggressively repositioning itself beyond a traditional payment gateway. The rebranded entity is focusing on becoming an 'AI-native transaction infrastructure platform.' This strategy involves integrating its diverse assets – including Rediff, RediffOne, CCAvenue, and its AI subsidiary Phronetic AI – into a unified ecosystem. The vision is to create a 'compounding flywheel' where every transaction strengthens the platform's intelligence layer, enhancing routing, fraud detection, risk management, and automation capabilities.
Phronetic AI is described as the 'brains' of this ecosystem, converting data into actionable insights and driving autonomous transactions. Innovations like CCAvenue CommerceAI and PayCentral.ai are central to this AI-driven architecture, designed to provide foundational infrastructure for enterprises.
Regulatory Wins and Market Expansion
The company achieved several key regulatory milestones during the quarter. It received an in-principle license from the Reserve Bank of India (RBI) for issuing prepaid payment instruments, approval from the International Financial Services Centres Authority (IFSCA) at GIFT City, and authorization from the RBI for offline payment aggregation. Management expressed confidence that international markets will contribute a growing share of net payment revenue, with GIFT City serving as a strategic hub for cross-border flows.
Guidance Boost and Future Outlook
Buoyed by the strong quarterly performance and operational momentum, AvenuesAI has revised its full-year FY26 guidance upwards. The company now expects gross revenue to be between ₹7,500 - 8,000 crore (up from ₹5,000 - 5,500 crore) and PAT to reach ₹2,500 - 2,750 crore (up from ₹2,100 - 2,200 crore). Management anticipates that the next fiscal year will see stronger AI-driven monetization, increased automation-led margin expansion, and enhanced cross-platform revenue capture.
Risks and Negative History
While the growth figures are impressive, the significant gap between gross and net revenue growth warrants investor scrutiny, indicating a large pass-through component. Some market observers have raised concerns about margin compression despite the revenue surge, suggesting that costs may not be scaling efficiently. Furthermore, for the nine months ended December 31, 2025, the company reported a year-on-year decrease in Profit Before Tax (-17.1%) and Profit After Tax (-13.6%), contrasting with the strong Q3 performance. The execution risk of its ambitious AI transformation, integrating disparate businesses, also remains a key factor to watch.
Historically, Infibeam Avenues (now AvenuesAI) has faced regulatory attention. In 2020, SEBI imposed penalties and impounded funds following an investigation into insider trading and the improper sharing of unpublished price-sensitive information by one of its joint statutory auditors in 2016-2017.
Peer Comparison
Competitors in the Indian payment gateway space are also evolving. Paytm reported a net profit of ₹225 crore in Q3 FY26, driven by merchant subscriptions and financial services. Pine Labs saw its net profit rise to ₹42 crore in Q3 FY26, with revenue growing 24% year-on-year. Razorpay, a significant player, holds over 20% market share in India and has achieved a TPV of $150 billion. While AvenuesAI's revenue growth is exceptional, its net revenue and margin performance will be closely watched against these peers, especially concerning the efficiency of its AI-driven infrastructure play.