eMudhra cuts FY27 revenue outlook to Rs 800 crore after TLS exit

eMudhra Limited cut its FY27 revenue expectation to about Rs 800 crore from Rs 825 crore after an October 17 public TLS key incident prompted an exit from publicly trusted TLS certificate sales. Management estimated a Rs 20 crore to Rs 23 crore reduction in annual income, largely in the second half, while saying TLS represented about 1% of revenue.

Why did eMudhra exit public TLS certificate sales?

eMudhra exited public TLS certificate sales after an independent researcher reported weak keys in eight intermediate certificates in one public TLS hierarchy on October 17. The certificates had been created during a key-generation ceremony in April 2025, and eMudhra said it revoked all eight intermediates the next day. Management said none had been used to issue certificates to end customers, root keys were unaffected, and its infrastructure was not compromised.

The company said browser programs distrusted the related hierarchy as a precaution, even though it reported no data breach and said security controls remained intact. eMudhra moved potentially affected customers to replacement certificates from other trusted providers at no charge, appointed KPMG as an independent external reviewer, and began a full review of its ceremony procedures. The withdrawal covers publicly trusted TLS only, rather than digital signatures, eSign or its five enterprise platforms.

How much will the TLS incident reduce eMudhra's FY27 guidance?

eMudhra now expects FY27 revenue of about Rs 800 crore and profit after tax of around Rs 125 crore, versus its initial guidance of about Rs 825 crore in revenue and Rs 137 crore in profit after tax. Management attributed the revised outlook to an estimated Rs 20 crore to Rs 23 crore annual-income effect and a Rs 10 crore to Rs 12 crore profit-after-tax effect, primarily in the second half of FY27.

Management said direct TLS activity was about 1% of eMudhra's revenue, but its estimate includes possible reputational effects beyond certificate sales. Executive Chairman Venkatraman Srinivasan said the effect may last for the next two quarters before gradually waning. That timing is management's assessment rather than a reported financial result.

Which eMudhra businesses were affected by the October incident?

eMudhra said the incident affected only publicly trusted TLS business, while digital signatures, eSign and all five enterprise platforms were unaffected. Management said total TLS business had been around Rs 8 crore, including about Rs 4 crore in the US. The company will continue pursuing private public-key infrastructure, or private PKI, opportunities for devices, internet-of-things equipment and wearables.

The directly affected US customer was University Federation, which used both eMudhra's CertiNext product and TLS certificates. Management said University Federation chose to continue with CertiNext and asked eMudhra to source TLS certificates from another vendor through a subcontract model. eMudhra also said it had withdrawn from two to three TLS-linked deal discussions as part of its decision to leave the public TLS market.

The guidance effect exceeds the stated Rs 8 crore size of total TLS activity because management allowed for potential effects on other opportunities. It said customers had sought clarity over the prior two weeks and cited diversified geographies, products, service lines and brands as factors that had limited the reputational effect.

Did eMudhra's core business continue to grow in Q2 and H1 FY27?

eMudhra's core operations continued to grow before the October event, with Q2 FY27 total income rising 19.6% year on year to Rs 209 crore and profit after tax increasing 26.3% to Rs 33.4 crore. Earnings before interest, tax, depreciation and amortisation, or EBITDA, rose 21.6% to Rs 51.3 crore, producing a 24.5% margin.

For H1 FY27, total income grew 23.4% to Rs 402 crore, while profit after tax rose 27% to Rs 65.4 crore. EBITDA reached Rs 101.7 crore, up 30.2%, and gross-profit margin was 56.5%, compared with 55.8% in Q2. Management said enterprise solutions built on its five-product platform grew 36% and accounted for two-thirds of revenue, while international markets also contributed two-thirds.

Receivables rose with business volume while receivable days remained about the same, according to management. It said H1 operating cash flow was affected because creditors declined despite higher revenue as payments were made without delay. Planned incremental capital expenditure for FY27 is around Rs 23 crore.

What will eMudhra focus on after leaving public TLS?

eMudhra's second-half priorities are to complete the external review, strengthen procedures, expand enterprise platforms in selected markets and convert recent market entries into lasting business. Management cited a national PKI win for Nigeria's certifying-authority regulator, a first Kazakhstan defence-sector win, and client additions in Indonesia, the Philippines, Germany, Qatar and Abu Dhabi during Q2 FY27.

Management also cited a United Arab Emirates trust-services pipeline, where it is awaiting a licence, and said cross-selling with CRYPTAS added three large European enterprise clients. CRYPTAS generated about Rs 30 crore of revenue in the quarter, according to management. It said more CRYPTAS deals include eMudhra products, which management expects to improve that unit's margin profile.

In India, management said it had already won a data-privacy deal for a non-banking financial company, or NBFC, in the preceding quarter. It described typical data-privacy deal sizes as about Rs 40 lakh to Rs 50 lakh for mid-sized entities, rising to Rs 1 crore or Rs 2 crore for larger customers. Management expects more traction next year as Digital Personal Data Protection, or DPDP, requirements are enforced.

Conclusion

eMudhra's revised guidance reflects a deliberate exit from a small public TLS activity and a broader allowance for temporary reputational disruption, rather than a reported compromise of root keys, infrastructure or customer data. Its H1 FY27 income rose 23.4% to Rs 402 crore and enterprise platforms grew 36%, but the October event changed the expected FY27 outcome.

The next items to watch are completion of KPMG's independent review, the transition of TLS customers to replacement providers and whether the effect remains limited to two quarters, as management expects. eMudhra has also proposed an investor meet at the Trident Hotel in Mumbai on December 2, where management may provide further detail on the review, guidance and enterprise-platform pipeline.