What started as a bootstrapped venture 25 years ago is today an all-round player incybersecurity domain with presence in consumer business and Government segment.
Since our inception 25 years back we have grown exponentially. Our growth speaks ofthe support and faith that our employees stakeholders and the entire Quick Heal teamentrusts us with. We envision a bright future and your encouragement only inspires amomentum that pushes us each day to get better in terms of innovation amd technology.
In 2018-19 we reported revenues of र 3149 Million as against र 3183 Million inthe previous year a decline of 1%. The performance was not in line with our expectationsowing to a marginal dip of 5% in the retail business and overall muted volume growth of2%. The Enterprise and Government businesses grew at 8% in Revenues and 11% in volumesdespite competitive environment. The customer acquisition has moved up but averagerealisation per unit is lower so the translation of customer acquisition to the revenuehas not moved up as much. Our EBIDTA strengthened by 6% from र 1203 Million in 2017-18to र 1279 Million in 2018-19. We also reported healthy EBIDTA margins of 41% anincrease of 281 bps over the previous year. With no interest cost and lower depreciationPAT increased 11% from 830 Million in 2017- 18 to र 918 Million in 2018-19. Thesatisfactory pro tability levels were an outcome of our relentless cost rationalisationefforts during the year. We maintained our leadership position in the retail segment with30%+ market share. During the year 2018-19 we witnessed 2% increase in the total retaillicences sold and improved our renewal ratio to approximately 40%. We have built thelargest channel eco-system selling security products and solutions. Thanks to theiruntiring efforts that helped us create the desired brand visibility. It also helped usimprove acceptability of our IT security products across the households and businessusers.
India posted an annual GDP growth rate of 6.8% during the nancial year 2018-19. Variouseconomic reforms undertaken by the Government (improvement in Ease of Doing Businessopening to foreign direct investments the push for infrastructure development and astable and decisive policy environment) underpinned this economic growth. This enabledIndia to stand ahead of China while retaining its tag of the world's fastest growingeconomy'. The nancial sector reforms with efforts to reduce public debt remained essentialto secure the economy's growth prospects. This was further supported by strengthening andstabilising goods and services tax compliance. With Government's push for digitalisationIndia is swiftly moving towards a digital economy.
Relevance of IT security in today's digital world
As we grow increasingly dependent on connectivity digitalisation is becoming a part ofour daily lives. Within just a few years the internet has consolidated itself as a verypowerful platform. It has forever changed the way we communicate entertain or even dobusiness. The internet has given a globalised dimension to the world with everythingavailable at our ngertips. In the wake of digitalisation words like digital business anddigital governance are catching up across multiple industries. Drivers such as socialmedia cloud analytics mobility along with IoT (Internet of Things) and security driveevery enterprise to transform and be successful in the changing economy.
But just like every coin digital too has a dark side in the form of cyberthreats.
Increasing cyber crimes
Cybercriminals and malicious threat actors threaten the security of the digitaleconomy making it fragile with each attack. They expose the internet world tovulnerabilities with increasing magnitudes of threats resulting in infecting andhijacking devices and networks. Today cybercrime is an organised industry wherecybercriminals work with the intent of making nancial gains and other malicious motives.The ever-increasing mobile workforce and emergence of bring your own device' (BYOD)work culture presents unprecedented challenges to the cybersecurity ecosystems of thebusinesses.
Emergence of smartphones
Increasing smartphone usage has led to a higher dependency on the internet andtechnology. Besides abundant availability of hi-speed data and connectivity at affordableprice points are gradually changing the way a user consumes content and absorbsinformation. Customers engage across an increasing number of touchpoints and marketingefforts are also designed keeping these in mind. More and more customers are becomingmobile connected and a good chunk of retail purchases happen online. Under suchcircumstances it would only be suf ce to say that the internet is an omni-present toolinfluencing and shaping human behaviour while exposing devices to immense cybersecuritythreats.
Arti cial Intelligence (AI)
In a fast evolving digital world automation is slowly becoming the norm and a criticaldifferentiator. Soon smart algorithms bots and AI tools will become a norm fororganisations. AI has been around for several decades but is only now gaining traction.AI's ability to allow machines to take over the more mundane and repetitive jobs makes ita preferred choice. The flipside to this is the fear that automation will result incyberthreats.
Internet of Things (IoT)
IoT presents organisations with the opportunity to improve internal ef cienciesprovide better customer service enter new markets and even build new business models.From banks to healthcare utilities to automotive manufacturing and logistics industriesand home automation are already being transformed by IoT and the expectation is thatalmost every sector will be impacted in the future. This leads to larger scale ofconnected devices and integration of operations. However there are loopholes andinadequate security systems which may lead to possible hacking and substantial damage.
Innovation-driven products and solutions
We take pride in consistently charting innovation in a eld that never ceases to evolve.By delivering a true platform and empowering a growing ecosystem of change-makers like uswe provide highly effective and innovative cybersecurity solutions. This has given us theprivilege of securing millions of end points and networks.
A robust cybersecurity approach requires adequate proactive and reactive measures toidentify protect detect respond and recover processes. We have consistently transformeddeep threat intelligence and security expertise into security solutions and services forour customers across the globe. Our tailor-made products come with enhanced securityfeatures that help increase our product's acceptability. We introduced new products duringthe year which include Seqrite Cloud Secure Web Gateway (SWG) Enterprise MobilityManagement Solution (mSuite and MobiSMART) and Quick Heal Home Security (QHHS). Ourobjective is not just to protect the enterprise with good cybersecurity hygiene and basiclines of defence we also aim to optimise the response time to attacks with more advancedtools and strategies. As digital transformation proceeds cybersecurity must be anenabling function rather than an obstacle to innovation and change. Today we are aprominent and renowned name in the IT security industry. Our brands Quick Heal and Seqriteare now widely accepted across retail enterprise and Government segments. Ourcybersecurity products and solutions keep our 9 Million users protected and secure 32900+businesses and enterprises from the potential threats and unanticipated cyber-attacks. Ourpowerful integration of cyberthreat expertise automated systems and state-of-the-arttechnology give us the desired edge. Our research operations help provide proactiveprotection and rapid response that our customers are looking for to safeguard theirsecurity productivity and regulatory compliance.
Long term goals
We are well-positioned to leverage our strengths and explore future opportunities by:Offering tailored products and solutions to our users backed by our strong R&D andinnovation and deep intelligence on threat landscape Focussing on new technologies such asIoT and home security automation Penetrating deeper into Tier II and Tier III towns byoffering unique value propositions and improved customer experience Continue focussing onthe manufacturing BFSI healthcare and hospitality industries Expanding mobilecapabilities by monetising on free solutions for mobile devices and developing productsfor various platforms Emphasising on international expansions through consistent brandbuilding and marketing effort and exploring opportunities across Africa Middle East andSouth East Asia
Regulations: The way forward
As society today is getting more and more dependent on technology cyber crimes arebound to increase. For greater security private and public companies will have to takethe responsibility collectively to ensure safety of their customers' information and othercon dential data. Right data protection and cybersecurity policies would be the correctstep in this direction. The European Union implemented the General Data ProtectionRegulation (GDPR) a law for primarily regulating how companies protect EU citizens'personal data. Under the GDPR law the Companies are required to diligently comply withthe new data protection and privacy requirements. Any failure in compliance will bestrictly subjected to stiff penalties and nes. Taking cue from the European Union Indiatoo needed a fresh data protection law to ensure growth of the digital economy whilesafeguarding personal data of citizens. Srikrishna Committee was set up to propose thebill on Data Protection which states to introduce a data protection regime that can strikean appropriate balance between protecting the interests of the individuals and thelegitimate use of data by State and private businesses. Also the Government of India hasproposed Digital Information in Healthcare Security Act (DISHA) that provides tougherprivacy and security measures for digital health data. Going ahead the awareness relatedto various regulations is likely to increase the demand for robust cybersecurity and dataprotection products and solutions.
In conclusion I am proud of the tremendous progress we as a Company have made in thelast 25 years. It's a result of independent thinking and extensive expertise andadaptability with respect to people and the ambition to create innovations which provideadded value for customers. These values have been the cornerstones of our success and willcontinue being so in the future as well.
I would like to express my heartfelt thanks to all those who have played a part in thejourney of the Quick Heal family. I must thank our dedicated employees channel partnersstakeholders investors and shareholders for their continued support loyalty and condence entrusted upon us. Without them this journey would not have been possible. I assureyou our relentless focus and hard work for many years to come. We will continue to lookforward in securing the digital world while creating tangible value.
Best Wishes Kailash Katkarb