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eMudhra's appointment as a Validation Agent of Legal Entity Identifier India (LEIL), a wholly owned subisidiary of the Clearing Corporation of India (CCIL), is expected to create a new growth opportunity for its Trust Services business, while supporting profitability, according to Kaushik Srinivasan, Co-founder and Whole-time Director of eMudhra, India's largest licensed Certifying Authority.
The company said the initiative is expected to build on its existing digital signature distribution network and could help drive faster growth in the Trust Services segment over the next few years. While management said it is too early to quantify the revenue contribution, it expects the opportunity to be margin accretive and reiterated its margin guidance.
"This is an incremental opportunity for us over a period of time as this kind of penetrates more and more in the Indian market," Srinivasan said, adding that the company also plans to explore similar opportunities in overseas markets over time.
India currently issues around 3.6 lakh LEIs every year, with the number expected to rise as more use cases emerge. Srinivasan said nationwide distribution network and relationships with chartered accountants should help the company capture both renewals and fresh issuances.
"Every LEI number is about ₹3,000-4,000 per application... there's a revenue share arrangement between us and CCIL," he said.
Trust Services growth expected to improve
The Trust Services business currently contributes around 15-20% of eMudhra's revenue. Srinivasan said the company had earlier guided for 12-14% growth in the segment, but the LEI opportunity could push growth beyond those levels.
However, he said it is still too early to estimate the exact revenue contribution.
"Over the next two quarters, we'll have a better sense of where we head with this," he said.
Margin guidance remains intact
Srinivasan said the LEI business will largely leverage eMudhra's existing technology platform and operational infrastructure, resulting in limited incremental costs.
"This will be margin accretive, not dilutive... whatever numbers we make will be sizably more than the operational cost," he said.
He also reiterated that the company expects to sustain EBITDA margins of around 25%, supported by enterprise solutions, Trust Services and other growth initiatives.
Growth strategy includes acquisitions and global expansion
Srinivasan said eMudhra remains on track to deliver around 18% organic revenue growth, while profit growth will be supported by both organic expansion and selective acquisitions.
He said the company's German subsidiary Cryptas is expected to reach break-even this year after winning new enterprise customers in Germany and Austria.
Internationally, eMudhra continues to see demand across the US, Europe, Africa and Asia-Pacific markets, with encouraging traction in the Philippines and Indonesia.
On the LEI opportunity, Srinivasan said the immediate focus is India, but the company eventually plans to explore international markets where LEI adoption is still at an early stage.
For the full interview, watch the accompanying video
Catch all the latest updates from the stock market here
The company said the initiative is expected to build on its existing digital signature distribution network and could help drive faster growth in the Trust Services segment over the next few years. While management said it is too early to quantify the revenue contribution, it expects the opportunity to be margin accretive and reiterated its margin guidance.
"This is an incremental opportunity for us over a period of time as this kind of penetrates more and more in the Indian market," Srinivasan said, adding that the company also plans to explore similar opportunities in overseas markets over time.
At 2:56 pm, eMudhra shares were trading at ₹663.05 on the NSE. The company has a market capitalisation of ₹5,187.13 crore, while the stock has declined more than 4% over the past year.
India currently issues around 3.6 lakh LEIs every year, with the number expected to rise as more use cases emerge. Srinivasan said nationwide distribution network and relationships with chartered accountants should help the company capture both renewals and fresh issuances.
"Every LEI number is about ₹3,000-4,000 per application... there's a revenue share arrangement between us and CCIL," he said.
Trust Services growth expected to improve
The Trust Services business currently contributes around 15-20% of eMudhra's revenue. Srinivasan said the company had earlier guided for 12-14% growth in the segment, but the LEI opportunity could push growth beyond those levels.
However, he said it is still too early to estimate the exact revenue contribution.
"Over the next two quarters, we'll have a better sense of where we head with this," he said.
Margin guidance remains intact
Srinivasan said the LEI business will largely leverage eMudhra's existing technology platform and operational infrastructure, resulting in limited incremental costs.
"This will be margin accretive, not dilutive... whatever numbers we make will be sizably more than the operational cost," he said.
He also reiterated that the company expects to sustain EBITDA margins of around 25%, supported by enterprise solutions, Trust Services and other growth initiatives.
Growth strategy includes acquisitions and global expansion
Srinivasan said eMudhra remains on track to deliver around 18% organic revenue growth, while profit growth will be supported by both organic expansion and selective acquisitions.
He said the company's German subsidiary Cryptas is expected to reach break-even this year after winning new enterprise customers in Germany and Austria.
Internationally, eMudhra continues to see demand across the US, Europe, Africa and Asia-Pacific markets, with encouraging traction in the Philippines and Indonesia.
On the LEI opportunity, Srinivasan said the immediate focus is India, but the company eventually plans to explore international markets where LEI adoption is still at an early stage.
For the full interview, watch the accompanying video
Catch all the latest updates from the stock market here
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