Financial Performance Highlights

Full Year FY26 Performance (Year ended March 31, 2026)

  • Consolidated Revenue: ₹968 crore, representing 20% year-on-year growth from FY25 revenue of ₹807 crore
  • Adjusted EBITDA: ₹112 crore, showing 14% year-on-year growth
  • EBITDA Margin: 11% (resilient despite one-time charges)
  • PBT before exceptional items: ₹81 crore, improving 33% year-on-year
  • Reported PAT: ₹36 crore, representing 10% growth from FY25 PAT of ₹32 crore
  • Dividend: Maintained at 30% (₹1.50 per equity share with ₹5 face value)

Quarterly Q4 FY26 Performance

  • Quarterly Revenue: ₹250 crore (highest quarterly revenue in company history)
  • Annualized Run Rate: Surpassed ₹1,000 crore milestone based on Q4 performance

Geographic Performance FY26

  • India Revenue: Grew 17% year-on-year; Q4 domestic revenues grew 37% year-on-year
  • International Revenue: Grew 22% year-on-year

Segment Performance FY26

  • Services Business: 21% year-on-year growth
  • Solutions Business: 17% year-on-year growth

Customer Mix FY26

  • Enterprise Customers: 31% year-on-year growth
  • Government Customers: 6% decline year-on-year

Exceptional Items and Provisions

  • One-time ECL Provision: ₹36 crore additional provision for expected credit losses on trade receivables and unbilled revenues
  • Deferred Tax Asset Benefit: ₹21 crore recognized, partially offsetting the ECL provision impact
  • Tax Rate Guidance: Normalized tax rate expected at 25% for FY27, with some deferred tax asset benefits continuing

Audit Qualification Resolution

All prior audit qualifications from FY25 have been fully addressed:

Section 186 Compliance

  • Total Loans to Subsidiaries: ₹117 crore
  • Conversion to Equity: ₹112 crore converted into equity by FY26 year-end
  • Remaining Balance: ₹5-6 crore across 4-5 subsidiaries, with interest now being charged
  • RBI Approval: Process underway for formal approvals, expected within 2 quarters

Other Audit Matters Resolved

  • GST Input Tax Credit Reconciliation: Completed
  • Physical Verification of Assets: Comprehensive verification completed for property, plant, equipment, intangible assets, inventories, and investment property
  • ECL Policy Implementation: Additional provisions made aligning with auditor recommendations

Operational and Order Book Update

Q4 Order Wins

  • Total New Orders and Renewals: ₹166 crore
  • Broad-based momentum across domestic and international markets

Key Q4 Engagements

  • Smart City Segment: Citywide integrated command and control center engagement
  • Energy Sector: Managed services and annual support maintenance with leading enterprises
  • Global Workplace Services: Multi-region support engagements across North America, Latin America, and Africa including multilingual service desk operations, on-site support, and remote infrastructure management

Renewal Momentum

Strong renewal activity across BFSI, manufacturing, mining and metals, healthcare, and real estate sectors

Pipeline and Future Outlook

Immediate Pipeline

  • Mumbai Government Contract: ₹150-200 crore value, expected announcement in 2-3 weeks, 9-month implementation followed by 5-year O&M
  • Maharashtra State Pipeline: ₹2,000 crore+ worth of opportunities
  • Large Contracts: Two ₹600 crore individual contracts in Maharashtra where company is front-runner
  • Noida Smart City: Active bidding participation
  • Western Railway: Two contracts (₹165 crore and ₹85 crore) to be re-tendered in mid-July after previous tender cancellation due to equipment cost inflation

Growth Guidance

  • FY27 Revenue Growth: 20-25% year-on-year guidance
  • Long-term Target: 10x growth over 10 years (approximately 20-25% CAGR)
  • Margin Targets: Short-term target of 12.5-13% EBITDA margins, long-term target of 15%

AI Strategy and Implementation

Three-Pronged AI Approach

1. Smart City Solutions: Incorporation of AI in solutions and sensor technologies with edge AI processing

2. Managed Services AI Integration: Digital desk with AI+ feature to reduce ticket resolution time and improve automation

3. Agentic AI Solutions: Development and deployment of agentic AI solutions in emerging market

Current AI Implementation

  • Proof of Concepts: Two completed last quarter
  • Live Implementation: One large BFSI customer implementing automation and AI
  • Resource Impact: Expected 20-25% reduction in low-level resources through AI implementation
  • Implementation Timeline: 6 months for automation benefits, 1 year for full AI benefits

Global AI Adoption

  • US Market: Higher adoption rates with opportunities in AI-based data center managed services
  • Customer Demand: Increasing requests for AI capabilities in all customer conversations

Business Model Strategy

  • Services vs Solutions Mix: Target 75-80% services revenue for consistency (5-year contracts)
  • Solutions Business: Acts as strategic entry point for larger annuity-led managed services engagements
  • Integrated Model: Strengthens customer relationships, enhances revenue visibility, and supports long-term margin sustainability

Governance and Compliance

  • Auditor Change: Appointed larger, more reputed audit firm during the year
  • Governance Focus: Strengthened processes, systems, and financial reporting framework
  • Transparency Commitment: Proactive addressing of all audit observations within 12 months

Market Challenges

  • Margin Pressures: Industry-wide competitive pricing pressures
  • Government Delays: Tender delays due to geopolitical events (Iran-Israel war) causing equipment cost inflation
  • Sales Cycles: 2-3 month delays in government tender financial openings affecting quarterly timing

Call Participants

Management Attendees

  • Mr. Nitin D Shah, Founder, Chairman & Managing Director
  • Mr. Ramanan Ramanathan, Global Head Strategy responsible for Growth, Innovation and Partnerships
  • Mr. Nehal Shah, Whole-time Director
  • Mr. Paresh Shah, Global CEO
  • Mr. Gopal Tiwari, Chief Financial Officer
  • Mr. Sunil Bhatt, Board Member and Chief Technical Officer (mentioned in introduction)

Analyst Participants

  • Kunal Bajaj – Choice India
  • Jay Adwani – Alokik
  • Nitin Gandhi – Inoquest Advisors
  • Maitri Shah – Sapphire Capital
  • Prateek Dedhia – Individual Investor

Call Details

  • Duration: 52 minutes and 34 seconds
  • Date: May 22, 2026
  • Moderator: Mayank Vaswani from CDR India