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Commercial Services company eMudhra announced Q1FY25 results:
Financial Highlights:
- Revenue for the quarter was Rs 950.2 million, an increase of 17.7% YoY
- Gross profit for the quarter was Rs 631.0 million, representing a gross margin of 66.4%
- Operating expense for the quarter was Rs 319.2 Million
- EBITDA for the quarter was Rs 294.5 Million, with an EBITDA margin of 31.0%
- Net income for the quarter was Rs 182.0 million, with a net margin of 19.1%
- Earnings per share for the quarter was 2.2, an increase of 6.6% YoY
Business Highlights:
- Revenue split between India and International is 41:59
- Enterprise Revenue split between Partner and Direct is 25:75
- Enterprise Revenue split between Cyber Security and Paperless segments is 66:34
- Trust Service Revenue split between Retail, Channel and New Products (eSign/SSL) is 22:48:31
Commenting on the first quarter results, V. Srinivasan, Executive Chairman, eMudhra Limited said, “We are pleased to report first quarter results for FY25 with a revenue growth of 17.7% YoY, EBITDA growth of 19.0% YoY and PAT growth of 11.2% YoY.
The first quarter saw continued traction in both domestic and overseas markets for our enterprise solutions. In India, we continue to see deal momentum in BFSI for integrated eSign/eStamping usage via emSigner for customer onboarding, lending workflows. We also participated in a number of critical digital transformation projects in eGovernment. In view of central elections there has been a delay in respect of government projects. Further, in view of change in methodology of selling digital signatures announced by Controller of Certifying Authorities in April 2024, which was to take effect from July 2024, the partners of Indian trust services business bought lesser stock resulting in lower revenue in Indian Trust Services.
Our traction in the United States continues to improve with penetration into certain key accounts for Certificate Lifecycle Management/PKI offerings. We have also been able to win deals in the Education sector via Ikon’s relationship serving end customers in that sector. Europe is going through an interesting change in landscape where Identity is being harmonized through the deployment of European Identity Wallet. This is likely to result in better opportunities for trust services and enterprise solutions. To capitalize on this opportunity, we have appointed Carmine Auletta as Head of Europe for eMudhra. Carmine was Chief Operating Officer at Infocert, a large Certifying Authority in Europe.
We have made meaningful strides in penetrating emerging markets such as Philippines, Malaysia where we now have a local presence to tap into digital transformation opportunities. Our investments into Kenya are bearing fruits as there is a strong digital transformation push at a country level. We also participated in several PKI deployment opportunities as part of “Digital Public Infrastructure” rollouts in other African countries.
We also continue to make investments into building services capability, to not only address professional services needs for our product implementation but also be able to upsell into target customer spends on cyber security in areas such as security operations, data privacy, threat intelligence and generative AI. In line with this, we are acquiring Two95 International based in New Jersey to bolster services capabilities and give us market access into a new set of customers for our products. The acquisition is likely to be completed very soon.
On trust services, regulatory changes resulted in the implementation of a new business model which came into effect on July 15, 2024. In the new model, Certifying Authorities are now mandated to invoice end customers based on a transparent pricing policy and pay partners a referral commission. This is against the earlier model where we invoiced partners who then sold to end customers. The anticipation of implementation of the new business model resulted in a decline in purchase of our certificates by the partners in Q1. However, this is likely to be offset by better realizations in the coming quarters as a result of end customer invoicing.
To summarize, we see continued opportunities across our lines of business because of opportunities in new markets and upselling potential into existing customers. We continue to pursue these through a combination of both an organic and inorganic growth strategy”.
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