Quick Heal Technologies Limited (QUICKHEAL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Quick Heal Technologies Limited Q2 FY '24 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.

Good evening, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Quick Heal Technologies Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the second quarter and the first half of the financial year 2024. Before we begin, a quick cautionary statement. Some of the statements made in today's earnings conference call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's conference call is purely to educate and bring awareness about the company's fundamental business and the financial quarter under review. Now I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Dr. Kailash Katkar, Chairman and Managing Director; Dr. Sanjay Katkar, Joint Managing Director; Mr. Vishal Salvi, Chief Executive Officer; Mr. Ankit Maheshwari, Chief Financial Officer. Without any further delay, I request Dr. Kailash Katkar to give his opening remarks. Thank you, and over to you, sir.

Thank you. Good evening, and warm welcome, everyone, to our quarterly earnings conference call. We are the pioneer of cybersecurity in the country and work tirelessly towards achieving our vision of being trusted by our customers in securing the digital world and aiming to grow as a reputed -- reputable global market leader in the cybersecurity industry. Q2 for this year is special in the journey of the company, as we have onboarded Mr. Vishal Salvi as the Chief Executive Officer of the company. He is very well known in cybersecurity industry and he is here to take care of future strategy and direction of the company. Now I request Mr. Sanjay Katkar to share few thoughts on the industry.

Good evening, everyone. Thank you very much. The world is transforming rapidly, and we are in the era of technology revolution. Constant technological advancements of the world come with inherent security risks with enlarged attack surface. There has been a paradigm shift in attack techniques and volume due to the adoption of new technologies like AI/ML in recent times. So we are the proud owners of SEQRITE Labs, the largest in the country, which does grassroot research on the threat factors to protect our customers on a daily basis. I would now request Vishal to talk about the company's strategy and performance.

So thank you so much, Kailash and Sanjay, and good evening, everyone. See, the cybersecurity market is deeply fragmented in organizations using more than 45 crores on an average. And this adds to the huge complexity and operational challenges for the professionals and especially with the shortage of skilled manpower, it really adds fuel to the fire. So we are deeply empathetic to these challenges faced by the Chief Information Security Officers, when it comes to managing and then integrating all these multiple security products and hence, innovation, simplification and building secure technology is very core of our purpose and the key mantras for solving these cybersecurity challenges for our customers. So we take pride in being the India's only full stack enterprise cybersecurity platform provider through our brand called SEQRITE to offer integrated, modular, scalable, sentient, easy to deploy and easy-to-operate solutions. It has been a busy and exciting quarter personally for me and our business continues to evolve as we do it gradually towards the holistic cybersecurity player protecting the consumers as well as the enterprise businesses. The enterprise business now represents 40% of our top line as compared to 20% in FY '21. Our enterprise segment has been growing at a CAGR of 21% over the last 3 years, against the industry growth of 11%. We are the market leaders in the SMB security market in India and starting this year, expanding our customer segment to mid and large segments. We have refined our go-to-market strategy in terms of adoption of platform's architecture, focused on brand and marketing, building channel partners' ecosystem, addressing our target segments. We continue to participate and share our thought leadership in the cybersecurity domain across several forums, and we have done multiple global events to make sure that we are able to share our thought leadership and spread our brand message. Our consumer business has started to regain momentum after facing headwinds in the recent past. We recently launched Quick Heal Version 24 with a groundbreaking and unique features like metaProtect, a cloud-based security management platform, revolutionizing the consumer cybersecurity experience. There is still a huge latent potential in the market as the penetration of AV in India is only 20%, whereas the global developed geographies like U.S. and Europe have reached up to 50%. So we have focused our marketing efforts towards consumer awareness in our regions, in our country and trying to make sure that we are able to look at and tap that headroom that exists as far as our market is concerned. I'm pleased by the progress that we have made in defining our strategic road map covering areas of growth, relevance, operational excellence, branding and lastly, but more importantly, our people. The team is well poised and focused on execution of the same. And with this, I would like to now invite Ankit to talk about our financials for the quarter. Thank you.

Thank you, Vishal, and good evening, everyone. The consolidated revenues for the quarter stood around INR 78 crores, which grew by more than 52% on quarter-on-quarter basis. Our total expenditure remains flattish at around INR 65 crores in the quarter. As we operate with high gross margin, the revenue growth has significantly flown into the bottom line. EBITDA for the quarter stood at 14%, amounting to INR 11 crores, while PAT stood at 16%, amounting to INR 13 crores. Coming out of a challenging and exceptional period starting H2 of the previous year, we believe our year-on-year comparison at this stage would not be the right metric of benchmarking performance. On a half year basis, we clocked revenue of INR 130 crores and broke even at the PBT level. Our newly introduced products are gaining market traction, instilling confidence in us. We onboarded 82 clients -- 82 enterprise clients for our new products in H1 FY '24. We have also been able to generate good traction in the international markets like Africa and some parts of Europe in the quarter. Our continued investment in research and development supported by focused sales and marketing has yielded consistent growth in both our revenue and profitability. One important update, which I would like to bring to your notice is that we have completely written off our investments in L7 Defense on a conservative basis, where we are a minority investor. While the start-up still continues and the operations is a going concern, we have taken this conscious call as we do not see ramp up in the company's performance as were the expectations. Our balance sheet is strong with cash and cash equivalents over INR 182 crores, and we are a zero debt company. We are proud to have achieved a significant milestone of empowering over 50 lakh lives through our CSR initiative till date. With this, I would like to open the call for question-and-answer session. Thank you.

[Operator Instructions] The first question is from the line of Mr. Chirag Kachhadiya from Ashika Institutional Equities.

Vishal, a couple of questions in terms of strategy, what we can and would like to...

Mr. Chirag, we are unable to hear you clearly. Can you use the handset mode while speaking and not the speaker phone?

Now, am I audible?

Much better, sir.

I have a couple of questions to Vishal. So as you joined and the Quick Heal is very quite old brand in the industry and in India as well. So what strategy you are planning from next 3 to 5 year perspective to navigate the growth because the industry itself is growing at a single-digit antivirus protection itself. And globally also, the growth rate is -- if we exclude the cybersecurity space is relatively in the single digit. So what's the strategy is there? And also, you mentioned that we added around 82 or so enterprise client in first half of FY '24. So what's the strategy to navigate the enterprise vertical, particularly going forward? And how we are tapping the client and what's the broader thought process to at least growing beyond 10% or CAGR going forward? And also the strategy with respect to the margin expansion and R&D spend going forward, what would the R&D spend as a percentage of revenue? Yes, so 2 broader questions from my side.

So thank you so much for your question, Chirag. And see, when you look at in terms of our strategy, clearly, we have -- as you mentioned, we have a very strong heritage about the last 3 decades of working in this space. And we want to really now amplify that value in the enterprise business, which is a new pivot that we've been doing for the last 5, 6 years. And so we do believe that we will focus heavily on that pivot. And therefore, we have been -- if you're tracking us, you will see that we have been investing in building a cybersecurity stack across zero trust access control, data protection, EPP, MDR, XDR, EDR mobile security platforms, right? And all of these solutions are already now been generally available in the market, and we are now generating traction for those. So clearly, our strategy continues. While we continue to have a leadership position as well as India is concerned on the B2C part, our focus now is to see how we scale and it starts doing the same execution as far as our enterprise security is concerned. Now to do that, clearly, we need to have a strategy for, like I mentioned, the 5 areas of growth, relevance, delivery excellence, branding and people. All of those 5 areas, we have a clear strategic road map in terms of what we want to execute and what we want to do in all of those. And so we will continue to double down on our product road map. And you will expect more features, more functionalities, modular integrated architecture being deployed as far as our product speed is concerned. Now apart from that, one of the things that we are proud of is we've been having a very strong partner channel network. As far as the B2C is concerned, we will continue to leverage that for the SMB business and micro business, and we want to now replicate that into the large enterprise and the mid-market. So focus is going to be in terms of adding more channel partners and distributors for our business. And then the third is about really the point that I talked about on branding and marketing. So SEQRITE, which is our enterprise security brand, we want to make sure that it has the right mind share and recall and then usage as far as the market is concerned. So we are participating in multiple events, customer roadshows, advisory groups so that we are able to share with them exactly what we do and how that solutions work and create that perception and understanding of where we are so that they are able to start using our product. And lastly, we do believe that we have a very strong differentiator because we are indigenously developed technology Make in India. And when it comes to something like cybersecurity technology, sovereignty of a country is very, very important. So we already are there in national critical infrastructure, protecting many organizations like ISRO and the forces. And we want to make sure that we became -- we will continue to be the good alternative of Make in India for our government business. And so we see a huge potential for us to actually start playing in that space. So that way, we have a clear path, which is defined for our go-to-market so that we can grow the enterprise business. Now -- and I think that answers also your specific question on enterprise vertical. And so therefore, you can expect that we will see a lot more investments happening in our sales organization, strengthening our sales motion and also building stronger and scalable and robust enterprise solutions tools for that. Now on the margin expansion is concerned, see, we are in the product business, right? So as we -- as you can see that we have actually been in an investment mode for last 3, 4 years because delivering so many different solutions at a go is -- required significant amount of investment. And all of that, we believe, is creating a strong platform and a foundation for our future growth. And as we start seeing the top line, we believe that we would start seeing our margins improving because we don't expect the same level of investment continuing given that already the strong foundation has already been set. So we believe that as the scale happens in the business, we will start seeing improved margins. And like -- and the point on R&D, we will continue to double down on R&D. We have an extremely talented team of people who are committed towards addressing the problem. I think we are extremely proud about the SEQRITE Labs that we have in India, which is I think one of the biggest and largest malware lab in the country. And we will continue to invest and create that value for our customers through them. But we will continue to invest in our R&D and solutions because this is like a constant thing that we have to do and keep on adding more. So we have a proper road map and quarterly release cycle, which will continue to happen for our -- through our R&D for all our solutions.

Just one follow-up question, Vishal. We have enough liquidity on balance sheet. So is there any plan to acquire entities or do M&A or stuff?

See, I think we are extremely happy to be in a situation where we are completely debt free, and we are having cash in hand. And it's a good situation to be in and we want to, like I mentioned, about focus on profitable growth, so that we'll keep on adding more cash to it. And we will always be look out for something which is aligned with our strategy for growth and something which fits into our architecture approach. And so we will continue to be open and look at where we want to do those investments and make sure that we have that available for us when the need arises. So that's really how we are looking at it.

The next question is from the line of Mihir from Carnelian Capital.

First of all congratulations, sir, for joining as CEO and first of all for that and also very good results, I mean, after losses of 3 quarters, so I mean good to know that. Sir, lastly, I wanted to understand the strategy, I mean, to detail your strategy on enterprise side. I would like to understand your enterprise strategy on 3 fronts. Cost of sales augmentation, what kind of sales augmentation are you looking at on the enterprise side of the market? I mean how you are going to compete with the players which are there in the mid market and large market? And third is on the international front, when this is going to the international front -- specifically for enterprise. So just wanted to have understanding on that. And my second question was on the new products and our products are EDR, XDR ready and also with DPDP Act coming into picture and then traction for them. So if you could just tell what kind of traction we're getting after the products getting market ready from the HawkkScan side, that will be helpful. Yes. So those are the questions.

Thank you, Mihir. So as far as our sales augmentation is concerned, see, we have been through our work that has happened in the last 5, 6 years, we are -- we have made a reasonable and a good progress as far as the small and medium-sized business is concerned and making good entry in the micro business. But when we are looking at mid-market and large enterprises, we obviously want to do a significant pivot in terms of our sales motion, and that would mean we would reorganize and rebuild and reenergize our sales organization. And that's why you can expect that we will continue a more focused investment as far as building the team is concerned. So of course, apart from that, making sure that there is a product orientation, training and empowering the team with the right talent and making sure that we have the right branding and marketing strategy coupled with that. So that is really how we are looking at the sales augmentation apart from, like I said, onboarding new partners, distributors and getting them excited about our technology and getting them introduced to our technology. How do we compete in the market? See, we obviously know the -- we -- like I said, we have a very good experience of being in this space for last 3 decades. Very few cybersecurity organizations can claim to have survived so long. And we have competed with the global players. A lot of them have actually perished, but we continue to be #1 player in B2C. So we understand exactly what it takes to really compete. Of course, the terrain is different because enterprise security is a different terrain. So while the craft is still the same, but we'll have to navigate a different terrain. And that's where we are making sure we have the right talent, right skills to be able to do that and compete with the best in the industry. We do believe that Make in India is a very big differentiator for us. And that will obviously be something that we will double down on. The other big differentiator that we have is that we have a largest cybersecurity malware lab in the country. And we have the complete leadership team of the country actually in locally present here. And so the amount of empathy and the connected and the zero distance that we have between us and customers, it cannot be achieved by our competition because we are the only Indian cyber stack -- full-stack cybersecurity company in the country. Most of the others are -- our competition is actually from U.S. or some other parts of the world. So that way, we can differentiate and compete very well over there. And as far as the international market is concerned, so we definitely have already onboarded multiple partners through whom we are reaching out to certain geos. It is in right now, more of a tactical form. And as we start making bigger traction on our enterprise security stack and start acquiring more customers and more business and as we scale, then we will have a much more expansion plan and investment plan as well as global markets is concerned. So that's really how we're looking at international market.

Sure, sir, sure. That's really helpful. And just some color around the traction of the new products, so most of our products getting ready. I think what is the sense that you're getting from clients on the products getting ready? And also HawkkScan part of the piece given the DPDP, which is going to come.

Yes. So we obviously are in a very sweet spot because we were not sure when the DPDP Bill was actually going to be actioned, but we actually had introduced HawkkScan much earlier to the DPDP Act. And so we are in a very sweet spot as far as that is concerned. Basically, what HawkkScan does is data discovery and classification, which is a very fundamental requirement for you to be able to achieve the compliance for DPDP. Now we have got a very significant traction in terms of needs and interest coming up to evaluate our technology. We also have signed up certain partners with whom we are going and helping organizations look at their DPDP compliance. We do believe that once DPDP becomes more tangible enforcement plan. And once the Government of India announces that, I think then the seriousness and the real traction will happen much faster. But I think the good thing about just not HawkkScan, but all of our new solutions is that we are getting some very good feedback in terms of what customers are really liking and what they would like for us to do more. And so all of that feedback is going back to our R&D team to see how we can actually start quickly addressing those requirements and those expectations from our customers. So I would say that still early days as far as these new solutions are concerned. And I think we are doing the right thing in terms of making sure that we don't face them beyond where they are in terms of their maturity. And we want to make sure there is a very stable execution of these technologies so that they are able to give the right stack to our customers. So you can expect a gradual growth and then eventually the scale coming up in future.

[Operator Instructions] The next question is from the line of Abhishek Bhandari from Nomura.

Sir, I had two questions. My question on enterprise has been answered very nicely. The first one is consumer business is the bedrock of the company, or the cash cow. And it has gone through a turmoil phase for last few quarters. What have you learned from that experience like where -- what exactly happened? Was it more external than internal? And what kind of changes you think needs to be made to the awareness program, adoption program to set it back on a good growth path? And the second question related to it is, you also spoke at some forums around expansion of your consumer business into overseas market. Could elaborate what kind of partnerships you're looking at, what kind of distribution models you're looking at? And what kind of scale do you think it's going to bring to you when you go to markets very similar to India, maybe Africa or middle East?

So thank you for that question. I think the consumer -- the headwinds that we have seen so far on the consumer market have been largely external factors. We've seen degrowth in the adoption of PC market, which -- where the statistics are there for you to see. And also, that has created an impact and a degrowth to overall antivirus consumer business. Obviously, there are a lot of lessons learned from that. And we have a very strong distribution network and a very strong retail sales organization. And so we have kind of -- the lessons that we have learned, we have kind of applied that to look at in terms of how we can become innovative in terms of our strategy to reach out to our consumers. And so we have developed different strategies around that, and there is an execution which is happening to that, which is what is resulting in the revival that we talked about and something that you can see in this quarter's performance. So we will obviously continue to double down on those strategies and continue to execute that. See, the other thing which we are extremely proud of is that we've launched our flagship AV 24 version where we did -- we went and engaged with all our dealer network throughout the country. And we continue to engage them and talk to them about all the new cool features -- innovative features like metaProtect, which is on cloud, which helps you to manage multiple instances of your personal AV on a single place and single instance, right? Similarly, we've introduced features like YouTube control, which are, again, something which not many competitions are providing. So we have added a lot of these new features, including seamless upgrade features and seamless user experience. So we believe that, that are game changers, including, for example, secure scoring. We do security scoring. We do privacy scoring, so we can measure the performance of your computer against malware and against the privacy requirement. So all of these are empowering our customers. And hopefully, that will actually generate a lot more traction and help us to grow inside. But apart from that, we will continue to be more innovative and add more features and functionalities and solutions on the B2C side. So we do believe that by doing all of this, we would be able to tap that potential that exists beyond the 20% that has reached in the country right now, and we do believe that, that will happen. We are continuing to explore opportunities as well as our global market for the B2C segment. We will continue to see where all it would make sense for us to be operating there and onboard some of the channel partners for us to go and be present there. So that is something which we never rule out. We will continue to explore and continue to expand.

The next question is from the line of Aditya Sen from RoboCapital.

Congratulations on this number. My question is also related to this, the revenue jump that we see in Q2 this quarter. Is it primarily because of the new product that we launched? Or is it a mix of all the existing products, including enterprise and retail segment?

So it is the latter, Aditya, because see, that is the beauty of our business that we have a very nice product mix, including B2B and B2C, right? So it actually provides us -- poises us very well into the market where each one will feed other. And also, we will continue to work on all areas. So it is not one over the other, but it's actually the combined effort of all, which is why we are -- we have demonstrated this quarter's results here.

All right. So this -- obviously, this should be sustainable in the coming quarters. And also, as you replied to the previous participant that the -- you will double down on research and development expenses. So is it on absolute terms, around how many crores should be? Should it be around INR 30 crores, INR 35 crores per quarter? Or will it increase going forward?

See, we will -- we never share these details publicly. But I think what -- see, there is already a standard model that has evolved as far as how do we do our sales, our R&D expenses and our general expenses, right? I think we will continue to watch on those areas. We feel very comfortable with the kind of investment that we are doing on R&D right now. As I mentioned in the call earlier that we would be investing more on our sales organization so that we are able to do a proper pivot and transition. But I think we feel very comfortable right now in terms of the amount of investment that we have done so far. But like I said, we will continue that investment as far as our R&D is concerned. So we are not letting it drop and we will keep on adding. And so our road maps are going to be busy and our features and releases will continue to be busy.

Understood. Understood. So accordingly, will we be able to reach to the previous high levels of EBITDA of around 30%, 35% range?

See, we will not be able to right now give you guidance on absolute numbers. But our focus is very clear that we want to focus on growth but profitable growth, okay? So we will continue to focus on both the areas. And we are looking at extremely long-term view on these points are concerned. So we -- everything that we are doing, it is all long-term basis here.

Yes, that is completely evident because there is certain development that we have been doing since past 1, 1.5, 2 years. So we are also expecting the fruits.

[Operator Instructions] The next question is from the line of [ Harshil Kothari ] from RV Investments.

So my question was regarding the debtor days that it's been on a rise around 161 days. So is there any guidance that it will be increasing to come into 190 days or it be around those days?

Ankit this side. We are continuously focused on higher collections in last 3, 4 quarters. We believe that this number will further go down, and we are on the right trajectory.

Okay. And my second question is on the basis of the article, which was released about Israel, the INR 12.55 crores loss, which was removed and it was transferred to OCR. So will that be ever going to be affected on the balance sheet and in the P&L or it will stay L7?

So L7 Defense was not able to do break even for last 2 quarters. And they were facing severe liquidity crunch. The current geopolitical condition in Israel further casts uncertainty on the future operations of L7. Considering the financial position, liquidity position, market condition, we believe that the value of investment should be taken to nil. Having said that, this is a conservative stand. The company is still a going concern. They are doing their operations. And hopefully, in the quarters to come once things settle down, we will see maybe right back settling, but it's early days. So we'll wait for some indications. As I said earlier, the company has not done as per our expectations. So we have taken a write off.

The next question is from the line of Mihir from Carnelian Capital.

Sir, there is an agreement -- arrangement, which we have made with Tata Teleservices. If you can throw some light as to what is this arrangement exactly? And what quantum of benefits can they bring to us, what are we going to, -- what is this going to change -- what is this going to provide, some color around that? The second question was on the 84 (sic) [ 82 ] customers that we onboarded on enterprise segment.

Mihir, can you ask your question a little slow because you were not -- your audio line is not very clear.

Sure, sure. Is it proper now?

Yes, you can ask a little slower.

Sure, sure. Sir, lastly, I wanted to understand on this Tata Teleservices. I mean we have entered into arrangement with Tata Teleservices. So what is the scope exactly that Tata Teleservices is going to do for us? Some color around that. And what kind of potential business can we look from this particular arrangement? That was my first question. Second was on the fact that we onboarded 84 (sic) [ 82 ] customers on the enterprise side this quarter. I understand it is difficult, but what can be the potential revenue from these 84 (sic) [ 82 ] customers? That was the second question. And just the third question that I completely understand that one should not see this business on a quarter-to-quarter basis. But however, for this particular quarter, the growth rate for the enterprise segment is 9% on a Y-o-Y basis whereas we used to have 20% kind of a growth. So I mean, should one see acceleration from here on? Or there are just think something around that, yes. So those are the questions.

Yes. So thank you for that question. See, I think we -- like I've mentioned, right, we have a very clear strategy on building partnership with SIs, with distributors and with channel partners. And one of that is the partnership that we have announced with Tata Teleservices. So the idea is really to -- this business model, one of the go-to market is about these partnerships and working with the partners to go together. And so the objective is that I will not be able to share with you specifics on how much revenue we're going to generate only from this partnership. But this is obviously a very core part of our growth strategy, right? And we will -- we are talking to many more partners and SIs so that we can actually work with them to reach out to our customers. As far as the 84 (sic) [ 82 ] customers is concerned, like I said, right, our current mix is between -- we have 40% enterprise business, vis-a-vis it being 20% in FY '21. So clearly, we have demonstrated a good growth and a good mix between our consumer and enterprise in the last year. So we do believe that the rate of growth that is going to be there in enterprise is far, far higher and we can reach a lot more customers over there. And that's why you can expect that this percentage will keep on improving and getting better when it comes to the 2 ratios. Yes, we had a sort of a sluggish growth as far as this quarter is concerned. But I think we will -- and like I said, right, our enterprise strategy is more long term. And we do believe that it will start bearing fruit as we have seen in this market. But we are right now in a very early stages of the release of all our solutions. And so we want to make sure we consolidate, we establish foothold. We are able to seek feedback from our customers, make sure those are implemented in our releases and cycles, make our solutions covered and then release and then scale. So we'll have to wait and see exactly when we'll start seeing that. But we do -- we are confident that we do believe that we are in the right direction on that.

[Operator Instructions] The next question is from the line of [ Harshil Kothari ] from RV Investments.

So my question was a follow-up question on the previous participant's question. The product which you mentioned, it will be -- it is 39% right now on enterprise and the rest is on retail. So what is your future regarding that? Are we able to increase more enterprise and if yes, then how much?

So thanks for that question, [ Harshil ]. Yes, we do believe that the enterprise pie will continue to grow, and it will continue to increase because we do believe that overall as a market, the enterprise security market is growing much faster than the consumer security market. So we will not be able to specify to you exactly what numbers we will achieve by then, but we are going to share with you what we have achieved in the last quarters and last years. So that will give you an indication of how the trajectory has been.

Okay. And I was asking what are the margins for the enterprise looking? Like what are we looking at?

So we don't segregate both the segments separately. Currently, the margins, which have been shown are the combined margins and we'll not be able to disclose that. But at the same time, our consumer business is not profitable than the older business. So does this help?

The next question is from the line of [ NGN Puranik ] from ENAM Holdings.

Hi Vishal. Nice to see you in the office of challenge, coming straight from Infosys. I want to understand from you -- from your enterprise background, especially a company like Infosys and your consulting background. See, I have seen a lot of these large global corporation, global enterprises, how do they manage security. You have designed security systems for them. You partnered with a lot of enterprise security guys and build large solutions in. And these were -- a lot of it is international. And Quick Heal is a branded trusted name in the retail devices market in India. And they have built a decent enterprise practice. So if you want to really build enterprise practice of scale, so what do you need to do? How do you sell services in India because Indian market generally hesitant to -- they want everything free, especially when it comes to a product. How do you do that? And are you going to focus a lot more on international market? And how do you design your service offering in the first place?

Yes. So thank you, [ Puranik ] for that question. See, I think see, I've been an Indian market for almost 3 decades, and I've been an Indian buyer. And I've never expected any product to be free of cost, right? I do believe that for everything that -- any good thing that you want to use, you will always have to pay some value for you to get it. So I do believe that -- even buyer is reasonable. But I believe that as India becomes more affluent, as India becomes more larger and have a -- affluence more, if not just in terms of digital adoption, but also in terms of growth as a country, we will have more and bigger maturity coming in from an Indian buyer to pay the right value for the technology and the products that they acquire. So we do believe that while today also, it is reasonable, it can -- it will get more and more mature as India -- as the growth is ambition. So we do believe that there is a huge opportunity in a market for a company like that because there would be a lot of start-ups, a lot of new companies coming up, and a lot of them are digital -- digitally enabled organizations. And they will definitely require a fabric of security to protect their digital ambitions. So I think that's really how we see it. But we are not going to stop there. Like I said, we do have our global ambitions, and we will -- we -- our ambition is to become a significant prominent player in the global markets as well. And we will -- we have a clear strategy in terms of when and how we are going to reach there.

So you think the deals in India -- cybersecurity deals in India are profitable deals? Most companies are making enough profit from both product and services combined.

Yes. I think -- see, primarily, we are a product company. And clearly, my anticipation and observation so far is that every product company will always be profitable in any market. I think in the services part where you can have certain deals which are not as profitable because it's purely people-based, it is very subjective in terms of quality of work. But when it comes to product, it is black and white, right? It is deployed or not deployed, it is either bought or not bought. So we do believe that it is definitely profitable. And our experience so far in the Indian market has been that -- I mean, we are only here for profitable growth, right? So we are very clear that we will not pick up any deals which are not profitable.

But there -- is there a focus to education program? Because you talked about cybersecurity, malware and all that. That looks like an interesting opportunity. How do you sell some of these to Indian enterprises?

I think -- see, you are right, [ Puranik ] because the SEQRITE Lab that we have, I think we need to amplify that message and we want to reach out and talk about that in a much profound manner and spread that message to the Indian CISOs and CIOs. And like I mentioned in my opening comments, we have already started doing that, right? We have started participating the events, we started doing road shows. We have started hosting prominent clients into our facility and showing them exactly what our teams are doing and what we are thinking. So we have a clear plan and outreach right now in terms of how we are going ahead and actually getting that awareness as far as what we do and what we have to offer?

Are you equally comfortable dealing with Indian enterprises as compared to international enterprises?

Yes, absolutely. That is what I mentioned, right? And...

They'll appreciate the value proposition and they're willing to pay a price that maturity has come in net or it has led to travel a lot more.

No, I think they're already there. And I think we are confident, and we are already experiencing that, right? We have -- the kind of -- like I said, we already have a good book of business from enterprises, and we don't see any concerns there.

So how do you get a $1 million deal in India?

I mean we can -- this is not something that we can sort of discuss right now on this call, [ Puranik ], because there are various strategies that you would have when you look at your sales motion and how you would identify a particular deal and then how do you execute in it. But we can definitely take it offline, and I can -- we can have a talk about that.

Interesting. Another question I have is about the AI. How deeply you're using both AI in both in product development. So how -- is it already at use and also in the malware, are you using AI? How is it helping in terms of improving product development productivity?

So we have our solution called GoDeep.AI. And see, in the business that we are in, we cannot survive without use of automation, ML and AI. And so we have been early adopters of this technology right from the beginning because the scale at which malwares have increased, we wouldn't have been able to manage it without behavioral detection and automated detection and generating vaccines to protect computers against that. So we are -- we have been having this stack for many years. We continue to invest in data science, our teams and data models and powering our different security solutions in stack. And we keep a watch on how we are adding more and more models so that we can adopt AI in all our technologies. So we have a clear plan and path in terms of how we are going to adopt AI into our stack here.

So when will you start looking at the international market? At what stage?

Sorry to interrupt, Mr. [ Puranik ], may we request that you return to the question queue? The next question is from the line of [ Harshil Kothari ] from RV Investment.

So my question is on the basis of dividend and buybacks. So the company has a very rich dividend and buyback policy. So is the company going to continue on this line? Or is it going to take a battery for a while until the company actually gives good profit and becomes a growth making company?

Thanks, [ Harshil ]. So as of now, there are no plans for buyback and at an appropriate time, we'll let our investors know. With respect to dividend, we have a standard dividend policy, which is there on our website as well. In the past year also, just want to add that if you have noticed, there were not significant profits, but still we have given the dividend. We will continue with our dividend policy.

Ladies and gentlemen, that was the last question. I now hand the conference over to the management from Quick Heal Technologies Limited for their closing comments. Over to you, sir.

Thank you so much, and thank you all for participating in this earnings call. I hope we have been able to answer all your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our Investor Relations Managers at Valorem Advisors. Thank you, and stay safe.

Thank you.

Thank you, members of the management team. Ladies and gentlemen, on behalf of Quick Heal Technologies Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.