Conference Call with Quick Heal Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen in to the full transcript.
Call Participants: Mr. Kailash Katkar – Managing Director & CEO, Mr. Sanjay Katkar – Joint Managing Director & CTO, Mr. Nitin Kulkarni – Chief Financial Officer
Introductory Remarks from Nitin Kulkarni
Hello and good morning everyone! I am pleased to welcome you all on our earnings call to discuss our Q4 and financial year 2020 results. Please note, a copy of all our disclosures are available on the investors section of our website as well as the stock exchange.
Major developments and key initiatives from Kailash Katkar
Good morning ladies and gentlemen! Thanks for joining us today to discuss the Quick Heal Technologies financial year result and Q4 results for the year 2020. I would like to take this opportunity to update you about the major development and the initiatives for the quarter as well as some highlights for the year. Before I begin, I hope you and your family are safe and taking proper precautions while dealing with this pandemic. I would like to take this opportunity to thank all the frontline staff and public operatives for this continuous effort in containing this pandemic and keeping us safe.
The year 2020 was more challenging than what we expected. Throughout the year, we saw some slowdown in the economy which coupled with an overall credit crunch affecting our business. Going into Q4, we were optimistic about the year as our Q4 is always strongest for us and we were hoping to end this year on a positive note. However, the sudden and unexpected Covid-19 crisis in March 2020 led to a very weakened quarter actually. I will let Nitin discuss the impact of Covid-19 on the financial in detail.
On the positive side, I am impressed with how the entire Quick Heal works to implement the work from home protocol while supporting our customers seamlessly. Quick Heal was able to adjust to the rapidly changing work culture due to the lockdown and continue to support our customers in an increased cyber threat environment. We also announced a strategic investment of Rs 2 crores in Ray Ltd, Singapore based company. It is a strategic investment in this networking and wireless technology space. This is the second investment from us during the year and we will continue to explore such small and mid size strategic investments.
Highlights from Sanjay Katkar
Good morning everyone! As Kailash mentioned, we have invested around Rs 2 crores in Ray Pte Ltd. Ray is a Singapore based start-up specializing in next generation networking and wireless technology with a flagship product RayOS which is open, secure, cloud native, extensible Operating System with an ecosystem of applications. Ray’s vision is to reimagine networking and wireless technology and its intertwined vision of safe, secure and seamless vision of digital experience for everyone and therefore Ray is an ideal partner for us. Another key development for the quarter that I would like to highlight is Fino Payments Banks selected us to power and secure its workforce mobility platform. Fino Payments Banks selected Seqrite's mSuite after rigorously evaluating multiple products. Our product was selected due to its better ease of use, design and better monitoring capabilities of devices on a real time basis. The thread and suite also makes it easy to remotely schedule security scans for the IT team to identify risk and infection with the best in class in our capability.
The lockdown obstructed our financial year 2020 growth due to lower Q4 sales but it has also opened new opportunities for us. In the lockdown, we saw the majority of enterprises asking their employees to work from home. This led to a change in working style for many enterprises which led to cyber security challenges. The pandemic demonstrated the fact that cyber security’s crucial element of a successful business continuity plan and cannot be ignored. Following the spread of coronavirus in India, we were among the very few companies to adapt to the remote working culture and encourage our employees to work from home to ensure their safety. All departments including threat intelligence, protection, response and daily updates through our products continue to remain operational and uninterrupted as normal to provide round the clock protection and technical support to all our customers. During the last two months, we observed cyber criminals riding on Covid-19 wave and exploiting security loopholes in remote working to distribute a variety of malware.
Highlights by Nitin Kulkarni
All of you are aware that the World Health Organization announced the global health emergency because of a new spread of coronavirus or Covid-19 and classified it as a pandemic on March 11, 2020. In response, the Indian government has taken various actions and ensured many precautionary measures which force significant disruption to business operations and adversely impact most industries which has resulted in slowdown of economic activity. The lockdown was imposed by the Indian government in the entire country from the last two weeks of March. A lot of business and customers began to take precautionary measures earlier. For the retail segment, we followed a stop and sale model and the goods are required to be physically dispatched to dealers. This was not possible due to non availability of transport facilities across the country and has significantly impacted the revenue for the quarter for the retail vertical.
If you look at the enterprise vertical, revenue was impacted in the later end part of the quarter as most of the enterprises were waiting for better understanding of the impact of Covid-19 on the businesses and uncertainty in the economy before committing their order. As a result of this, if you look at the consolidated revenue from operations which stood at Rs 2,861 million, down 9.1% compared to INR 2,149 million in financial year 2019. 80% of revenues come from the retail segment and 20% from enterprise and government.