Financial Performance Highlights

  • Revenue: $104.8 million, up 1.2% quarter-on-quarter (QoQ); 1.8% growth in constant currency terms
  • Revenue (INR): ₹985 crore, up 5% QoQ and 7.7% year-on-year (YoY)
  • Operating EBITDA: 15.4% margin
  • PAT: ₹105.9 crore (10.6% of total income)
  • EPS: Basic EPS of ₹34.2 (up 14.8% YoY); Diluted EPS of ₹33.9 (up 15% YoY)
  • 12-Month Order Backlog: $310 million, up 3.2% QoQ and 13.3% YoY in USD terms; up 25% YoY in INR terms

Cash Flow and Balance Sheet

  • Collections: $116 million collected in Q1 FY27
  • DSO: 75 days (increase of 2 days primarily due to pushout of $2.5 million collection into early July and Middle East headwinds)
  • Operating Cash Flow: Positive ₹27 crore generated despite ₹107 crore variable pay to employees
  • Net Cash Position: Improved by ₹200 crore over last two quarters through prudent cash management

Geographic Performance

  • UK Business: Grew 3% QoQ in constant currency; maintained healthy EBIT of ~20%
  • North America Business: Grew 2% QoQ constant currency (6% in INR); order backlog improved 29.8% QoQ and 23.5% YoY
  • Middle East Business: Faced severe headwinds due to geopolitical instability; impacted by bench costs and delayed collections

Business Metrics

  • Service Line Performance: Data, automation and AI business grew 9.8% sequentially
  • Industry Performance: Public sector business grew 7.9% sequentially
  • Utilization: Excluding trainees down 2% QoQ due to order pushouts and Middle East situation
  • New Customers: Added 13 new customers during the quarter
  • Headcount: Closing headcount of 4,897 (addition of 167 during quarter; UK added 125)
  • Attrition: Last 12-month attrition rate decreased from 17.4% to 16.4%

Key Business Developments

  • AI Transformation Focus: Company steering towards becoming AI transformation company in select verticals; closed 40+ new AI-led opportunities in quarter
  • Leadership Changes: Amit Gajwani joined as Chief Operating Officer from LTM
  • Large Deal Wins: $25 million AI transformation deal in North America (Salesforce Agent force); expected to ramp up by H2 FY27
  • Healthcare Transition: NHS England projects transitioning from old to new projects creating timing gap; new projects focused on data modernization

Tax Matter

  • Received income tax assessment for FY 2022-23:
  • ₹91 crore income added on account of transfer pricing
  • ₹32.5 crore income added on account of domestic tax
  • Total tax impact approximately ₹31 crore (not demand of ₹135 crore)
  • Appeal filed with Commissioner of Income Tax Appeals on June 26, 2026

Forward-Looking Commentary

  • Demand Environment: Positive sentiment with AI-led opportunities emerging across sectors
  • UK Public Sector: Monitoring policy changes under new government; cost savings and efficiency demands remain high
  • North America Margins: Expected to reach mid-teens at $28-30 million quarterly run rate
  • ESOP Impact: Estimated $400,000-$500,000 per quarter starting Q2
  • Margin Outlook: Q2 margins expected to be impacted by increments; full-year focus on cost efficiencies to mitigate ESOP impact
  • Growth Trajectory: FY27 performance expected to be better than FY26; H2 expected to show stronger growth particularly in North America

Internal Transformation

  • Implementing AI-led business transformation internally as "Customer Zero"
  • Replacing core systems (CRM, recruitment, payables) with AI-native solutions
  • Transforming resource skill matrix toward forward deployed engineers and domain consultants