Any current/future new fundraising through debt or equity?

The management discussed having INR 103 crores cash position but did not explicitly mention any current or upcoming fundraising. Both organic (internal product investments) and inorganic (acquisitions) growth options are being considered. There is mention of the possibility of strategic investors or new promoters in the future, but only after the company is in a better shape. The company is focused on repairing and strengthening itself first before bringing in new investors. No specific plans for raising debt or equity were disclosed during the call. Investment focus currently is on product de

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

Subex has INR 103 crores in cash reserves, which may be deployed for growth initiatives including acquisitions. Both organic (homegrown product development) and inorganic growth (acquisitions) options are being considered actively, with investments required to enhance core products' roadmaps. The company is balancing investments between strengthening its existing product portfolio and exploring acquisition-led growth. Focus is on investing in the products being built, aligning with telecom enterprise growth and AI-driven capabilities. The organization is preparing for compliances and i

Future growth expectations in sales/revenue/volumes?

Subex is focused on top-line growth, aiming to grow alongside telecom sector growth, which is around 1-4% globally. The company is realigning its product portfolio to capture emerging growth levers in telecom, especially enterprise segments fueled by 5G and AI. New partnerships and product onboarding are expected to contribute to revenue, with some revenues from recent order wins beginning to accrue in Q4 FY24 and more significantly from FY25. Revenue from the account aggregator license is anticipated starting about a year after in-principle RBI approval, i.e., Q4 FY25. Growth strategy include

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

The management aims for top-line growth as a primary focus, believing revenue increase will eventually improve EBITDA and PAT. Profitability improvement is targeted, with an aspiration to reach double-digit PAT levels within a couple of years. No specific timeline or exact percentage growth guidance is provided; management requests patience, describing it as a transformation journey. Efforts include optimizing cost and growing revenue without disproportionately cutting expenses. New order wins and business licenses are expected to start contributing to revenue from Q1 FY25 onwards. Growth is a

Current/ Expected Orderbook/ Pending Orders?

The company has mentioned two new order wins: one client from the Middle East and another in the APAC region. One of the projects is AI-based and has just kicked off, expected to generate revenue faster. The other order is more of a SaaS-based model, with revenues starting after implementation. Partial revenue from these orders may begin reflecting in Q4 FY24, with the bulk expected from Q1 FY25 onwards. The company is actively working on partnerships to add to the pipeline without significantly increasing costs. Growth strategy includes both organic and inorganic (acquisition-led) pipelines t

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Subex LtdQ4 FY25IT - Software

Subex Ltd Q4 FY25 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

Yes

Order

N/A

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 3

→Subex is focused on top-line growth, aiming to grow alongside telecom sector growth, which is around 1-4% globally.
→The company is realigning its product portfolio to capture emerging growth levers in telecom, especially enterprise segments fueled by 5G and AI.
→New partnerships and product onboarding are expected to contribute to revenue, with some revenues from recent order wins beginning to accrue in Q4 FY24 and more significantly from FY25.
→Revenue from the account aggregator license is anticipated starting about a year after in-principle RBI approval, i.e., Q4 FY25.
→Growth strategy includes both organic (investing in core product development) and inorganic (potential acquisitions) approaches.
→The management aims for double-digit growth and profitability within a couple of years, although exact targets are not specified.
→The company is also adding revenue streams by distributing complementary third-party products leveraging its telecom distribution channel.

Margin guidance

Category 3

→The management aims for top-line growth as a primary focus, believing revenue increase will eventually improve EBITDA and PAT.
→Profitability improvement is targeted, with an aspiration to reach double-digit PAT levels within a couple of years.
→No specific timeline or exact percentage growth guidance is provided; management requests patience, describing it as a transformation journey.
→Efforts include optimizing cost and growing revenue without disproportionately cutting expenses.
→New order wins and business licenses are expected to start contributing to revenue from Q1 FY25 onwards.
→Growth is anticipated to come from both organic product development and inorganic (acquisition-led) opportunities.
→The company seeks to grow in line with telecom sector growth (1-4% globally) and aims to connect product offerings closer to telcos' growth drivers.
→There is a commitment to improving investor communication on progress and milestones.

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Fundraise plans

Yes

→The management discussed having INR 103 crores cash position but did not explicitly mention any current or upcoming fundraising.
→Both organic (internal product investments) and inorganic (acquisitions) growth options are being considered.
→There is mention of the possibility of strategic investors or new promoters in the future, but only after the company is in a better shape.
→The company is focused on repairing and strengthening itself first before bringing in new investors.
→No specific plans for raising debt or equity were disclosed during the call.
→Investment focus currently is on product development and growth rather than aggressive fundraising.

Order book

→The company has mentioned two new order wins: one client from the Middle East and another in the APAC region.
→One of the projects is AI-based and has just kicked off, expected to generate revenue faster.
→The other order is more of a SaaS-based model, with revenues starting after implementation.
→Partial revenue from these orders may begin reflecting in Q4 FY24, with the bulk expected from Q1 FY25 onwards.
→The company is actively working on partnerships to add to the pipeline without significantly increasing costs.
→Growth strategy includes both organic and inorganic (acquisition-led) pipelines to expand the order book.
→No specific quantitative disclosure of total current order book value or detailed pending orders was provided in the transcript.

Capex plans

Yes

→Subex has INR 103 crores in cash reserves, which may be deployed for growth initiatives including acquisitions.
→Both organic (homegrown product development) and inorganic growth (acquisitions) options are being considered actively, with investments required to enhance core products' roadmaps.
→The company is balancing investments between strengthening its existing product portfolio and exploring acquisition-led growth.
→Focus is on investing in the products being built, aligning with telecom enterprise growth and AI-driven capabilities.
→The organization is preparing for compliances and infrastructure build-out related to the Account Aggregator license from RBI, which may involve capital expenditure over the next year.
→Overall, strategic investments aim to maintain product competitiveness, expand the portfolio, and leverage telecom sector growth opportunities, especially in AI and enterprise segments.

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