Double-digit growth masks margin miss and revenue deflation

₹260.5 Cr delivered, 18.9% YoY actual growth

₹25 Cr EBITDA / ₹260.5 Cr revenue = 9.6% actual margin

PAT down 14.2% YoY; OPM 8.7% vs undisclosed prior year

QoQ revenue down 2.7%; YoY growth 18.9% below 20-25% FY27 target

Stated in call; diversified across workspace, enterprise apps, government

Prior: 12.5-13% short-term target. Now: 10-11% current, targeting 12-13% in 'couple quarters' — lower bound cut 50 bps, timeline extended.

Q1 FY27 came in at 18.9% YoY growth; prior FY27 target was 20-25%. Full-year tracking implies miss unless acceleration in H2.

Nehal Shah to JMD, Paresh Shah to Chief Innovation Officer (AI focus), new CEO hired for cloud division. Execution risk: changes mid-transformation.

First unqualified audit report after multi-year comprehensive review. Prior qualifications fully resolved.

Lost ₹180-200 Cr railway project due to 25-30% hardware price spike and OEM uncertainty. Confidence in order conversion weakened.

Competitive pressure in US market, heavy AI/talent investments, annual wage revisions. Expect margin improvement once AI automation deployed at customer sites; cannot specify timing.

AI is opportunity, not threat. We have 42-year track record adapting to tech cycles. New challenges bring new opportunities. Will know impact once we implement and show cost optimization.

Two reasons: (1) India hardware prices up 25-30%, lost railway deals; (2) US market competitive pricing pressure. Expect stabilization Q2-Q3 as OEMs confirm prices. Another quarter and we see new deals.

Cannot predict when; 'very soon.' Industry facing cost pressure universally; those ahead on automation will recover margins. Guidance: 10x growth in 10 years = 20% CAGR.

Lost ₹180-200 Cr railway orders due to 25-30% product price increase mid-bid. Became cautious for 2 quarters. Now OEMs confirming stable pricing; expect announcements Q2-Q3 FY27.

Currently 10-11% EBITDA. Will improve to 12-13% in couple quarters when large deals kick in + AI investments pay off.

Long-term target; management acknowledged 'some quarters' will deviate due to macro. Q1 FY27 at 18.9% already below FY27 target of 20-25%.

Prior guidance was 12.5-13% short term; now pushed to 'couple of quarters.' Dependent on government project ramp-up and unproven AI cost savings.

No timeline given; contingent on AI automation implementation proving ROI at customer sites. Currently at 9.6%.

US market customers demanding price cuts in anticipation of AI-driven cost savings. Management admits to 4-8 quarters of margin pressure. Pricing power eroding.

Hardware product prices spiked 25-30% in India, causing lost ₹180-200 Cr railway project. Delayed government sector order wins for 2 quarters. Risk of further price swings or demand destruction.

Q1 FY27 revenue growth 18.9% already below FY27 target of 20-25%. QoQ revenue down 2.7%. Unless H2 accelerates significantly, full-year FY27 will miss guidance.

Management betting on AI-led cost optimization to recover margins to 12-13%, but no customer success stories or proof points shared. Benefits contingent on adoption and ROI realization.

₹120+ Cr orders booked but conversion timeline unclear. Management says 'couple of quarters' to see margin improvement, but large deals may slip further given elongated procurement cycles.