Stock of this recently listed company has zoomed 50% in last six days

Post listing, institutional investors holdings in eMudhra increased by 3.28 percentage point to 14.99% as on June 30, 2022 from 11.71% as on May 27, 2022.

Shares of eMudhra continued their upward movement, hitting a new high of Rs 373.50 on rallying 12 per cent on the BSE in Friday's intra-day trade. In the past six days, the stock has zoomed 50 per cent from a level of Rs 248.95 after the company reported healthy earnings for the quarter ended June 2022 (Q1FY23).

eMudhra made its stock market debut on June 1, 2022. Currently, it was quoting 46 per cent higher as against the issue price of Rs 256 per share. The stock had hit a 52-week low of Rs 236.30 on June 22, 2022.

Meanwhile, post listing, institutional investors led by foreign portfolio investors and mutual funds hiked their stake in eMudhra by more than 3 percentage points. Institutional investors' holdings in the company rose by 3.28 percentage points to 14.99 per cent as on June 30, 2022 from 11.71 per cent as on May 27, 2022, the shareholding pattern data shows.

eMudhra is engaged in the business of providing digital trust services and enterprise solutions to individuals and organizations functioning in various industries.

It has strong digital signature certificate (DSC) expertise and is the only Indian company to be directly recognized by renowned browsers and document processing software companies such as Microsoft, Mozilla, Apple, and Adobe, allowing it to sell digital identities to individuals and organizations worldwide and issue SSL/TLS certificates for website authentication.

eMudhra has around 1.6 lakh retail customers and about 1 lakh channel partners in digital trust services segment. In enterprise solutions, the company’s client base is 614 and it has 277 partners in India and 288 partners in 21 countries. The company’s client base consists of a diversified mix of government, BFSI and private sector.

For Q1FY23, eMudhra reported a 44 per cent year-on-year (YoY) and 27 per cent quarter on quarter (QoQ) jump in its consolidated profit after tax of Rs 13.71 crore.

Earnings before interest, taxes, depreciation, and amortization (ebitda) margin remained stable at 40.1 per cent in Q1FY23, as against 40.6 per cent in Q4FY22, while improved 540 bps from 35.2 per cent in Q1FY22.

The margins improvement was driven by higher contribution from enterprise solution business and operational efficiencies.

Operating revenue grew 15 per cent YoY and 21.7 per cent QoQ at Rs 52.22 crore. Revenue from operations registered a strong growth primarily led by increase in enterprise solution business, especially in international markets, which grew 140 per cent YoY. The company has become a debt free at the end of June, 2022.

The management said the performance was aided by growth in international markets. This is also a reflection of enterprises globally adopting cybersecurity and paperless transformation solutions as part of enterprise digital initiatives.

The company looks forward to maintaining this growth momentum in its enterprise solution business backed by its competitive advantage, established presence in key markets and diverse product portfolio in the area of digital security and paperless transformation.

Rating agency ICRA expects eMudhra to continue to benefit from its established market position in the digital authentication market and enterprise solution segment coupled with healthy financial profile maintained by the company.

Going forward, the company is expected to maintain the healthy financial risk profile supported by healthy operating margins and low debt levels. Its ratings also take comfort from extensive experience of the promoter in the information technology industry and eMudhra’s established track record of operations and strong market position as a leading licensed certifying authority for issuing DSC in India, supported by its wide sales and distribution network across the country, it said.

The ratings are also supported by its diversified customer base in the DSC segment given it is largely retail in nature and established relationship with reputed customer base and strong order book in the enterprise solutions segment, ICRA said in a rating rational, which is valid till August 24, 2022.