eMudhra

eMudhra delivered a robust Q2 FY25, with total income surging 47.5% YoY to INR 142.67 crores. This growth was primarily fueled by increasing demand for its enterprise solutions in both domestic and international markets. The company maintained healthy profitability, reporting an EBITDA margin of 23.7% and a PAT margin of 15.6% for the quarter, reflecting strong operational execution.

For the first half of FY25, eMudhra's total income reached INR 237.69 crores, marking a 34% YoY growth. The enterprise solution segment was the primary revenue driver, contributing INR 178.8 crores, while trust services generated INR 54.9 crores. H1 FY25 EBITDA stood at INR 63.28 crores (26.6% margin) and PAT at INR 40.49 crores (17% margin), indicating consistent performance across segments.

The company is actively transitioning its security solutions to a managed services architecture, leveraging cloud platforms like AWS and GenAI capabilities. This strategic move aims to simplify deployment and management for customers, bundling software, infrastructure, and eMudhra's resources for a seamless integrated security experience. This is expected to enhance customer adoption and scalability, particularly in the US market.

New regulations in trust services, effective July 15, 2024, shifted to direct invoicing of end customers, improving net realizations (from INR 300 to INR 800-900 per certificate) despite a 25-30% drop in DAC volumes due to changes in tax audit requirements. Acquisitions, particularly TWO95, contributed INR 16.5-17 crores to Q2 revenue, with TWO95 alone adding INR 15-16 crores, demonstrating successful inorganic growth and market penetration.

eMudhra is making significant progress in next-generation security products, including Post-Quantum Cryptography (PQC) with ready products and ongoing POCs, Mobile PKI which has been vetted by CDAC, and Homomorphic Encryption, targeting readiness in 3-4 months. The Certificate Lifecycle Management (CLM) platform is also seeing strong demand, driven by regulatory discussions to reduce certificate lifecycles, necessitating automation and providing comprehensive end-device provisioning.

Management reiterated its FY25 guidance, expecting revenue around INR 500 crores with an almost 18% PAT, which they deem 'reasonably achievable.' The order book is continuously expanding, and the company is confident in its growth trajectory, with new customers being acquired consistently. Future guidance for FY26 will be evaluated around March based on the evolving order book and market conditions.

The reported Q2 EBITDA margin of 23.7% was explained by a higher mix of lower-margin services business, the new gross revenue booking method for trust services, and one-time^📎 acquisition-related expenses. Management clarified that, on an adjusted basis (using the old accounting method), the EBITDA margin would be closer to 26% and PAT margin above 18.5%, aligning with previous projections and indicating underlying profitability remains strong.