Key Financial Performance (Q2 FY27)

Revenue:

  • INR 28.3 billion, up 22.2% year-on-year (YoY) and 3.7% quarter-on-quarter (QoQ).
  • US$296 million, up 11.7% YoY and 2.6% QoQ.
  • Constant Currency (CC) growth: 12.3% YoY and 2% QoQ.
  • This represents the 12th consecutive quarter of sequential revenue growth and the 10th straight quarter of double-digit YoY growth.

Profitability:

  • EBIT: INR 3.5 billion, up 32.2% YoY.
  • EBIT Margin: 12.5%, expanding by 100 basis points (bps) YoY and 10 bps QoQ. This is the 8th straight quarter of sequential margin expansion.
  • Profit After Tax (PAT): INR 2.3 billion, up 29.7% YoY and 4.8% QoQ on a normalized basis.
  • Diluted EPS: INR 3.31.

H1 FY27 Performance:

  • Revenue: INR 55.5 billion (US$584 million), growing 12.3% YoY in CC terms.
  • EBIT: INR 6.9 billion, up 33.4% YoY with a margin of 12.4%.
  • Adjusted PAT: INR 4.5 billion, up 30.4% YoY.
  • Effective Tax Rate: 23.2% for H1; expected to be between 22% and 24% for FY27.

Balance Sheet & Cash Flow

  • Cash and Bank Balance: INR 4.1 billion as of 30th September 2026.
  • Net Debt: INR 15.3 billion, reduced from INR 17.1 billion at the end of June 2026.
  • Normalized Days Sales Outstanding (DSO): Remained in the range of 67-69 days.
  • Free Cash Flow (FCF) to PAT: 150% for the quarter and 126% for the half-year.
  • Hedge Book: Coverage of GBP 69.2 million for the next 12 months at an average rate of INR 116.6/GBP, and USD 68.5 million at an average rate of INR 95.7/USD.

Business Highlights & Operational Metrics

Deal Wins & Clients:

  • Signed four large deals (ACV > US$5 million), the seventh consecutive quarter with four or more large deals.
  • Two of the large deals were from new logos.
  • Added 17 new logos in the quarter, including six strategic logos (potential for >$5M annual revenue).
  • Client Cohort Growth: Number of clients with >$5M revenue run rate increased to 51 (up 6 QoQ, nearly doubled over 2 years). Clients with >$10M run rate increased to 23 (up 3 QoQ, up nearly 80% over 2 years).
  • Revenue concentration reduced: Share of top 5 and top 10 clients down by 6 and 10 percentage points respectively over the last 8 quarters.

Notable Deal Examples:

  • Expanded with a leading UK-based MVNO for customer experience services, transitioning their in-house operations offshore.
  • Selected by a top 10 North American healthcare payer (existing client) for claims processing.
  • Expanded with a leading US non-profit managed care organization across multiple health plan operations.
  • Selected by a leading UK/European bank for managed operations support (new logo).
  • Won a deal from a leading US-based student loan provider for legal and third-party collections (new logo).
  • Won a large deal from a leading US digital bank for CX services.
  • Expanded with a major UK communications/media company across retention, collections, and digital support.

Headcount & People:

  • Total Employees: 39,937 as of 30th September 2026, a net increase of 3,062 during the quarter.
  • Growth driven by the transition of associates from a major banking client and program ramp-ups.
  • Over 85% of the net addition was in India and the Philippines.
  • Voluntary Attrition (TTM, >180 days tenure): Steady at 28.4%.
  • The company is expanding the use of AI in people operations (talent acquisition, engagement, retention).

Awards & Recognitions:

  • HFS: Featured in non-linearity index; first runner-up for 'best services eating software'; Horizon 3 market leader for customer experience services.
  • ISG: Recognized as a leader in Generative AI and Agentic AI services; placed in the 'Breakthrough 15' for the $1-3B tier.
  • Great Place To Work: Top 50 India's Best Workplaces for Women 2026 (2nd consecutive year).
  • Brandon Hall: Gold award for best development program for frontline managers; Silver award for best employee engagement.

Vertical Performance (Constant Currency)

Banking & Financial Services (BFS):

  • Growth: 19% YoY and 9% QoQ.
  • Added 9 new logos.
  • Growth was broad-based, driven by consumer debt servicing complexity and efficiency demands.
  • Strong execution on a large engagement won in prior quarters.
  • Healthy pipeline exiting the quarter.

Healthcare:

  • Growth: 5% YoY; declined 2% QoQ.
  • Added 4 new logos.
  • Growth impacted by timing of payer program ramps/transitions and the prior quarter's contract wind-down.
  • Strong engagement across payers and providers. Provider side seeing tailwinds from HR1 changes (Medicaid renewals moving to six-monthly from January 2027).
  • Voice AI and DenialsAI platforms are live and gaining traction.

Communications, Media & Technology (CMT):

  • Growth: 6% YoY; flat QoQ.
  • Added 2 new logos.
  • Steady growth with some quarterly volatility. Broadened engagements through scope expansion and increased offshore/nearshore utilization.
  • Healthy pipeline across telecom, cable, media, tech, and digital-native clients.

Diverse Portfolio (Utilities & Retail):

  • Growth: 25% YoY; flat QoQ.
  • Added 2 new logos.
  • Utilities: Focus on cost optimization and nearshore delivery. Healthy pipeline.
  • Retail: Steady demand focused on customer experience and efficiency. Seasonal ramp expected in Q3.

Geographical Performance (Constant Currency)

North America: Grew 6% YoY and 1% QoQ. Growth led by BFS. Healthy pipeline.

Europe: Grew 27% YoY and 7% QoQ. Growth led by BFS, with good momentum in CMT. Strong demand for nearshore delivery (South Africa). Secured two large wins. Healthy pipeline.

Australia: Grew 50% YoY, supported by existing relationships and an improving pipeline.

Strategic Priorities & Outlook

Progress on Strategy (Intelligence-that-Operates):

  • Focus on shifting from services to productized services to scale expertise through repeatable workflows and AI.
  • Kairos, the AI-native operating system, is the engine for this shift, comprising:
  • Domain Harness: Captures skills and playbooks for reuse.
  • Intelligent Context Framework: Provides AI with decision-making memory.
  • Governed Autonomy: Ensures compliance in regulated industries.
  • Key indicators for success: repeatability of solutions across clients, evolution of revenue mix (increase non-linear, outcome-based revenue), and disciplined measurement of AI outcomes.

FY27 Guidance Update:

  • Revenue Guidance Raised: Now expects constant currency revenue growth of 10.5% to 13% (from 10% to 13% earlier).
  • Margin Guidance Reaffirmed: EBIT margin guidance maintained at 12.25% to 12.75%.
  • The revision reflects strength in the portfolio, ramp-up of large deals, healthy pipeline, and new logo momentum.
  • Management expects H2 FY27 to be stronger than H1 and believes this growth places the company in the top decile of its industry.
  • Long-term Margin Aspiration: The goal remains to take EBIT margins to the 14% to 15% band over the next 2-3 years.

Q&A Session Key Points

  • Furloughs: The business does not anticipate significant furloughs as it runs mission-critical, continuous operations.
  • Attrition: The 28.4% attrition rate is stated to be in line with BPO industry averages, not IT services.
  • Healthcare Bottoming Out: Management believes the headwinds from the previous contract wind-down are largely behind, and the vertical is well-positioned for growth.
  • Large Deals: The consistent pace of 4+ large deals per quarter is a result of a strengthened sales engine; the goal is to increase this number further.
  • Margin Levers: Future margin expansion (50-75 bps per year) will come from right-shoring, automation, process excellence, account-level improvements, and pricing.
  • M&A Philosophy: Focused on acquisitions that plug capability gaps or provide distribution access, as seen with past acquisitions QBSS (healthcare RCM) and TeleMedik (Puerto Rico footprint, clinical ops).
  • AI & Competition: Sees opportunity for symbiotic partnerships with AI-native startups (who have tech but lack domain depth), combining forces to win deals.
  • Q2 Headcount & Wage Cost: The net headcount addition of 3,062 included onboarding for a major banking transition and seasonal ramps. The modest 3% QoQ increase in employee cost reflects this onboarding alongside ongoing optimization efforts.

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