Exceptional growth masks margin compression; long-term structural tailwinds intact

ETS at 63.4% of revenue, delivering majority of 44% consolidated growth

₹10 Cr revenue Q1 with 26% margin confirmed; ₹40 Cr annual target stated but not yet secured

16.24% Q1 vs 18.02% prior year; one-time costs ₹1.46 Cr add back only ~40 bps, still below YoY

Guided 24-25% for FY27; structural investments (nearshore, sales, AI) ongoing

₹2.5 Cr booked Q1; ₹12-15 Cr FY27 expected; USD 17M (~₹140 Cr) visibility over 4 years confirmed

Prior call: 30-31% 'historical' EBITDA margins expected as investments mature. Current: 24-25% FY27 guidance. ~600 bps cut despite strong revenue growth.

Q1: ₹10 Cr revenue at 26% margin; ₹40 Cr FY27 order book secured (up from pilot stage). Mechanism now tangible, not aspirational.

Prior: 'engagement signed, work in progress.' Current: ₹2.5 Cr Q1 revenue, ₹12-15 Cr FY27 range, USD 17M/4-year visibility. Moved from promise to delivery.

₹62 lakh Q1 for AI training 300 employees, ₹4 Cr capex for AI-native products. Management flagged 2-year stabilization horizon for AI spend.

Reclassification: ETS kept separate; products clubbed as interconnected. Both segments growing uniformly; no strategic pivot.

Expecting 24-25% EBITDA margin for full year, in line with last quarter guidance.

Prior guidance was shrinkage from US operations. New guidance reflects sales team expansion + capacity building not accounted for before. Prefer 30%+ growth at 25% margin over 20-25% growth at higher margin.

30%+ growth would require further investments; not committing to next-year margin improvement. Conservative guidance of 25% floor.

₹2.5 Cr Q1; ₹12-15 Cr expected FY27 booking. Over 4 years, USD 17 million (~₹140 Cr) visibility.

3 targets in pipeline: 1 US, 2 India. Two have non-binding offers; third early-stage. Final stage of negotiation.

₹400 Cr including FDs on balance sheet.

Short-term margin dilution expected; long-term nearshore margins 35-40% as utilization improves. Balanced approach, not aggressive onsite hiring.

Yes, still pursuing. IPO slowed it down; numbers renegotiated; now in final stage, couple of weeks from decision.

NTA CEO contacted us post recent exam issues. We pitched capability. Now in touch with 4-member government task force; meeting Thursday. Aggressively pursuing.

Over 4 years, USD 17 million visibility. Likely 2nd largest account; potential upside beyond current visibility.

Mix of both. ~69-70% organic growth, 30% inorganic growth expected over next 5 years.

Expenses inevitable for growth. Selective investments over next few quarters, not recurring basis.

Interest expense up (₹15M vs ₹7.8M); other income factored into EBIT calculation for PAT bridge.

Revenue: ₹350-360 Cr. EBITDA margin: 24-25% (same margins as Q1 guidance, no specific PAT number).

Multiple: started with 1, added 1 more this quarter. ₹40 Cr is combined top-line; execution mix onshore/offshore.

Q1 typically slowest for product (number of tests lower). FY27 product growth: 25-30%, given AQA contribution.

Extrapolated from Q1 ₹80.3 Cr as 20-22% of full year (slowest quarter). AQA ₹12-15 Cr, nearshore ₹40 Cr, organic growth 30%+ assumed.

One-time investments (sales, nearshore, AI) expected to moderate as utilization improves. Management cautious, committed floor at 25%.

Amortization ₹6.5 Cr Q1; fresh capex ₹4 Cr. Expected to revert to prior year levels or lower.

Top 5 customers = 70% of revenue; top 10 = 83%. AQA becoming 2nd largest account post-ramp will concentrate risk further. Churn in 1-2 accounts could reduce revenue 15-20%.

Nearshore at 26% margin Q1; management expects 35-40% by year-end. If utilization stalls or attrition occurs, margin uplift won't materialize. ₹40 Cr order book represents 11% of full-year target but needs flawless execution.

AQA currently ₹2.5 Cr Q1, ₹12-15 Cr expected FY27. Pilot/phased deployment approach means scaling is contingent on customer satisfaction & regulatory approval. Missed target would be 15%+ revenue miss vs guidance.

Management downgraded FY27 margin guidance from 30-31% to 24-25%, citing sales/nearshore/AI investments. Recovery path to historical margins not quantified. If investments don't yield expected revenue upside, margin floor of 25% may be tested.

1 US target + 2 India targets: two have non-binding offers, one in early stage. IPO caused prior slowdown; renegotiations ongoing. Failed/delayed M&A would slow inorganic growth target (30% of next 5 years' growth).