Professional Documents
Culture Documents
Investor Presentation
August 2016
1
DISCLAIMER
This presentation and the following discussion may contain “forward looking statements” by Quick Heal Technologies Limited (“Quick Heal” or the “Company”)
that are not historical in nature. These forward looking statements, which may include statements relating to future results of operations, financial condition,
business prospects, plans and objectives are based on the current beliefs, assumptions, expectations, estimates and projections of the management of Quick
Heal about the business, industry and markets in which Quick Heal operates.
These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors, some of which are
beyond Quick Heal’s control and difficult to predict, that could cause actual results, performance or achievements to differ materially from those in the forward
looking statements.
Such statements are not and should not be construed as a representation of future performance or achievements of Quick Heal. In particular, such
statements should not be regarded as a projection of future performance of Quick Heal. It should be noted that the actual performance or achievements of
Quick Heal may vary significantly from such statements.
2
DISCUSSION SUMMARY
• INDUSTRY OVERVIEW
• COMPANY OVERVIEW
• COMPETITIVE ADVANTAGES
• BUSINESS MODEL
• SHAREHOLDING STRUCTURE
• ANNEXURE
– CONSOLIDATED FINANCIALS
– CASE STUDIES
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INDUSTRY OVERVIEW
RISING INCIDENCES OF CYBER ATTACKS
RISING CYBER ATTACKS IN INDIA SOCIAL MEDIA SCAMS ON THE CYBER THREAT
RISE SCENARIO IN INDIA 2015-16
Number of Cyber Attacks Average Cost Suffered per Attack • 16% of social media scams are • India is the 3rd top destination of
targeted at Indian users cyberattacks
57 • 156% rise has been seen in social • 50% of cybercrimes in India are not
In Thousand 278,912 In Thousand media scams reported (KPMG)
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INDUSTRY OVERVIEW
RISING INCIDENCES OF CYBER ATTACKS
5
INDUSTRY OVERVIEW
FAST EXPANDING INTERNET USER BASE
INDIA HAS 2ND LARGEST INTERNET USER RISING SMARTPHONE SUBSCRIPTIONS SIGNIFICANT EXPANSION IN NUMBER
BASE IN THE WORLD OF NETWORKED DEVICES
500 339
In Million CAGR: In Million CAGR:
27% 39%
354
74%
218
257
190 140
90
of all devices
expected to become
2013 2014 2015 2017E 2013 2014 2015 2017E mobile connected by
2019
In Million
CAGR:
25% 314
In Million
CAGR:
10%
57.5
70
40%
236 47.5 of all devices
159 175 expected to be
130
smartphones by
2019
15 – 20%
Services Software Hardware 20 – 25% 15 – 20%
% Share
80 - 85
In Rs Billion In Rs Billion
15 - 18
20%
65 - 67
25%
6-8
Key Drivers
12 - 14
51 - 53
16 - 19
23% 10 – 15%
• Rapid growth in internet user base and
number of networked devices
10 - 12 27% 14 - 16 including desktops, laptops,
17%
15 - 18 smartphones, tablets
11 - 13 4-5
• Increasing number of security
25% 15 – 20%
intrusions in Corporate India
45 - 50 57% • Increase in allocation of corporate
37 - 39 budgets towards IT Security
28 - 30 25 – 30% 3 – 3.5
• High priority to IT Security especially
from businesses having higher
0.8 – 1.1 dependency on internet (e-commerce)
and with sensitive information (BFSI,
2013 2015 2017 E MDM UTM EPS Retail Total telecom, or the Government)
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COMPANY OVERVIEW
QUICK HEAL JOURNEY
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COMPANY OVERVIEW
TECHNOLOGY & MARKET LEADERSHIP
Our solutions have earned a variety of awards and certifications from industry groups and
publications including AV-Test and OPSWAT
Awards in India
International Certificates
• 2016: Best Antivirus, 9th NCN Most Innovative Product of the Year Award
• 2016: Best Make in India Brand, 14th VARINDIA IT Forum
• 2016: 12th Annual Info Security PG's 2016 Global Excellence Awards, USA
* Gold Winner for Product Development/Management Executive of the year
* Silver Winner in the category of Security Products and Solutions for Small Businesses and SOHO
• 2016: ICSA Labs Excellence in “Information Security Testing” Award for the 5th consecutive year
• 2015: IMC Information Technology Award for Excellence in Information Technology Products for small and
medium enterprise category, awarded by Indian Merchants Chamber
• 2015: Mumbai Hot 50 Brands in the B2C category, awarded by OneIndia
• 2014 – 2015: DQ Channels India’s Most Popular Vendor
• 2014 and 2015: CRN Channel Champions, Client Security awarded by United Business Media
• 2012, 2013 and 2014: Quality Brands, awarded by Quality Brand Times
• 2012: Maharashtra Corporate Excellence Awards, by Maxell Foundation
• 2008, 2009 and 2010: CRN Channel Champions, Antivirus Segments awarded by United Business Media
• 2010: Tech Life – The Lifestyle and Gadgets Awards, awarded by NDTV
• 2010: SME Awards for Best SME Innovation awarded by Business Today
• 2010: Deloitte Technology Fast500 Asia Pacific awarded by Deloitte
• 2010: Deloitte Technology Fast50 India awarded by Deloitte
• 2009: Channels Choice Award, awarded by DQ Channels
• 2009: Maharashtra IT Awards, awarded by Government of Maharashtra
• 2009: Emerging India Awards, awarded by ICICI Bank and CNBC TV 18
Promoter of the Company since Promoter of the Company since Responsible for Sales &
incorporation incorporation Marketing
Ex-IAS Officer and has served a series of increasingly Serves as the Director of
senior positions at the State Government and Central RippleWave Equity Private
Government Limited
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COMPANY OVERVIEW
STRONG BRAND RECOGNITION AND RECALL
18,041 Retail, 438 Enterprise, 139 Government and 1,189 Mobile Partners
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COMPANY OVERVIEW
EXPANDING PRESENCE ACROSS INTERNATIONAL MARKETS
13
COMPANY OVERVIEW
LARGE AND GROWING USER BASE
6,317
5,450
4,386
3,635
14
COMPETITIVE ADVANTAGE
ESTABLISHED AND PROVEN TECHNOLOGY
8 3
• Technological evolution over past 22 years
Pending patent
• Majority of products have been developed indigenously Trademarks in India
applications in India
• Highly effective against latest emerging threats and zero-day attacks
7 2
QUICK HEAL’S PRODUCT COMPETENCE
• Consumer Security - 1,343 million attacks blocked in FY16 Trademarks in RoW Copyrights in India
• Enterprise Security - 118 million attacks blocked in FY16
4 4
TECHNOLOGY CERTIFICATIONS
• AV Test, AV Comparatives Patents in United Pending copyright
• VB 100, States applications in India
• ICSA Lab
• OPSWAT
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COMPETITIVE ADVANTAGE Retail / SMB
COMPREHENSIVE PRODUCT PORTFOLIO
Features
Track My Laptop 16
COMPETITIVE ADVANTAGE Mobile Security / Fontastic
COMPREHENSIVE PRODUCT PORTFOLIO
/Gadget Securance
Features
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COMPETITIVE ADVANTAGE SEQRITE ENDPOINT
COMPREHENSIVE PRODUCT PORTFOLIO
SECURITY
Features
Asset Management
Vulnerability Scan
Other AV Removal
Web Security
Application Control
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COMPETITIVE ADVANTAGE DATA LOSS PREVENTION
COMPREHENSIVE PRODUCT PORTFOLIO
(DLP)
WINDOWS & MAC
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COMPETITIVE ADVANTAGE SEQRITE TERMINATOR
COMPREHENSIVE PRODUCT PORTFOLIO
Features
20
COMPETITIVE ADVANTAGE SEQRITE ENTERPRISE
COMPREHENSIVE PRODUCT PORTFOLIO
CLOUD PLATFORM
Features
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COMPETITIVE ADVANTAGE SEQRITE MOBILE
COMPREHENSIVE PRODUCT PORTFOLIO
DEVICE MANAGEMENT
Features
Application control
Remote wipe
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COMPETITIVE ADVANTAGE SEQRITE SECURE CHAT
COMPREHENSIVE PRODUCT PORTFOLIO
Features
One-to-One chat
Group Chat
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COMPETITIVE ADVANTAGE
EXTENSIVE PAN-INDIA DISTRIBUTION NETWORK
Customer Centric Approach
Domestic & International Support
Quick Heal – 64 offices & warehouses across 36 cities in India Centre (Telephone, SMS, Online
Jammu chat, forum, Remote and on-site
ground support)
Jaipur
End Users End Users End Users Guwahati
Lucknow
Kochi
Madurai
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COMPETITIVE ADVANTAGE
SUPERIOR CUSTOMER SUPPORT
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BUSINESS MODEL
SEASONALITY IMPACT ON REVENUES & MARGINS
38 - 45%
27 - 29%
SEASONALITY IMPACT ON REVENUES & MARGINS:
• Revenues are higher in Q2 and Q4.
• R&D, G&A expenses are spread across all
17 - 19% four quarters
15 - 17%
• Hence, there is variation in EBITDA margin
on quarterly basis
Q1 Q2 Q3 Q4
Source: Industry Overview and Trends – India and IT Security Market India - Inferences - Zinnov
555
433
Business Development Quality Incidence 318
Logic Team Team Assurance Team Response Team
191
138
• Business Logic Team - helps in building product roadmaps and devising appropriate strategies.
• Product Development Team - responsible for the design and development of various products
and solutions.
• Incidence Response Team – responsible for any emergency situation/incident at any enterprise
security infrastructure.
• Threat Research and Response Team -takes part in detection of and removal of reported Earmarked Rs 418.8 mn Indian GAAP Financial
viruses and malwares from IPO proceeds to be Reporting with full
• Internet of Things Security Team - create products and solutions for home automation security spent on R&D investments expensing of R&D
over next 3 years expenses
• Quality Assurance Team - provides systematic measurement, standard evaluation and
monitoring of processes.
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STRONG DRIVERS FOR LONG-TERM GROWTH
• Work ongoing on
several new
technologies such as
• Develop product for
IoT and home
upcoming platforms like
• Focus on international security automation
Androids, Windows,
expansion through Linux, iOS to address • Has 4 US patents to
consistent brand opportunities in its credit. Awaiting 3
building and marketing consumer enterprise. Indian patents
• Plans to focus on effort including media
manufacturing, BFSI, events and exhibitions • Monetize opportunities
healthcare, of our free solutions for
• Exploring opportunities mobile devices
• Special focus on Tier hospitality industries in Africa, Middle East &
II and Tier III towns • Reach out to SMBs, South East Asia
• Tailored offerings for identify new SMB
SMB and enterprise opportunities,
users increase engagement
• Develop and promote with channel partners Strengthen R&D
software-as-a-service Investments and
model Broaden Product
Expand Portfolio
Mobile
International Capabilities
Grow SMB and Expansion
Retain and Enterprise
Expand User Business
Base
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Q1 FY17 RESULTS HIGHLIGHTS
In Rs. Million
9.8%
485.2 475.5 -7.2%
47.5
2%
'(34.1)
Q1 FY16 Q1 FY17 Q1 FY16 Q1 FY17
EBIDTA EBIDTA Margin %
0.9%
61.5
-11.5%
4.4
19.2
'(54.8)
75 %
64 %
432.5 911.2
362.4 746.7
18 %
16 %
Enterprises & Government 16.2% 27.2% Enterprises & Government 12.6% 23.4%
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Q1 FY17 – EMPLOYEE BREAKUP
249 256
Technical Support 245
555 541
442
Others
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Q1 FY17 – CHANGES RELATED TO IND-AS FINANCIALS
• As per SEBI pronouncements, due to first time implementation of Ind-AS, companies can
issue Ind-AS financials for the quarter, and the same quarter last year
• A reconciliation between the Ind-AS revenue and Indian GAAP revenue is being provided
herewith.
• As per SEBI rules, we have opted for publishing the standalone financials for the quarter. A set
of consolidated financials is also provided, consolidating the financials for subsidiaries also,
however, these are not auditor reviewed.
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Q1 FY17 CONSOLIDATED RESULTS – PROFIT & LOSS
Rs Million
Consolidated
S.No Head
Q1 FY17 Q1 FY16 Growth % Change
1 Revenue 475.5 485.2 (9.7) (2.0%)
2 Direct Cost 45.5 54.1 (8.5) (15.7%)
3 Gross profit 429.9 431.1 (1.2) (0.3%)
4 Gross Margin, % 90.4% 88.9%
Operating Costs
5 R&D Cost 158.8 139.6 19.2 13.8%
6 Sales and Marketing (S&M) 150.2 139.3 10.9 7.8%
7 General Administration (G&A) 154.9 104.7 50.2 47.9%
8 Total 463.9 383.6 80.3 20.9%
13 Profit Before Tax & Exceptional Item (35.6) 9.2 (44.8) (486.9%)
14 Exceptional Item 37.8 0.0 37.8 -
15 Tax (18.7) 4.9 (23.6) (481.6%)
16 Profit After Tax (54.7) 4.3 (59.0) (1372.1%)
Revenue Reconciliation between IGAAP and IND-AS
1 Revenue (Gross) 561.5 566.4
2 Taxes 49.3 41.2
3 Net revenue 512.2 525.2
4 Less Dealer Incentive 36.7 40.1
5 Net revenue after Dealer Incentive 475.5 485.2
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Q1 FY17 CONSOLIDATED RESULTS – COST ANALYSIS
Rs Million
Operating Cost
Consolidated
S.No Head
Q1 FY17 Q1 FY16
1 Expenses
2 Margin
35
Q1 FY17 STANDALONE RESULTS – PROFIT & LOSS
Rs Million
Standalone
S.No Head
Q1 FY17 Q1 FY16 Growth % Change
1 Revenue 475.1 479.6 (4.5) -0.9%
2 Direct Cost 42.9 49.3 (6.4) -13.0%
3 Gross profit 432.2 430.3 2.0 0.5%
4 Gross Margin, % 90.9% 89.7% 1.0 1.4%
Operating Costs
5 R&D Cost 158.8 139.8 19.6 14.0%
6 Sales and Marketing (S&M) 136.6 131.1 5.4 4.2%
7 General Administration (G&A) 151.9 100.4 51.0 50.8%
8 Total 447.3 371.3 76.0 20.5%
13 Profit Before Tax & Exceptional Item (17.8) 20.8 (38.6) -185.8%
14 Exceptional Item 37.8 0.0 37.8 -
15 Tax (18.7) 2.4 (21.1) -878.3%
16 Profit After Tax (36.9) 18.4 (55.3) -301.1%
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Q1 FY17 STANDALONE RESULTS – RATIO ANALYSIS
Ratio Analysis
Standalone
S.No Head
Q1 FY17 Q1 FY16
1 Expenses
2 Margin
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Q1 FY17 CONSOLIDATED RESULTS – BALANCE SHEET
Particulars (In Rs Mn) Q1 FY17 Q1 FY16 Particulars (In Rs Mn) Q1 FY17 Q1 FY16
Total Equity & Liabilities 6,861.9 4,262.3 Total Assets 6,861.9 4,262.3
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Q1 FY17 STANDALONE RESULTS – BALANCE SHEET
Particulars (In Rs Mn) Q1 FY17 Q1 FY16 Particulars (In Rs Mn) Q1 FY17 Q1 FY16
Long Term Borrowings 0.0 0.0 Long-Term Loans And Advances 3.8 3.7
Deferred Tax Liabilities (Net) 0.0 0.0 Other Non-Current Assets 255.5 193.0
Other Long Term Liabilities 0.0 0.0 Total Non-Current Assets 2,453.8 2,288.8
Trade Payables 392.4 334.5 Cash And Bank Balances 2,394.0 60.3
Other Current Liabilities 89.6 541.5 Short-Term Loans And Advances 75.5 61.6
Total Of Current Liabilities 598.3 908.8 Total Current Assets 4,526.9 2,044.0
Total Equity & Liabilities 6,980.8 4,332.8 Total Assets 6,980.8 4,332.8
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SHAREHOLDING STRUCTURE
Public, 14.57
Institutions, 12.56
Source – BSE
40
FOR FURTHER QUERIES
Long Term Borrowings 0.0 0.0 Long-Term Loans And Advances 177.7 172.3
Deferred Tax Liabilities (Net) 0.0 0.0 Other Non-Current Assets 2.0 1.2
Other Long Term Liabilities 0.0 0.0 Total Non-Current Assets 2,253.4 2,074.2
Trade Payables 531.8 373.7 Cash And Bank Balances 2,690.6 126.4
Other Current Liabilities 143.3 75.0 Short-Term Loans And Advances 94.6 55.4
Total Of Current Liabilities 1,084.7 965.3 Total Current Assets 4,900.6 2,205.5
Total Equity & Liabilities 7,154.0 4,279.7 Total Assets 7,154.0 4,279.7
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ANNEXURE – CASE STUDIES
AIMIL LIMITED
Nature of Business – Civil Engineering
43
ANNEXURE – CASE STUDIES
BOMBAY HOSPITAL, INDORE
Nature of Business – Healthcare & Hospitals
44