eMudhra - a largest Certifying Authority

A top brand for issuing Digital Signature Certificates offering a range of PKI authentications.

eMudhra Limited is a leading provider of digital identity and cyber security solutions in India, specializing in digital certificates, e-signatures, and public key infrastructure (PKI) solutions. As a Certifying Authority licensed by the Controller of Certifying Authorities, eMudhra plays a crucial role in enabling secure digital transformation across sectors like banking, finance, government, and healthcare.

Key Highlights

• Largest Certifying Authority in India: eMudhra is a top brand in India for issuing Digital Signature Certificates (DSC) and offers a range of PKI authentication and security solutions, including emAS, emSigner, emDiscovery, and emCA.

Business Verticals

1. Digital Trust Services (34% of FY23 Revenue)

   • eMudhra provides a variety of certificates, including individual/organizational certificates, SSL/TLS certificates, and device certificates for IoT applications. These solutions form the backbone of digital trust for secure communications.

2. Enterprise Solutions (66% of FY23 Revenue)

   • The company's enterprise offerings are categorized into:

     • eSignature Workflow Solutions: Facilitates paperless office operations.

     • Authentication Solutions (emAS): Provides advanced user authentication.

     • Public Key Infrastructure Solutions: Ensures secure digital communications.

New Product Launches

• eMudhra recently introduced innovative products for remote signing and IoT certificate management to enhance its zero-trust security strategy. It also launched mDiscovery, designed to manage the lifecycle of SSL/TLS certificates and keys, which are critical for IT infrastructure security.

Market and Industry Applications

• Industry Segmentation (FY23):

  • Government: 30%

  • Banking, Financial Services, and Insurance (BFSI): 21%

  • Private Sector: 48%

• Geographic Revenue Distribution (FY23):

  • India: 64%

  • International: 36%

Global Presence

• eMudhra expanded its Certifying Authority (CA) operations to Kenya and the UAE. The company is recognized globally by institutions like IDC, Gartner, and DXC, with a presence in over 21 countries. It has also formed multiple partnerships to extend its global reach.

Current Projects and Strategic Developments

• Data Centers: eMudhra is developing data centers in Chennai and Bengaluru to support global and Indian trust services. It is also setting up a global data center in Amsterdam to expand its international capabilities.

• Acquisition of TWO95 International Inc: The acquisition aims to enhance eMudhra's presence in the U.S. market, broaden its customer base, and provide better local support. This acquisition is expected to be EPS accretive, leveraging lower valuations to boost shareholder value.

Market Expansion and Revenue Guidance

• U.S. Market Expansion: eMudhra's recent entry into the U.S. market has shown significant growth, with revenue reaching $6-7 million. The acquisition of TWO95 International will likely accelerate its expansion and increase its market share in the region.

• Revenue Guidance: The company targets revenue growth in the range of INR 480-500 Crores, combining organic and inorganic growth strategies, while maintaining a PAT margin of approximately 18%.

Challenges and Headwinds

• Regulatory Changes: New regulations in the trust services sector require direct invoicing to customers, impacting certificate sales through partners. This has temporarily affected revenue but is expected to improve in the long term with direct sales.

• Government Project Delays: Central elections have caused delays in certain eGovernment projects, affecting project timelines.

Future Outlook

• Growth in Digital Identity and Cyber Security: eMudhra's focus on international markets, particularly in North America, Europe, and Asia-Pacific, is expected to drive significant revenue growth.

• Strategic Focus on Innovation: Continued investments in research and development for AI, block chain, and cyber security will enhance its competitive edge and broaden its product offerings.

Financial Performance (March 2024)

• Quarterly Performance: eMudhra reported a 32.66% increase in net profit, reaching INR 210 million (INR 21 Crore), and a 29.79% increase in sales to INR 996.9 million (INR 99.69 Crore).

• Annual Performance: For the fiscal year ending March 2024, net income grew by 21.7% to INR 750.6 million (INR 75.06 Crore), with total sales rising by 50% to INR 3,731.2 million (INR 373.12 Crore).

Weekly Chart

Technical Outlook

• Bullish Trend: The technical indicators for eMudhra shares are generally positive, with moving averages indicating a "Strong Buy" signal across various time frames.

• Mixed Indicators: While some indicators like the RSI suggest a "Buy," the MACD signals potential short-term corrections, pointing towards a cautious approach in the near term.

Conclusion

eMudhra's financial and technical outlook is promising, driven by its focus on innovation, international expansion, and strategic partnerships. With its diversified product portfolio and emphasis on digital transformation, the company is well-positioned to capitalize on the growing demand for digital identity and cyber security solutions globally.

Disclaimer: This document is for informational purposes only and does not constitute investment advice. All opinions expressed are personal and may contain errors.