Subex Ltd

New European logo order

• Awarded by an international European open-access fibre operator.
• EUR 0.6 million, three-year hosted and managed Partner Ecosystem Management solutions with end-to-end operations and ongoing support.
• No promoter group interest or related-party transactions disclosed.

Business overview

• Core telco software stack covers Fraud Management, Revenue Assurance, and PEM.
• AI embeds GenAI capabilities across products to accelerate PMF and upsell.
• Exited non-core lines; reinvest in core telco business with moat.
• 3-5 year growth window; TAM of $4.3B; $1.7T telco AI opportunity.

Operational highlights

• FY27 YTD EBITDA ₹79.45 Cr; PAT margin improved to 10.2%.
• 150+ installations across 100+ countries; 700+ employees.
• Customer retention 92%; recurring revenue ~70%.
• Cash and equivalents ₹184.8 Cr; up ~54% since FY23.
• EBITDA margin expanded from -3.9% to 14.9%; PAT margin from -18.4% to 10.2%.

Financial performance

• Recurring revenue constitutes ~70% of revenue.
• Back to profitability trajectory since FY23.
• AI-enabled product strategy reduces deployment cycles and enables upsell.

Capital structure & liquidity

• No debt detail disclosed; liquidity supported by cash growth to ₹184.8 Cr.

Strategic priorities & outlook

• Exited non-core; reinvest in core telco business with moat.
• AI-enabled product strategy to shorten development cycles and drive AI upsell.
• 3-5 year growth window with large TAM and AI-led growth.
• Geographic expansion across North America, South America, Europe, and the Middle East.

Risks & governance

• Risks include earnings volatility, client concentration, competition, and integration.
• Mitigation: AI flywheel and annuity revenue.

Meeting Details

• Date: August 19, 2026.
• Conference: Non-Deal Roadshow.
• Mode: Physical; Venue: Mumbai.
• Time: 10:00 AM to 05:00 PM.
• Meeting format: Group or One-on-One.

Participants

• Key participants: company management.

Purpose

• Purpose: Analyst/Institutional Investor meeting to discuss business updates.

Availability

• Investor presentation will be uploaded on the company's website.

Resolutions via postal ballot

• Resolution 1 (Special): Formulate Subex ESOP-2026 up to 5% of paid-up capital via ESOP Trust; outcome not disclosed.
• Resolution 2 (Special): Extend ESOP-2026 option grant to employees of subsidiaries; outcome not disclosed.
• Resolution 3 (Special): Authorize ESOP Trust to acquire equity shares in secondary market; outcome not disclosed.
• Resolution 4 (Special): Grant interest-free loan to ESOP Trust for secondary market funding; outcome not disclosed.
• Dilution potential: up to 5% of paid-up capital via ESOP-2026.
• Trust acquisitions limited to 5% of paid-up equity capital.
• Maximum options per employee: 25 lakh per year or 1% of issued capital.
• Total options under ESOP-2026 capped at 5% of paid-up capital.
• No new shares issued; ESOPs funded via secondary market acquisitions.
• Vesting: options vest 1-4 years subject to performance and employment.
• Trust will not vote on held shares; employees vote after transfer.
• Scheme administered by Nomination & Remuneration Committee.
• Exercise price equals market price or such rate as NRC decides; not below average secondary market price.
• Option grants subject to vesting schedule; minimum one year, maximum four years.

Financial performance

• Q1 revenue INR 79.45 crores; up 8.9% QoQ and 19.7% YoY.
• EBITDA INR 16.87 crores; EBITDA margin 21.2%.
• PAT INR 14.22 crores; normalized PAT INR 16.09 crores.
• Cash and cash equivalents INR 184.8 crores.

Growth and strategic focus

• FY27 focus is accelerating growth with disciplined investments in AI, products, and delivery.
• PEM renewal with Tier 1 operator in Asia Pacific.
• Managed services and software license renewal with Tier 1 operator in Middle East.
• Europe renewal of business assurance and fraud management last quarter.
• Active industry engagement at MVNO Nation and GSMA meetings.

Capital allocation and ESOP

• ESOP approved for 5%; 2% annual cap; postal ballot in about two weeks; execution in Q3.
• Board considering structural balance-sheet changes; long-term actions under consideration.
• No additional Middle East capex requirement; entity self-sustaining.
• Unlisted investment to be fair-valued in Q2 or Q3; current performance positive.

Backlog and pipeline

• 70% of revenue is recurring; 30% relates to current-year new orders; backlog guides next year.
• Qualified sales pipeline around 3–4x annual intake target.

R&D and margins

• R&D intensity to rise; GenAI-enabled products; Horizon framework with 10% on Horizon 3 bets.
• Margins expected to stay in a healthy band; reinvestment into growth.

Q&A and outlook

• Top-line INR 100 crores in a few quarters; line of sight claimed.
• Middle East slowdown, no cancellations; delivery increasingly from India to mitigate risk.
• FX impact: INR 3 crores currency gain in the quarter; QoQ slight loss, YoY improvement.
• NDRs to cadence quarterly; visits planned to Mumbai, Ahmedabad, Chennai.

Overview

• Main activities: AI-driven Fraud Management, Business Assurance, and Partner Lifecycle Management.
• Reporting boundary: standalone India operations for FY2025-26.

Key ESG Risks & Opportunities

• Data privacy and cybersecurity risk mitigated by vulnerability management, patching, monitoring, and passwordless authentication.
• Wellbeing initiatives and remote work enablement via periodic connects and EAP.
• Health and safety cost risk; ongoing awareness and safety camps implemented.
• Ethical and transparent conduct risk; periodic internal reviews and regulator updates.
• Net-zero emissions target by 2035 creating long-term environmental opportunities with governance oversight.

Governance & Policy Highlights

• NGRBC principles covered with board-approved policies extending to value chain.
• MD & CEO oversee implementation; no standalone sustainability committee.
• INR 1,82,000 penalty for board composition; waiver application filed.
• Certifications: ISO 9001:2015 and ISO 27001:2013 held.
• Assurance: no external assurance sought.
• No dedicated sustainability committee; board provides safety and sustainability oversight.

Social Responsibility & Workforce

• Total employees 632; permanent 626; 424 male and 202 female.
• Board comprises six directors with one female member.
• Well-being spend 0.35% of revenue; retirement benefits 100% coverage.
• Mandatory trainings include Code of Conduct, Whistleblower, Anti-Bribery, Data Privacy.
• BoD and KMPs training coverage 100%.
• No employee unions.
• No safety incidents; ongoing health and safety initiatives.
• POSH complaints FY26: 3; all upheld; FY25: 0.
• Global redressal policy provides grievance mechanism accessible to all.

Environmental Performance

• Net-zero emissions target by 2035 across Scope 1-3.
• Renewable energy share 1096.41 GJ; total energy 3132.60 GJ; renewables ~35%.
• Water: groundwater 4700 kL; total water 4700 kL; water intensity 1.83 Kl/Mn.
• GHG emissions: Scope 1 0.02 tCO2e; Scope 2 1.18 tCO2e.
• Waste: 93% recycled; <7% to landfills; incineration 2400 MT.
• Certifications: ISO 9001:2015 and ISO 27001:2013; operations in tech park.

Stakeholder Engagement & Complaints

• Key stakeholder groups: shareholders, employees, customers, suppliers/partners, communities; annual/ongoing engagement.
• Engagement channels include AGM, meetings, email, website, and surveys.
• FY26 complaints: 1 employee; 3 POSH; all resolved; 0 community/investor.
• Whistle-blowing policy provides redress channels; links provided.

Other Notable Metrics

• Related-party transactions: purchases 75.4%; sales 72.2%; investments 86%.
• Exports contribute 99% of turnover.
• R&D and capex on specific technologies: nil.
• Sustainable sourcing: vendor selection includes SH&E, compliance, and code of conduct.
• Cybersecurity and data privacy framework in place; no external assurance.

agm details

• Date of AGM: August 4, 2026; Time 2:00 PM IST.
• Mode: VC/OAVM; Deemed venue: registered office.
• Record date for e-voting: July 28, 2026.
• Remote e-voting: July 31, 2026 to August 3, 2026.

resolutions to vote

• Ordinary: adoption of audited financial statements for FY ended March 31, 2026.
• Ordinary: re-appointment of Nisha Dutt as Director, liable to retire by rotation.
• Special: re-appointment of Rupinder Goel as Independent Director for a second term.

dividend

• Dividend: no dividend proposed for the financial year 2025-26.

director changes

• Cessations: Anil Singhvi, Poornima Prabhu and Archana Muthappa ceased 29 Sep 2025.
• New appointments: Narayana (Dec 25, 2025); Alok Ohrie (Jan 4, 2026); Stephane Le Letty (Mar 25, 2026).
• Nisha Dutt to be re-appointed as MD & CEO; subject to AGM approval.

auditors

• Statutory auditor: M.S.K.C. & Associates, LLP for a 5-year term (31st–36th AGM).
• Secretarial auditor: M/s V. Sreedharan & Associates for 5 years (2025–2029).
• Internal auditor: M/s RSM Astute Consulting Pvt Ltd reappointed.

material related party transactions

• Wholly owned subsidiaries provide subcontracting income to the Company.
• Subsidiaries charge marketing & support services to the Company.
• Royalty paid to Subex Assurance LLP for developed technology.
• Intercompany reimbursements; share of profit/loss from LLPs.

other material approvals

• ESOP-2025: 38,00,000 options granted; 32,00,000 options granted on 2026-03-31.
• Total options in force: 48,50,643; treasury shares held by ESOP trust.
• CSR: no mandatory CSR spend for FY26; SCT continued for community initiatives.