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

Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY '25 Conference Call of Quick Heal Technologies Limited, hosted by Valorem Advisors. [Operator Instructions] I now hand the conference over to Ms. 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 of the financial year 2025. 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 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 their opening remarks. We have with us Mr. Vishal Salvi, Chief Executive Officer; and Mr. Ankit Maheshwari, Chief Financial Officer. Without any delay, I request Mr. Vishal Salvi to give his opening remarks. Thank you, and over to you, sir.

Thank you so much, Purvangi, and good evening, ladies and gentlemen. I'm Vishal Salvi, CEO of Quick Heal Technologies Limited. Welcome to our Q2 FY '25 earnings call, and thank you for joining us today. As we navigate through an era marked by rapid digitization, technologies such as 5G connectivity, cloud, AI and ML, which are shaping the way we live and work, this transformation and the rise of the hybrid workspace setup has led to a larger attack surface and more advanced cyber threats. Driven by our core purpose of innovation, simplicity and security, our primary goal remains to protect individuals, enterprises and government organizations from this ever-evolving threat landscape. Our journey started as a consumer antivirus company. And the reason for our 3 decades of existence is due to the trust that our end consumers have placed on Quick Heal. The challenges of these consumers have evolved, and they are a constant target of financial frauds. Being a market leader in the consumer security domain, we have taken the onus upon us and launched AntiFraud.AI, a groundbreaking innovation, first of its kind, to help customers prevent these frauds. AntiFraud.AI reiterates our dedication to securing India's future, allowing every citizen to participate in the digital economy with confidence. I would urge all of you to give it a try and experience the innovation. Talking about innovation, it gives me immense pleasure to state that our products and solutions have received multiple accolades in the first half of this year. We received yet another patent, taking the tally to a total 9. Seqrite XDR has been awarded the prestigious AV-Test Approved Advanced Endpoint Detection and Response Certification. Our endpoint security solution received a perfect score of 18 out of 18, featuring as the top product in the recent tests conducted by AV-Test, an independent global cybersecurity testing body. Quick Heal's Total Security also received an excellent score of 17.5 out of 18 in a similar test conducted by the body. All this has been possible due to our malware analysis center, Seqrite Labs, which is India's largest malware research and analysis facility, producing unmatched threat intelligence. In our commitment towards deep research and innovation to tackle the advanced malware and dynamic threat landscape, I'm happy that Sangamesh Shivaputrappa has joined us to Head the Seqrite Labs. Let me deep dive a little bit on our business and our go-to-market and performance. We have delivered a robust 11% growth in revenue and 238% growth in the EBITDA in the first half of this year. Despite market challenges, we have significantly improved our consumer business. We are committed to creating consumer awareness, leveraging social media platforms and micro influencers. We have started to work extensively to create the market demand and penetrate our product, AntiFraud.AI. We believe the twin offering will create a synergy for each other. However, our enterprise business saw a sluggish quarter, leading to a dampened growth than expected. This has been largely due to the non-closure of some of the key government orders and also an enterprise sales pivot, which is still work in progress. As we move up the consumer segment in the mid and the large enterprises, we compete against the globally best solutions available to fulfill customers' demands. It is heartening to see the initial success stories that we have been able to create. We secured a contract with one of the largest logistics companies in the industry to modernize their cybersecurity stack, increasing visibility and protection for their customers. For a leading media company, we solve the problem of securing remote access to its hybrid workforce through a Zero Trust solution. Similarly, a staffing company, we elevated their security posture of the organization through our XDR protection stack. For a healthcare company, we replaced their existing vendor for an improved product performance and support the ecosystem. Government is a key stakeholder to our journey, and we work hand-in-hand with the customers across nations, states, municipalities and PSUs to succeed together. Important point to note here is also that in all the above stories, we were competing with the top global companies. While these are our initial success stories, we are striving together replicating them on a scale. With this, I would like to invite Ankit, our CFO, to walk you through the financial performance.

Thank you, Vishal, and good evening, everyone. Our consolidated revenue for the quarter stood at INR 73.5 crores, marking a 5% increase quarter-on-quarter. Having said that, on a year-on-year basis, there's a decline of 6% in the revenue due to flattish enterprise business, as Vishal highlighted earlier alongside the headwinds in the consumer business. While the competitors in the consumer vertical have been struggling due to industry level degrowth, we have shown resilience against market challenges, thanks to all the initiatives within the business that we have taken. However, we are mindful of improving our collections and are monitoring it very closely and working towards improving it in the next half year. As we speak, the split between consumer and enterprise business remains at 62% and 32%, respectively. Our growth is aligned with our commitment to profitability. EBITDA for the first half of FY '25 stands at INR 5.7 crores as against negative EBITDA of INR 4.1 crores last year H1. Our PAT for the quarter stands at INR 4.1 crores. We have taken several investment initiatives within the company, like initiation of Horizon-3 products development, leadership strengthening, et cetera. Through effective cost management, we have maintained steady expenses at INR 71 crores. We follow prudent accounting practices, expensing all R&D investments. Additionally, we continue to invest in sales and marketing to enhance consumer awareness and bolster the Seqrite brand through events and sponsorships. The efforts will be further amplified as we would be focused towards category creation and awareness of our flagship product, AntiFraud.AI. We are a cash-rich company focused on creating long-term value for our shareholders. We are focused on and geared up towards bettering ourselves in the next half of the year. With that, I would like to open the floor for the question-and-answer session. Thank you.

[Operator Instructions] The first question is from the line of Deepan Sankara from TrustLine.

Congratulations for the launch of such a unique and need-of-the-hour product. So firstly, what is the kind of market size for the antifraud product in India?

So thank you so much, Deepan, for your question. See, this is the first of its kind product that is getting launched in India. There is -- we are creating a new category, and this category is in the space of anti-fraud. And it is specifically tackling the growing challenges of fraud calls and fraudulent attempts, which are being faced by unsuspecting consumers on their phones and on their computers. And as you know, they are all focused on using the social engineering techniques to extract funds and extract money in an unauthorized manner from these consumers. And these numbers are only growing. So basically, this is a completely new category which will address it from a 360-degree point of view in terms of the foundational elements of cybersecurity, which is looking at fraudulent links and phishing attempts, which have been made and rouge websites that are being connected by the users from their computers as well as their phones. But once it goes beyond that, we have also added features which will give you SPAM alerts, fraud alerts. In a proactive basis, show you all the hidden applications which are running on your mobile phone. It will show you the unintentional use of your mic and camera while your phone is not in use, and so on and so forth. And in addition to that, it has got cool features like unauthorized OTP access not just on your phone, but also on your parent's phone or your loved ones. So basically, it's attempting to have a technology solution to address the problem of frauds on unaware customers. So it basically has a huge potential in the market because of the category that has got created. And now we have an India-wide go-to-market plan through various ad campaigns and various plans that we have through our channel partners and alliances to get this app to as many customers as we can.

Okay. And sir, who are our real target segments? So nowadays, we can understand that most of the financial transactions are happening through mobile phones even in cities and even in rural areas. So are we targeting in the sense all mobile phone customers or between a certain age group or certain income profile? How do we target that particular segment?

See, this is a B2C product, right? And so if you look at the fraud, the fraud is indiscriminate. It is getting -- anybody who has money is getting impacted by frauds, right? So basically, any citizen or any resident of the country which is having financial independence or finance and money in his bank accounts and he's regularly doing transactions is a potential victim. And so those are also our potential customers. So as you know, this is a mobile-first kind of a product, and we have more than 850 million mobile users in the country and growing. So from that point of view, it's a humongous amount of opportunity that is available out there in terms of reaching out this product into them?

Okay. What is the kind of revenue target we have in our mind for medium term, like over 3 to 5 years from this product alone?

We are right now not sharing our revenue targets for this product. But of course, on a quarter-on-quarter basis, we will be sharing with you how the revenues are panning out as far as this category is concerned. I can confirm to you that the product is already launched, and we have already started shipping as well as the downloads have already started from the Play Store and the App Store. And so the revenue has already started getting generated from this quarter onwards.

[Operator Instructions] The next question is from the line of [ Shankar Narayanan ] from ithought Financial Consulting.

So in the previous year, a percentage of R&D spending as a percentage of sales have been increased, but that haven't translated much into the revenue part. Could you throw some light on that one?

Thank you for your question, Shankar Narayanan. See, the way we look at it is that we have started our journey as a company being a consumer antivirus company, right? And around 7 years back, we pivoted also and diversified into enterprise security business. And from then on until now, like Ankit mentioned, the split between our consumer business and our enterprise business stands at 62% versus 38%. So there's a 38% diversification, which has happened in the last so many years. And so we have always adopted a strategy of diversifying and looking at any new growth areas of businesses in cybersecurity, and that's what we are continuing to do. So just like we have made that to growth and our core as is shifting from consumer into enterprise, we also believe that once we start seeing the investment that we are doing now and in recent past in our Horizon-2 and Horizon-3 solutions, we'll start generating revenues and increasing our business mix in the coming future. The opportunity is humongous, and we have just started to see a growth, and our new products have started to generate revenues for us. So I think -- we believe that our strategy is really working well. And cybersecurity is one thing where we have to invest now to start looking at the future in the next 2 to 3 years.

And one more question. Can you give some guidance on this financial year on revenue and margin and PAT perspective?

See, we have not given any guidance. We don't give guidance on the revenue, PAT and our overall financial performance, albeit we can say and we have stated consistently is that we are focused on profitable growth. And that is what we endeavor to do in coming quarters as well. One thing we want to say is that we overall are focusing on a very long-term approach in terms of how we look at our investments and our plans. So we would ensure that we are always staying true to that. And like we had committed earlier that we would be releasing new solutions and products, and I'm very happy to announce to you that we announced a new solution now in the market, which is a completely new category, and you can expect that from us. So I think we are really looking at the future. But like I said, we don't give guidance in terms of our financials and how we are going to do this year as well as future.

And my last question is regarding your new product, AntiFraud.AI. So recently, Bharti Airtel also launched a feature, which will be applicable for Airtel users, which will detect a fraud and Spam alerts automatically. So how different is this from the product that they have launched? And is there any specific features that you have in for this function?

Yes. So basically, Bharti Airtel, all telcos are able to look at scams and scam alerts. And as you know, a lot of the frauds, they are getting initiated through such scams. So that's really how we are there. Looking at their lens, it's about looking at fraud and scams coming out of the phones and alerting their customers. We definitely have that feature in our product. But our product has got a lot more features that I just talked about earlier. And so our product is a 360-degree solution which is covering a holistic fraud management and not just from a telephone -- telecom point of view. So we have a carrier features. We have phone features. We have cybersecurity features. And in addition to that, we have banking process control features. All of these 4 combined together give a holistic solution for fraud management.

The next question is from the line of Pankaj Bobade from Affluent Assets.

Am I audible?

Yes, Pankaj. Go ahead.

Well, I'm new to this company. Just wanted to understand what had gone wrong post-FY '22 that our margins collapsed from 30-plus percent to below 10% now.

So your -- can you just repeat your question? What has gone wrong between FY '22 and now? Is that what your question is?

Yes, yes, yes. That our margins have collapsed, completely collapsed from, say, 30-plus percent to current less than 10%.

Yes, yes. I got it now. See, I think, Pankaj -- see, what we have been saying is that we are reinvesting all our margins and profits into our new set of technologies. And the company has been constantly increasing its R&D spend to make sure that we are building new products. And since the last 2 years, if you're tracking our company, you will find that we have introduced products like Zero Trust Network Access, Extended Detection & Response, data privacy solutions. And so as a result of all of this, we have diversified our portfolio in the enterprise security spends. And all of that investment, we have been actually getting through the profits generated by the company from the core technologies and core products. So that is the conscious call that we have taken in the last 3, 4 years to make sure that we are able to create a diversified and a sustainable growth business for the future.

Pankaj, in addition to this -- Ankit here, so in addition to this, we have seen some headwinds in our consumer business, because of which our revenues were down, especially in the customer side of things. And hence, a, there were reduction in revenue; and b, we were investing into new technology, which Vishal was referring in the enterprise side of things. So these 2 things lead to reduction in EBITDA -- EBITDA percentage.

So how long will we take to regain our past legacy?

See, Pankaj, we don't -- as I said, again, we don't give guidance in terms of how long it will take. All we can say is that we are focusing on consistent, predictable, profitable growth. And that has been our endeavor. Of course, we are also readying the company for the future scale and growth. We -- in the past, we have talked about how these investments have generated increased serviceable, operatable market for us. And we are constantly focused on seeing how we can not just looking at from a product point of view, but also looking at a new set of customers. So we have been traditionally a micro and an SMB player, and we are now getting into mid-market and the lower end of large enterprises. And for that, we are doing a significant pivot, not just in terms of our products, but also in terms of our sales organization. And that is something which is work in progress. It takes -- if you look at the history of all the cybersecurity companies in the world, it has -- it takes time and effort to really start seeing how that growth happens. And that's really the journey that we are on right now.

Yes, agreed, I take your point. But I just wanted to know. At least, can you please guide the roadmap for monetization of the products which you have developed in the last 2 years?

Yes. There is a clear path for monetization. If I segment our products into different categories, the mature and core products are already giving us a very significantly higher returns versus the ones which are just got introduced, which are having a breakeven path and the ones which are currently in development. So we do have a detailed plan for -- and a P&L for each of the product segments that we have. We don't right now give guidance publicly in terms of how each of those plans are defined. But yes, of course, we do have a detailed plan in terms of -- and our commitment to our Board as well as founders on how we are going to break even each of these categories.

At least, can you guide? Out of this INR 300-odd crores of top line, how much was contributed by the matured products along with the EBITDA?

Yes, yes. I mean, I can't give you the EBITDA split for -- Pankaj, let me give you, see, something which we have mentioned in the past also is that our core technologies between consumer and enterprise together roughly is calculating between 85% to 90% of our revenue right now. So the new products that we have just introduced in the market, in the last 1.5 years, has started generating 10% to 15% of our revenues.

But they are eating away almost all of the profits, which have been generated by the old products, right?

So the way I would put it is that, that is how the investment cycle is for any new incubation and any new product. So we don't see them as eating away the profits. We see them as investments. We capitalize -- we don't capitalize, we basically expense out all our investments in the same year books. So that's how we have been actually -- that's been our strategy for innovation as well as adding new products in the market.

At least, can you help me at global level the companies of -- the companies which are your peers, how long did they take to regain their profitability after launch of any new product, if you can help me with that? Or with your own experience, means earlier whenever you launch a product, how long did it take to gain currency and become profitable or break even?

Yes. So -- I mean, I can give you a broad brush on this, Pankaj, and you can do your research afterwards. The top cybersecurity product companies in the world, which are doing well right now have -- would have taken anything between 15 to -- 10 to 15 years to break even. And there are some which are yet to break even, right, in spite of that. So that is the general trend that we have seen for companies to break even globally. So you should see our journey starting around 4 or 5 years back when you talk about our new set of investments that we are doing in enterprise security.

So you are already 5 years past that phase, right?

Around 4, 5 years, yes.

The next question is from the line of [ Darshil Jhaveri ] from Crown Capital.

Some of my questions have already been answered. So sir, I just wanted to know like on a ballpark what's the basic R&D spend we are planning to do like in the current year and going forward, like it's a sizable chunk of our expense.

Yes. Thank you, Darshil, for your question. See, I think we are doing 2 things when it comes to our R&D spend, okay? We announced in the previous 2 quarters that we had got a Board approval to start investment in our Horizon-3 products, and that work has already started. The good thing for us is that because some of our core technologies are already stable, we can have some level of flexibility of using some of our R&D talent into these new technologies. The second thing that we do is to look at all avenues and opportunities to optimize and improve our return on investments on R&D expenses. And the third thing is the incremental additional talent which is required or specialized skill is where we augment and hire from the market. But broadly, the core of our R&D team is already there in place. What we are doing is making sure that we augment it. We do tactical investments which are required to have those skills. And so we feel ourselves are in a very comfortable space in terms of managing the cost related to R&D and control them vis-a-vis our aspirations for all the new products that we are developing. So that's really how we are looking at it. So we don't expect our R&D cost to go and significantly grow, but they will maintain at the rate they are, and maybe incrementally, we'll add the skills which are required for us.

Okay. Fair enough, sir. So -- and just sir, we are now talking about like you've launched our new products and some more products we are into like development phase, so I just wanted to know like a typical cycle, you said, maybe it takes 10 years to breakeven. But like what is like the full life cycle. Like how much time does it go to develop it? And like -- and is there a possibility that you've been developing something for some time, but then the market doesn't accept it or like it's now redundant or something like that? So what -- could you just brief us a bit about your thoughts about how you mitigate those risks, like it's not just too much gestation period in just making a product, right?

Yes. I mean, a lot of the -- see, first of all, I wanted to say that we are the only full-stack cybersecurity company from India, okay? And so a lot of the work that we are doing is very well tried and tested in the sense that when we talk about Zero Trust Network Access, when we talk about data privacy, when we talk about mobile security, we talk about extended detection and response solutions, all of these are well-defined solutions which are well established in the global market, but obviously has a potential from Indian context, right? And so you can never go wrong once we know exactly how these technologies are going to pan out as far as India is concerned and even globally in future once we start adding more innovation and scale to these products. So that's really what goes into our planning. And in the consumer space also, we've been very, very strong, and we have a lot of IP and a lot of research that we have done over a period of years. So we have the largest malware lab in the country. And so we really, really understand what's happening. And so to pivot to a technology like antifraud is something which is a natural adjacency for a company like us to really create a new set of solutions to address a new -- completely new market.

The next question is from the line of Grishma Shah from Envision Capital.

If you could highlight or share more about what's happening on the consumer side of the business, if you could elaborate a little bit, that would be helpful.

Yes. Thank you, Grishma. So basically, there are some headwinds in the consumer business and antivirus business in terms of the demand and how the overall adoption of antivirus -- consumer antivirus has been. Within that headwind, as you have seen our performance, we have been one of the top performers in the market. And we do occupy a market leader position and our products are also valued at a premium for the kind of value that we provide to our customers. So we would -- we are ensuring that we will show a respectable growth while overall the market is degrowing, okay? Now while we do that, we are extremely happy that now we have launched antifraud, which will give a boost to our consumer business and add one more category in our business mix to look at and then drive the growth, right? So that's really how we are looking at the consumer market.

Okay. Sir, even in quarter 2, this market has degrown, and we've like kind of held on? Is that a fair assumption?

Yes.

Okay. And, therefore, the gross margins or overall operating margins in this business segment would have also been slightly under pressure.

I think we are doing okay. We are still holding on to our prices. And -- because this is a well-oiled kind of a business model for us, we've been doing it for the last 3 decades, it's a very mature business model. And so it's, therefore, very stable when it comes to margins and how we drive it. Of course, like Ankit has mentioned in his initial remarks, we do have some kind of work to do in the coming quarters to improve on our collections. But, otherwise, we are doing okay as far as margins are concerned.

The next question is from the line of Mihir Manohar from Carnelian Asset Management.

So I wanted to understand on the enterprise part of the business, 17% of the Enterprise business was on cloud in FY '21. And now 28% is on cloud. So how does it change the revenue recognition? I wanted to understand that. And second question was on the working capital. I mean, how should one see the working capital normalization happening?

So I'll ask Ankit to answer the second part, but let me answer the first part of your question, Mihir. The revenue recognition is based on how we agree on the ULA or our agreement with the customers and how we are selling the licenses of our products. So it is by product and not by cloud consumption, okay? So I think that's the answer to your first question. You want to answer the second one?

Yes. So just to add on the first part, when we do the revenue recognition, it's done by -- so we have done product-by-product analysis as per IAS 15, International Accounting Standards, IndAS, whatever it is, we are following that policy. So, Mihir, can you repeat your second part regarding working capital? Mihir?

Am I audible?

Yes. I can hear you now.

Sorry, I think there's some issue at my end. So basically, how should one see the normalization of working capital by the end of the year?

So difficult to answer this question at this point in time, but as I said in my opening remarks as well that we are currently focused on getting the collections back to business. So there is a lot of effort which has been made, especially in our consumer section, where we're -- where we'll be focusing on the collections in the next 6 months.

The next question is from the line of Manan Vandur from Wallfort PMS.

So I had 2 questions. First question is on -- so out of the INR 4,000 crore market that we have given in the PPT around FY '26-'27, the whole total addressable market, how much are we planning to cater to?

So Manan, actually, when we talk about serviceable operatable market, that is the market available for us. So that is what we'll focus on. So the entire market is something, that number is what is available, addressable for us.

And we would be the only person to address this? Or we have a competition also in this market?

No, we will have competition in this market, and we will have other players also in the market.

But we will be the largest player, right?

No, no. We will -- this is the market available for us. We will aspire to take a percentage of that market, and we'll keep on growing on that percentage. But we will not be the -- right now, we are not the market leader nor we expect us to be a market leader by 2027 in that market at that point in time.

Okay. So the percentage that you mentioned, how much can we take?

So we don't disclose that right now, Manan. So -- but I just wanted to give you some additional nuances to my answer, okay? So we are the market leader in one segment, which is our consumer AV, okay? And so consumer AV India, we are the market leaders. We have 33% to 35% of the market share, so that is number one. And the second thing, which I also wanted to clarify, is the antifraud launch that we have done. Also, we are the first one to launch it, right? So we don't have any competition in that space right now.

All right. Understood, understood. And the second question that I have is the new products like the antivirus -- sorry, AntiFraud.AI that we have launched and some others also which we might launch in the future, will these new products will do better than our old products? Or -- I mean, it should do better, so -- which is I'm asking, will these products do better than our old products?

Yes. So, Manan, the way to look at it is that we are diversifying when we introduce new products. And so when -- we will have a set of our core products and technologies right now, right? And when we diversify, these new products will start gaining momentum for us and revenue share. And so over a period of time, we'll have more diversification happening. But the core remains core for a period of time until that mix changes. So like I said, if you look at the antivirus, consumer antivirus and enterprise antivirus together form our core right now, which is around 85%. But that used to be only consumer AV 100% around 7 years back. So a lot of things have changed over the period of years to have a better product mix into our business model. And by introducing these new products, we can -- we are hoping and we are aspiring to have a similar diversification happening in the coming years for us.

Okay. So these new products that you are having, do you think they will, let's say, like 5, 10, whatever, years ahead in life, these might also take like a sizable chunk? So like right now, we're at 80% and the new products are 15%, so this might go to 30%, 40%, 50%?

Yes. Actually, all our products, we have a full conviction and confidence and only then we have launched this. So we have full confidence that they will add a good amount of revenue in future for all our products. So the way you are articulating is how we are looking at it in future, Manan.

The next question is from the line of Debashish Mazumdar from Svan Investments.

I have 2 questions. First one is on your new product which you have launched. First of all, congratulations on the new product launch and starting to create a new category. Just wanted to get some sense that what I have understood by discussing with you for the last 6, 8 months, that you were trying to pivot towards more into a B2B business. Why launching a product in a B2C business and investing there? So that is first part. The second part is our historical experience suggested that it is very difficult to monetize any mobile-related product in India. So why to get into that business again? So that is on the new product category. And the second one is on B2B business. This -- I mean, if I see the numbers, it is very difficult -- getting very, very difficult for us to predict that how the trajectory would be. So I'm not asking for any guidance or anything. But can we get some amount of lead indicators, whether it is number of clients signed or number of licenses getting sold so that we can build some amount of predictability on our B2B business? So these are the 2 questions I have.

Yes. So me actually coming from the Indian banking industry, where I worked for 2 decades, I've actually seen the consumer fraud in India and also overall growing significantly, and it has been unabating, right? So it is constantly creating a bigger challenge for the ecosystem, right? And there have been humongous amounts of investments and money being spent on B2B2C products for antifraud so far, okay? But because it's B2B2C, it becomes a big challenge for adoption for the common citizen because they work with different banks. One consumer may be working with various banks, so the challenge -- it doesn't pick up. Now when it comes to -- when -- and so there was clearly an opportunity for us to look at a direct B2C solution. And also it's a complete -- while it is a completely new category, but it builds on the core of Quick Heal as a company, right, for its commitment towards fighting this problem. See, because we -- when we look at Quick Heal, you should look at Quick Heal not as an antivirus company. We are in the business of protecting end consumers. Now if that is our mission, then we need to recognize that when the issues have moved from antivirus to frauds, it is our responsibility to do something about that. And we want to be known as a company which is safeguarding our consumers. And so it was a very natural, logical step for us, right? That was number one. And number two, because a lot of the things that we have leveraged, our existing power of understanding the risks and threats which are happening, the use of AI. And so we have used a lot of these things and added some additional features, functionalities, which we believe can be pathbreaking for Indian consumer. And so then it was a no-brainer, Debashish, to go into it. And it looked like a very important aspect and a mission to solve, and hence, commitment to AntiFraud.AI. And I think in the last previous quarters or so we have always hinted although not mentioned it as much, but we always hinted at working on these issues -- these areas and coming out with announcements in near future. As far as predict...

Just to add, Vishal. So, Debashish, we have this experience in B2C business, we have 3 decades experience, so we want to capitalize that as well. And we are confident that by doing this, we are doing the right thing. Sorry, Vishal...

Sorry, just to harp on the same point. So do you think that in Indian customer, there is a change in behavior? Because in the past, we have seen several times that despite trying to create awareness in the client's mind, normally B2C clients doesn't want to pay for this kind of product, especially when it comes to mobile. So do you see any change in behavior of the customer?

See, Debashish, what we are thinking is we don't want to sort of stereotype an Indian customer because the same Indian customer is actually adopting lot of global apps, right? So like why can't they do it? And if, for example, a Blinkit can be adopted as an app in India, which is mobile first for some other business models, the same model can be adopted for securing your -- and full proofing you from a frauds point of view, right? So I think we are -- we know that it is a challenging business model, but we are going with an open mind and embracing that challenge. But because of our understanding of how this pans out in the computer business, we will be able to navigate these challenges and ensure success. So I think your point is well taken, but we are looking at how do we cover all our bases to ensure a success here. And so far, the feedback has been very good we received from customers as well as our partners.

Sure, sure, sure. Just one observation, when you try to download this through App Store, it is showing a 4-year-old product. So I'm not very sure that if there is any mistake there. I was just checking. So if you can check that, it is showing a 4-year-plus old product in the App Store.

Sure, sure. We'll have a look. Maybe it's a different app that is popping up for you, but we will look at it, Debashish. We'll definitely circle back with you on that.

Sure, sure. And the second question on the predictability, if we can get some kind of direction towards the predictability of the B2B business that will be helpful.

See, we have already been sharing our business mix. We have this time also shared -- so when we talk about lead indicators and some KPIs, we are constantly seeing how we can start disclosing more KPIs. So this time around, we have shown how our enterprise business is changing from a cloud versus on-prem. So that's a very important KPI to track, which will show the maturity of our business and modernization of our business. And we will continue to add more and more features as we go along. And your point is well taken, yes.

The next question is from the line of Sanjay Shah from [ Kanishtha ].

Can you just talk a little bit more about the enterprise market and how it's evolving? Because a large part of the discussion, I think, we were focused on the new product and the B2C. So just your overall perspective on the experience, the transition. Of course, you've given the numbers. And how do you see that panning out over the next 1 to 2 years?

Thanks, Sanjay. Sanjay, I think one of the things we are extremely happy about is that we have now started to work on the new set of solutions like SWG, which is your Secure Web Gateway or your cloud security access broker. We've also -- developing a malware analysis platform, a threat intel platform. And all of these are back of the deep research that we do and the deep amount of technologies that we have created through our Seqrite Labs. So extremely bullish and happy about how we are progressing as far as these new solutions are concerned. We are focusing on how to pivot from a sales motion point of view to the mid-market segment. And that is -- like I said, is a work in progress. And we are adding leaders and mid-management team members in our sales organization to bolster our team and drive that. So overall, if you look at, there's a huge potential. If you see the recent events and incidents unfolding globally as well as in India, you will find that humongous amount of cybersecurity breaches and incidents which are happening. So the awareness levels of enterprises is only growing. The expectation from the Government of India through regulations or bankers, even SEBI has come out with a very detailed cybersecurity guidance and policy framework, which has been launched recently, which is very, very comprehensive. So all of this is heightening the need and the requirement for cybersecurity to be adopted in larger enterprises and organizations. So I think clearly, we see a huge potential for us because of these different trends that I just talked about, Sanjay.

That's wonderful. And then would you mind, Vishal, also talking a little bit more about the data privacy and how that's evolving?

Yes. I think very interesting is that, obviously, now India is at the cusp of launching the enforcement of the data privacy as far as India is concerned. And you know that the law -- an act has already been passed in the parliament. We are now just waiting for the final enforcement guidance and guidelines from Government of India. We -- in one of these calls -- investor calls, we had mentioned that our anticipation was that this will be announced in Q3, which is this quarter. And we can start seeing a positive impact of that in terms of our pipeline and our closures in Q4 and Q1 onwards from next year. So I think we are -- generally speaking, Sanjay, what we have seen with the experience of GDPR in Europe and California Data Protection Act in U.S. that generally, whenever such things come in, not just the data privacy, but also the overall cybersecurity investments grow around 5% to 7% in the country where the act gets launched. So we expect that the same thing will happen as far as India is concerned, and it's going to be a very positive move for India and the digital adoption of India in the country as well as how people are seeing India as a country.

Ladies and gentlemen, we'll take this as the last question. I now hand the conference over to the management for closing comments.

So before that, I just want to clarify, Debashish, if you are here, 4-plus is the age recommendation and not age of the app. So we thought just to clarify right away.

Okay. I think you can ask the next question.

This was the last question.

Okay. All right. All right. Thank you so much, everyone, for a very engaging conversation and asking a variety of different questions. I hope you found this useful. Thank you so much for joining today and look forward for the next quarter call as well. Thank you.

Thank you, everyone. Good day.

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