odyssey technologies ltd share price Management discussions

<dhhead>Management Discussion and Analysis Report</dhhead>

Pursuant to Regulation 34(3) and Para B of Schedule V of SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015 and the amendments thereof, details of the Management discussion and analysis are given below:


Industry structure and development

As the company is predominantly a service provider in the Public Key industry, the discussion is largely focused on that. Six new Certifying Authorities were licensed and commenced operations in India during 2022-23. However, the number of digital certificates issued has remained more or less at the earlier years’ levels. Consumption of digital certificates also has remained a prerogative of the Government to Citizen services like the Income Tax and GST, Provident Fund administration, Ministry of Company Affairs and Government procurement via eTenders.

The eSign markethasseensignificantgrowth and eSignature has become the favorite of most one-time eTransactions.

There is some reason to believe that eSign has stopped and reversed the growth of global click-wrapped signature providers like DocuSign etc. Several Indian players too have started offering online signature services based on eSign.

There is no evidence to show that eSign services have replaced any existingDigitalCertificatebased signatures. However there is certainly some impact on thegrowthofcertificatebased services owing to the popularity and perceived simplicity of eSign.

As we mentioned here last year, the CA software provider market has become very crowded exerting serious pressure on the prices. The company alsohasseensignificanterosion of its revenue from this segment. As the company had been conscious of this for some years and had already shifted its focus to other value added products based on public key cryptography, it is neither a surprise nor a worrying factor.

A larger ecosystem, whichever way it obtains, is likely to provide a wider and richer playfield for the company’s unique and novel xorkee infrastructure and services. Outside the PKI market the overall Information industry also received a couple of jolts towards the end of the year. Both are related to the Artificial Intelligence segment one relating to the surprising effectiveness of the Large Language Models (like the ChatGPT) in mimicking human thought and its expression and the second relates to actual ease of use of such techniques that may lead to them becoming commonplace techniques threatening the existing paradigms of Computer Science and Information Technology.

The voices against the development of AI have also been gaining in intensity. The objections have come from a wide range of scientists, experts and businessmen, the most recent from Geoffrey Hinton, the father of the modern AI and Google’s chief scientist himself. But these voices are unlikely to impact the growth of this technology – the same way the voices of Einstein and many of the nuclear scientists did not stop the growth of nuclear technology. It is unlikely that AI can be contained or slowed by international treaties like the nuclear could be.

The long term impact of AI is difficult for anyone to foresee today. However, in the medium term, as many AI scientists have opined, it is going to become extremely difficult to differentiate the fake from the original. This will have far reaching implications for identities and messages. For now, possible help can come only from Public Key Cryptography and we expect that the importance of Cryptographic techniques in business and society is going to significantly increase in the next few years.


Opportunities and Challenges

The ‘xorkeesign’ service launched last year has shown robust growth in the last quarter of the year. Much of this growth has come from the Government to Citizen (G2C) segment.

The company took a conscious decision to offer a major chunk of the India G2C services free of cost to the users. The company’s analysis shows that this is the most effective form of marketing for xorkeesign simultaneously familiarizing the potential users with a unified interface. Already use of xorkee has become second nature to a good number of users.

Towards the very end of the year, the company has introduced some paid services covering more than 80 Government of India and State Government Sites. This is expected to see full growth in the ensuing year.

The company sees this as the most important near term opportunity. Simultaneously it is also in the process of launching additional xorkeesign based services some of which are just not available anywhere else in the world.

The company is also enhancing its marketing activities for the xorkeeAuth service launched during the year. Here, as the customers are likely to be enterprises rather than end customers, initial growth are halting and measured. This represents a large medium and long term opportunity.

The company’s primary challenges will be in expanding its marketing footprint and operational infrastructure to support and sustain the millions of free and paid transactions that are anticipated.


Product-wise performance

A major portion of the company’s revenue still accrued from the legacy products. ‘xorkee’ and related services saw reasonable user adoption but the revenue from them is not yet significant.

The total revenue for the year was 241.93 million rupees. 66.52% of the revenue came from product related services and 31.39% from product licenses. The balance came from software exports.

Of the service revenue, 12.40% came from Pay As You Go services, 17.50% from customization and implementation and the rest from Annual Maintenance and onsite services.

The product revenue is composed of 84.05% from Snorkel, 3.69% from Certrix and eSign and 12.26% from AltaSigna as well as a number of variants of AltaSigna like the NPCI eMandate application.



The company’s xorkee offerings have already gained the reputation of being the most user and customer friendly in the market and adoption has been gaining pace. The company remains extremely optimistic in its outlook.


Risks and Concerns

The biggest risk continues to be the attacks both by private and state-sponsored attacks. We continue to strengthen our operational processes to make our operations resilient.

Availability of quality manpower is of great concern as this is the time for the company to build skills to replicate what it is now doing in the country to a global scale in the coming years. The company is exploring several options to expand this highly specific skill set.

As mentioned in the earlier years, restrictive regulatory measures in the country and outside also can be a matter of concern.


Internal Control Systems

Internal control systems continued to function as effectively as in the past. Top management and the Board of Directors and the Committees thereof continue to be actively involved in ensuring that all controls work as intended.


Financial and Operations Performance

There is a revenue growth of 6.70% with the operating profit margin at 27.38%. The total expenditure during the year was Rupees 203.29 million against 171.92 million last year which was due to the considerable jump in employee benefits expense added with the increase in employee count. The PBT for the year stays at 56.52 million as against 63.71 million last year, a marginal fall of 11.29%. The tax provision is lower this year at 12.86 million instead of the last year’s 17.74 million. This has resulted in the net profit of 43.66 million as against 45.97 million last year, a marginal dip of 5%.

The cost of manpower stood at 152.77 million compared to 120.52 million last year, and continues to be the major cost component for the company.

The Company has identified the following as key financial

Key Financial Ratios



Variance %

Operating Profit Margin (%)




Net Profit Margin (%) 18.05 20.27


Return on Net Worth (%)




Current Ratio (times)




Days Sales Outstanding (in Days)





Ratios where there has been a significant 22 changefrom FY 2021- to 2022-23 are explained below: Decline in operating profit margin is due to the increased employee benefits expense during the year. Increased current ratio is caused by increase in current assets duringtheyear,significantportion of which is held in short term deposits.

The debt-equity ratio and the debt service coverage ratio are not applicable to the Company since there are no borrowings.


Research and Development

The company’s R & D efforts are what distinguish our offerings from that of others.The R & D team has given the company extremely short response times to changes in the external technology and regulatory environment. The company has also expanded its support for additional devices, operating systems and applications owing to these efforts.


Human Resources Development

There were one hundred and sixty one employees in the rolls of Odyssey. Last year the figure stood at one hundred and fifty three. The attrition levels were under control. This has also had the effect of increasing the company’s expenditure by way of a raised median compensation. The company feels that it should keep up the increased investment in its developmental resources to fully exploit the opportunities available to it at this juncture.