Ladies and gentlemen, good day, and welcome to the Quick Heal Technologies Limited Q2 FY 2024 Earnings Conference Call. As a reminder, all participants in lines will be in 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 star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.
Good evening, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Quick Heal Technologies Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the second quarter and the first half of the financial year 2024. Before we begin, a quick cautionary statement. Some of the statements made in today's earnings conference call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions.
The purpose of today's conference call is purely to educate and bring awareness about the company's fundamental business and the financial quarter under review. Now, I would like to introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Dr. Kailash Katkar, Chairman and Managing Director, Dr. Sanjay Katkar, Joint Managing Director, Mr. Vishal Salvi, Chief Executive Officer, Mr. Ankit Maheshwari, Chief Financial Officer. Without any further delay, I request Dr. Kailash Katkar to give his opening remarks. Thank you, and over to you, sir.
Thank you. Good evening and warm welcome everyone to our Quarterly Earnings Conference Call. We are the pioneer of cybersecurity in the country and work tirelessly towards achieving our vision of being trusted by our customers in securing the digital world and aiming to grow as a reputed, reputable global market leader in the cybersecurity, cybersecurity industry. Q2 for this year is special in the journey of the company, as we have onboarded Mr. Vishal Salvi as the Chief Executive Officer of the company. He is very well known in cybersecurity industry, and he's here to take care of future strategy and direction of the company. Now, I request Mr. Sanjay Katkar to share a few thoughts on the industry.
Good evening, everyone, and thank you, Kailash. The world is transforming rapidly, and we are in the era of technology revolution. Constant technological advancements of the world come with inherent security risks with enlarged attack surface. There has been a paradigm shift in attack techniques and volume due to the adoption of new technologies like AI, ML in recent times. So we are the proud owners of Seqrite Labs, the largest in the country, which does grassroots research on the threat factors to protect our customers on a daily basis. I would now request Vishal to talk about the company's strategies and performance.
So thank you so much, Kailash and Sanjay, and good evening, everyone. See, the cybersecurity market is deeply fragmented, with organizations using more than qualified tools on average. And this adds to the huge complexity and operational challenges for the professionals, and especially with the shortage of skilled manpower, it really adds fuel to the fire. So we are deeply empathetic to these challenges faced by the Chief Information Security Officers when it comes to managing and then integrating all these multiple security products. And hence, you know, innovation, simplification, and building secure technologies is very core of our purpose and the key mantra for solving these cybersecurity challenges for our customers. So we take pride in being India's only full-stack enterprise cybersecurity platform provider through our brand called Seqrite, to offer integrated, modular, scalable, sentient, easy to deploy, and easy to operate solutions.
It has been a busy and exciting quarter personally for me, and our business continues to evolve as we move gradually towards a holistic cybersecurity player, protecting the consumer as well as the enterprise businesses. The enterprise business now represents 40% of our top line, as compared to 20% in FY 2021. Our enterprise segment has been growing at a CAGR of 21% over the last 3 years, against the industry growth of 11%. We are the market leaders in the SMB security market in India, and starting this year, expanding our customer segment to mid and large segments.
We have refined our go-to-market strategy in terms of adoption of platforms architecture, focused on brand and marketing, building channel partners' ecosystem, addressing our target segments. We continue to participate and share our thought leadership in the cybersecurity domain across several forums, and we have done multiple global events, to make sure that we are able to share, our thought leadership and spread our brand message. Our consumer business has started to regain momentum after facing headwinds in the recent past. We recently launched Quick Heal version 24 with a groundbreaking and unique features like metaProtect , a cloud-based security management platform, revolutionizing the consumer cybersecurity experience. There is still a huge latent potential in the market as the penetration of AV in India is only 20%, whereas the global developed geographies like U.S. and Europe have reached up to 50%.
We have focused our marketing efforts towards consumer awareness in our region, in our country, and trying to make sure that we are able to look at and tap that headroom that exists as far as our market is concerned. I'm pleased by the progress that we have made in defining our strategic roadmap, covering areas of growth, relevance, operational excellence, branding, and lastly, but more importantly, our people. The team is well poised and focused on execution of the same, and with this, I would like to now invite Ankit to talk about our financials for the quarter. Thank you.
Thank you, Vishal, and good evening, everyone. The consolidated revenues for the quarter stood around INR 78 crore, which grew by more than 52% on quarter-on-quarter basis. Our total expenditure remains flattish at around INR 65 crore in the quarter. As we operate with high gross margin, the revenue growth has significantly flown into the bottom line. EBITDA for the quarter stood at 14%, amounting to INR 11 crore, while PAT stood at 16%, amounting to INR 13 crore. Coming out of a challenging and exceptional period setting starting H2 of the previous year, we believe a year-on-year comparison at this stage would not be the right metric of benchmarking the performance. On a half year basis, we plot revenue of INR 130 crore and breakeven at the PBT level. Our newly introduced products are gaining market traction, instilling confidence in us.
We onboarded 82 clients, 82 enterprise clients for our new products in H1 FY 2024. We have also been able to generate good traction in the international markets like Africa and some parts of Europe in the quarter. Our continued investment in research and development, supported by focused sales and marketing, has yielded consistent growth in both our revenue and profitability. One important update which I would like to bring to your notice is that we have completely written off our investments in L7 Defense on a transaction basis. There we are a minority investors. While the startup still continues and the operations in Israel is a growing concern, we have taken this conscious call as we do not see ramp up in the company's performance as were the expectations.
Our balance sheet is strong, with cash and cash equivalents over INR 182 crore, and we are a zero debt company. We are proud to have achieved a significant milestone of empowering over INR 50 lakh lives through our CSR initiative to date. With this, I would like to open the call for question and answer session. Thank you.
Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question, may please press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Chirag Kachhadiya from Ashika Institutional Equity. Please go ahead.
Hi, Vishal. A couple of questions and, and in terms of strategy, what we're planning, I would like to.
Mr. Chirag, we are unable to hear you clearly. Can you use the handset mode while speaking and not the speaker phone?
Hi, now it's, n ow am I audible?
Much better, sir. Thank you. Please proceed.
Yeah. Yeah. So I have a couple of questions to Vishal. So as you joined and, the Quick Heal is very, quite old brand in the industry and in India as well. So what strategy you are planning from next 3-5 perspective to navigate the growth? Because, the industry itself, is growing at a single digit, antivirus protection itself, and globally also, the growth rate is, if we exclude the cybersecurity space, is relatively in the single digit. So what, strategy is there? And also you mentioned that, we added, around 82 or so enterprise client in first half of FY 2024.
So what's the strategy to navigate the enterprise vertical, particularly going forward, and how we are tapping the client, and what's the broader thought process to, you know, at least growing beyond 10% or CAGR going forward? And also the strategy with respect to the margin expansion and, R&D spend going forward, what would the R&D spend as a percentage of revenue? Yeah, so few product questions from my side. Thanks.
So thank you. Thank you so much for, for your question, Chirag. And see, when you, when you look at in terms of our strategy, clearly, you know, we have, as you mentioned, we have a, a very strong heritage about the last three decades of working in this space, and we want to really now amplify that value, in the enterprise business. You know, it is, it is a new pivot that we've been, doing for the last 5-6 years.
So we do believe that, you know, we will focus heavily on that pivot, and therefore we have been, if you're tracking us, you would see that we have been investing in building a cybersecurity stack across Zero Trust, access control, data protection, EPP, MDR, XDR, EDR, mobile security platforms, right? All of these solutions are already now being generally available in the market, and we are now generating traction for those. So clearly, our strategy continues. While we continue to have a leadership position as far as India is concerned on the B2C part, our focus now is to see how we scale and start doing the same execution as far as our enterprise security is concerned.
Now, to do that, clearly, we need to have a strategy for, like I mentioned, the five areas of growth, relevance, delivery excellence, branding, and people. All of those five areas, we have a clear strategic roadmap in terms of what we want to execute and what we want to do in all of those. And, and so we will continue to double down on our product roadmap, and you will expect more features, more functionalities, modular, integrated architecture being deployed as far as our product suite is concerned. Now, apart from that, you know, one of the things that we are proud of is we've been having a very strong partner channel network as far as the B2C is concerned.
We continually leverage that for the SMB business and micro business, and we want to now, you know, replicate that into the large enterprise and the mid-market. So focus is gonna be in terms of adding more channel partners and distributors for our business. And then the third is about really you know the point that I talked about on branding and marketing. So Seqrite, which is our enterprise security brand, we want to make sure that it has the right mind share and recall, and then usage as far as the market is concerned.
So we are participating in multiple events, customer roadshows, you know, advisory groups, so that we are able to share with them exactly, what we do and how their solutions work, and create that, you know, perception and understanding of where we are, so that they are able to, you know, start using our product. And lastly, we do believe that, we have a very strong differentiator because we are indigenously developed, you know, technology made in India. And, you know, when it comes to something like a cybersecurity technology, sovereignty of a country is very, very important. So we already are there in national critical infrastructure, protecting many organizations, like, and, you know, like ISRO and, you know, the forces.
We want to make sure that we become, we will continue to be the good alternative of making India for our government business. And so we see a huge potential for us to actually start playing in that space. So that way, you know, we have a clear path which is defined for our go-to-market, so that we can grow the enterprise business. Now, I think that answers also your specific question on enterprise vertical, and so therefore, you can expect that we will see a lot more investment happening in our sales organization, strengthening our sales motion, and also building stronger and scalable and robust enterprise solution too for that. Now, on the margin expansion is concerned, see, we are, we are in the product business, right?
So, as we, as you can see, that we have actually been in a investment mode for the last three, four years, because, you know, delivering so many different solutions, at a go, is require significant amount of investment. And all of that, we believe is creating a strong platform and a foundation for our future growth. And as we start seeing that top line, we believe that, you know, we would start seeing our margins improving, because, you know, we don't expect the same level of investment continuing, given that already the strong foundation has already been set. So we believe that as, as the scale happens in the business, we will start seeing, you know, improved margins. And like, and the point on R&D, we will, we will continue to double down on R&D.
We have an extremely talented team of people who are committed towards addressing the problem. I think we are extremely proud about the Seqrite Labs that we have in India, which is, I think, one of the biggest and largest malware lab in the country. We will continue to invest and you know, create that value for our customers through them. But we will continue to invest in our R&D and solutions, you know, because this is like a constant thing that we have to do and keep on adding more. So we have a proper roadmap and quarterly release cycle, which will continue to happen through our R&D for all our solutions.
Just, one follow-up question, Vishal. Do you have enough liquidity on balance sheet? Is there any plan to acquire entities or do M&A or so?
See, I think we are, we are, extremely happy to be in a situation where, we are, completely debt-free and we are having cash in hand. And it's a good situation to be in, and we want to like, like I mentioned, about focus on profitable growth so that we keep on adding, more, more, cash to it. And we will always be look out for something which is aligned with our strategy for growth and, something which fits into our, architecture approach. And, so we will continue to be open and look at where we want to do those investments, and, and make sure that, you know, we have that available for us, when the need arises. So that's really how we are looking at it.
Thank you. All the very best.
Thank you. The next question is on the line of Mihir from Carnelian Capital. Please go ahead.
Yeah, hi. Thanks for giving the opportunity. Am I audible?
Yeah.
Yeah, sure, sure. Thanks for giving the opportunity. First of all, congratulations for joining as the CEO. Thank you, first of all, for that. And also, very good results. I mean, you know, back after losses of three quarters, so it'll be good to know that. Sir, I actually wanted to understand your strategy, I mean, to detail your strategy on the side. Wanted to understand your enterprise strategy on three fronts. First, on sales augmentation, what kind of sales augmentation are you looking at, on the enterprise side? With market, I mean, how are you going to compete, with players which are there in the mid-market, large market? And second, on the international front, you know, important is going to be international partners, specifically for enterprise. Just wanted to have understanding on that.
And my second question would be on the new products, and you know, about products with MDR and XDR are ready, and also the DPDP, coming into picture and getting traction for them. So if you can just let me know what kind of traction are you getting after the products getting market ready, and also the Hoxhunt side, after launching, that will be helpful. Yeah, so those were the questions.
Okay. Thank you. Thank you, Mihir. So as far as our sales augmentation is concerned, see, we have been, you know, through our work that has happened in the last five, six years, we have made a reasonable and a good progress as far as the small and medium-sized business is concerned, and making good entry in the micro business. But when we are looking at mid-market and large enterprises, we obviously want to do a significant pivot in terms of our sales motion, and that would mean we would reorganize and rebuild and re-energize our sales organization. That's why you can expect that we will continue a more focused investment as far as building that team is concerned.
Of course, apart from that, you know, making sure that there is a product orientation, training, and empowering the team with the right talent, and, you know, making sure that, you know, we, we have the right branding and marketing strategy coupled with that. That is really what, how we are looking at the sales augmentation. Apart from, like I said, onboarding new partners, distributors, and getting them excited about our technology and getting them introduced to our technology. How do we compete in the market? See, we obviously know the, the, l ike I said, you know, we, we have a very good experience of being in this space for the last three decades. Very few cybersecurity organizations can claim to have survived so long, and we, we have competed with the global players.
A lot of them have actually perished, but we continue to be number one player in the B2C. So we understand exactly what it takes to really compete. Of course, the terrain is different because enterprise security is a different terrain. So while the craft is still the same, but we have to navigate a different terrain, and that's where we are, you know, making sure we have the right talent, right skills, to be able to do that, you know, and compete with the best in the industry. We do believe that Make in India is a very big differentiator for us, and that will obviously be something that we will double down on.
The other big differentiator that we have is that we have the largest cybersecurity malware lab in the country, and we have the complete leadership team of the country actually locally present here. So the amount of empathy and the connected and the zero distance that we have between us and customers, you know, it cannot be achieved by our competition because, you know, we are the only Indian cyber stack, full stack cybersecurity company in the country. Most of the others are, our competition is actually from U.S. or some other parts of the world. So that way, we can differentiate and compete, you know, very well over there.
As far as the international market is concerned, we definitely have already onboarded multiple partners through whom we are reaching out to certain geos. It is right now more of a tactical form. And as we start making bigger traction on our enterprise security stack and start acquiring more customers and more business, and as we scale, then we will have a much more expansion plan and investment plan as far as global market is concerned. So that's really how we are looking at international market.
Sure, sir, sure. That's really helpful. And, and just some color around the, you know, traction of the new products, the post-development products getting ready. You know, what is the sense that you are getting from clients, on the products getting ready and also Hoxhunt part of the piece, given the DPDP which is going to come?
Yeah, so, so we obviously are in a very sweet spot because, you know, we were not sure when the DPDP bill was actually going to be actioned, but we actually had introduced HawkkHunt much earlier to the DPDP act. And so we are in a very sweet spot as far as that is concerned. Basically, what HawkkHunt does is data discovery and classification, which is a very fundamental requirement for you to be able to achieve the compliance for DPDP. Now, we have got a very significant traction in terms of leads and interest coming up to evaluate our technology. We also have signed up certain partners with whom we are going and helping organizations look at their DPDP compliance.
We do believe that once DPDP becomes more tangible enforcement plan, and once the Government of India announces that, I think then the seriousness and the real traction will happen much faster. But I think the good thing about just not Hoxhunt, but all our new solutions, is that we are getting some very good feedback in terms of, you know, what customers are really liking and what they would like us to do more. And so, you know, all of that feedback is going back to our R&D team to see how we can actually start quickly addressing those requirements and those expectations from our customers. So I would say that still early days, as far as these new solutions are concerned.
I think we are doing the right thing in terms of making sure that we don't hasten them beyond where they are in terms of their maturity. We want to make sure there is a very stable execution of these technologies, so that we are able to give the right stack to our customers. You can expect a gradual growth and then eventually the scale coming up in future.
Sure, sure. That's it from my side. Thank you very much, sir. Thank you very much for that.
Thank you. A reminder to the participants, anyone wishing to ask questions, may please press star and one. The next question is on the line, Abhishek Bhandari from Nomura. Please go ahead.
Hi. Thank you, sir. So I had two questions. My question on enterprise has been answered very nicely. Thank you for that. The first one is, you know, consumer business is the bedrock of the company or the cash cow, and it has gone through a turmoil phase for last few quarters. What have you learned from that experience? Like, where, what exactly happened? Was it more external than internal? And what kind of changes you think needs to be made to the awareness program, adoption program, you know, to get it back on the right growth path? And the second question related to it is, you know, you also spoke at some forums around expansion of your consumer business into overseas market.
Could elaborate, you know, what kind of partnerships you are looking at, what kind of distribution models you are looking at, and, you know, what kind of scale do you think it can bring to you, when you go to markets very similar to India, maybe Africa or Middle East? Thank you, sir.
Thank you for that question. I think the consumer headwinds that we have seen so far on the consumer market have been largely external factors. We've seen degrowth in the adoption of PC market, where the statistics are there for you to see. Also, you know, that has created an impact and a degrowth to overall antivirus consumer business. Obviously, there are a lot of lessons learned from that, and you know, we have a very strong distribution network and a very strong retail sales organization. So we've kind of, you know, the lessons that we have learned. We have kind of applied that to look at in terms of how we can become innovative in terms of our strategy to reach out to our consumers.
And so, we have developed different strategies around that. And, and there is an execution which is happening to that, which is what is resulting in the revival that we talked about and something that you can see in this quarter's performance. So we will obviously continue to double down on those strategies and continue to execute that. See, the other thing which we are extremely proud of is that we've launched our flagship AV 24 version, where we went and engaged with all our dealer network throughout the country.
And we continue to engage them, and talk to them about all the new cool features, innovative features, like metaProtect which is on cloud, which helps you to manage, you know, multiple instances of your personal AV, on a single place and single instance, right? Similarly, we've introduced features like YouTube control, which are again, something which, where, you know, not many competitions are providing. So we've added a lot of these new features, including seamless, you know, upgrade features and, you know, seamless user experience. So we believe that, that are, game changers, including, for example, secure scoring. We do security scoring, we do privacy scoring, so we can measure, you know, the performance of, of your computer against malware and against the privacy requirements.
So all of these are empowering our customers, and hopefully, that will actually generate a lot more traction, and help us to, you know, grow in size. But apart from that, we will continue to be more innovative and add more features and functionalities and solutions on the B2C side. So we do believe that by doing all of this, we would be able to, you know, tap that potential, that exists beyond the 2-20% that has reached in the country right now, and we do believe that that will happen. We are continuing to explore opportunities as per our global market for the B2C segment.
We will continue to see where all it would make sense for us to be operating there and onboard some of the channel partners for us to go and be present there. So that is something which we never rule out. We will continue to explore and continue to expand.
Thank you, sir, and all the best.
Thank you. The next question is in the line of Aditya Sen from Robo Capital. Please go ahead.
Hi, thank you for the opportunity and, congratulations on this number. My question is also related to this: the revenue jump that we see in Q2 this quarter, is it primarily because of the new product that we launched, or is it, a mix of all the existing products, including enterprise and retail segment?
So it is the latter, Aditya, because, see, that is the beauty of our business, that we have a very nice product mix, including B2B and B2C, right?
Yeah.
So, it actually positions us very well into the market, where each one will feed other, and also we will continue to work on all areas. So, it is not one over the other, but it's actually the combined effort of all, which is why we have, you know, demonstrated this quarter's results, yeah.
All right. So this obviously, this should be sustainable in the coming quarters. And also, as you replied to the previous participant that the, you'll double down on research and development expenses. So is it on absolute terms, around how many crores it should be? Should it be around INR 30-35 crore per quarter, or will it increase going forward?
See, we will, w e never share these details publicly. But I think, see, there is already a standard model that has evolved as far as, you know, how do we do our sales, our R&D expenses, and our general expenses, right?
Yeah.
I think we will continue to watch on those areas. We feel very comfortable with the kind of investment that we are doing on R&D right now. As I mentioned in the call earlier, that we would be investing more on our sales organization so that we are able to do a proper pivot and transition. But I think, you know, we feel very comfortable right now in terms of the amount of investment that we have done so far. But like I said, we will continue that investment as far as our R&D is concerned. So we are not letting it drop.
Yes.
You know, and we will, we will keep on adding, and so our roadmaps are gonna be busy and our features and releases will continue to be busy.
Understood. Understood. So, accordingly, will we be able to reach to the previous high levels of EBITDA of around 30%-35% range?
See, we will not be able to, right now, give you guidance on, for ex- the absolute numbers, but our focus is very clear that we want to focus on growth, but profitable growth, okay? We, so we, we will continue to focus on both the areas, and we are looking at extremely long-term view on these points are concerned. Everything that we are doing, it is all long-term basis, yeah.
Yeah, that is completely evident, because the research and development that we have been doing since past 1, 1.5, 2 years, so we are also expecting the fruits. All right, then. That was my question. Thank you.
Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is from the line of Harshal Kothari from RB Investments. Please go ahead.
Hello, am I audible?
Yeah.
Yes. So my question was regarding the debtor days, that it's been on a rise and it's around 161 days. So is there any guidance that it will be increasing to coming to 190 days, or it will be around those days?
Hi, Ankit this side. We are continuously focused on higher collections in last 3, 4 quarters. We believe that this number will further go down, and we are on the right trajectory.
Okay. And my second question is on the basis of the article which was released about the Israel 12.55 crore loss, which was removed and it was transferred to OCI. So will that be ever going to be affected on the balance sheet and the P&L, or it will stay in OCI only?
So, L7 Defense was not able to do break even for last two quarters, and they were facing severe liquidity crunch. The current geopolitical condition in Israel further casts uncertainty on the future operations of L7. Considering the financial position, liquidity position, market condition, we believe that the value of investment should be taken to minimum. Having said that, this is a consolidated standalone. The company is still a going concern. They are doing their operations, and hopefully, in the quarters to come, once things settle down, we will see maybe a write back settling. But it's early days, so we'll wait for some indications. As I said earlier, the company has not done as per our expectations, so we have taken a write-off.
Okay. Thank you so much.
Thank you.
Thank you. The next question is from the line of Mihir from Carnelian Capital. Please go ahead.
Yeah, thanks for giving the follow-up. So there's an agreement, arrangement which we have made with Tata Telese rvices. If you can throw some light as to what is this arrangement exactly, and, you know, what quantum of benefit changes have to us? What are we going to, you know, what are we just going to change? What is it going to provide? Some color around that. The second question was on the 84 customers that we onboarded on enterprise.
Mihir?
Hello.
Can you ask your question a little slow because we were not sure?
Sure.
Audio line is not very clear.
Sure, sure. Is it proper now?
Yeah, you can ask a little slower.
Sure, sure. So lastly, wanted to understand on this Tata Teles ervices. I mean, we have entered into arrangement with Tata Teles ervices. So what is the scope exactly that Tata Teles ervices is going to do for us? Some color around that, and what kind of potential business can we look from this particular arrangement? That was my first question. Second, was on the fact that, you know, we onboarded 84 customers on the enterprise side this quarter. I understand it is difficult, but what can be the potential revenue from these 84 customers? That was the second question.
Just a third question, that, you know, I completely understand that one should not see this business on a quarter-to-quarter basis, but however, for this particular quarter, the growth rate for the enterprise segment is 9% on a YY basis, whereas we used to have 20% kind of a growth. So I mean, you know, just say something around that. Yeah. So those are the questions.
Yeah. So thank you for that question. See, I think, we, like I mentioned, right, we have a very clear strategy on building partnerships, with, SIs, with distributors and with channel partners. And, one of that is the partnership that we have announced with Tata Teles ervices. So, so the idea is really to, you know, this business model, one of the go-to-market, is about these partnerships and working with our partners to go together. And, and so the objective is that I will not be able to share with you specifics on, you know, how much revenue we are gonna generate only from this partnership. But this is obviously a very core part of our, our growth strategy, right?
And we will, w e're talking to many more partners and SIs so that we can actually work with them, to reach out to our customers. As far as, the 84 customers is concerned, like I said, right, our current mix, is between, you know, we are 40%, enterprise business, vis-a-vis, you know, it being 20% in FY 2021. So clearly, we have demonstrated a, a good growth, and a good mix between our consumer and enterprise in the last year. So we, we do believe that the rate of growth that is going to be there in enterprise is far, far higher, and we can reach a lot more customers over there. And that's why you can expect that, that this percentage will keep on, you know, improving and getting better when it comes to the two ratios.
Yeah, we had a sort of a sluggish growth, as far as this quarter is concerned. I think we will, you know, and like I said, right, our enterprise strategy is more long term. We do believe that it will bear, start bearing fruits as we have seen in this market. We are right now in a very early stages of the release of all our solutions. We want to make sure we consolidate, we have adopt, you know, establish protocols, we are able to, you know, seek feedback from our customers, make sure those are implemented in our releases and cycles, make our solutions robust, and then, you know, release and then scale. We'll have to wait and see exactly, you know, when we'll start seeing that. But, we do, we are confident, and we do believe that we are in the right direction on that.
Sure, sure. This is really helpful. Thank you very much, and best of luck for the future.
Thank you, Mihir.
Thank you. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is from the line of Harshal Kothari from RB Investments. Please go ahead.
Hello. Yeah, so my question was a follow-up question on the previous participant's question. The product mix which you mentioned that it will be, it is 39% right now on enterprise and the rest is on retail. So what is the future regarding that? Are we going to increase more enterprise, and if yes, then how much?
So, thanks for that question, Harshal. Yeah, we do believe that the enterprise pie will continue to grow, and you know, it will continue to increase because we do believe that overall, as a market, the enterprise security market is growing much faster than the consumer security market. So we will not be able to specify to you exactly what numbers we will achieve by then, but we are going to share with you what we have achieved in the last quarters and last years. So that will give you indication of how the trajectory has been.
Okay, thank you. I was asking, what are the margins for the enterprise looking? Like, what are we looking at?
So, we don't segregate both the segments separately. Currently, the margins which have been shown are the combined margins, and we will not be able to disclose that. But at the same time, our consumer business is much profitable in the older business, so, does this help?
Okay, okay. Thank you so much.
Thank you. The next question is in the line of NGN Puranik from Enam Holdings. Please go ahead.
Hi, Vishal. Nice to see you in the office of Quick Heal, coming straight from Infosys. I want to understand from you, from your enterprise background, especially a company like Infosys and your consulting background. So you have seen a lot of these large global corporations, global enterprises, how do they manage security? You have designed security systems for them. You partnered with a lot of enterprise security guys and built large solutions in. And these were a lot of it is international. And Quick Heal is a branded, trusted name in the retail devices market in India, and they have built a decent enterprise practice. So if you want to really build enterprise practice of scale, what do you need to do? How do you sell the services in India?
Because Indian market generally are hesitant to, they want everything free, especially when it comes to product. How do you do that? And are you going to focus a lot more on international market? And how do you design your service offering in the first place?
Yeah. So thank you Puranik, for that question. See, I think, see, I've been a Indian in the Indian market for almost three decades, and I've been an Indian buyer.
Mm.
I've never expected any, any product to be free of cost, right? I do believe that, for everything, that any good thing that you want to use, you will always have to pay some value, you know, for you to get it. I do believe that, you know, the Indian buyer is, you know, reasonable. I believe that as India becomes more affluent, as India becomes more, larger and have a, you know, affluence more, not just in terms of digital adoption, but also in terms of growth as a country, we will have a, a more and bigger maturity coming in from a, from an Indian buyer, to, to pay the right value, for the technology and the products that they acquire.
We do believe that, while today also it is reasonable, it can, it will get more and more mature as India grows in its ambition. We do believe that there is a huge opportunity in the market for a company like us, because there would be a lot of startups, a lot of new companies coming up, and a lot of them are digital, are digitally enabled organizations. They will definitely require a fabric of security to protect their digital ambitions. I think that's really how we see it. You know, we are not gonna stop there. Like I said, we do have our global ambitions, and we will. O ur ambition is to become a significant, prominent player in the global markets as well. We will have a clear strategy in terms of when and how we are going to reach there.
So you think the deals in India's cybersecurity deals in India are profitable deals? Most companies are making enough profit from both product and services combined?
Yeah, I think, I think, see, primarily we are a product company, and, you know, clearly, my anticipation and observation so far is that every product company is, will, will always be profitable, you know, in any, any, any, in any market. I think it's the services part where you can, you can have certain deals which are not as profitable because it's a purely people-based and, you know, it is, it is very subjective, you know, in terms of quality of work. But when it comes to product, it is black and white, right? It is either deployed or not deployed. It is either bought or not bought. So, so we do believe that, it is definitely profitable.
And our experience so far in the Indian market has been that, I mean, we are, we are only here for profitable growth, right? So, we are very clear that we will not pick up any deals which are not profitable.
But, is there, is there a focused education program? Because, you talked about cybersecurity, malware and all that. That looks like a very interesting opportunity. How do you sell some of these to Indian enterprises?
I think, see, you are right, you know, Purvangi, because, you know, the Seqrite Labs that we have, I think we need to amplify that message, and we want to reach out and talk about that in a much profound manner and, you know, spread that message to the Indian, you know, CISOs and CIOs. Like I mentioned in my opening comments, we have already started doing that, right? We have started participating in the events, we've started doing road shows, we have started hosting prominent clients into our facility and showing them exactly what our teams are doing and what we are thinking. We have a clear plan and outreach right now in terms of how we are going ahead and actually, you know, spreading that awareness as far as what we do and what we have to offer.
Hmm. Are you equally comfortable dealing with Indian enterprises as compared to international enterprises?
Yeah, absolutely. That is what I mentioned, right?
The dialogue that many people, they'll appreciate the value proposition, and they're willing to pay a price. That maturity has come in it, or it has, they'll have to travel a lot more?
No, I think, I think they are already there.
Okay.
I think we are confident, and we are already experiencing that, right? We are-
Hmm.
You know, like I said, right, we already have a good book of business from enterprises, and we don't see any concerns there.
How do you get a million-dollar deal in India?
I mean, we can, you know, It is not something that we can sort of discuss right now on this call, Purvangi, because, you know, there are various strategies that you would have when you look at your sales motion and how you would identify a particular deal and then how do you execute in it. But we can definitely take it offline and, you know, I can, we can have a talk about that.
Interesting. Another question I have is about the AI. How deeply you are using AI in both in the product development, you know? Is it already at use, and also in the malware, are you using AI? How is it helping in terms of improving product development productivity?
So we have our, you know, solution called GoDeep.AI.
Mm.
You know, see, in the business that we are in, we cannot survive without use of automation, ML, and AI. And so we have been early adopters of this technology right from the beginning, because, you know, the scale at which the malwares have increased, we wouldn't have been able to manage it without behavioral detection and automated detection and, you know, generating vaccines to protect computers against that.
Hmm.
We have been having this stack for many years. We continue to invest in data science, teams and data models, and powering our different security solutions in stack. We keep a watch on how we are adding more and more models, so that we can adopt AI in all our technologies. So w e have a clear plan and path in terms of how we are going to adopt AI into our stack, yeah.
So when will you start looking at the international market? At what stage?
Mr. Puranik, may we request that you return to the question queue, sir?
Yeah, yeah. Sure, sure, sure. Thank you.
Thank you, sir. The next question is from the line of Harshal Kothari from RB Investments. Please go ahead.
Hello. Yeah, so my question is on the basis of dividend and buybacks. The company has a very rich dividend and buyback policy. So is the company going to continue on those lines, or is it going to take a backseat for a while till the company actually gets good profit and, becomes a growth, making company?
Thanks, Harshal. So as of now, there are no plans for buyback, and at appropriate time, we'll let our investors know. With respect to dividend, we have a standard dividend policy, which is there on our website as well. In the past year also, just want to add that, if you have noticed, there were not significant profits, but still we have given the dividend. We will continue with our dividend policy.
Okay. Thank you so much.
Thank you.
Thank you. Ladies and gentlemen, that is the last question. I now hand the conference over to the management from Quick Heal Technologies Limited for their closing comments. Over to you, sir.
Thank you so much, and thank you all for participating in this earnings call. I hope we have been able to answer all your questions satisfactorily. If you have any further questions or would like to know more about the company, please reach out to our investor relations managers at Valorem Advisors. Thank you, and stay safe.
Thank you.
Thank you, members of the management team. Ladies and gentlemen, on behalf of Quick Heal Technologies Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.