eMudhra Limited ($EMUDHRA)

Ladies and gentlemen, good day, and welcome to the eMudhra Limited Q4 and FY 2026 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Venkatraman Srinivasan, Executive Chairman, sir. Thank you, and over to you.

Thank you. Good afternoon to everyone, joining us in this conference call today. I welcome all of you to our FY 2026 results call and thank you for your continued trust in our company. FY 2026 was a year of compounding momentum for us. We closed the year with a total income of INR 7,132 million, up 35% year-on-year, and EBITDA of INR 1,654 million, up 30%, and PAT of INR 1,100 million, up 26%. Over a 5-year horizon, we have compounded PAT at 30.5% per annum. Our CFO will take you through the granular numbers shortly. My intent here is to give you the strategic and qualitative texture of the year, where we grew, why we grew, and where we are poised towards. eMudhra today is a three-segment business. Enterprise Solutions accounts for 59% of the revenue and grew 55% year-on-year in the last year with organic growth of 23% and acquisitive growth of 32%. Trust services business represent 20% of the revenue, up 32% last year. The pure services business is 21% of revenue and remained flat, largely in line with the industry trends. In North America, our services business has continued to create enterprise relationships, and we will continue to pursue cross-sell opportunities into our product portfolio from this base. Growth in Enterprise Solutions has been the defining feature of FY 2026. Our certificate life cycle management platform, CertiNext, and our identity and access management platform, SecurePass, have added enterprise accounts across financial services, government, energy, and education globally, and the proportion of product-led revenue in our mix has grown. In geography, international revenue is now 64% of our total and grew nearly 39% year-on-year. We operate from 15 offices across 5 regions and serve customers in more than 35 countries. North America accounts for 34% of our revenue; India, 36%; Europe, 12%; the Middle East and Africa, 11%; and the Asia Pacific, 7%. In North America, a notable win this year was a large TLS certificate order for a university Federation in the United States, which is a meaningful step in establishing our credibility across U.S. markets. In Europe, the acquisition of CRYPTAS brought with it a PrimeSign and eIDAS-aligned service provider. CRYPTAS integration is going on. We are actively cross-selling our CLM platform into the CRYPTAS customer base and expect the deals to close in the next few quarters. NIS2 & DORA continue to drive demand for compliant PK and Identity controls across European banks and critical infrastructure. Infrastructure in India. In India, our services franchise continues to perform steadily, with our emSign business processing well over 3 lakh daily transactions in banking and financial services. In the Middle East, we have completed e-signature workflow rollouts for banking customers in Oman and are seeing continued upgrades across the existing base. Africa is an area of growing focus. We have active DPA deployments underway, including certificate life cycle management for critical IT infrastructure and e-signature rollouts across government and banking. The continent represents a significant long-term opportunity for our end-to-end DPA stack, covering digital ID, PKI, ePassports, and e-SIM, and we are investing in building our presence there. On infrastructure, we now have data centers operating in the United States, Europe and UAE, and India, positioned to meet data sovereignty requirements across our key markets. Enterprises and governments are increasingly requiring that cryptographic operations and identity workflows be processed within their jurisdiction, and our multi-region footprint addresses this directly. Our R&D investments in post-quantum cryptography, CertiNext, and SecurePass have translated into customer wins across our target markets. CertiNext added accounts in gaming, ERP, energy, and financial services across the U.S. and Europe, and in critical infrastructure in Africa. SecurePass won mandates with defense agencies, large banks, and government departments in India requiring converged identity management. Our ongoing R&D is focused on two areas. Agentic AI is being embedded as a capability layer across all our 4 platforms as AI Agents act on behalf of the enterprises, they require digital identities, signed authorizations, and audit trails, which our products are built to operate. The data privacy stack addresses the need to manage, protect and demonstrate compliance around personal data aligned with India's DPDP Act and GDPR in Europe. On quality and governance, in FY 2026, we renewed or maintained CMMI Level 5 WebTrust, ISO 27001 and SOC 2 Type 2 certifications. eMudhra remains the only Indian certifying authority listed in all major browser trust stores. On CSR, our focus has been on digital public infrastructure, skill building and training, where we see a natural role at the intersection of digital identity, PKI and e-governance. FY 2027 is a year of product-led growth organized around three themes: one, cybersecurity. The convergence of Agentic AI, Zero Trust mandates, post-quantum risk is driving enterprise demand for data security products. DPA deployments in emerging and frontier markets, several pipeline opportunities in Africa, the Middle East and Asia Pacific are at advanced stages. The SME and banking adoption of emSigner, large untapped opportunity in India MSME segment and across the banking sector addressed also through product simplification and partner-led distribution. We remain open to selective bolt-on acquisitions where they bring differentiated AI-based cybersecurity capabilities or accelerate our market access. Our ambition is to double PAT over the next three years. The tailwinds are clear. AI, data sovereignty, PQC transition and tightening compliance requirements are all driving demand for the products we build. We remain focused on innovation to develop solutions that are the need of the ever for global markets. Thank you. And I will now hand over to our CFO, Mr. Ritesh Pariyani, for the detailed financial commentary, after which we will be happy to take your questions. Thank you.

Thank you, Chairman. Good afternoon, everyone. I'm pleased to share the highlights of our Q4 and financial year 2026 performance. Our total income for Q4 financial year 2026 was INR 1,966 million, making a 31.7% year-over-year growth. Gross profit for the quarter grew 32.6% year-over-year to INR 1,037 million with a margin of 52.8%. EBITDA for the quarter was INR 441 million, registering a 25.5% year-over-year growth with a margin of 22.4%. Profit after tax for the quarter was INR 296 million, reflecting a 21.6% year-over-year growth with a margin of 15.1%. Now turning to the financial year 2026 performance. Total income for the year was INR 7,132 million, representing a 35.1% year-over-year growth. The Enterprise Solutions and Service segment generated revenue of INR 5,616 million, while the trust service revenue was INR 1,400 million. EBITDA was INR 1,654 million, registering a 32.6% year-over-year growth with a margin of 23.2% while PAT was INR 1,100 million, growing 26.2% year-over-year with a margin of 15.4%. That concludes my remarks. Thank you, and we may now open the floor for the question-and-answer session.

[Operator Instructions] The first question is from the line of Surbhi from Bellwether Capital.

First of all, thanks for improved disclosures in the PPT. My first question is on the U.S. products business. Google had a policy change on the multipurpose certificate side for the new route certificates. And I think there's some 15 June deadline for all the new route certificates that are going to be issued. We were in a process of getting these approvals done. I wanted to get a sense of what's the update on this side?

Surbhi, I'll take this question. So, the 15th June was not really a deadline. It was more policy change that they keep affecting every year. Our new routes have been submitted some time back. So, they are in the process of queuing it up. As you know, they have to distribute these trust stores across all of their environments like Chrome, Android, et cetera. So nothing stops for us because our existing routes are already trusted on Google. And we basically have a transition period where the existing routes will continue to work until the new routes are accepted by Google, right? So there is really no impact as such. We just await their process and time line on the new route acceptance. Until then, we continue to issue from our existing route.

Got it. Got it. And with the INR 238 crore order book that we have called out, I wanted to get a sense on what's your outlook on the U.S. product business? What kind of lead pipelines are you seeing, any POCs that we are doing? How would you attribute the U.S. product business out of this INR 238 crores.

Yes. If you see U.S. product business, almost last year, it was around 6.5 million to 7 million within that range. From there, it has come to more than 9.5 million kind of level. So that kind of growth we have achieved in the U.S. product itself. Now another thing recently, as we have mentioned, we have got a good order from a university consortium called InCommon, and they have almost how many 700 university enrolled. So, this order from a U.S. trust service vendor, it has been now given to us. So, we are going to process the entire TLS certificate for this consortium consisting of so many universities. So, this is a very big order, and it will give a good visibility across the entire 700 universities and also across several other segments. And even our competitors like DigiCert and the Keyfactor, they have published about this. They have issued a press statement about this. So with this, I feel next year also, we can see 25%, 30% growth definitely in the U.S. product segment, if not more.

Okay. Will it be possible to quantify this deal ballpark?

Quantify this deal, we are not supposed to intimate the number for each separate deal.

Got it. No problem, sir. And it's fair to assume that the order book that we have disclosed is largely on the product business side and does not include any service element?

Yes, yes, yes. Product business only. And another thing is, if you see, generally, we projected 2x the order book. So this time, from February end, this war in Middle East started. So some of the Middle East orders, which would have come in March, they are all getting delayed. But it is getting delayed. Nevertheless, it will come. So that's why we have projected a little over 2x, maybe 2.2, 2.3x the order book as the next year project.

Got it. I have one more question on the PTC product stack. I wanted to get a sense that are we seeing any deployment opportunities trying to test this product? Any POCs that we are running on the PC side?

Yes, quite a few POCs are going on in PC because now there are clear-cut mandates both from domestic regulators as well as global bodies on how do you transition. So we are working on POCs. Some of them will come to fruition, at least in a closed user group scenario effective essentially this financial year. But I think there are clear directives by 2029, 2030 that many companies that are running critical infrastructure have to essentially move out of the conventional algorithms to PQC.

Got it. Can you give some flavor on where these deployments are? Are these in regulated industries like BFSI or health care? Any sense on where are we seeing these deployment opportunities?

Mostly in BFSI, particularly critical large banks. Second is defense, right, and some critical government agencies.

[Operator Instructions] The next question is from the line of Pankaj, an individual investor.

Firstly, lots of congratulations for a fantastic result. My quick couple of questions are, one is Mr. Chairman mentioned that you're open to kind of product acquisitions. So, what kind of technology or what kind of geography you have in mind for those kind of execution? That's one. Point number two is there is a dispute which is going with the 3i Infotech, would appreciate if you can put some more light around that. Third question is, sorry, you're saying something?

No, no, no. these two questions, then we'll go to the third question. No, product acquisition, as of now, we do not have anything in the pipeline, mainly so that's why unlike last year and previous year where acquisitions happened around July, August, it may not happen now. Mostly, we may have to evaluate because of the CLM SecurePass in all these areas, I think our feature set is very good, and we are comparing continuously with the global competitors, and we feel that our features are good and with that we can compete. The main area will be the AI, integration of AI into this identity authentication and cybersecurity suit. If any such product company, which is a small company is available, then that we may consider acquisition, maybe it could be in third quarter or fourth quarter. But still, we have not evaluated any company. But if at all such a company is available, most likely, it may be in U.S. only, may not be in other geographies. So that's why your question of which geography we are thinking could be U.S. only. So, this is the answer to the first question. Then the second question is the 3i Infotech. On the 3i Infotech matter, though we clarified everything after that, nothing has moved. So, we have not got the complaint from the police or any inquiry from the police and all that. Similarly, though they said they are going to file a complaint with SEBI, we have not got anything from them. And another important thing is because they have taken all these actions without any, giving any opportunity to us to explain or what is to be done and all that, we have also sent a legal notice to 3i Infotech and its directors that what they have done is wrong. And so there also, we are awaiting their reply. So as such, nothing really has progressed on either side compared to what it was two months back.

My last question is about FY '27 guidance, both in terms of top line and bottom line.

Yes. FY '27, we are expecting from a top line perspective because as I said, we are not thinking of last year, we did acquisition also. So there was organic growth and acquisition growth. Organic growth was around 19%. This year, we are expecting an organic growth of around, because the base has also increased around 15% to 18%, most likely 18% organic growth is possible. This is what we are expecting. So top line is 18%. But bottom line may be around between 25% to 30%, could be around 27%, 28% kind of thing. And as I said earlier, we want to double the bottom line in a 3-year time frame. So that is where we are working on. So this is the guidance.

[Operator Instructions]. The next question is from the line of Rishi Maheshwari from AKSA Capital.

Congratulations on a great set of numbers. I wanted to understand on Slide 10, the kind of growth driver that you've written from Artificial Intelligence perspective. My sense is that there are threats and there are opportunities, opportunities that you've mentioned over there from the Agentic AI as it forms the attack surface expanding and therefore, foundation models which is anthropic, which therefore increases your capacity and scope to work. However, we've also read from several literature that Mythos is also claiming to have its own software for cybersecurity. To some extent, can you clarify that, in terms of whether the attackers themselves can have a cybersecurity product? Because from what I've also read on Zscaler, Zscaler and other similar products, they've also been under some form of threat is what is mentioned in some of the literature or the news articles that has spread across this.

Yes. Let me clarify that a bit. So Anthropic Claude, mythos, et cetera, are various models, right? So with Mythos, the whole idea is it has a completely new set of capabilities to kind of break open any infrastructure, right, in terms of pointing out what kind of vulnerabilities that kind of exist in your infrastructure. So Anthropic mythos is largely a model. It is not a product in itself that it can sort of solve for various things that today, various cybersecurity vendors do that is to deploy certificates or manage identity. So Mythos is an LLM or a foundational model that gives you now advanced capabilities to figure out what the vulnerabilities in your ecosystem are. So you're absolutely right in that context that the attack surface is now significantly expands because whatever was undetected now becomes to the forefront in terms of enterprises needing to significantly better their cybersecurity posture, right? So very recently, a couple of days back, a very large public sector bank itself announced that they will ramp up their cybersecurity spends by 50%. So that is what Mythos is capable of. So enterprises are obviously more worried saying what's going to happen. And essentially product companies like us help them better the cybersecurity posture.

In the context of this, isn't the guidance that you have claimed at least for the overall and I'm presuming large part of it is flowing from enterprise is slightly underwhelming given the kind of, given the nature of growth in terms of cybersecurity that is anticipated should be far higher. What is your thought on this?

No, we always want to estimate in a reasonable way and then think that almost, if you see last 4, 5 years, whatever guidance we have given, we have achieved 100%. So we don't want to overestimate anything because in the world, only thing can change in spite of all our knowledge and all our belief everything. So that's where this estimate what we are giving with 100% conviction without doubt kind of thing.

How would you break this estimate, sir, in terms of revenue? Where would you classify how much growth would come from enterprise from services and from trust services?

Services, mostly no growth will come because that is in line with the general services trend across the world. Then the trust services last year, 30% came predominantly in India. This year, we estimate 20% will come. But the balance growth predominantly will come in the enterprise product. That's where the main segment growth. So there, the growth we estimate is almost 25% to 30%.

Right, sir.

And what drives, when we say revenue, even though sometimes the order may come more, it is hard to be because these are all large banks, large government and other things. When it gets executed only, we can recognize as revenue. For the execution apart from our software, a lot of times, their infrastructure, their team and so many things are required. So with the result immediately, everything may not be able to recognize as a revenue. So considering all this only, we are suggesting this kind of estimate we are giving.

Generally, sir, are there any changes in the revenue model or the revenue recognition principles or the way in which the commercialization used to happen versus what is happening now, for instance, when the IT services, when it's happening on from the change is very large and prevalent from a T&M model to an outcome-based model. Yours was not strictly in that sense, but is there any change that is happening sir?

This is mainly for the IT service industry, they are talking about the change in the model, but our services is only in total, only 20%, 21% is the services. So, in that, if it happens to some extent on the outcome model also, we may not be affected much, and we are not estimating much growth in that segment also.

Product, there is no change. We still continue to do the recurring billing as well as the license model.

Yes. All right. And what is driving the efficiency in terms of PAT growing by about 27%, 28% as you projected?

PAT, what is driving the efficiency is with more product going because if you see product gross margin is much higher compared to the services and services. So that's where the gross margin will grow higher. Similarly, EBITDA will grow higher and PAT will also grow higher if we do more product business. You see product composition, the composition wise, it will increase because the service is not at all going.

The next question is from the line of Harsh Kachchhi from Banyan Tree Advisors.

First of all, congratulations on the great set of numbers. I have a few questions. I'll begin with a couple of them, and then maybe we can proceed with the further questions. My first question is on the line of geography mix. So which geographies do you expect will drive the Enterprise Solutions growth over the next few years? Are the upfront investments in the senior hires, data center and the new offices in the U.S., like you said, are they beginning to translate into stronger deal wins and pipeline and conversion over there? And second question is on the India enterprise business. We saw a decline this quarter. So is this largely due to a high base in Q4 FY '25 or are there any underlying demand-related factors we should be aware of?

See, geography-wise, we have invested in senior management resource in the U.S. And also we did acquisition in U.S. and that resulted in cross-selling. And as I explained earlier, from the last year to this year, our product business grew by almost 30%, 35% from almost 7 million to 9 million, 9.5 million kind of thing. So now I also explained, we won a recent order where it is a consortium of universities consisting from seven universities and all that. So that momentum is there in the U.S. market. And in the U.S., we have also invested in the data center, which is also starting to yield result. The other markets which are growing is the Middle East market as well as the Africa market. In Africa market, we are in discussion with the number of potential deals. So those will also win. So that way, we, the win will be across many markets. And Europe market also through CRYPTAS, we are trying to sell our products where a lot of demos are being given, a lot of discussions are happening. So across markets, this is not peculiar to one market. Then coming to your question on India market, the India market, mainly if you see in one quarter because the last quarter was much bigger, this quarter has dropped. You see year as a whole, there is a good growth only. Enterprise business in India also saw a 27.6% growth year as a whole. So we cannot exactly see every quarter after quarter what will happen. So that way, it is a good growth only.

Yes. In Q3, we had a deal from defense to slightly larger. That's why ticket appears.

Okay. Understood. Just a next couple of questions. One is Trust Services grew strongly even after the new income tax circular because of which the requirement for digital signature certificates has come down. So what is driving this Trust Services growth? And secondly, the PrimeSign subsidiary of CRYPTAS, so the revenue from this particular entity is classified under trust services or under enterprise solution?

No. Up to now, it is classified under enterprise solution only because still it is sold along with other things also. So it is classified under. Our trust services growth is mainly because of the, within the partner model, we are enhancing the other services and also the combination of instead of a simple digital signature, the combo certificates are sold and number also slightly increasing. And then our direct retail is also increasing. So with that, and earlier, we were not focusing on token. Now token also, tokens, we are selling separately. Now token also, we are putting the portal and directly people are purchasing the tokens. So all these, and eSign also has increased some of the eSign along with emSign goes in the enterprise. Pure eSign, which is only used for signature goes in the services. So all this combination has resulted in this 30% growth.

Understood. Just one last question from my side. Just wanted to understand the level of integration of products in the Enterprise Solutions business. So if you win a client, what are the reasons why they might switch to another vendor and how difficult it is for them? Just wanted to get some color on this.

Now our products are fairly core. So the two products that we largely sell is the identity authentication and access and then the certificate life cycle management. These sit at the heart of many of their core workflows. For instance, the authentication system for a large bank essentially powers customer authentication when you log into Internet banking. So that way, we are more core to the system than peripheral. So we think that the switchability or replacement is a cumbersome affair for anybody that once they implement it, they try and do that.

[Operator Instructions] The next question is from the line of Surbhi from Bellwether Capital.

I wanted to understand more on the cross-sell opportunities. I think we were looking at some opportunities in identity and access management solution in the U.S. I wanted to get some sense on what's the traction there and is anything materializing?

No, the Identity Access Management, we have not taken to the U.S. because that is still not part of the full plan. More focus was on certificate life cycle management, where there is good traction building up. And like we said, the new order that we won is giving more impetus to that as of now. So as of now, the Identity Access Management product, the immediate focus for this year is to take it to adjoining markets outside of India because we have strong references and credibility built here. So some of the other emerging markets in Asia Pacific, maybe Middle East, Africa is where the first attempt will be.

Got it. And I have one bookkeeping question. What would be the full year contribution from CRYPTAS on the revenue and PAT side?

Last year, CRYPTAS revenue was INR 85 crores for the whole year. And from a PAT side, almost to breakeven like what I described in the last quarter. The first quarter of integration, it was some maybe INR 2 crores or INR 1.6 crores loss. And in the second quarter of integration, it was some INR 2 crore profit. So not much, maybe totally INR 1 crores or INR 2 crore profit.

And from an efficiency perspective of profitability, where do you expect CRYPTAS to be once we replace the product with our solution?

Yes. No, that is a continuous effort. So now already in eight or nine conversation instead of the other American company CLM solution, we are proposing our CLM solution. Once those happens, then the profitability will increase. This year, almost we are expecting, estimating almost over $1 million of profit from the CRYPTAS. But that will also depend on how far we are able to, they are able to sell our CLM solution instead of the American CLM solution and all that.

And as you know, the sales cycle in Europe typically tend to be long because all of these are large banks. So we are also waiting or planning for that kind of sales cycle.

Thank you. [Operator Instructions] As there are no further questions from the participants, I now hand the conference over to Mr. Venkatraman Srinivasan for closing comments.

Thank you. So I would like to thank everyone for joining the call today. We remain focused on delivering consistent performance and innovative solutions that enable secure digital transformation for our clients across the globe. For any additional information or queries, kindly get in touch with our Investment Relations advisers, Churchgate Partners. Thank you once again. Thank you.

Thank you. On behalf of eMudhra Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.