eMudhra Limited — Call Transcript 2022

Jun 17, 2022

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EL/SEC/2022-23/ 12

June 17, 2022

Corporate Relationship Department BSE Limited 1st Floor, New Trading Ring Rotunda Building, P J Towers, Dalal Street, Fort, Mumbai 400 001	The Manager Listing Department National Stock Exchange of India Limited "Exchange Plaza', C-1, Block G Bandra-Kurla Complex, Bandra (El, Mumbai - 400 051
Script Code: 543533	Script Code: EMUDHRA

Dear Sir/Madam,

Sub: Transcript of Earnings Call held on June 13, 2022

Pursuant to Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2021, please find enclosed the transcript of the Earnings Call held on June 13, 2022, post announcement of financial results of the Company for the quarter and financial year ended as on March 31, 2022. The audio recording of the Earnings call along with the Transcri�t has been uploaded on the Company's website https://emudhra.com/investors.jsp

This is for your information and records.

Thanking you

Yours faithfully,

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For eMudhra Limited

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Johnson Xavier Company Secretary & Compliance Officer Membership No. A28304

eMudhra Limited

eMudhra Digital Campus, 12-Pl-A & 12-Pl-B, Hi-Tech Defence and Aerospace Park (IT sector), Jala Hobli, B.K. Palya, Bengaluru, Karnataka 562149 I Phone: +9180 48 48 4001 I Email: corporate@emudhra.comIWeb:www.emudhra.com CIN - L72900KA2008PLC060368

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eMudhra Limited

FY2022 Earnings Conference Call Transcript

June 13, 2022

MANAGEMENT PARTICIPANTS:

MR. VENKATRAMAN SRINIVASAN - EXECUTIVE CHAIRMAN

MR. SAJI LOUIZ - CHIEF FINANCIAL OFFICER

MR. KAUSHIK SRINIVASAN - SENIOR VICE PRESIDENT, PRODUCT DEVELOPMENT

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Moderator:

Ladies and gentlemen good day and welcome to the eMudhra Limited’s FY2022 Earnings Conference Call. As a reminder, all participants’ lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing ‘*’ then ‘0’ on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikas Luhach from Churchgate Partners. Thank you and over to Mr. Vikas.

Vikas Luhach:

Good afternoon everyone, I am Vikas Luhach from Churchgate Partners and I welcome you all to the first Earnings Call of eMudhra Limited, post Company’s listing on the stock exchanges on 1[st] June 2022. Before we begin I would like to remind all the participants that some of the statements made on today’s call maybe forward-looking in nature. For more details please refer Page number 43 of Investor Presentation.

Joining us today from the management side we have Mr. Venkatraman Srinivasan – Executive Chairman, Mr. Saji Louiz – Chief Financial Officer and Mr. Kaushik Srinivasan – Senior Vice President, Product Development. I would now like to hand over the call to Executive Chairman for his opening remarks. Thank you and over to you sir.

Venkatraman Srinivasan: Good afternoon everyone and welcome to the eMudhra Limited’s first ever Earnings Call. I hope you and your loved ones are staying safe and healthy.

The Company recently got listed on BSE and NSE on 1[st] June 2022 and I would like to thank all our employees’ customers and shareholders who have shown confidence in our business model and supported us in our journey so far.

Given this is our first Earnings Call, I would start with the overview of our business model and its underlying strength. Then I would pass on the call to Mr. Kaushik Srinivasan – Senior Vice President, Product Development to talk about our business segments and product portfolio. Followed by Mr. Saji Louiz – CFO who will discuss the financial performance in more detail. We have already circulated our investor presentation which is available on our website as well as on the stock exchange’s website. I hope you had the opportunity to go through the presentation and we would be happy to take any question afterwards.

Coming to the Company’s overview, we at eMudhra are engaged in the business of providing Digital Trust Services and Enterprise Solutions to individuals and organizations. If I look back at our inception, our journey started in 2008 with a mission to accelerate the transition to a secure integrated digital society whose foundation is built on digital identity and trust.

Over the next decade we have extensively focused on the R&D, introduced enterprise solutions with the core objective of empowering our customers and offering great experiences, save significant cost and at the same time improve security, compliance, governance, support client’s in their digital journey.

Fast forward to the present, eMudhra enables enterprises and consumers to transact securely through a combination of trust services, cyber security, and digital transformation solutions.

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Today we are one-stop shop solution provider in secure digital transformation journey and are assisting clients not just in India but internationally as well.

In our Digital Trust Services segment, we have around 191,000 retail customers, 95,000 plus channel partners and in Enterprise Solutions we have 270 plus partners in India and 280 plus partners in 21 countries. During the year, we had a net addition of 196 clients, with total clientele of 714 customers and a well-diversified mix of BFSI, government and private sector. Our client retention ratio is more than 90% and top 10 customer contributes only around 30%.

I am pleased to report that the Company has delivered growth across all key performance indicators in FY2022. Our Revenue from Operations grew by 39% to Rs. 183 crores. The Revenue growth was led by Enterprise Solutions segment with registered Revenues of Rs. 98 crores, a robust growth of 52% and supported by Digital Trust segment which registered Revenues of Rs. 85 crores a growth of 26%. Our Net Profit was Rs. 41 crores growth of 62% with improvement in margins to 22% from 19% in FY2021.

Company continues to generate strong cash flows of Rs. 39 crores around 96% of Net Profit which reflects underlying fundamental strength of our business model. In the light of strong performance during the year. the Board of Directors have recommended a final dividend of Rs. 1.25 per share which is 21% of the EPS and is subject to shareholder’s approval.

During the year we have many successful projects wins to our credit. Some of which I would like to highlight:

For our emAS offering, we are delivering and an end-to-end data encryption project for a defense force which will have secure key management capabilities. A leading utilities Company based out of Saudi Arabia is implementing emSigner to deliver paperless transformation using e- signatures. Kindly note that in the MEA region the banking version of emSigner is accepted by many banks as a platform of choice for banking paperless transformation.

In Europe we have implemented emCA for a leading payments and payments security provider which allows issuance of digital signature certificates to IoT devices.

We have also launched the emPower portal to resell SSL or TLS certificate. This is aimed at providing our partners a centralized dashboard for procuring, managing certificates for their customers. In the domestic market we have acquired several customers across BFSI for eSign services.

Now if I take a moment to look back at last five years, the Company has delivered a strong Revenue CAGR growth of 22% with accelerated profitability and delivered a PAT CAGR growth of 33%. Our five-year average return on equity is around 26%.

We look forward to maintaining this growth momentum backed by our competitive advantage, established presence in key markets and a diverse product portfolio in the area of digital security and paperless transformation.

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The near-term strategic focus areas of company are: One, to gain market share. We are the industry leader in Indian Trust Services market and will strive to maintain and gain our leadership with our value proportion of ‘one-stop shop’ player which in the long run will help us capitalize on emerging opportunities in data privacy, data protection and digital transformation that is happening in India.

We will continue to tap into the large opportunity present before us and further expand our presence in the international market. As part of our strategic expansion plan we will be setting up additional data centers in India and at various overseas locations which will augment our technological, infrastructure and support our plants of expanding into the overseas markets to drive growth.

New age industries such as electric vehicles space and smart cities presents a viable and good growth opportunity due to their enhanced dependence on cyber security framework and Company is continuously investing in developing, innovate, and provide better products for such segments.

Overall, we believe that the demand for cyber security and digital transformation solutions will see a healthy growth momentum. The renewed focus on sustainable and environmental-friendly practices by both public and private organizations will give thrust to presence less, paperless way of doing business. Also, the unfortunate health pandemic COVID-19 has only accelerated the inevitable adoption of the paperless process.

I am confident of the ability and strength of the eMudhra business model and I can assure you that the management team remains fully committed to expand the business and maintain its industry leadership position in a fast-growing industry. Now I will hand over the call to Mr. Kaushik Srinivasan – Senior Vice President, Product Development to talk about our business segments and product portfolio. Thank you.

Kaushik Srinivasan:

Thank you. eMudhra today operates to two business verticals Digital Trust Services and Enterprise Solutions.

I will first talk about Digital Trust Services. We are the largest licensed Certifying Authority in India with a market share of 37.9% in the digital signature certificate segment. Since inception we have issued over 50 million digital signature certificates. The Company issues range of certificates both in India and internationally through our Webtrust accreditation.

Our digital signature certificates provide digital identities and ensure authenticity of transaction through cryptographic validation and are primarily used by individuals, large enterprises, and small and medium enterprises across all industries.

Through our Certifying Authority operations we issue three kind of certificates:

First, individual organizational certificate such as signature certificate, encryption certificate code signing, document signer certificate. These allow individuals and organizations to authenticate or sign documents as part of e-commerce or online transactions.

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Second, SSL or TLS certificate such as domain validation, organizational validation and extended validation certificates which protect websites through varying levels of assurances to the end user on the security of the website.

And third device certificates which secures devices and communication in IoT ecosystems and ensures authenticity and confidentiality of data exchange.

In terms of our presence, we have a pan India presence with more than 191,000 direct retail customers and around 90,000 channel partners. We also provide technology platforms that cater to both partners and direct retail customers and our clientele in this vertical comprises of all kinds of subscribers who use digital signature certificates such as for income tax return filing and Ministry of Corporate Affairs filings, tenders, foreign trade, banking, railways, and many other leads.

Now if you at the domestic industry for the segment its size is estimated to the tune of approximately Rs. 1,200 crore at the end of FY21and is expected to grow with a CAGR of 16% over the next five years due to increasing adoption of digitalization and support from government policy and eMudhra is well positioned to capitalize on the growing market opportunity.

Moving to our second business vertical: Enterprise Solutions. Under Enterprise Solutions vertical we offer a diverse portfolio of digital security and paperless transformation solutions. Our offerings provide identity, authentication and authorization solutions thereby enabling enterprises to secure and managed identities of the consumers, employees, and partners as well as IoT devices. Through this business vertical, we offer three kinds of products.

First, emSigner which offer eSignature workflow solutions or paperless workflow through the use of digital signatures. This is an effective solution to the paper problem faced by organizations and at the same time ensures better customer experience and managing risk governance.

Second, emAS through which we offer authentication solutions to enterprises to securely handle online identity and access management. The key features of this product include multi-factor authentication engine, single sign-on integration with LDAP an active directory, advance reporting, and many others. These first two offerings are used primarily by eGovernment and banking platforms, various financial institutions and other industries in India as well as internationally.

Third, is emCA through which we offer publicly infrastructure solutions. Our clients use this to issue digital signature certificates to individuals, organizations, and devices. Key modules of emCA include certificate lifecycle management, time stamping, certificate revocation list, online certification status protocol, tamper proof login and reporting. The entire solution is robust, standards compliance, scalable and policy driven. EmCA is used again by government agencies and as well as private sector and used case include setting up of various digital signature infrastructure as well as for electric vehicle and smart cities.

Our Enterprise solutions are either cloud-based or on-premises which support DevOps based deployment models allowing clients to rapidly deploy our solutions using continuous

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development integration and delivery process through the use of tools such Docker and Kubernetes. Our enterprise customers stood at 714 as of March 31, 2022, which comprises top IT, banks, and automotive companies as well as several others. I am proud to say that we today have a diverse client base with high customer retention.

Now I would like to hand over the call to our CFO – Mr. Saji Louiz to discuss the financial performance in detail.

Saji Louiz:

Thank you Kaushik. A very good afternoon to all the attendees. I would present the recent financial performance of the Company.

In FY22, the Company registered a Revenue of Rs. 1,826 million, an increase of 38.8% on yearon-year basis from Rs.1,316 million in FY2021. Revenue growth was supported by growth in both the business verticals with new customer acquisitions, international market expansion and incremental cross-sales.

If you look at the segment results, in FY22 Enterprise Solutions contributed 53% to the total revenue while share of Trust Services stood at 47%. Both business verticals complement and augment each other and are strong pillars for the Company’s overall growth.

In terms of the geographical distribution of our business, Revenue from India stood at Rs. 1,477 million constituting 81% of our total revenue with remaining 19% was from outside India. EBITDA for the year stood at Rs. 688 million a growth of 68.7% on year-on-year basis and margins improving significantly to 37.4% as compared to 30.8% in FY2021. EBITDA growth and margin improvements were driven by increased revenues and improved operating leverages and efficiency in the business.

Net profit for the year was Rs. 411 million a growth of 62.2% on year-on-year basis with margins at 22.4% as compared to 19.2% in FY21.

Due to the health pandemic, though there was increased adoption of digitalization but at the same time, cost control measures adopted by companies have resulted in slower than expected growth, a situation which we believe will improve going forward.

Company has degenerated cash from operations of Rs. 395 million in FY22 which constituted 96.1% of Net Profit, a result of a profitable and cash generating business model built over the years. We continue to generate incremental wealth for our shareholders and in FY22 Return on Equity of 30.4% and Return on Capital Employed of 34.1% was at a four-year high.

In the light of the Company’s recent performance, Board of Directors have recommended a dividend of Rs. 1.25 per share a payout of 21% EPS.

For the initial public offering made by the Company in May 2022, Rs. 1,522 million is the net proceeds received from the fresh issue. This amount is outlined for utilization towards business expansion, IT infrastructural development, new product development, working capital

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requirement and repayment of our borrowings. Kindly note that the Company has become netdebt free as on 7[th] of June 2022.

Thank you very much and now we will be happy to answer any question you have on Company’s recent performance or business model.

Moderator: Thank you. We will now begin the question-and-answer session. Our first question is from the line of Himani Shah from Alchemy Capital. Please go ahead. Himani Shah: Congratulation on good set of numbers, just wanted to understand on the pricing front there is so much talk about that is going on geopolitically, slowing growth all of that. Do you see any impact on pricing on your products because of these and what kind of guidance would you give on pricing for each of the certificate and currently what is the pricing that is applicable for every certificate that you issue on an annual basis?

Venkatraman Srinivasan: If you see the pricing there are two segments, one is the Digital Trust segment and the other is Enterprise segment. In the Enterprise segment, there is no standard pricing it all depends on the size of the organization; the complexity of the organization and then how many number of users are going to use and in how many countries they are going to use. So, it depends on so many parameters and in those, currently the pricing is good only and it is favorable. So, we do not see any pricing pressure on the Enterprise segment. So, on the Digital signature segment there could be some pricing pressure but already this was also indicated earlier in our investor meeting before the IPO, that we generally command pricing premium of around 20%. So, with this currently whatever price we are selling, we are able to sell at that price and volumes have consistently maintained as you might have seen on one of the slide. Even inspite of our current pricing, the volume has only improved over the last year both in the retail segment and also in the channel segment. So, that way we could not see any pricing pressure and the world over the inflation is going. With the inflation I think the prices will be better rather than coming down. That’s what I personally feel.

Moderator: Thank you. Our next question is from the line Sahil Desai from Hornbill. Please go ahead. Sahil Desai: Just couple of questions, one is can you give us a breakup of the Digital Trust revenues between your direct retail and channel distribution Saji K Louiz: So, our Revenue breakup from trust services comes to about Rs. 845.6 million which is divided among channel and retail. Retail constitutes about 25-30% of our total trust service revenue and the enterprise solution we have roughly Rs. 981 million of our total sales.

Venkatraman Srinivasan: Almost you can say 30% is retail sale and the retail continue to increase that’s why you see between the prospectus and the number of retail customer what is put in the presentation, it has increased only.

Sahil Desai:

Right, can you help us understand in terms of margins of your direct retail in which we see that number has grown in terms of number of retail customers. From a revenue standpoint what would be differential between the margins for eMudhra in the direct retail versus the channel?

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Venkatraman Srinivasan:	As earlier we had explained in several investor meets, in the channel we may realize the average
	around Rs. 300 but in retail we realized around Rs. 1,500 per digital signature.
Sahil Desai:	Got it and how would translate into margin in terms of how much basis points will that be higher.
Venkatraman Srinivasan:	In issuing of the digital signature, there is no direct material cost or no direct cost. Once the data
	center is set up, the same way the signature is issued for channel and signature is issued retail
	also. In the retail, some selling cost will be there and also another thing is that in both when we
	say I am selling at Rs. 300 to the channel the Rs. 300 only is taken as a revenue. It is not Rs.
	1,500 is taken as a revenue and then Rs. 1200 is shown as cost. If that way it is put, then the
	margin will be very low on the channel but because revenue itself is taken at Rs. 300 so almost
	entire thing becomes the margin because cost of additional issuance is very low. And in the same
	way in retail Rs. 1,500 is taken as the sale, the direct selling cost will be very-very less because
	it is only some salespeople who are employed for doing the direct retail sale and our Google
	advertisement is also very-very low because our Google ranking is very high. So, it is not like
	other ecommerce products. So, that way, the margin on both will be on Rs. 300, your margin
	will be some Rs. 200 and almost 85%-90% will be around same.
Sahil Desai:	Got it and on the enterprise side, based on the order books that you are looking out today as well
	as the conversations with enterprise clients in terms of deal pipeline. Can you give some sense
	of the visibility for this year and how is it looking in terms of growth?
Venkatraman Srinivasan:	The Frost & Sullivan Report and various reports has projected almost that for the enterprises in
	India around 30% growth and also globally they are projected from almost $11 billion to $26
	billion and because of several of our uniqueness and we are striving towards the similar growth
	and we are seeing a very stable and growing order book position and the growing pipeline
	position also. So, that way we feel it will be good for the current year.
Moderator:	Our next question is from the line of Saurabh Thadani from IIFL. Please go ahead.
Saurabh Thadani:	Just had another question on the pipeline. Could you throw some light on our pipeline is shaping
	up versus say last year, particularly in the enterprise solution segment?
Venkatraman Srinivasan:	Almost if you see compared to April one of last year and April one of this year, the pipeline has
	almost little more than doubled and the same situation previous two years back, you see it would
	have almost tripled kind of thing. That is the opening pipeline, where we have got the orders
	which is yet to be converted and similarly if you take the other pipeline, where it is a same
	pipeline not converted to order, that’s also almost become more than one and half times
	compared to last April to this April. So, that way there is robust growth in both pipeline and also
	order book position.
Saurabh Thadani:	Just a follow-up on that what would be the average duration of the current order pipeline in terms
	of execution like how long would the current pipeline be?
Venkatraman Srinivasan:	Generally, for most of the customer it takes 3-4 months but some of the bigger orders and
	government orders may take up to six months.

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Moderator:

Thank you. Our next question is from the line of Kunal Shah from Hornbill Capital. Please go ahead.

Kunal Shah: I wanted to understand the traction on the new products of the Company for example SSL, TLS certificate and eSign. So, how is the demand and what are the revenues from these offerings. Venkatraman Srinivasan: Now those products have started in the Indian market and starting is very good. So, we are seeing some 2 or 3 major order, which has materialized in the revenue and in the foreign market because we have to perfect the verification guideline and verification methodology for all the countries which is a little complex matter. For India, we have perfected, so that’s we launched in India in the next quarter we want to perfect another 5/6 countries and then launch in those countries. So, once we launch gradually so this additional revenue stream will develop but within the last three months the Indian revenue stream has started working. Kunal Shah: I had one more question on the repeat rate. So, can you tell me for the retail segment, in the digital trust service portion of our business, what would be the repeat rate? Repeat customers for the retail business of the DSC. What would be the repeat rate for that segment in particular? Venkatraman Srinivasan: We are not separately measuring, but I am sure it will also be more than 90-95% what is it because on the overall itself it is more than 90% from the digital trust services, so Retail also should be like that, but we are not separately measuring these. Moderator: Our next question is from the line of Rishi Jhunjhunwala from IIFL. Please go ahead. Rishi Jhunjhunwala: Just one question on our margins, our EBITDA margins have expanded by almost close to 700 basis points in fiscal 22 versus 21 and a large part of that seems to be coming from employee benefit expense but there are other operating expenses which have come down as well. Firstly, just wanted to understand how much of this expansion can we attribute to the change in the business mix where enterprise solutions is a bigger proportion and retail among trust services is a bigger proportion? Would you be able to quantify to some extent how much this segmental margins could roughly look like and secondly what do you envisage in terms of employee expenses going forward given that you may have plans to potentially expand in international markets on the enterprise side and do we expect 37% to be a bit more sustainable level or it will start going down given the investments?

Venkatraman Srinivasan: Yes first I’ll cover the segments what you’ve asked. One is the digital trust segment then the other is the enterprise segments. So, almost if you see the digital trust segment, we get almost 85% kind of gross margin on the only trust certificate issuance side but if you take the token which is the hardware, there the margin may be very low may be 4% to 5% kind of thing but that’s why consciously we are not maximizing on the token, very little token is issued but then coming to the enterprise guide also on the software, if you see per se we get 85-90% gross margin and also in the hardware maybe 15-20% gross margin which is less. But if you see the overall hardware itself may be around 20% or less than 20% of the overall sales. . So, that way both on the software side the margins are so shift from one segment to another segment may not necessarily increase the gross margin but this one side but the other side is when the volumes

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scales up, because our business is not proportionate model, so, instead of supplying emSigner to some 20 places we supply to 35-40 places. Corresponding number of employees will not add up and again because like Kaushik said earlier that the products are all perfected in DevOps, Kubernetes, and various things the implementation timeframe, implementation methodology is simple. So, that’s where when we last year if you see when the revenue has gone up by 38%, the employee cost might have gone by 15% or 16% somewhere like that and the other cost because all travel in the respective geographies it is a little bit going to be more but the employee cost wise it is not proportionately increase in cost. So, that’s where we feel when the volume further and further goes definitely the current kind of margin is maintainable definitely, if not, probably it can improve also.

Rishi Jhunjhunwala:

Okay and the next question is a bit on the balance sheet side so it looks like that even compared to FY20 assuming that FY21 wasn’t a normal year, our working capital intensity seems to have gone up substantially with receivable and unbilled is going higher. So, just wanted to understand any particular reason for that to happen this year and how do we think about it going forward?

Venkatraman Srinivasan: Yes one is the receivable and the other unbilled. So, both I will answer separately. So, if you take the receivable. In September, receivable almost went up to Rs. 55-57 crore. From there if you see December little bit of reduction and again if you see March it was around Rs. 43-44 crore on a combined basis. So, actually it has come down. Why it went up in the initial phase in December is that there were 2-3 large defense projects because of the milestone and the payment things were after you achieve the milestone and the invoice there was some 30% payment in one month, 60% payment in another three months. Then another 10% payment after 6 months, that kind of payment methodology was there. So, gradually it is coming down. So, this is on the receivable side. So, receivable side though initially has increased to Rs. 56 crore in March it has come down out of that also quite a bit of as you see Rs. 43 crore, and on Rs. 43 crore almost some Rs. 22-23 crore is mainly from the government kind of receivable which subsequently also has been received. So, this is one side.

Coming to unbilled, it is a proportionate of the order book portion. So, when you get the order the execution of the order takes as I said maybe 3-6 months’ time so during the execution of the order, whatever progress has been achieved that progress is what is booked in the unbilled revenue. So, naturally when the order book improves from some level to some level almost double the level, the unbilled revenue also will increase to double there also. So, that’s why you see almost what has happened is unbilled has increased from in the beginning of the year some Rs. 12 crore or Rs. 13 crores into some Rs. 20-23 crore at the end of the year. So, it is almost proportionate to the pending order book position which is yet to be executed. So, there nothing is alarming because it is not disproportionate to the order book position. So, this is the difference between the receivable and the unbilled.

Rishi Jhunjhunwala:

Understood sir and just one last question. You have talked about order book. So, standing today can you give us some sense in terms of how much of revenue visibility you have for FY23 on your enterprise solution business given where the order book is and what kind of potential risk could there be if macro situation worsens especially in Americas and Europe, given your plans

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to continue to expand in those regions have you spoken to customers to understand whether some part of these product implementations are potentially discretionary and could be delayed?

Venkatraman Srinivasan: Revenue visibility side we do not want to give any guidance, we will work towards a good number and I have told the leading indicators are good so we’ll work towards it. So, that’s what we have to say. We don’t want to give any specific guidance on the revenue visibility. Then coming to the macro picture and all that. So, generally this macro pictures are applicable to anybody who maybe commanding some 10%-20% of the market. We are niche strategic player who are not still not instilled into commanding 20% market share or 50% except in India where the digital signature and certification authority market where we command 37% market share. So, it’s a more of tactical entry with the customer with the help of various market guides and other thing and with the help of our salespeople aggression. So, from that perspective I have not seen any doubt expressed by any of the customers or anything and doubt expressed by even our own sales team that we will not be able to penetrate or anything like this. So, that way that also looks quite positive.

Moderator: Thank you. Our next question is from the line of Himani Shah from Alchemy Capital. Please go ahead.

Himani Shah: Sir I just had two more questions, one is in the presentation you mentioned about new product launches in the enterprise solutions using a blockchain and cryptography. Would it be possible to throw some light about, probably like as an example, of what is the solution and what is that these new product launch are all about that’s one, and my second question is on and also can you throw some light on the competitive landscape. We have a 38% market share and if you can just throw some light on the domestic as well as international competition in a digital certificate trust services and the enterprise solutions that we offer?

Venkatraman Srinivasan: On the competitive landscape, I will answer then about the blockchain and the other product that Kaushik will answer from a technology perspective. So, on a competitive landscape, while we command 38% market share, our next player commands almost may18-19% and we have been consistently commanding this kind of a market share for the last 2-3 years and the other 2-3 players are smaller players who are commanding 10-15% market share. This is on the digital trust services in India. Then when we come to the enterprise solution there is almost no local competition, everywhere we are the only Indian solution provider providing the digital signaturebased authentication, providing the paperless workflow including the digital signatures in India so that way there is no local competition but the foreign competition there are some deficiencies for them to enter into India because there they are not allowed to issue the sign or issue the digital signature. So, though they may have solution they have to come to a signature provider to help them to give the signature side. So, that way this one-stop shop approach has really helped and that’s where we do not face much competition, we are able to penetration the Indian market and in the global market also because of our flexibility and we go more into the regulated industry and banking where instead of cloud-based service they want on-premises based service or a private cloud-based service, which predominant American competitors are not offering. So, that is another niche area we are able to enter, so the main competition for paperless work is US competition, then again for the emCA product also two European companies and then one US

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Company. So, against them, we have been able to do several win because we are also featured in the Gartner Report, IDC reports and many reports as a full-service provider and we have got several referral customers globally as of now so that way we are able to take care of the competition. Then coming to the blockchain I would request Kaushik to address this in which area of blockchain we are there and what we are doing.

Kaushik Srinivasan:

So, broadly on blockchain it is for decentralized platform and today there are several concerns around identity and how do you prove the identity and authenticity. So, that is the bridge that we are trying to sort of fill through Certification Authority like our Company where we are able to use these digital signature certificates. If those are used to sign various transactions on blockchain, particularly smart contracts, then they will be upheld in the court of law and sort of these legally valid. So, that the broader used case. More specifically blockchain platforms today being used for various decentralized finance transactions which is already equivalent of something like a peer-to-peer lending used case, in such transaction again digital signature certificates that are provided by certifying authorities if they are used, they’ll be legally valid so already working with several blockchain platforms to essentially allow the use of these legally valid digital signature certificates, which can then be used to sign various smart contracts so that they can become legally valid.

Himani Shah:

And Kaushik while you’re here if I can just add one more question just to understand on the international side, what is it that I think sir mentioned about offering services that are not really offered in the US, so what are those services that you are offering and you think you have a right to win in the international market?

Venkatraman Srinivasan: No, it is not the service not offered in US. The major US players are offering cloud model whereas we are offering on the on-premises and private cloud model. May be better Kaushik can amplify. Kaushik Srinivasan: So, just to again elaborate a little on that, today if you some of the competitive platform they are completely on public cloud. They are designed to be more general-purpose contracting platforms and typically do not allow identity backed digital signature to be used and those are the three things that we provide in the context of regulated industries, even in the developed markets like banking, financial services etc. There are these requirements for sort of maintaining data residency, providing the identity and authenticity. So, those are again capabilities that we have built in the context, for instance when we use emSigner in the context of banking industry and that is where we feel we will have some unique positioning when we even go to these developed markets.

Moderator: Thank you very much. Our next question is from the line of Sahil Desai from Hornbill. Please go ahead. Sahil Desai: Thanks for the follow-up just wanted to get a sense on what are our plans for the US market in terms of what investments we are making, the team size that we are hiring there, if you can just help us understand and then from a revenue contribution point of view in the medium term, what kind of target are you internally sort of chasing from the US geography?

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Venkatraman Srinivasan: Mainly in US, two strategies will be done One will be the recruitment of people. Already as of now we have only 1 person so we have to increase the team to 7-8 people and then we have to enroll a number of partners. So, the partners who are in the similar industry so who are marketing, because lot of partners do not have any exclusivity, so for them we can offer better terms and then better other various things, so, that we can get those partners. Anyway because they are similar products. This is the same strategy we followed in middle east also. So, then we could get lot of business through them. So, both the strategy will be adopted and the other thing is the how will the niche market reports of docker and other important analysts, we have to figure in. Already if you see our emSigner product, it is already there as a global full-service provider. Similarly banking specific product also, if we bring into that then penetration into lot of mid-tier banks can happen may not be large but at least mid-tier banks will be possible. So, these are all the four or five ideas. Then another thing, even if you see the MCA product there are lot of private certificate authority in USA or even several banks having private ability to do private certification for their own transactions. So, those kind of market again we can try to penetrate because of our product superiority and also maybe better cost in terms of the US local competition. So, all these will be possible so this is what we are predicting. And then if you see the how much we done in USA last year itself being first, we could do about I think six crore or seven crore in US. So, that way we can definitely we feel that just with 1 person we were able to do so much. We should be able to better in the coming days.

Moderator:

Thank you. As there are no further questions I would now like to hand conference over to the management for closing comments.

Venkatraman Srinivasan: Yes. Thank you and thanks everyone for joining our first earnings call. We are excited to start our journey as a listed Company and look forward to having more such interactions going forward. So, if any questions remain unanswered or you have any further questions please feel free to connect with our investor relation team. Thank you very much.

Moderator: Thank you. On behalf of eMudhra Limited that concludes this conference. Thank for joining us and you may now disconnect your lines.

Notes:

1. This transcript has been edited for readability and does not purport to be a verbatim record of the proceedings

2. No part of this publication may be reproduced or transmitted in any form or by any means without the prior written consent of eMudhra Limited

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