Return to Normal by March, page-142

Whilst we await an update from the company, here's something else that I have my attention on.

As many of you already know, TSI India manages the complete Tamilnad Mercantile Mutual Bank Ltd (TMB) ATM network and their relationship with their bank client goes back several years. Refer to page 8 of the Corporate Presentation dated 15/05/15 below.

http://www.asx.com.au/asxpdf/20150515/pdf/42yl8x4cqbsnp7.pdf

A while back fellow poster @TomDi (if you're still with us, thanks mate!) provided us with his calculations/summary collated from RBI's website below for Tamilnad Mercantile Mutual Bank Ltd (TMB). I recommend you have a read of his post below. I was just looking at what those TMB statistics looked like from March 2016 compared to March 2017. Refer to RBI's website and Tom's calculations/summary below.

https://m.rbi.org.in//scripts/ATMView.aspx (RBI website)

https://hotcopper.com.au/threads/rb...2779004/page-36?post_id=17891337#.WQJ7vIVOLIU (Tom's post)

Here's Tom's March 2016 summary/calculations collated from RBI's website:

Total ATMs: 1015
Total debit cards on issue: 928,589
Total transactions: 3,291,198
My calculations (to 1 decimal place):
Average transactions per debit card for the month: 3.5
Average transactions per ATM for the month: 3242.6
Average transactions per day: 104.6

Fast forward to March 2017 and here are what the statistics look like....

Total ATMs: 1063
Total debit cards on issue: 1,057,761
Total transactions: 3,737,091
Here's what this works out to...
Average transactions per debit card for the month: 3.5
Average transactions per ATM for the month: 3515.6
Average transactions per day: 113.4

Why do I find these statistics important? Because many of these machines are well established and have been for many years. So, are many/all of these 'one off' hardware costs per ATMs behind them now? When does payback kick in? Has it already?

113.4 transactions per day x 1063 ATMs x 90 days (qtr) = 10,848,978 transactions per quarter.

10,848,978 x $0.15c (transaction fee may be around this figure as many of the contracts are many years old now) = $1,627,347 revenue per quarter.

$1,627,347 x 4 = $6,509,387 per year.

Each ATM costs between $15-20k.

Let's use $15k as the figure for the purpose of this exercise.

$15k x 1063 ATMs = $15,945,000.

Even at 95 transactions per day x 365 days = 34,675 transactions per year.

34,675 x $0.15c = $5,201.25

Let's round this off to $5,000 revenue per ATM per year.

So it might potentially take them 3 years to pay off each ATM based on those 95 transactions per day.

Of course we have to then factor in the ongoing costs, but this exercise highlights just how interesting the older ATMs in this business model are.

Note, PNB and HDFC are also TSI's bank clients pre Mphasis, but because TSI are not the sole company managing their ATMs, we're not going to be able to ascertain exact transactions per day from RBI's website. Just be mindful that they too are also older and established clients of TSI.

Tony