Any current/future new fundraising through debt or equity?

The company currently holds about Rs. 250 crores in cash, partly from a Qualified Institutional Placement (QIP). Rs. 80 crores of this cash is reserved for acquisitions, but it is yet to be spent. Rs. 43 crores is earmarked for new product development in areas like homomorphic encryption, mobile PKI, and post-quantum cryptography. There is no specific mention of any new fundraising plans through debt or equity in the transcript. The management indicates comfortable cash flow management with ongoing cash accruals balancing expenditures. No announcements or plans for new debt or equity fundraisi

Any current/future capex/capital investment/strategic investment?

eMudhra has approximately Rs. 250 crores cash on the balance sheet, partly from QIP funds. Around Rs. 80 crores is reserved for acquisitions and is yet to be spent, currently under evaluation. Rs. 43 crores is allocated for three new products involving homomorphic encryption, mobile PKI, and post-quantum cryptography, with about Rs. 10-12 crores already spent. Cash will be deployed gradually on these strategic investments, reducing cash balance over time while offset by cash accruals. The company is focusing on R&D in post-quantum cryptography, fully homomorphic encryption, and mobile PKI as s

Future growth expectations in sales/revenue/volumes?

Expecting overall revenue growth of 25% to 30% in the coming years. Enterprise solutions order book at Rs. 149 crores, projecting a 2x multiple gives about Rs. 300 crores in revenue for solution business. Services business, especially cybersecurity-related, expected to grow at around 20% or more. International enterprise business anticipated to grow by 25%-30%. India enterprise business expected to stabilize around Rs. 15 crores per quarter. Trust Services likely to see further upside with new pricing models starting FY25. Africa and Middle East are key regions with expected growing demand; US

Future growth expectations in earnings/operating earnings/profits/EPS?

eMudhra expects overall revenue growth of around 25%-30% in coming years driven by enterprise solutions, services, and Trust Services. The solution business order book stands at Rs. 149 crores as of FY25 start, expected to translate to around Rs. 300 crores in revenue, not including services and Trust Services. Services business is projected to grow at least 20%, contributing to overall growth. EBITDA margin guidance is a conservative 30% for FY25, slightly lower than Q4's 33%, considering risks. Net profit margin is expected around 18%-20%, impacted by new taxation in international markets. T

Current/ Expected Orderbook/ Pending Orders?

Opening order book for FY25 is approximately Rs. 149 crores (solutions only, excluding services). Previous year's order book was Rs. 118 crores. The historical revenue multiplier on the order book has been around 2x to 2.2x. Using this multiplier, FY25 enterprise solutions revenue is expected around Rs. 300 crores (149 x 2). Services business order book is additional and separate; includes Ikon Tech services and new services from India and Middle East. Total combined revenue (solutions + services + Trust Services) is expected to grow 25%-30% in FY25. Large portion of orders are cyber security

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eMudhra LtdQ1 FY24IT - Services

eMudhra Ltd Q1 FY24 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹452P/E: 36.1Market Cap: ₹3.9K CrSector: IT - Services

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→Expecting overall revenue growth of 25% to 30% in the coming years.
→Enterprise solutions order book at Rs. 149 crores, projecting a 2x multiple gives about Rs. 300 crores in revenue for solution business.
→Services business, especially cybersecurity-related, expected to grow at around 20% or more.
→International enterprise business anticipated to grow by 25%-30%.
→India enterprise business expected to stabilize around Rs. 15 crores per quarter.
→Trust Services likely to see further upside with new pricing models starting FY25.
→Africa and Middle East are key regions with expected growing demand; US showing incremental improvement with POCs converting into orders.
→Specific products like eSign showing good growth; SSL product repositioned for niche market expansion.
→Digital transformation and zero trust security initiatives underpin long-term growth opportunities.

Margin guidance

Category 3

→eMudhra expects overall revenue growth of around 25%-30% in coming years driven by enterprise solutions, services, and Trust Services.
→The solution business order book stands at Rs. 149 crores as of FY25 start, expected to translate to around Rs. 300 crores in revenue, not including services and Trust Services.
→Services business is projected to grow at least 20%, contributing to overall growth.
→EBITDA margin guidance is a conservative 30% for FY25, slightly lower than Q4's 33%, considering risks.
→Net profit margin is expected around 18%-20%, impacted by new taxation in international markets.
→The company aims for sustainable or increasing realizations in Trust Services post new regulatory changes.
→Digital products like eSign and cybersecurity solutions are gaining traction, supporting future earnings growth.
→Services business is anticipated to compound annually with around 20-25% growth potential as it matures.

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Fundraise plans

→The company currently holds about Rs. 250 crores in cash, partly from a Qualified Institutional Placement (QIP).
→Rs. 80 crores of this cash is reserved for acquisitions, but it is yet to be spent.
→Rs. 43 crores is earmarked for new product development in areas like homomorphic encryption, mobile PKI, and post-quantum cryptography.
→There is no specific mention of any new fundraising plans through debt or equity in the transcript.
→The management indicates comfortable cash flow management with ongoing cash accruals balancing expenditures.
→No announcements or plans for new debt or equity fundraising were shared during the call.

Order book

Yes

→Opening order book for FY25 is approximately Rs. 149 crores (solutions only, excluding services).
→Previous year's order book was Rs. 118 crores.
→The historical revenue multiplier on the order book has been around 2x to 2.2x.
→Using this multiplier, FY25 enterprise solutions revenue is expected around Rs. 300 crores (149 x 2).
→Services business order book is additional and separate; includes Ikon Tech services and new services from India and Middle East.
→Total combined revenue (solutions + services + Trust Services) is expected to grow 25%-30% in FY25.
→Large portion of orders are cyber security related (74%) versus paperless transformation (26%).

Capex plans

Yes

→eMudhra has approximately Rs. 250 crores cash on the balance sheet, partly from QIP funds.
→Around Rs. 80 crores is reserved for acquisitions and is yet to be spent, currently under evaluation.
→Rs. 43 crores is allocated for three new products involving homomorphic encryption, mobile PKI, and post-quantum cryptography, with about Rs. 10-12 crores already spent.
→Cash will be deployed gradually on these strategic investments, reducing cash balance over time while offset by cash accruals.
→The company is focusing on R&D in post-quantum cryptography, fully homomorphic encryption, and mobile PKI as strategic product investments.
→There is a revamp in their software model especially related to Trust Services in response to new CCA regulations effective July 2024.
→Overall, capital allocation is balanced between acquisitions, new strategic product development, and ongoing operations.

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