Key Financial Figures

Q2 FY27 Performance:

  • Consolidated Revenue: ₹37.8 crores (decline of 8.8% QoQ and 4.7% YoY)
  • EBITDA: ₹9.7 crores
  • EBITDA Margin: 25.7% (compared to 30.3% in Q1 FY27 and 30.4% in Q2 FY26)
  • Profit After Tax (PAT): ₹7.25 crores
  • PAT Margin: 19.2%
  • EPS: ₹3.05 (compared to ₹3.55 in Q2 FY26)

H1 FY27 Performance:

  • Revenue: ₹79.2 crores (growth of 2.5% YoY)
  • EBITDA: ₹22.3 crores
  • EBITDA Margin: 28.1%
  • PAT: ₹16.5 crores (growth of 10.9% YoY)

Business and Strategic Updates

Revenue Impact: The sequential revenue moderation of ₹3.6 crores was primarily driven by client-specific ramp-downs at a couple of large enterprise clients against a backdrop of cautious client spending and discretionary spending scrutiny. The company indicated these were client-specific issues, not a structural change in business or client relationships.

AI Partnerships and Strategy: Ksolves achieved Select Partner status in both the Anthropic Claude Partner Network and the OpenAI Partner Network, a tier requiring certified practitioners, live production deployments, and client endorsements. 100% of the company's engineers are Claude certified. The company is moving towards a forward-deployed engineering model where AI is embedded across client engagements, changing sales conversations from headcount-based to outcome-based.

New Business Wins: The company secured strategic wins across diversified sectors in Q2, including three banking clients in South America, the UK, and Europe, plus projects in global ports and the education industry in Australia. The company was also upgraded to Frappe Bronze Partner in India.

Geographic Revenue Mix:

  • North America: 59%
  • India: 20%
  • Europe: 6%
  • Australia: 4%
  • Rest of World: 11%

Business Mix: IT services contributed 98.4% of revenue. Top 10 clients contributed 50% of revenue.

Operational Efficiency: The company rationalized headcount from approximately 550 to 495 employees (10% decline) and deployed AI more extensively across delivery, resulting in 2x-3x productivity improvements per engineer. Full quarter benefit of cost actions taken in Q2 is expected from the end of Q3.

Balance Sheet and Returns: The company maintains a debt-free balance sheet with cash and bank balance of ₹17.6 crores as of September 30, 2026. The Board declared a second interim dividend of ₹1 per share, taking total interim dividend for H1 to ₹5 per share, representing approximately 72% of H1 PAT.

Guidance and Outlook

Management expects FY27 revenue to remain soft and trail FY26 levels, reflecting cautious client spending amid global macroeconomic and geopolitical uncertainty. EBITDA margin is expected to remain in the guided range of 25-30% for FY27, with scope for improvement in Q4 as recent wins ramp up. Focus for H2 FY27 is on building a broader and stronger pipeline, scaling AI opportunities, and supporting recovery and expansion of enterprise accounts. The company is positioned for a return to growth in FY28.

Management Participants

  • Mr. Ratan Srivastava – Chairman and Managing Director
  • Mr. Umang Soni – Chief Financial Officer
  • Mr. Manish Gurnani – Chief Technical Officer
  • Mr. Darpan Audichya – Head, Business Transformation and Consulting
  • Mr. Pratik Jagtap – Ernst & Young, LLP (IR Moderator)

Q&A Session Highlights

Dividend Policy: Management indicated shareholder returns remain a priority given the debt-free status and healthy cash position, with the Board to decide each payout based on annual profitability and cash needs.

Geographic Expansion: The company has established a sales office in Australia for local client contracts and bidding, with the delivery team based in India. Middle East business has been retained and increased compared to previous quarters.

Banking Sector Focus: The company has 11-12 BFSI clients currently. Three banking wins in Q2 are expected to contribute meaningfully from H2 FY27 onward, with one South American bank expressing long-term vision to execute major projects with Ksolves.

Margin Explanation: The margin reduction was attributed to a revenue-led dip, with management noting that without the ₹3.6 crore revenue decline, margins would have been at the upper end of the guided range.

AI Implementation Examples: Management provided specific examples of AI implementations including: building a complete agentic AI platform for banking clients for intelligent assistance and compliance monitoring; developing a low-code, no-code platform for a telecom client used by 500+ operations staff; and using AI agents to migrate legacy code for a US-based client, reducing project timeline from 1.5 years to 7-8 months.

Cybersecurity Exploration: The company is exploring entering the cybersecurity vertical due to increased client concerns about AI security and the need for guardrails, though plans are still in development.