Any current/future new fundraising through debt or equity?

The company is on the borderline regarding a rights issue, which was initially aimed at managing attrition and investing in growth. Promoters currently do not have the funds to subscribe to the rights issue; hence, the rights issue remains in a state of uncertainty. There is a perception risk if promoters do not participate in the rights issue, but the company maintains integrity and transparency about the situation. No concrete decision has been made yet; the company is in a "quandary" but is "bordering on tilting towards" not proceeding with the rights issue. There is no mention of new debt

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

No explicit mention of current or future capital expenditure (capex) or strategic investments detailed in the transcript. The company emphasizes cautious capital use, noting that some growth initiatives (e.g., US government reporting, ESG in Europe) can happen "without too much capital" as they "muddle along." Discussion on rights issue highlights promoter constraints in subscribing due to lack of capital; no final decision yet on proceeding. The company has hired senior personnel at high cost, indicating investment in talent as a strategic move signaling confidence in growth. Focus is more on

Future growth expectations in sales/revenue/volumes?

Growth is expected to be driven by new mandates such as ESG reporting, particularly in markets like Europe and the US government reporting domain. The Create segment showed robust growth of 46%, with good profitability and scale economics improving margins. The Collect segment growth has been stagnant but potential exists as regulatory mandates roll out. Expansion into replacement markets by targeting customers using inefficient or pricier solutions. Introduction of new products like the Disclosure Management platform and Litigation Management System to tap adjacent markets. Early adoption by

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

IRIS sees growth opportunities primarily from new mandates like US government reporting and ESG initiatives in Europe starting next year. Create segment showed robust 46% growth with improving profitability due to scale economies and increased platform usage. Collect segment revenue growth is slower, affected by regulator delays, but expected to improve with new tenders expected by December. ESG filings under SEBI are increasing, indicating a ramp-up in XBRL adoption and potential growth. The company is investing in senior hires and marketing to drive growth, signaling confidence despite curre

Current/ Expected Orderbook/ Pending Orders?

The company is currently bidding on four projects, but specific timelines for decisions are unknown. There is no clear clarity on the budget cycles of these projects, making it difficult to predict when orders will materialize. Some tenders and RFP screening by regulators have started, but actual scaling and implementations are awaited. The company has not lost any existing orders but has not won new significant orders recently; the situation is described as being "Trishanku is still hanging in the sky." Delays in some regulatory mandates and implementations, such as the iFile project and GST-

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IRIS Regtech Solutions LtdQ3 FY23IT - Software

IRIS Regtech Solutions Ltd Q3 FY23 Earnings Call Analysis

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

Price: ₹244P/E: 34.1Market Cap: ₹483 CrSector: IT - Software

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

N/A

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Growth is expected to be driven by new mandates such as ESG reporting, particularly in markets like Europe and the US government reporting domain.
→The Create segment showed robust growth of 46%, with good profitability and scale economics improving margins.
→The Collect segment growth has been stagnant but potential exists as regulatory mandates roll out.
→Expansion into replacement markets by targeting customers using inefficient or pricier solutions.
→Introduction of new products like the Disclosure Management platform and Litigation Management System to tap adjacent markets.
→Early adoption by customers and ongoing feedback loops expected to stabilize and ramp offerings within a year.
→Continued focus on winning government tenders and scaling regulated markets as mandates unfold gradually.
→Management remains optimistic about a gradual ramp-up in regulatory-driven demand and replacement market opportunities.
→Investment in senior resources and technology platforms shows confidence in future growth potential.

Margin guidance

Category 3

→IRIS sees growth opportunities primarily from new mandates like US government reporting and ESG initiatives in Europe starting next year.
→Create segment showed robust 46% growth with improving profitability due to scale economies and increased platform usage.
→Collect segment revenue growth is slower, affected by regulator delays, but expected to improve with new tenders expected by December.
→ESG filings under SEBI are increasing, indicating a ramp-up in XBRL adoption and potential growth.
→The company is investing in senior hires and marketing to drive growth, signaling confidence despite current cautious cash flow.
→Attrition, especially at senior level, remains a key challenge affecting growth and operational efficiency.
→Management cautions that growth is linked to regulatory timelines which are uncertain, with some mandates only expected to materialize next fiscal year.
→Overall, the outlook is cautiously optimistic with targeted initiatives and new product launches expected to drive earnings and profitability expansion.

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Fundraise plans

Yes

→The company is on the borderline regarding a rights issue, which was initially aimed at managing attrition and investing in growth.
→Promoters currently do not have the funds to subscribe to the rights issue; hence, the rights issue remains in a state of uncertainty.
→There is a perception risk if promoters do not participate in the rights issue, but the company maintains integrity and transparency about the situation.
→No concrete decision has been made yet; the company is in a "quandary" but is "bordering on tilting towards" not proceeding with the rights issue.
→There is no mention of new debt fundraising in the transcript.
→The company continues to focus on organic growth and managing cash flows prudently, including hiring senior resources despite cash constraints, signaling confidence in future growth.

Order book

→The company is currently bidding on four projects, but specific timelines for decisions are unknown.
→There is no clear clarity on the budget cycles of these projects, making it difficult to predict when orders will materialize.
→Some tenders and RFP screening by regulators have started, but actual scaling and implementations are awaited.
→The company has not lost any existing orders but has not won new significant orders recently; the situation is described as being "Trishanku is still hanging in the sky."
→Delays in some regulatory mandates and implementations, such as the iFile project and GST-related systems, affect order inflow timing.
→Optimism exists that some of these orders or mandates may come through by December, but definite timelines remain uncertain.
→Integration and testing phases for some offerings, such as e-invoice IRP system, are ongoing with expected go-live in early December.

Capex plans

→No explicit mention of current or future capital expenditure (capex) or strategic investments detailed in the transcript.
→The company emphasizes cautious capital use, noting that some growth initiatives (e.g., US government reporting, ESG in Europe) can happen "without too much capital" as they "muddle along."
→Discussion on rights issue highlights promoter constraints in subscribing due to lack of capital; no final decision yet on proceeding.
→The company has hired senior personnel at high cost, indicating investment in talent as a strategic move signaling confidence in growth.
→Focus is more on organic growth through technology innovation, new product launches (e.g., IRIS Litigation Management System, disclosure management platform), and developing markets rather than large capex or acquisitions.
→No mention of imminent large-scale investments or capital-intensive projects; emphasis is placed on scalability of existing platforms and gradual market expansion.

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1IRIS Regtech Solutions Ltd

Rev 3Mar 3

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