Release Date: May 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Subex Ltd (BOM:532348, Financial) achieved an 11.1% year-on-year growth, the highest in the last decade.
- The company turned EBITDA positive for Q3 and Q4 of FY 2024.
- Subex Ltd (BOM:532348) secured strategic Tier 1 wins in Q4, including significant AI components.
- The company has maintained a strong cash balance above INR 100 crores.
- Subex Ltd (BOM:532348) has successfully retained key talent and reduced attrition rates.
Negative Points
- The company made an impairment provision of INR 148 crores, impacting overall profitability.
- Profit after tax for the quarter stood at negative INR 86 million, worsening from the previous quarter's negative INR 49 million.
- Despite revenue growth, EBITDA for the year remained negative at INR 157 million.
- The company faces a tough talent market, making it challenging to retain and attract key personnel.
- Subex Ltd (BOM:532348) has not provided specific forward-looking growth targets, causing some investor uncertainty.
Q & A Highlights
Highlights of Subex Ltd (BOM:532348) Q4 FY 2024 Earnings Call
Q: When you took over last year, you have been talking about GenAI. Can you explain with at least two use cases where you have got the customers for GenAI, and how you are helping them to improve their performance? Also, how confident are you to continue 10%-plus growth for the next year and so?
A: We have several use cases for GenAI, including contract assurance and handset fraud detection. Both use cases have been successfully implemented with paid customers. Regarding growth, we aim for a breakout year with significant growth beyond the 11.1% achieved this year.
Q: The impairment has resulted in a loss of INR145 crores. Are you going to write off that from the share capital reserve?
A: Yes, the impairment will be taken out of our reserves. This is a routine annual exercise to assess the goodwill carrying value.
Q: In FY '23, we had 43 customers for IDcentral and 21 for security. How many customers have we added this year?
A: We have added around 125 customers for IDcentral this year. I will confirm the exact numbers and get back to you.
Q: What is the strategy behind the account aggregator license? Is Subex looking to pivot into the fintech space?
A: We already operate in the fintech space, particularly with telcos. The account aggregator license is specific to the Indian market, and we are evaluating its business case and potential investments.
Q: Are there any surprises like the impairment we should expect in the next quarter?
A: Impairments are routine annual exercises, and we do not foresee any similar surprises in the next quarter.
Q: Are we planning any roadshows or analyst meets to generate more interest in Subex?
A: Yes, we plan to start roadshows and analyst meets in the next quarter to showcase our growth and future plans.
Q: What are the investments required for the breakout year you mentioned?
A: We have already budgeted for the necessary investments to support our growth plans. These include investments in product development and technology.
Q: Can you provide more details about IDcentral and Sectrio in your presentations?
A: We will consider including more detailed updates on IDcentral and Sectrio in future presentations. We are also exploring the integration of GenAI into Sectrio.
Q: What is the progress on Subex's account aggregator license?
A: We have received in-principle approval and are evaluating the business case and necessary investments before applying for the full license.
Q: Are there any plans for annual increments and headcount growth?
A: Our annual increment cycle is in June-July. We are well-staffed currently and will hire as needed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
