Kailash Katkar – Managing Director & CEO and Sanjay Katkar – Joint Managing Director & CTO addressed the call.

Highlights of the call:

On yoy basis Quick Heal Technologies registered 29% jump standalone sales to Rs 118.38 crore for the quarter ended March 2018.

OPM jumped 1420 basis points to 55.8% which saw OP rise 73% to Rs 66.11 crore.

PBT went up 102% to Rs 72.74 crore. EO was Rs 7.18 crore against NIL. Thus PBT after EO grew 82% to Rs 65.56 crore. Net profit grew 81% to Rs 42.72 crore.

In March 2018 quarter retail segment revenue up 27% to Rs. 106.9 crore as compared to Rs 84.5 crore yoy. It now contributes 85% to total revenue.

No. of licenses sold grew by 30% to 2.15 million from 1.65 million in Q4 FY17.

Enterprise & Govt. segment contributes 15% to total revenue. No. of licenses sold grew by 31% to 0.34 million from 0.26 million in Q4 FY17

In FY 2018, it registered 6% rise in sales to Rs 316.22 crore. OPM jumped 660 basis points to 39.1% which saw OP grow 27% to Rs 123.73 crore. PBT grew 35% to Rs 126.72 crore.

EO loss jumped from Rs 4.41 crore to Rs 7.51 crore. Thus PBT after EO grew 33% to Rs 119.22 crore. Net profit grew 33% to Rs 78.88 crore.

In FY 2018 exceptional items include impairment of investment in wholly owned subsidiaries amounting to Rs 7.51 crore (against 63 lakh for FY 2017). It also included Rs Nil (against Rs 3.78 crore in FY 2017) towards impairment of financial assets being loan to and interest receivable from Wegilant Net Solutions Private Limited.

In FY 2018 retail segment contributes 81% to total revenue. No. of licenses sold grew by 4% to 5.51 million from 5.31 million in FY17.

In FY 2018 Enterprise & Govt. segment revenue grew 14% to Rs 64.7 crore compared to Rs 57.0 crore. It contributes 19% to total revenue. No. of Licenses sold grew 23% to 1.12 million from 0.91 million in FY17.

The company reported highest ever quarterly performance in Q4.

The Q4 performance is a testimony to strong business fundamentals supported by a great product line.

During the quarter, the company was able to improve profitability margins led by focused cost optimization strategy.

GST impacted working capital by 11 days. Adjusting for that one-time impact, it has seen improvement in receivable days compared to last year.

It is actively working to reduce working capital cycle through various strategies.

It has seen a strong pick up in retail segment post GST implementation and is able to sustain the growth momentum.

Retail segment which started the year with a de-growth ended with flattish revenue indicating continued customer confidence. However, the Enterprise & Government segment grew 14% resulting in overall growth of 6% at company level.

The growth momentum in the Enterprise & Government segment is mainly driven by rising acceptance of 'Seqrite' as the preferred brand for securing the data against rising threat of cyber-attacks.

With India moving towards digitization, the management sees a shift in retail and enterprises preference to secure their digital assets which gives it the confidence of increasing acceptability of cyber-security products going forward.

Due to seasonality, revenues & margins fluctuate.

R&D, G&A expenses are spread across four quarters and hence there is variation in EBITDA margin on quarterly basis.

Renewal ratio provides revenue visibility.

Retail Segment has renewal ratio of around 35%.

Enterprise & Govt. has renewal ratio of around 75%.

It has 8.4 million active licenses.

It has 34% market share in retail segment.

It has 4 Patents in US and has presence in 40 countries.

It has 318 people in sales and marketing team and Research & Development team has 389 members.

It has established a robust & diversified network and a dynamic ecosystem of Channel Partners in cities & towns across India to reach our end-customers.

It has 21,401 retail partners, 527 enterprise partners, 164 Government partners and 12 mobile distributors.

Mobile security has huge future opportunity as customers understand the need for Mobile security. This is a vast untapped Market.

Users in India accessed the Internet through their mobiles nearly 80% of the time in 2017.

72 crore transactions were done using mobile in 2016-17, a jump from 9.47 crore in 2013-14.

Cybersecurity predicts that there would be increase in threats to mobile devices.

The company hopes to improve market share, identify new SMB & Enterprise opportunities, expand channel partner network and strengthen sales teams.

Cybersecurity predictions for 2018 includes ransomware will be more vicious and Crpytojacking will be a new menace to deal with.

Enterprises are increasingly adopting security solutions to combat advanced cyber-threats.

Government is working on strong data protection regulations.

By 2022 around 6 billion people will be vulnerable to cyberattacks.

The company will have special focus on Tier II and Tier III towns.

It hopes to increase penetration and adoption of security solutions by offering unique value propositions.

It is exploring opportunities in Africa, Middle East & South East Asia.

Focus is on international expansion through consistent brand building and marketing efforts.

With rising awareness of cybersecurity among individuals and enterprises, the management sees the demand for IT security solutions going up from hereon.

Its ability to cater to diverse needs of customers through a range of products and specialized services supported by strong customer support makes it preferred partners for robust IT security solutions that customer is looking for.

The company has always endeavored to be ahead of the curve in terms of Research & Development efforts and will continue offering future-ready products to customers.

Efforts will be to achieve annual growth in retail as well.