Subex Ltd Result and Concall Q3 FY25: Business Insights & Investor Updates

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Subex Ltd Concall: Key Highlights and Market Strategy

Subex Ltd Concall: Key Highlights and Market Strategy

Financial Performance

Subex Ltd reported a revenue of ₹727 million for Q3 FY25, slightly down from ₹742 million in the previous quarter. However, EBITDA improved to ₹25 million from ₹19 million. The company posted a loss of ₹33 million this quarter compared to a profit of ₹6 million in the previous one, which had an exceptional gain.

Year-to-date EBITDA margins improved to 4% from -5% last year, showing a positive turnaround. The quarterly EBITDA margin stood at 9%, up from -3% in the same period last year.

Growth in Telco Business

The telco business saw a 2% quarter-on-quarter growth. The company is prioritizing this segment to stabilize revenue and improve profitability. Non-core projects have been scaled back to conserve cash and reinvest in key growth areas like fraud management. The goal is to make the telco business a cash-generating asset that drives sustainable growth.

Market Conditions and Challenges

The telecom industry is currently facing some challenges, including delays in investments from telecom companies, impacting new orders. Additionally, potential tariff changes in certain regions may pose currency risks.

Despite these hurdles, Subex has successfully secured Tier-1 contracts in the Americas and strengthened its presence with a major telecom operator in the Middle East.

Advancements in Fraud Management

Subex is placing strong emphasis on AI-driven fraud management. Over 80% of new deals now include AI applications, reflecting a growing demand for advanced fraud detection solutions. The company is also running next-gen AI proof-of-concept (POC) trials with three clients across the Americas, Middle East, and APAC regions.

Cost Efficiency and Productivity Improvement

The company continues to focus on cost-cutting and operational efficiency. Automation has played a key role in reducing costs, and manpower expenses have decreased year-over-year. These steps are aimed at improving operating margins and overall business stability.

Strategic Business Decisions

Subex’s management acknowledges that performance has been inconsistent, emphasizing the need for a more structured transformation plan. The Sectrio business, which focuses on operational technology security, has been deprioritized. Existing contracts will be fulfilled, but no new contracts will be pursued.

Additionally, the company is working on winding down certain contracts that are contributing to cash burn, ensuring a more sustainable financial position.

Customer Engagement and Growth Strategy

The company is focusing on strengthening relationships with key customers through upselling and cross-selling. Efforts are also being made to form strategic partnerships with industry leaders to enhance market positioning.

To build investor confidence, Subex plans to improve transparency regarding contract wins and financial performance.

Future Outlook

Despite the challenges, Subex‘s management remains optimistic about the future. They believe the telco business has the potential for double-digit growth. The company is committed to fixing core business fundamentals, ensuring long-term growth while maintaining effective cash management.

FAQs

1. What was Subex Ltd’s revenue for Q3 FY25?
Subex Ltd reported a revenue of ₹727 million, slightly lower than the previous quarter’s ₹742 million.

2. What steps is Subex taking to improve profitability?
The company is focusing on cost-cutting, automation, and prioritizing high-growth areas like AI-driven fraud management.

3. How is the telco business performing?
The telco segment grew by 2% QoQ and is being positioned as a core revenue driver.

4. What are the key challenges faced by Subex?
Delays in telecom investments and potential tariff-related currency risks are some of the major challenges.

5. What is Subex’s long-term vision?
The company aims for double-digit growth in the telco business while ensuring financial stability through better cost management and strategic investments.