eMudhra Q1 FY27 earnings call

eMudhra Limited commenced FY27 with robust financial results, reporting a total income of INR 1,925 million, marking a 28% year-on-year growth. This growth translated into a significant increase in profitability, with EBITDA rising over 40% to INR 504 million, achieving a healthy margin of 26.2%. Profit after tax also saw a 28% increase, reaching INR 320 million, and maintaining a strong PAT margin of 16.6%.

The Enterprise Solutions segment continued to be the primary growth engine, growing approximately 50% YoY and contributing 65% of the total income, with revenue of INR 1,623 million. International markets now account for 66% of the company's total revenue, demonstrating successful global expansion. This quarter saw encouraging momentum in Europe, including the first sale of eMudhra's CertiNext platform to a large German data center customer and the deployment of mSigner for an Austrian city municipality through the Cryptas acquisition.

The Cryptas acquisition contributed approximately INR 200 million in revenue during Q1 FY27, accounting for about 13% of the total income growth. Management confirmed that the integration efforts, focused on substituting third-party products with eMudhra's IP, are yielding results, as evidenced by new wins. While Cryptas was not profitable initially, it is expected to turn profitable in FY27, and the European subsidiary (B.V.), which incurred a net loss of INR 4 crores due to legal expenses, is also projected to become profitable in the current year.

The Trust Service business experienced a temporary decline in Q1 FY27, growing only 5% YoY to INR 284 million. This was primarily attributed to a transition to a new global security standard (FIPS 140-3) for digital signature tokens, which reduced demand for legacy tokens as customers and partners prepared for the change. Management expects this segment to normalize and token volumes to increase post-September, once ePass tokens receive recertification.

eMudhra is actively positioning itself for the emerging Agentic AI landscape, recognizing the critical need for AI trust and governance, particularly for agent identification and secure communication using digital signature certificates. The company is strengthening its existing CertiNext and SecurePass product suites to address these needs and is exploring bolt-on capabilities. Additionally, the PrivaTrust cloud platform, focusing on data privacy and consent management, is live with consent management capabilities, with incremental modules for PII discovery and classification to be launched soon, targeting the Indian market first due to the DPDP Act.

The company reiterated its FY27 guidance of 18% organic growth and 25% PAT growth, with a three-year vision to achieve 2x PAT. Management aims to maintain EBITDA margins at 25% and PAT margins at 16-16.5%. The strategy emphasizes profitable product-led growth, expanding international footprint, and launching UAE Trust Services. The company maintains a disciplined capital allocation approach, avoiding significant borrowing to prevent burden, and aims to maintain an ROE of 14.5-15%.