Hi @NaveenM3119: If you don't foresee any requirements for queue processors, dedicated stream node is not mandatory (but recommended to have). Also consider that OOTB queue processors will still need a stream node so that you may need to configure your batch node to serve as stream node too.
Starting in version 8.7, the use of an internal Kafka is deprecated. On-premises systems that have been updated from earlier versions of Pega Platform™ can continue to use Kafka in embedded mode. However, to ensure future compatibility, do not create any new environments using embedded Kafka. When configuring the Stream service in a new environment, use external Kafka.