eMudhra shares have stabilised after a steep sell-off over weak private keys in digital certificates, but analysts warn that reputational damage could spread beyond the company’s discontinued SSL/TLS business.
eMudhra shares have steadied after a sharp sell-off sparked by security concerns around the digital signature certificate provider, with some analysts arguing that the fallout may be more damaging to sentiment than to the company’s long-term earnings outlook.
The stock rose 2.17% to ₹353.45 on Thursday, outpacing the Nifty 500, which gained 1%. That followed a bruising stretch in which the shares fell to lower circuits on October 21 and October 22, dropping 20% on each day. Even after the recent bounce, the shares remain down nearly 44% over the past month, underscoring the scale of the earlier rout.
The pressure on the stock began after eMudhra disclosed security concerns linked to weak private keys found in some of its digital certificates. Tom’s Hardware reported that eight intermediate certificate authority certificates were affected, including six TLS certificates and two code-signing certificates, with the weak keys described as so small that they could be brute-forced. In practical terms, that kind of flaw can undermine trust in website identities and software signatures, which are central to secure online communications.
eMudhra later said it planned to exit its global SSL/TLS business, which accounted for about 1% of revenue. Arijit Malakar, an equity research analyst at Ashika Stock Broking, told Business Standard that the episode raised serious security questions because it could allow attackers to issue fake website certificates. Even so, he said the company’s core business remained intact and that retail interest appeared to be returning after the stock’s sharp decline.
Harsh Thakkar, a research analyst at Samco Securities, said the bigger issue was reputational damage, particularly if concerns spread to eMudhra’s enterprise and overseas operations, which together make up about two-thirds of revenue. He noted that the company has said its India signature and eSign services were not affected. Thakkar also pointed to eMudhra’s FY27 targets, announced before the incident, which call for 18% organic revenue growth and 25% growth in profit after tax. The company’s second-quarter results on November 4 are likely to be watched closely for evidence of any wider impact.
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