Financial Performance Highlights

  • Revenue: ₹260 crore for Q1 FY27, representing 19% year-on-year growth
  • EBITDA: ₹25 crore with an EBITDA margin of 10%
  • Profit Before Tax (PBT): ₹17 crore, up 19% YoY
  • Profit After Tax (PAT): ₹12 crore (compared to ₹14 crore in Q1 FY26)
  • Tax Provision: ₹4.5 crore in current quarter (compared to net tax benefit of ₹0.3 crore in Q1 FY26)
  • Trailing 12-Month Revenue: Crossed ₹1,000 crore milestone, reaching ₹1,009 crore

Key Operational and Strategic Developments

  • Leadership Changes:
  • Nehal Shah appointed as Joint Managing Director
  • Paresh Shah transitioned to Chief Innovation Officer to lead AI and technology transformation
  • Arun Pathak joined as CEO of Cloud Infrastructure Services for India and Middle East
  • Order Wins: Totaled ₹120+ crore during the quarter, including:
  • Enterprise Application Services engagement with a NYSE-listed electronics design company (entry into U.S. market)
  • Workspace Service Management Solution with a customer-owned mutual bank in Australia
  • Turnkey System Integration project for Department of School Education, Government of Punjab for Integrated Command and Control Center
  • Managed services engagement with Government of India organization under Ministry of Commerce
  • IT asset management with international property consulting firm
  • IT Infrastructure Support with leading Indian FMCG company
  • Renewals across pharmaceuticals, chemicals, real estate, BFSI, medical devices, and retail design sectors

Governance and Accounting Milestones

  • All previous auditor observations and qualifications fully resolved
  • Audit report for the quarter is unmodified with no qualifications
  • Funds deployed in U.S. subsidiary reclassified from debt to equity, eliminating quarterly foreign exchange revaluation impacts

Management Commentary and Outlook

  • Market Environment: Customers are more measured in spending with longer procurement cycles, but underlying demand remains strong
  • Strategic Focus: Investments in AI, cloud, cybersecurity, and digital infrastructure remain priorities
  • Growth Aspiration: Target of 10x growth over next decade (approximately 20% annual growth)
  • Margin Outlook: Current EBITDA margins 10-11%, expected to improve to 12-13% in coming quarters through AI implementation and large deal execution

Cost Structure Analysis

  • Employee Costs: Increased due to annual wage revisions and talent investments
  • Finance Costs: Increased modestly due to higher working capital deployment and project execution
  • Other Income: Reduced due to elimination of foreign exchange gains following U.S. subsidiary equity reclassification
  • Cost Optimization: Ongoing initiatives helping offset some cost pressures

Q&A Session Highlights

  • Margin Pressures: Attributed to competitive environment, investments in people/technology, and global geopolitical factors
  • AI Impact: Viewed as opportunity rather than threat; expected to improve service delivery optimization
  • Revenue Conversion: Delayed due to product price volatility (25-30% increases) causing caution in bidding, particularly for government projects
  • Growth Timeline: Expect improved order announcements in Q3 FY27 as pricing stabilizes

Call Participants

  • Management: Nitin D Shah (Founder, Chairman & MD), Nehal Shah (Joint MD), Paresh Shah (Chief Innovation Officer), Gopal Tiwari (CFO)
  • Investors: Vishal Pandya (Individual Investor), Shreya Mehra (Choice Equities)
  • Moderator: Mayank Vaswani from CDR India

Call Duration

31 minutes and 5 seconds