Any current/future new fundraising through debt or equity?

There is no explicit mention of any current or future fundraising through either debt or equity in the provided extract from the Q1 FY25 earnings conference call. The discussion primarily focuses on operational performance, revenue growth, capital allocation, and investment returns. Nisha Dutt emphasizes ensuring the right capital allocation as part of the transformation but does not specify plans for raising funds. Cash flow and efforts to recover dues to support business growth were discussed, indicating a focus on internal cash management rather than external fundraising. No direct statemen

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

Subex is focused on capital allocation as part of its multiyear transformation journey, emphasizing growth, efficiency, and talent. The company has made investments in AI, including internal tools like code co-pilots to improve engineering productivity. Investment decisions are guided by an internal rate of return (IRR) criterion of at least 20%; businesses or projects that do not meet this are divested. Recent divestment of the ID Central digital trust business was to free up cash to invest more in core Telco-oriented products. Continued R&D investments are being made in the HyperSense platfo

Future growth expectations in sales/revenue/volumes?

Management aims for double-digit growth in FY25, targeting around 10% quarter-on-quarter growth. Q1 is usually muted due to seasonality; growth is expected to pick up strongly in H2. Focus on Telco vertical specialization and upselling new products to existing 150+ customers to drive revenue. Increasing demand for AI-driven solutions (fraud management, revenue assurance) is expected to boost sales. AI contracts have seen an 8x increase in deployment at client side, indicating strong growth potential. Management is actively monitoring sales performance, pushing for deal closures, and is intoler

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

Management aims for top-line growth focusing on Telco sector, enterprise, and AI-driven solutions, expecting double-digit growth starting FY25-26 (Page 43, 30). Q1 revenue and EBITDA were muted due to seasonality; business is H2 heavy, with growth expected to pick up in latter half of the year (Pages 34, 17, 16). AI-related contracts showing approximately 8x increase in client adoption versus last year, indicating growing demand and revenue potential (Page 19). EBITDA currently negative, with management controlling costs; PAT positive timing not specified but efforts to optimize costs and boos

Current/ Expected Orderbook/ Pending Orders?

The transcript does not explicitly mention the current or expected order book or pending orders in specific numbers. However, there is mention of some deals being shifted to future quarters rather than lost, indicating pending orders or spillovers. Q1 is usually muted due to business seasonality; revenue is expected to pick up in subsequent quarters. There's a tentative indication of growth in coming quarters, though no exact figures or confirmed double-digit growth guidance was provided. Management refers to ongoing active engagements, including AI-related contracts, and increased RFP demands

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Subex LtdQ2 FY24IT - Software

Subex Ltd Q2 FY24 Earnings Call Analysis

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

Price: ₹10.5P/E: 18.4Market Cap: ₹590 CrSector: IT - Software

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

N/A

0 of 2 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Management aims for double-digit growth in FY25, targeting around 10% quarter-on-quarter growth.
→Q1 is usually muted due to seasonality; growth is expected to pick up strongly in H2.
→Focus on Telco vertical specialization and upselling new products to existing 150+ customers to drive revenue.
→Increasing demand for AI-driven solutions (fraud management, revenue assurance) is expected to boost sales.
→AI contracts have seen an 8x increase in deployment at client side, indicating strong growth potential.
→Management is actively monitoring sales performance, pushing for deal closures, and is intolerant of complacency.
→Target to achieve INR 100 crore revenue per quarter within a few quarters is explicit and being strongly pursued.
→Growth is non-negotiable; management is focused on capital allocation, efficiency, and talent retention to support expansion.

Margin guidance

Category 3

→Management aims for top-line growth focusing on Telco sector, enterprise, and AI-driven solutions, expecting double-digit growth starting FY25-26 (Page 43, 30).
→Q1 revenue and EBITDA were muted due to seasonality; business is H2 heavy, with growth expected to pick up in latter half of the year (Pages 34, 17, 16).
→AI-related contracts showing approximately 8x increase in client adoption versus last year, indicating growing demand and revenue potential (Page 19).
→EBITDA currently negative, with management controlling costs; PAT positive timing not specified but efforts to optimize costs and boost revenue continue (Pages 16, 43).
→Commitment to capital allocation ensuring minimum IRR of 20% on investments (Page 30).
→Management cautious about giving explicit profit or PAT positive quarter estimates due to price sensitivity but strives to meet growth targets (Pages 10-11, 16).
→Long-term transformation underway with focus on growth, efficiency, and talent retention to deliver value over multiple years (Page 3, 5, 43).

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Fundraise plans

→There is no explicit mention of any current or future fundraising through either debt or equity in the provided extract from the Q1 FY25 earnings conference call.
→The discussion primarily focuses on operational performance, revenue growth, capital allocation, and investment returns.
→Nisha Dutt emphasizes ensuring the right capital allocation as part of the transformation but does not specify plans for raising funds.
→Cash flow and efforts to recover dues to support business growth were discussed, indicating a focus on internal cash management rather than external fundraising.
→No direct statements about upcoming debt or equity issuance were made during the call.

Order book

→The transcript does not explicitly mention the current or expected order book or pending orders in specific numbers.
→However, there is mention of some deals being shifted to future quarters rather than lost, indicating pending orders or spillovers.
→Q1 is usually muted due to business seasonality; revenue is expected to pick up in subsequent quarters.
→There's a tentative indication of growth in coming quarters, though no exact figures or confirmed double-digit growth guidance was provided.
→Management refers to ongoing active engagements, including AI-related contracts, and increased RFP demands across various regions (Middle East, Europe, APAC, Americas).
→No losses of customers post a key personnel exit; customer base remains stable or growing, suggesting order continuity.
→For detailed order book status, no direct quantitative disclosure was provided in the call transcript.

Capex plans

→Subex is focused on capital allocation as part of its multiyear transformation journey, emphasizing growth, efficiency, and talent.
→The company has made investments in AI, including internal tools like code co-pilots to improve engineering productivity.
→Investment decisions are guided by an internal rate of return (IRR) criterion of at least 20%; businesses or projects that do not meet this are divested.
→Recent divestment of the ID Central digital trust business was to free up cash to invest more in core Telco-oriented products.
→Continued R&D investments are being made in the HyperSense platform, an evolving AI product with a roadmap for new features.
→The company aims to ensure a minimum IRR of 20% on all investments and avoids falling into the sunk cost fallacy by cutting losses on non-performing assets.
→Future investments will focus on areas aligned with Telco growth drivers such as enterprise solutions and AI applications for productivity.

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