Earnings Call Transcript - XNSE:EMUDHRA 2026-11-05

Operator

Ladies and gentlemen, good day, and welcome to the eMudra Limited Q2F5 2027 Earnings Conference Call. We have with us today from the management of eMudra Limited, Mr. Venkat Raman Srinivasan, Executive Chairman, Mr. Kaushik Srinivasan, Full-Time Director, Mr. Arvind Srinivasan, Director, Mr. Itesh Raj Pariyani, Chief Financial Officer. Thank you, sir. As a reminder, all participants will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should we need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone telephone. Please note, this conference is recorded. I now hand over the conference over to Mr. Venkat Raman Srinivasan, Executive Chairman. Thank you, and over to you, sir.

Venkat Raman Srinivasan, Chairman

Thank you. Good afternoon, everyone, and thank you for joining us for E-Mudra's Q2 and first half F8-2027 yearnings call. Today I want to speak about two things. The first is a strong quarter for our core business. The second is a certificate security incident in our TLS business which took place in October after the quarter closed. I will walk you through our results, what happened, what it means for the rest of this year, and why our long-term direction is unchanged. Let me start with the numbers. In the second quarter, Total income was 209 crore, up nearly 20% over last year. The EBITDA was 51.3 crore, at a margin of 24.5%, and profit after tax was 33.4 crore, up 26% on Iranian basis. For the first half, the total income was 402 crore, up 23%, and PAD was 65.4 crore, up 27%. The margins year-on-year expanded on both lines, which tell us we are going with discipline. It is important to note that the growth is coming from enterprise solutions built on our own five product platform that grew 36% and now makes up two-thirds of our revenue. International markets also contribute two-thirds of our revenue. This is a more product-led and more global e-mudra, less dependent on any single market or single line of business. As our scale has increased, so have our working capital needs. Receivables have grown in line with the business. However, in terms of the number of days, it remains around the same level. Though the revenue has increased, we have paid the creditors without delay, resulting in decline in creditors in spite of the increase in revenue. And this has weighed on the operating cash flow in the first half. Our incremental planned capex for the year is around Rs.23 crore. We continue to open new doors this quarter. In Africa, we won the national PKI for Nigeria's satisfying authority regulator, our entry into that market. In CIS, we secured our first win in Kazakhstan with a defense entity, and our pipeline in Kazakhstan and Uzbekistan is growing. We added significant clients in Indonesia, the Philippines, Germany, Qatar, and Abu Dhabi. Cross-selling with cryptos brought in three more large enterprise clients in Europe, and in UAE, our trust services pipeline keeps building as we await our license. The market is moving in our direction. Customers now face fixed deadlines on post-quantum migration, on identity for machines and AI agents, and on data privacy. These are now board-level topics, especially in banking and regulated industries. We have moved early. Our platforms already support hybrid post-quantum certificate authorities and dozens of hybrid post-quantum certificate types. Because we own all our IP, we move at our own pace without depending on anyone else's roadmap. Now let me turn to the internet. On October 17, an independent researcher reported weak keys in eight intermediate certificates within one of our public TLS hierarchies, created during a key generation ceremony in April 2025. We revoked all eight the very next day. None of them had been used to issue any certificate to end customers. And our route keys were not affected. Our infrastructure was not compromised, no data was breached, and security controls remained intact. As a precaution, the browser programs have disrupted the related route. We moved potentially affected customers to replacement certificates from other trusted providers at no cost to them. We have appointed KPMG as an independent external reviewer and a full review of our ceremony procedures underway. We take this seriously and we will share what we learned. In the last two weeks, we did see some impact on our reputation as customers sought to understand what the incident meant for them. The impact has not been as pronounced as it might have been thanks to our diversification across geographies, across product, across service lanes and brands, and it is slowly settling down. We continue to be transparent about what happened, what we have learned, and how we are committed to improving ourselves. I also want to be clear about the scope. This affected only our publicly trusted TLS business, which was about 1% of our revenue. Our digital signatures, eShine, and all five enterprise platforms are not affected. Given the limited returns from TLS relative to our overall business, we have decided to exit the sale of publicly trusted TLS certificates and focus fully on our core platform. In the US, the only customer in the University Federation who will be directly affected was using our Certinext product and TLS certificate. They have decided to continue to work with us and asked us to provide the TLS certificate to any other TLS vendor on a subcontract model. This is a big morale boost for us and this is likely to considerably reduce our reputation risk in the US market. We are actively working with the University Federation to transition its members smoothly. We had to walk away from a couple of deals that were directly tied to TLS, but we continue to pursue private PKA opportunities there, where we are seeing a healthy pipeline. More broadly, there is enough global opportunity for our platform, and we will course correct to focus where we see maximum traction. We expect the incident to reduce our FY27 total income by about 20 to 25 crore and our PATH by about 10 to 12 crore, largely in the second half. At the start of the year, we guided a revenue of about 825 crore and PATH of about 137 crore, about 25% PATH worth. We now expect our revenue to be about 800 crore and a pat of around 125 crore. In our opinion, the impact of the incident may only last for next two quarters, after which it will be business as usual. Our priorities for the second half are simple. Complete the external review and strengthen our processes, keep growing our enterprise platform in our focus markets, and turn our new market entries into lasting business. To sum it up, while we went through the incident, the core grew 23% in the first half. And the demand for trust identity and post-quantum readiness keep rising. I am confident about the road ahead. And we proposed to hold one investor meet in Trident Hotel Mumbai on December 2nd, and we welcome all of you to attend that meeting. Thank you for your continued trust in eMudra. I will now hand it over to Ritesh to walk you through the financials.

Ritesh, CFO

Thank you, Chairman. Good afternoon, everyone. I am pleased to share the highlights of our Q2 and H1 FY2027 financial performance. Starting with Q2 performance, our total income for Q2 FY2027 was INR 2,090 million, marking a 19.6% year-over-year growth. Growth profit for the quarter grew 19.6% year-over-year to INR 1,167 million, with a margin of 55.8%. EBITDA for the quarter was INR 513 million, resisting a 21.6% year-over-year growth, with a margin of 24.5%. Profit after tax for the quarter was INR 334 million, reflecting 26.3 year-over-year growth with a margin of 16%. Now, coming to H1 FY2027 Performance. Our total income for H1 FY2027 was INR 4018 million, marking a 23.4% year-over-year growth. Gross profit for the H1 grew 27.2% year-over-year of to INR 2240 million, with a margin of 56.5%. EBITDA for the H1 was INR 1017 million, resisting a 30.2% year-over-year growth, with a margin of 25.3%. Profit after tax for the H1 was INR 654 million, reflecting a 27% year-over-year growth, with a margin of 16.3%. That concludes my remarks. Thank you, and we may now open the floor for the question-and-answer session.

Operator

Thank you very much, sir. Ladies and gentlemen, we will now begin with the question-and-answer session. If you have a question, please press star and one on our telephone keypad and wait for a turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and 1 again. Ladies and gentlemen, if you have any question, please press star and 1 on your telephone keypad.

Operator

Ladies and gentlemen, if you have any questions, please press star and one on our telephone keypad. Ladies and gentlemen, if you have any questions, please press star and one on our telephone keypad.

Operator

The first question comes from Surbhi Soni from Wellweather Capital. Please go ahead.

Surbhi Soni, Analyst — Bellwether Capital

Hi, thank you for the update. Just wanted to get some sense on how large is the U.S. private PKI business as a percentage of the total enterprise business that we have in India. And like you mentioned, sir, that you believe that private PKI business would continue to grow and the outlook is healthy. Would it be possible for you to share any outlook on that side from a three to five year perspective?

Venkat Raman Srinivasan, Chairman

You see, the U.S. business, we have two services business which was acquired through ICON and 295 International, and last year around $6 million is the solution business. So out of that solution business also, 9 million, 9 million is the solution business. Out of that solution also we have the MSigner and the other product as well as this 13x product. So in the Certinex product, it is not affected. Only the TLS business we are withdrawing. So in the U.S. TLS business, our total TLS business was around 8 crore. On that, the U.S. TLS business alone was only 4 crore. And even Certinex, even this in common, which is the university consortium. They now have decided to continue with us and use our Certinex product. They are saying, through your product only, you source the TLS certificate in the back end. Instead of our M-Saint TLS, source it from some other provider, and you only continue to frontend everything and handle us. So, what may be affected is only the TLS, and TLS was only 4 crore up to now. But two, three other deals we were discussing on the TLS, which may be around less than a million dollars, maybe 600, 700,000 dollars. Now, those things we will withdraw because we have decided to withdraw from the business. So that's why the reputation effect, it may not be contained only to the TLS business, it could be on other things also. That's why overall considering the diversified geographies, considering the brand name used in each geography, brand name which is different part of the business is sold, all the things we estimated almost in the next two quarters, 25 crores of top line may be affected. Instead of 825, it could become 800, but that effect will gradually went down. And on that very important point is since the affected customer itself and this entire incident just affected only one customer. All other people thinking that they could be potentially affected because if our other routes are also distrusted, that's why we have changed all of them to Sectigo or some other providers, SSL Certigate, but actually in reality they are not affected. The affected is only one customer, which is this University of Federation in the U.S. Now, the good thing is they have decided to continue with us. So that will, that in itself will contain the reputation risk in a big way. So that is where we estimate 25 crore revenue reduction and maybe 10, 11 crore profit reduction. Maybe after two quarters, the effect will wane away.

Kaushik Srinivasan, Other

Yeah, but to also address your point on the opportunity for private PKI, it's pretty large because anything outside of website certificates, if you're doing devices, IoT devices, wearables, and so many other things, those require private PKI, and those are sorts of the opportunities that we now go after, along with us here.

Surbhi Soni, Analyst — Bellwether Capital

That's very helpful. And second question is on the India side, there are opportunities on the DPDP side and LEI. Especially on the DPDP side, have you started doing any POCs with the customers and what kind of timeline should you look at in terms of, you know, revenue recognition on DPDP side and contracts will materialize?

Kaushik Srinivasan, Other

We already won a deal in the last quarter itself for DPDP. This is for a NBFC. There is quite a bit of momentum in the current quarter. We should be winning many more deals for the data privacy. And I think next year should be, you know, where because the DPDP is getting enforced by a certain timeline, we should see a lot more traction in the next year. So a number of conversations are going on with B2C, banks, NBFCs, private sector. It's across the board because DPDP legislation applies to everybody. The LEI we launched, but we did not seriously start marketing. Obviously, our attention was focused on this, but now we will again refocus on the LEI business as well.

Surbhi Soni, Analyst — Bellwether Capital

Kaushik, on the DPDP side, typically, what are the deal sizes here, say, if you were to implement this for, say, a large NDSC, or, say, what's up to three banks in India, then typically, how would a deal size look like here?

Kaushik Srinivasan, Other

These are typically in the range of 40, 50 lakhs to 1 crore, 2 crore for larger entities, but mid-size entities is about 40 or lakhs, say.

Surbhi Soni, Analyst — Bellwether Capital

Understood, understood. And except that this year, say from FY28, FY29 and FY30 onwards, how should one think about margins going ahead at a consolidated level?

Kaushik Srinivasan, Other

EBITDA margins are around 25%. That we will try and maintain because obviously our focus is more on the solutions business, which is anyway slightly high gross margins. As we continue to focus on that, EBITDA margins should kind of be at that same 25% level.

Surbhi Soni, Analyst — Bellwether Capital

Got it. Got it. Thank you. I'll fall back in the queue. Thank you.

Operator

Thank you, ma'am. The next question comes from Sagarika Chetty from Antic Stock Broking. Please go ahead.

Sagarika Chetty, Analyst — Antic Stock Broking Limited

Yeah, hi. I don't know. Yeah, so I just wanted to understand the service performance in the past service. I mean, is that pain point behind us, or can we accept the problems for service companies or the rest of the financial aid? Can we give more clarity on that? And the second question is, how has Cryptash performed this quarter? Is there a broad range in what it has been in the last two quarters? If you can also quantify the contribution from Cryptash.

Kaushik Srinivasan, Other

Could you repeat your first question? I understood the second question was on cryptos because your voice became a little feeble.

Sagarika Chetty, Analyst — Antic Stock Broking Limited

The first question was on just the clarity on the plugins around the digital trust services business, right? I understand that you had sort of explained the issue, but going forward, what, at least for the rest of FI 27, what kind of trajectory are you expecting in this segment? If you can give more clarity on that.

Kaushik Srinivasan, Other

On the first question was on the trust services, is it?

Sagarika Chetty, Analyst — Antic Stock Broking Limited

Yes, yes.

Venkat Raman Srinivasan, Chairman

The Trust Service has already indicated because the no new use case is given by the government and all that. So that way even we had not projected much growth for the Trust Service. It was projected to be around 10 to 12 percent growth only. So that kind of growth may be there, but even if it is slightly lesser, it will be more than compensated by the solution business and all that.

Kaushik Srinivasan, Other

Yeah, and on Cryptas, the revenue run rate for the quarter was around 30 crore, and they are, I mean, so more and more deals they are selling with eMudras products. Obviously, to that extent, the margin profile for Cryptas is improving. So, this year, I think they should make almost a million dollar or little over million dollar EBITDA up to December.

Sagarika Chetty, Analyst — Antic Stock Broking Limited

Okay. Okay. Thank you so much. I'll join that with you.

Operator

Thank you, ma'am. The next question comes from Pankaj Shat Therwa from Avis Capital. Please go ahead.

Pankaj Shat Therwa, Analyst — Avist Capital

Yeah, good afternoon, and thanks for the opportunity. My quick question is on the press services again. So, last time, you were given to understand that Q2, the disruption may continue, and it will get normalized starting Q3. So, just wanted to understand what is the status from a numbers perspective on that. That's one. And second, the related question is that last quarter we saw disruption in press services, and this time we had the TSL issue. Is there something which we should be kind of assuming that is a normal part of the business?

Venkat Raman Srinivasan, Chairman

The disruption in trust service was majorly in token. Because in the token, it has to be a FIPS 140 level 3 compliant token, and it was only released in September middle or something like that. So that's where the token revenue got affected. So this third, fourth quarter, it will improve. But from a pure DSC side, because in the token, if you see, the margins are less. Whereas in the DSC itself, the second quarter had a little better volume, third and fourth quarter, because second quarter is the main season, in third quarter, October is the season, but November, December may not be the season. So, maybe it will be around the similar levels only. It cannot be a bigger growth, and even we had projected only a 10% growth in the entire. But on the other side, E-Sign is growing very much. E-Sign is also in the trustee. E-Sign is enterprise. E-Sign is growing. More and more E-Sign, remote-sign, those kind of enterprise-related products will grow in a bigger way. Almost we, one year back, we were doing one lakh, two lakh esen. Now we are doing almost seven, eight lakh esen per day. So, those things will grow, but pure trust services, which is the conventional digital signature, may be flat to 8-10% only.

Kaushik Srinivasan, Other

Yeah, but the other question that you had was more related to the incident. So, it's not really, I mean, so it was basically a problem and widely covered in the sense that our TLS line of business kind of had an incident, right? So, which we have spoken about extensively through stock exchange filing. So, the first one was more industry-led, second one was more eMudra, but it's not normal in the sense that disruptions are, I mean, So these things happen, but it's not expected to continue as such.

Pankaj Shat Therwa, Analyst — Avist Capital

Thank you, sir.

Operator

Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. The next question comes from Deepak Kumar from IGP India Family Office. Please go ahead.

Deepak Kumar, Analyst — IGP India Family Office

Yeah, thanks for the opportunity. My question is on this incident, because of this incident, are we like reviewing the other segment also, and though there is no direct impact, but in AI world, means what we have learned from this incident, or specifically to other segment?

Venkat Raman Srinivasan, Chairman

Other segment business will not be affected. But from a technology perspective, whatever possible, we have to again analyze with the help of the AI and see what are the further securities to be put in place. That work is parallelly going on. It will be done. But business-wise, those things, other business are not affected. And this business is a very small one-person business. So that's where instead of – and one-person business also, there are other four or five reasons why we discontinued the business. Because if you see earlier, the global it was allowed to issue a 820 or 840 day certificate, and then later on gradually it is coming down to one year, then one year it has come down to 90 days, 90 days is coming to 46 days and all that. This is one side. Then the other side, earlier there were DV, OV, EV, and EV was a very high price item, and gradually the browser started not giving any importance to EV, so people are not buying the EV. That is another side. And the third most important side is that Google itself started issuing all the DV certificates free of cost, 90 days. So Google also issues 90 days free, we also issue 90 days at a cost. So nobody will buy from us. So that is why in spite of doing this business for 6-7 years, even after we went live in 2021, it is almost 5 years, we could not improve it to more than 1%. So considering all these, but the compliance requirement is very high. And then again, nowadays what is happening because every geography want their data center to be in their respective locations. So that also adds to the cost. So considering all these only, we came out of that. But the other business are not like that. So I don't think any effect will be there and other business will continue. But AI based, how to improve security by using the AI that we are continuously, our technology teams are working at.

Deepak Kumar, Analyst — IGP India Family Office

Yeah, so some sort of analysis and external agency analysis on the other segment of the business will help if we can do that on the other segment. We understand that it was only 1% of the revenue, but we concern only.

Venkat Raman Srinivasan, Chairman

If you see the other segment, except trust service segment, all the other product segment, we are not storing any data or we are not doing anything. These are all going to government to be affected and all that on a license basis where the data is stored at their risk and they are storing wherever they want to store. So this kind of risk cannot come in that business. Only in India trust services, it can be stored at their risk. We are more stringently securing you. So that way I don't think any big risk is there in the other segment.

Deepak Kumar, Analyst — IGP India Family Office

Thank you.

Operator

Thank you, sir. The next question comes from Pranay Jain from Banyan Priyad. Please go ahead.

Pranay Jain, Analyst — Banyan Priyad

Hello, sir. Can you hear me? Am I audible?

Operator

Yes, sir. You are audible, sir.

Pranay Jain, Analyst — Banyan Priyad

Thank you. Thank you for the opportunity. I had three questions. Number one was, can you, you know, let me know what was the constant currency growth for the enterprise business, both like services as well as the enterprise solutions business on the international side? That will be question one. Should I ask the other two questions together or?

Venkat Raman Srinivasan, Chairman

No, we will go one by one. If you see our total business, roughly around 800 crore, almost 275 crore is the India business. Balance almost 525 crore is the international business. International business, again, if you see currency-wise, it may be 5 rupees, something like that. So, constant currency also, it is a big growth, maybe 1 or 2% on the overall, maybe only due to currency, other thing will be on a dollar to dollar basis itself.

Pranay Jain, Analyst — Banyan Priyad

I understood.

Venkat Raman Srinivasan, Chairman

So, for 520 crore, you can work out what was the dollar price at that time now, that will be the only difference.

Pranay Jain, Analyst — Banyan Priyad

Okay, got it. Got it. Secondly, my question was whether when we sell our 13x product, was the bundling of TLS an important element when 13x was getting sold earlier, and will it have an impact going forward?

Venkat Raman Srinivasan, Chairman

No, not required at all. 13x is a neutral product. With 13x, we can connect any SSL given by any vendor. So in a lot of cases, it is sold standalone. It is not sold along with the... TLS. So, in this case, in in common, it was sold together. In some cases, only SSL is sold and not searchnext also. So, it is not affecting the TLS itself will not affect and now when we sell searchnext, we will either we may bundle or the part itself directly by the SSL from Sektigo, SSL from SSL.com or Godaddy or from DigiCert and then they use it through the searchnext. Understood. Thank you.

Pranay Jain, Analyst — Banyan Priyad

Got it. And my last question is on, so, like, will you be facing issues in terms of retaining customers as well, or the cut in your revenue estimates is more to do with the new deals that you were expecting to win?

Venkat Raman Srinivasan, Chairman

I will explain to you geography by geography, then you will get a better sense. For example, if you see India, In India, our revenue is not likely to be affected at all, because now everybody knows the America versus India sentiment, why Google distrust something, and various things. Though these browsers distrust at us, it is not unique. So many other people know Sektigo has done some 108 million certificate wrong, then some other GoDaddy has done some 5 lakh certificate wrong, then Alika has done something wrong. But that's why people know that's why somebody is distracted or not. So from this geography, that reputation risk is not at all there. And the segment in which our products are there, we are unique and mostly if, let us say, government banks do not choose our product, they may have to choose the American product. So we do not, we, I don't think we are facing any reputation risk. And even we saw immediately on that date, next date, next date also, whatever digital signature sale, e-signature sale, everything was increasing or around the same line, nothing got affected. Then if you take Europe Cryptos, again what is happening, because everything is sold in the brand name of Cryptos and Prime sign, not on the E-Mudra brand sign. Our product is also sold in their brand name because it's a quiet company. And another thing is they are all in European language, so they do not read this English language, Twitter and LinkedIn, by which a lot of unwanted messages are all passed, that they are isolated from them. So it is not affecting them. Then you go to U.S. In U.S. what are we doing? Two service business acquired by Icon and 295 International. They are all sold in that respective brand name. So, they are not affected. Then, even what product we are selling, we were earlier selling, we had a subsidy company called 13next, and under 13next, powered by eMudra and all this, but immediately, we removed the, because of all this message thing, we removed the eMudra link to 13next and trying to brand 13next into an individual positioning. Still, some business may be lost, but predominantly, still all the customers, all the conversations are continuing, and Africa almost isolated. Middle East, a little bit effect is there, and Far East, if you see Philippines and Indonesia, almost no effect. So, that's where the reputation risk is contained to U.S. and a little bit of Middle East. So, that's where we estimate only 825 crore, 800 crore could be there for the year as a whole. And that also within two quarters we will overcome. On that, the major booster is the client who is directly affected himself is continuing with our 13X product and also through a subcontracting for SSL. So that itself is a big positive sign.

Pranay Jain, Analyst — Banyan Priyad

Right, right, understood. If I can just ask one more question. I wanted to understand, you know, while you've spoken earlier about AI being a tailwind for the industry, we see a lot of vulnerabilities that AI is being able to catch. So, do you see that as a threat for the incumbents?

Venkat Raman Srinivasan, Chairman

Thread for the A is a thread for the general. Bank, any financial service, NBFC, all those industries, AI could be a threat, but they have to strengthen their security architecture and all that. For us, AI could become a positive also, because before them, we also strengthen everything, then we can also send it as a proposition to them. Maybe I will ask Kaushik to explain better about AI, what are all positive for us.

Kaushik Srinivasan, Other

Yeah, so AI in many ways has significantly accelerated our ability to deliver products at a faster pace. And because AI has now significantly increased the attack surface for many organizations, and our products mainly focus on user identity and device identity and data security, it's probably a big plus as enterprise trying to bring this zero trust posture, right, where everything has to be verified. So, identity, management, authentication, strong authentication, strong encryption of data, all of these are becoming big needs of the hour. And more with this transition to quantum computing, everybody is now mandated to adopt post-quantum cryptography. That is also an active area where people are looking to invest. So, the areas of cybersecurity investments broadly fall in the line of the products that we have already developed and put in place, Which is why BC hopefully continued opportunity for our products in the market.

Pranay Jain, Analyst — Banyan Priyad

Understood. This was very helpful. Thank you and all the best. Thank you.

Sagarika Chetty, Analyst — Antic Stock Broking Limited

Thank you.

Operator

Thank you, sir. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad.

Operator

Ladies and gentlemen, if you have any questions, please press star and 1 on your telephone keypad. The next question comes from Subham Sahani from RSVN Ventures.

Operator

Please go ahead.

Subham Sahani, Analyst — RSVN Ventures

Yeah, hi. Thank you for the opportunity. So I wanted to understand your view on the DPDP side of the business you're planning to do with private trust, right? So what all things are you planning to do in the whole lifecycle of the DPDP? Actually, there is consent management, and there is also the whole lifecycle of the data that stays with the company, right? And then you have to delete it after the data usage is complete as per the DPDP law. So what all products are you planning to build on it? And if you could provide any guidance on how big this opportunity could be in terms of number, top line or bottom and whatever you have in mind.

Kaushik Srinivasan, Other

Yeah, so from a product perspective, our product is fairly comprehensive. It deals with consent management, it deals with data discovery, data classification, data protection, basically data retention, governance. It deals with third-party vendor, data management, their lifecycle, their workflows, data subject access requests. So, pretty much the entire stack that somebody needs to put in place for DBDB compliance as a whole, and not just limited to consent. So, that's where, and also the whole audit trail, access records, historical use of data. So, the whole life cycle of as soon as you collect data to what you do with it, to where you send it, and how, you know, it's protected, etc. is kind of fully captured in the product. The idea is next year, how do we capture, let's say, 40-50 clients with the kind of value that we had, you know, ascribed earlier. That's the immediate scope because typically the first phase will largely look at entities that are, you know, somewhat, you know, focused on customer data and meaningful scale and give some kind of a value of, let's say, 40-50 lakhs, 1 crore, and that's probably the opportunity size that we are kind of looking at. Although there may be a much In a much larger universe, there will obviously be a phased implementation of many capabilities over the next two, three years, but this is our target market in the first year.

Subham Sahani, Analyst — RSVN Ventures

And also, do you see any other companies who are building in the same space? Because DPDP act compulsates like all the major companies in India and this could be a major opportunity going forward.

Kaushik Srinivasan, Other

There are quite a few companies that are building various capabilities, but many of them are focused on only one or two layers. There are very few select names that are focused on the entire DPDP stack, and our whole expertise has been on data protection, which is where we score very strong. So while some of the layers of DPDP could get commoditized with many players, the consent management is not, you know, it's pretty commoditized, but as you go more deeper into data protection and data retention governance and data loss prevention, then the number of players that do the kind of capabilities then start becoming very limited.

Subham Sahani, Analyst — RSVN Ventures

Okay, great. Thank you. Thank you.

Operator

Thank you, sir. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. I repeat, ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. We have a follow-up question from Surbhi Soni from Bellwether Capital. Please go ahead, sir.

Surbhi Soni, Analyst — Bellwether Capital

Yeah, hi. On the 23 crore investment that you mentioned, can you spend some time on where and which product seats would this be directed towards?

Kaushik Srinivasan, Other

The 23 crore incremental capex is mainly on completing the data privacy stack. Obviously, we have developed most of the modules, but incrementally, there are a few modules that need to get developed. And also some improvement in MSigner, mainly for certain, adding certain AI capabilities, and also for certain ID verification that we have to build as part of our global TLS operations. Oh, okay. Sorry, global digital signature operations, not TLS.

Surbhi Soni, Analyst — Bellwether Capital

Got it, got it. And on the post-fantum side, have you started receiving any inbound inquiries or any POCs that you have started on the PQC side itself?

Kaushik Srinivasan, Other

Yeah, yeah, quite a few POCs are ongoing. Some of those will materialize. I think one has materialized into an order. Many more will happen in the next quarter, next year onwards, actually. Because deadlines then start coming.

Surbhi Soni, Analyst — Bellwether Capital

Deadlines are related to PQC?

Kaushik Srinivasan, Other

PQC adoption and migration. Basically, 2029. So, many companies are kind of planning. They will start planning from next year onwards.

Operator

Understood. Cool. Thank you so much.

Operator

Thank you, ma'am. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad.

Speaker 7

Moderate, I think we have a question. Maybe you can request.

Operator

Okay, sir. The next question comes from Amit Chandra from HDFC Securities. Please go ahead.

Amit Chandra, Analyst — HDFC Securities Limited

Thanks for the opportunity. So, my question is that, you know, With these events which have happened, obviously, I explained about what the implications are. So are we seeing any kind of pushback from our existing clients in terms of the issues which are being there in terms of the certification issues or overall issues related to cybersecurity and all? And in terms of the existing contracts or the contracts which you have won, is there any kind of delays that we're seeing in terms of ramp up, especially in the RBI contract that we announced sometime earlier? So, if you can give some clarity, it will help also. Thank you.

Venkat Raman Srinivasan, Chairman

No, from an existing business or existing contract, no effect at all. And as I said, the only affected party was the U.S. University. Nobody else is affected at all because we had not issued any certificate out of these things and all this. So that way there is no effect at all. But even the U.S. University Federation, they continue to work with us. So from an existing contract, absolutely zero termination, zero anything. So nothing at all. Out of the new customer also, only the potential TLS customer, because we are withdrawing from the business, they are not acting, and other people little bit getting delayed. But otherwise, nobody, because they're distrusting or cancelling the certificate and all this in this industry is very common, and the customers are aware of this, because several times even interest has cancelled, not a certificate, certificate has cancelled, not a certificate, then Godaddy has cancelled, all the SSL.com has cancelled, So that way it is not new to the cyber security and industry people, though the media blew it up in a very big way. So that way the impact is very minimal. And as I said, the impact may be only confirmed a little bit to the US market and the Middle East market. So that's where we estimated around, instead of 825, it could be 800 and fat, maybe 10 crores, less kind of thing. And next year, it will become normal. Almost it is getting normal even today.

Amit Chandra, Analyst — HDFC Securities Limited

Okay. So, just a clarification that the enterprise obviously is the, you know, 60% of our revenue within that we have the cybersecurity, within that, you know, over the overall cybersecurity business, we have, like, Secure, Pass, and CertainExt. So this TLS was a part of your, you know, which is like, you know, the device identity and authentication service. So in the press release, you said 1% revenue from TLS.

Venkat Raman Srinivasan, Chairman

TLS is not a device identity and authentication. TLS is only a website identity and authentication. Trusted, yeah, that is the only thing, so that was only 1%, because as I explained earlier, gradually this business is becoming, because Google is issuing 90-day free certificates, and a lot of large customers are all renewing the certificate through ACME protocol with automatic renewals, and so nobody is willing to pay money to get the certificate, so that's why this business is not a growing business, it's a declining business, and that is the reason, and forget the compliance and other things. That is the reason our board also decided to come out of this business. So, it is not a big business at all, and it is not always bundled with our CLM 13x product also. So, 13x is independently sold, is independently sold.

Amit Chandra, Analyst — HDFC Securities Limited

So, the offering that is the TLS certificate validity management, that is a separate offering, or is it because most of the enterprises to manage their certificates also is a big challenge for them? So, that certificate management business is a part of the 13 next offering, or is it separate from the existing 1%?

Kaushik Srinivasan, Other

This is different from the existing 1% Amit, because the 13x as a platform is independent of the TLS certificates that were sold, and most of the places where we sold the 13x platform, So, certifying, basically the TLS provider was a third party. So, it did not involve MSign per se, our own TLS. So, it's completely independent. Okay.

Amit Chandra, Analyst — HDFC Securities Limited

So, that business is not impacted, right? That business is not impacted. Okay. Understood. So, obviously, it's very encouraging to hear that it's not going to have any kind of an impact. But the point is, the only concern that we had is, in the short term, obviously, we're not seeing any impact. But over the longer term, maybe some of the newer initiatives that we're planning or some of the newer contracts which are there in the pipeline, do you see any kind of risk in terms of conversion of these contracts?

Kaushik Srinivasan, Other

No, we have spoken to most of our prospective customers. As chairman had indicated, the only contracts were couple of them in the U.S. where the service itself was to directly provide the TLS certificates, and that is obviously the one that is getting impacted, which is what we have revised our kind of top line and bottom line guidance. Beyond that, there is no other impact.

Amit Chandra, Analyst — HDFC Securities Limited

Okay. Okay. Thank you, Saran. All the best. Thanks.

Operator

Thank you, sir. There are no further questions. Now, hand out the floor to the management for closing comments.

Venkat Raman Srinivasan, Chairman

Thank you. I would like to thank everyone for joining the call today. We remain focused on delivering consistent performance and innovative solutions that enable secure digital transformation for our clients across the globe. For any additional information or queries, kindly get in touch with us. Thank you once again. Thank you.

Operator

Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using DoSrabass conference call service. You may disconnect your lines now. Thank you and have a pleasant evening.