Quick Heal Tech

Quick Heal Technologies reported a strong Q2 FY26 with revenue reaching INR 83.5 crores, a 14.38% increase year-on-year from INR 73 crores in Q2 FY25, and a 46.49% sequential growth from INR 57 crores in Q1 FY26. EBITDA saw a significant turnaround, moving to a positive INR 9.2 crores from a negative INR 9.7 crores in the previous quarter, with the EBITDA margin improving to 11%. The company also posted a PAT of INR 8 crores for the quarter, maintaining a debt-free balance sheet with INR 191 crores in investments and cash as of September 30, 2025.

The company continues its strategic pivot towards the Enterprise segment, which historically contributed 20% of revenue four years ago and now accounts for 41% of current revenue. Management highlighted that their flagship EDR and XDR products contribute over 90% of Enterprise revenue, with newer products like STI and SMAP gaining traction. The focus remains on mid-market and SMBs (organizations with 1,000 to 5,000 endpoints), which are underserved by larger MNCs, rather than directly targeting Tier 1 IT services companies.

Quick Heal is actively pursuing opportunities arising from India's new data protection requirements, having onboarded its first customer for the data privacy solution and seeing good interest in ongoing Proof of Concepts (POCs). The government business segment demonstrated robust growth this quarter, driven by increasing cybersecurity budgets and a preference for 'Make in India' solutions. The company is actively demonstrating its capabilities to various government departments, anticipating good entry into this vertical despite long decision cycles for large-ticket items.

R&D investments are being optimized through the leveraging of AI and automation tools, contributing to cost savings and a decline in R&D expenses compared to previous quarters. The company currently spends approximately INR 30-35 crores on R&D per quarter, all of which is expensed. Management emphasized that continuous innovation is critical in cybersecurity due to evolving threats, ensuring that R&D remains a key investment area, growing with revenue but at a lesser percentage.

While the Consumer business experienced seasonal tailwinds this quarter, management acknowledged its structural degrowing trend, which is a global phenomenon. Despite this, Quick Heal has managed to maintain its market share, experiencing the lowest decline among competitors. The company is implementing schemes and partner incentives to convert more users to paid versions, aiming to hold its position as a market leader in the segment while focusing on Enterprise for future growth.

Quick Heal projects its total addressable market (SOM) to reach approximately INR 4,000 crores over the next 2-3 years, with Consumer contributing about 20% (INR 800 crores) and Enterprise 80% (INR 3,200 crores). International revenue currently accounts for 20% of the Enterprise segment. The company is expanding its geographical reach and strengthening its sales team to capitalize on growth opportunities in Southeast Asia and the Middle East, alongside domestic mid-market and government sectors.