Key Speakers

  • Mr. Venkatesh Korla - Global Chief Executive Officer, HGS
  • Mr. Vynsley Fernandes - Whole Time Director, HGS & CEO of NXTDIGITAL Media Business
  • Mr. Mahesh Kumar Nutalapati - Global CFO, HGS

Financial Performance Summary

Q4 FY2026 Performance

  • Revenue from Operations: ₹1,085 crores
  • Total Income (including other income): ₹1,255 crores
  • EBITDA: ₹197.1 crores
  • EBITDA Margin: 15.7%
  • Operating Expenses: ₹1,057 crores
  • Other Income: ₹170 crores

Full Year FY2026 Performance

  • Revenue from Operations: ₹4,307.4 crores
  • Total Income: ₹4,857 crores
  • EBITDA: ₹648.6 crores
  • EBITDA Margin: 13.4%
  • Operating Expenses: ₹4,208 crores
  • Other Income: ₹549.7 crores

Dividend Declaration

The Board has recommended a final dividend of ₹5 per equity share (on par value of ₹10 each) for FY2026, subject to approval of shareholders at the AGM.

Business Strategy & Transformation Update

Intelligent Experience Strategy

FY2026 was described as a year of "disciplined transformation" where HGS focused on strengthening fundamentals, simplifying business, and positioning for next phase of growth. The company is operating with a single integrated HGS value proposition bringing together experience, platforms, and operations.

Cost Rationalization & Margin Improvement

The company delivered around 200 basis points of margin improvement through cost rationalization across real estate, technology, and infrastructure. Q4 showed sequential recovery in top line and margins.

New Client Acquisitions

FY2026 was the strongest year ever for new client acquisitions with 79 new clients signed across BPM and Digital services, providing a broader base for revenue growth in FY2027.

AI Strategy & Realized AI Methodology

HGS is focusing on moving clients from AI experimentation to scaled adoption through its "Realized AI" methodology, which includes:

  • 23 active customers and 21 AI assistants in production (not pilots)
  • 90-day programs to move from zero to production
  • Three pillars: Team (18,000 people with operational experience), Method (scientific model with FDE approach), and AgentX™ Workbench (accelerators and pre-built components)

Package Solutions Strategy

The company now has eight new solutions in market including:

  • AMLens for anti-money laundering
  • LoanFlow for loan management and processing
  • KYCVision

Client Satisfaction Metrics

  • Net Promoter Score (NPS): 60 (up 12 points year-over-year)
  • 68% of clients are promoters
  • Company ranks in top quartile of industry benchmark on client NPS

Media Business Update (Presented by Vynsley Fernandes)

Business Performance

FY2026 was a year of "disciplined execution and portfolio rebalancing" for the Media business. The linear television business faced industry headwinds while broadband business (retail and CelerityX enterprise services) were developed as engines of forward growth.

Project Ganga MoU

The highlight was the signing of a Memorandum of Understanding with the Government of Uttar Pradesh for "Project Ganga" (Government-Assisted Network for Growth and Advancement). Key details:

  • Signed on March 9, 2026
  • Objective: Empower youth and enable up to 10,000 entrepreneurs at Nyaya Panchayat level as Digital Service Providers (DSPs)
  • Mandate includes significant number of women entrepreneurs
  • Target: Connect over 2 million households with high-speed broadband over 2-3 years
  • Funding: Each DSP receives interest-free, collateral-free loan of up to ₹5 lakhs under Mukhyamantri Yuva Udyami Vikas Avyaan (CM Yuva Scheme)
  • HGS role: Enabler knowledge partner providing training, business operations support, technology, network design, and handholding

Digital Skilling MoU

Additional MoU signed with UP government to skill 100,000 youth in digital skills, creating a robust ecosystem of "digital warriors."

Broadband Performance Metrics

  • Customers opting for high-speed plans (above 100 Mbps) increased from 10.7% to 15%
  • 101-200 Mbps segment now at 9%
  • 51-100 Mbps segment increased from 31% to 38%
  • Entry-level packages (up to 50 Mbps) decreased from 54% to 46%
  • Churn rate: 0.62% (compared to industry average of 2-3%)
  • ARPU: Stable at ₹122
  • Bandwidth cost as percentage of revenue reduced from 28% to 26%

Media Business Challenges

The Media division reported:

  • Q4 loss: ₹50 crores
  • Full year loss: ₹175 crores
  • Initiatives underway: Revenue optimization through enterprise sales (CelerityX revenues increased 2x, TCV increased 5x), cost optimization through bandwidth cost negotiations, and structured cost optimization

Financial Position & Cash Flow

Balance Sheet Strength (as of March 31, 2026)

  • Net treasury and cash surplus: ₹5,346 crores
  • Financial position described as "robust" with ample liquidity to fund organic growth and strategic investments

Cash Flow Deployment

FY2026 saw investments in:

  • AI-led centers of excellence
  • Package solutions
  • Broadband and CelerityX expansions
  • Conservative leverage maintained

Revenue Composition Analysis

By Source (Full Year FY2026)

  • Core CX BPM business: 55%
  • Digital and Media services: 45%
  • Q4 mix: CX 58%, Digital and Media 42%

By Vertical

  • Tech, Media and Telecom: 50%
  • BFSI: 18%
  • Retail: 17%
  • Public Sector: 8% (momentum encouraging with UK and Canada public sector wins)

By Geography (Origination)

  • India: 38%
  • US: 28%
  • UK: 13%
  • Others: 5%
  • Multi-region, multi-service platforms becoming meaningful growth vector

By Delivery

  • India: 42%
  • US: 19%
  • Canada: 9% (US + Canada = 28%)
  • UK: 10%
  • Philippines: 13% (public sector deliveries)

Q&A Session Highlights

DaVinci™ Platform Use Cases

  • CS Data Lake platform pulling customer interaction information
  • Four use cases: 1) Extract interaction insights, 2) Identify interactions for automation, 3) Provide 360-degree view for human agents, 4) Financial discipline and operational visibility

Public Sector Deployments

  • Social care case study in UK showed reduction from 4+ hours to 30 minutes per case
  • Deployments expanding to multiple agencies in UK, Canada, and discussions in US

Capital Allocation Strategy

  • Dividend declaration based on improved performance and future outlook
  • Sufficient cash assets (₹5,346 crores) not causing funding concerns

Media Division Turnaround

  • Acknowledged ongoing challenges in linear television business
  • Initiatives: CelerityX enterprise growth, Project Ganga, product mix improvement, cost optimization
  • No specific timeline provided for profitability; update expected after Q2 FY2027

Income Tax Case Update

  • GAAR panel case regarding merger of NXTDIGITAL is sub judice
  • Appeal filed with Bombay High Court; next hearing on June 12, 2026

EPS Context

  • FY2026 negative EPS due to standalone losses of ₹160 crores
  • Confidence expressed in turnaround through strategic investments in AI and broadband

Forward Outlook

Management expressed "cautious optimism" for FY2027 despite ongoing macro uncertainties and client caution. Priorities include:

  • Driving sustainable, profitable growth
  • Focus on productivity, cost discipline, and capital efficiencies
  • Leveraging strong pipeline, AI-driven differentiation, and disciplined execution
  • Expecting steady improvements in growth and margins over time