Q4 25/26

May 22, 2026

Summary

FY26 revenue rose 15.3% and EBITDA margin reached a record 18.7%, while adjusted PAT was INR 253 crore. FY27 organic growth guidance is ~8%; AI investment and new contract ramps are key variables.

Ladies and gentlemen, good day and welcome to Datamatics Q4 FY 2026 Earnings Conference Call. As a reminder, all participants' lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Pratik Jagtap from EY. Thank you, and over to you, sir. Thank you, Nitesh. Good day to all the participants in the call today, and welcome to Q4 FY 2026 earnings call of Datamatics Global Services Limited. The results and presentation have already been mailed to you, and they are also available on the website of Datamatics. In case anyone has not received a copy of press release or presentation, please do write to us and we will be happy to send you all. To take us through the results today and to answer your questions, we have with us the top management of the company represented by Rahul Kanodia, Vice Chairman and CEO, Ankush Akar, EVP and Chief Financial Officer, Mitul Mehta, EVP and Chief Marketing Officer. Rahul will start the call with a brief overview of the quarter on business, which will be then followed by Ankush, who will take us through the financials. Then we will open the floor for Q&A session. I would like to remind you that anything that is said on this call, which gives any outlook for the future or which can be construed as a forward-looking statement, must be viewed in conjunction with the risks and uncertainties that we face. These risks and uncertainties are included, but not limited to, what we have mentioned in the prospectus filed with the SEBI and subsequent annual reports, which you can find on our website. With that said, I now hand over the call to Rahul. Over to you, sir. Thanks, Pratik. Good evening, everyone. Welcome to the Datamatics Q4 and FY 2026 earnings calls. I will begin by sharing a summary of our annual performance and the strategic progress. Following my remarks, Ankush will present the detailed financial update, and then we will open the floor for Q&A. FY 2026 was a productive year for Datamatics. We delivered revenue growth while improving operational efficiency and advancing our position across our target markets. For the full year FY 2026, our revenue grew 15.3% year-on-year to INR 1,987.2 crores. We achieved a significant milestone in profitability, delivering an EBITDA margin of 18.7%, the highest in Datamatics history. The total EBITDA was INR 371.6 crores, representing a 62.1% year-on-year growth. This margin expansion was driven by operational efficiencies, disciplined cost management, and the realization of synergies from recent acquisitions. Our core strategy centers on delivering digital transformation, automation and AI-led modernization initiatives. We are concentrating our focus on securing large deals with our primary vertical markets, BFSI, manufacturing, logistics and publishing. To support this objective, we reorganized our sales team over the last year to prioritize engagements with existing customers. This structural alignment is functioning as planned, enabling us to expand relationships and drive deeper penetration within our current accounts. Reviewing our operational segments. Digital operations. Our revenue posted healthy growth led specifically by our digital content business. Margins improved due to process efficiencies and platform-driven automation. We expect this segment to lead our AI transformation efforts. Digital technologies revenue decreased slightly due to scheduled project completions, but we successfully maintained double-digit margins. The pipeline remains steady, and we anticipate revenue improvement in this segment for the current year. Digital experiences. The revenue and margins contracted as selected customers shifted work to captive centers, a factor we noted in the previous quarters. However, we have signed new contracts that will ramp up in FY 2027, which will drive stabilization and improvement. The integration of Dextara and TNQ Tech is proceeding to plan. TNQ Tech delivered a solid annual performance. Through our Dextara capabilities, we recently secured a Salesforce-led CRM transformation program with a leading U.S.-based logistics enterprise. Integrating AI into our operations and clients' deliverables is our primary operational focus. Recently, we launched TruAI, our enterprise suite for agentic automation designed for complex business processes. The initial solutions, TruAI Underwriting, enables insurers to assess financial and medical risks with increased speed, consistency, and accuracy. We have already acquired our first few customers for this platform. Additionally, we are seeing increased customer adoption for FINATO, our agentic AI platform for finance transformation, and our Kai series of accelerators for legacy modernization as organizations look to accelerate time to value. Demand for digital transformation remains consistent in our focus sectors. Moving forward, our priorities are strengthening our AI capabilities and product suite, expanding our presence in key international markets, deepening customer relationships and market share, improving execution excellence across all delivery centers. Based on our operational performance and cash generation, the board of directors has recommended a final dividend of INR 5 per share, representing 100% of the face value for the financial year ended March 2026. I thank our customers for their trust, our employees for their execution, and our shareholders for your ongoing support. We remain focused on our stated strategy and operational targets. I will now hand over the call to Ankush for our financial update. Thank you, Rahul. Welcome, everyone, and thank you for joining us for our Quarter 4 FY 2026 earnings call. We have delivered a strong performance in our fourth quarter and for the full fiscal year 2026. Starting with our fourth quarter performance, our Quarter 4 revenue stood at INR 519.3 crore, reflecting a growth of 4.4% year-on-year. Our ongoing cost optimization efforts and operational efficiencies helped us improve our EBITDA to INR 110.6 crore, a growth of 48.4% year-on-year. Our EBITDA margin for the quarter stood at 21.3%, reflecting an expansion of 631 basis points year-on-year. Our EBIT for the quarter stood at INR 88 crore, a growth of 61.3% year-on-year. Our EBIT margin for the quarter was 16.9%, reflecting an expansion of 597 basis points year-on-year. Before moving to the profit after tax, I want to highlight that our profit after tax was adversely impacted due to one-time exceptional charge towards fair value changes of contingent consideration payable towards acquisition of subsidiaries and impact arising from the changes in labour codes. Our PAT after non-controlling interest was INR 44.2 crore, down by 1.5% year-on-year. Our PAT margin stood at 8.3%. Excluding the one-time exceptional impact, our adjusted PAT after non-controlling interest would have been INR 72.9 crore, representing a margin of approximately 13.6%. In terms of segment, digital operations revenue for the quarter stood at INR 299.5 crore, which is up by 12.4% year-on-year. Digital operations EBIT margin was at 23.2% for the quarter. Digital technologies revenue for the quarter stood at INR 159.4 crore, which is up by 0.3% year-on-year. Digital technologies EBIT margin was at 10% for the quarter. Digital experiences revenue stood at INR 60.4 crore, which is down by 15.8% on year-on-year basis. Digital experiences EBIT margin was at 4.4% for the quarter. Moving to the full year FY 2026 performance, our revenue for the year stood at INR 1,987.2 crore, reflecting a growth of 15.3% year-on-year. Our EBITDA stood at INR 371.6 crore, a growth of 62.1% year-on-year. Our EBITDA margin for the year was 18.7%, reflecting an expansion of 540 basis points year-on-year. Our EBIT for the year stood at INR 287.6 crore, which is up by 58.7% year-on-year. Our EBIT margin was 14.5%, reflecting an expansion of 396 basis points year-on-year. Our profit after tax after non-controlling interest stood at INR 194.2 crore, down by 5.3% year-on-year. Our PAT margin was 9.5%. As discussed earlier, our PAT was adversely impacted due to one-time exceptional charge during the year. Excluding the one-time exceptional impact, our adjusted PAT after non-controlling interest for the year would have been INR 253 crore, representing a margin of approximately 12.4%. In terms of segments, digital operations revenue for the year stood at INR 1,101.4 crore, which is up by 40.2% year-on-year. Digital operations EBIT margin was at 18.7% for the year. Digital technologies revenue for the year stood at INR 626.5 crore, which is down by 4.5% year-on-year. Digital technologies EBIT margin was 9.7% for the year. Digital experiences revenue stood at INR 259.2 crore, which is down by 8% year-on-year. Digital experiences EBIT margin was 7.9% for the year. In terms of geographical footprint, U.S. remains our largest geography with 54% of our business coming from here, followed by U.K. and Europe at 22%, India at 16%, and ROW at 8%. In terms of industry footprint, education and publishing was the largest segment for us, contributing 26% of the revenue, followed by technology and consulting contributing 22%, BFSI contributing 19%, manufacturing and logistics contributing 12%, not-for-profit and government contributing 9%, retail contributing 9%, and rest are 3% of the revenues. Our client concentration remains healthy with top 5, 10, and 20 clients contributing to 26%, 39%, and 52% respectively. Our bill DSO was at 63 days as of March 2026. We continue to maintain a healthy balance sheet. As of 31st of March 2026, our net cash and investment net of debt stood at INR 639.2 crore. Overall, we are pleased with our quarterly and yearly financial performance and remain confident in our strategy to drive sustainable growth. With this, I will now pass on the call to the operator to open the floor for questions. Thank you for your patience and continued interest in Datamatics. Thank you very much. We will now begin the question answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have first question from the line of Vatsal Shah from An India Financial Services. Please go ahead. Hello. Hello. Can you hear me? Yes. Good afternoon, sir. Congratulations for the great numbers. I have a couple of questions. The first one, what are you expecting for your upcoming 2-3 year plan? How your growth expectation would be, and at what percentage are you looking for year-on-year growth? The growth we are looking at is a high single digits for next year. Because we just launched some of our agentic AI platforms. We have got some very good traction initially, but we still need to see the evaluative performance. But we are by and large looking at high single digits in the next year. Sir, can you tell me about the quantity in numbers, like percentage, like high digits, what could be like 8%-9%? Yeah, 8% would be approximately correct. Okay, sir. Sir, the another question is, you have INR 630 crores of odd numbers in cash. Yeah. Are you going to divest it, invest it in other mutual funds or other investments, or are you planning for merger and acquisition with other companies? We keep talking about acquisitions. We are in dialogue with several companies, but we are cautious because you don't acquire a company and then get stuck. Traditionally, we have used our surplus cash for growth and M&A. That would be the primary agenda with this current cash balance. Having said that, we do have Yeah, sorry, go ahead. Yes, sir. Please go ahead. I am done. Okay. Sir, there was a loss in your 26 crores of loss in net that you have said in exceptional item. So what is the problem of making it in profit? There is no loss in exceptional item. We had a labour code adjustment, and that is about 24 crores. I do not know where 26 is coming from, but 24 crores of adjustment because the labour code has changed, and it is across the whole industry, so many companies have had that, particularly labor organizations. Sorry, I misread it. It is negative net worth. 26 crores of net worth was negative. So- After subsidiary company. Yes. This has been one of the subsidiary company where we have the negative net worth. We continue to see now profitable growth in that particular subsidiary as well, and we are confident in terms of we will be able to recoup it and then improve the overall performance. Yes. Probably it will recover in the next 2 years or so. Okay, sir. Thank you so much. Thank you. We have next question from the line of Bhavya Chheda from Seven Islands PMS. Please go ahead. Yeah. Hello, I am audible? Yes. Yeah. Your EBITDA margins have been quite high this time. Yeah. Will they be sustainable considering our product business is contributing more and more to the top line? What is the expectation for next year? Will the margins improve or stay the same? The margins will move. We are at about 18.7%. Hello? There is a background noise. Yeah. Hello. Yeah. Our EBITDA margins is about 18.7%. We are looking at another roughly 50-100 basis points next year. By and large, it will remain steady. I do not see that moving substantially higher. Okay. My other question is, can you elaborate more on this product, FINATO, and is there any new planned additions in this? Can you explain more about this product? Yeah. We have now made FINATO into an agentic AI platform, so we had to re-engineer the platform quite a bit. We are getting some very good traction with some large opportunities on agentic finance transformation on FINATO. Yeah. Hi, Bhavya. Yeah. FINATO is a finance transformation platform which automates the entire finance, which is APA for several companies, specifically in the manufacturing and logistics space. This platform is a generation platform which is currently in production. We are now upgrading and adding agentic AI into it, which will put AI capabilities in it. That is what is the innovation for the next developments which we are doing on that platform. It is a backbone of our entire finance transformation. Okay. My other question is, can you give me the EBITDA of TNQ and Lumina EBITDA margin? I don't have it handy right now, but we can share that with you offline. Okay, fine. Thank you. That's it. Thank you. Thank you, sir. Thank you. The next question from the line of Aditi from IWealth India, please go ahead. Hello. Hi, sir. My question was relating to EBITDA only. Do you think the 50-100 basis points will be conservative? Because right now also your costs have been cut from three to four quarters, it has been nearing to INR 400 crores. So even if we take that number, we can still do a margin of 20%-21%. So is that not possible? It depends on how much we invest in our AI going forward, because we have to invest in the agentic AI platforms that we are building. Some of that will influence this EBITDA percentage. As you know that we are expensing out all our investments. We do not capitalize any of it. Understood, sir. Thank you. Thank you. The next question is from the line of George John from Equity Intelligence. Please go ahead. Yeah. Hi, good evening. I hope I am audible. Yes. My question is on the newly launched TruAI Underwriting solution. Yeah. I believe you have already added clients in this. Yeah. Could you please talk in detail about this tool and its monetization? Is it primarily a one-time implementation they are offering, or is it going to be like a platform with recurring revenues? It will be a platform with recurring revenues. It is not a one-time implementation, so there is an ongoing license fee and then there are some services that will be ongoing as well. Underwriting, as you probably know, is the core of insurance and it is a very complex process because they have to analyze financial statements, medical statements, and assess the risk of each individual before you do any underwriting for his health insurance. That is what it is. Our next step is to expand that to claims processing using agentic AI. Mitul here, if you want to just add in a little bit. Yeah. As Rahul mentioned, underwriting is the heart of the insurance business and extremely manual and complicated process. With TruAI Underwriting, we are automating that whole process to a high degree, which makes two things. One, it improves productivity, it improves accuracy, and it improves for clients. Since we have launched about a quarter back, roughly, we have seen some really good traction. It is a platform, and therefore it is not a one-time implementation. We are moving towards more outcome-based and base pricing. So it follows an outcome and a transaction-based pricing approach. Yeah. Yeah. We have got very good traction. We are talking to several companies. We have already signed up three or four. I am very positive. This market is about a $30 billion market globally. Sure. And I think we've got an early start. Our key element will be now how do we capture market share. Right now we're covering the health insurance market. We will then take it to P&C and life. Life and no, sorry. So it is for life. Yeah. Then we will take it into the general insurance, P&C, health. So that is where the opportunity is. Okay. So these clients, are they domestic or foreign in nature? Both. We have got a few domestic and a few overseas as well. One, we are speaking to overseas guys, but right now we are doing more overseas. Yeah, U.S. and India right now. Okay. Could you just walk us through some of your recent case studies? Because I know you have been going into AI projects, and I think in Bedworth some 70 projects already. Yeah. It would be helpful to understand the nature of these engagements, the kind of problems that they have addressed, the industries and client segments, and the kind of outcomes that you have achieved. Yeah. If you could explain those. I will just give you a very high level, otherwise we will go into details of each case. Yeah. That is fine. Yeah. We have addressed the logistics industry, the banking, insurance, retail. These are the industries we have largely addressed. Some of them have been generative AI, some of them have been agentic AI. We have had a combination of both. The productivity gains have been anywhere from 30%-60% for customers. That brought their TCO, the total cost of operations, down substantially, improved the accuracy, and also improved the quality. The accuracy, the turnaround time, and the cost. All of them were impacted. We have got very good traction on that. But now we are trying to focus very specifically on certain verticals. We want to focus on insurance and logistics as two major ones. Therefore we want to expand the scope or the coverage of those platforms. We have tried to concentrate on two or three and expand it. The other one that we are doing very active work with is FINATO, which is an agentic finance transformation solution. They are also being shown into some very large organizations and got a very encouraging response from them. On that front, the earlier version of FINATO is installed and we have got a customer base. The new version, which is agentic AI, we have shown it, but we have not yet signed up any customer. I hope that in the next one quarter we should have a few sign-ups. On the agentic, we can give you details on computer vision kind of AI-driven case studies, agentic AI kind of case studies. They are different types, but maybe offline we can share that with you. Yeah, that would be helpful. Thank you so much. Thank you. Reminder to all the participants that you press star one to ask a question. Reminder to all the participants that you press star one to ask a question. The next question from the line of Jay Ahuja, an individual investor. Please go ahead. Hello? Hello. Yeah, your voice is very muted. Hello. Audible, sir? Now audible but still cracking, but we can hear you. Great numbers, sir, that you have highlighted how you are going to invest in AI and all. I just want to know about the CapEx. Are you going to increase the capital expenditure on intangible assets or on plant and equipment, anything? We will have some capital expenditure in some of our real estate needs, a little bit of an investment to just upgrade. Beyond that, no major capital expense. We may have some of it from a building, because the buildings we have are a little old, and we may need to do some upgrade there. Could you just tell me about the current order book? I don't have that number handy, but regardless, it remains quite robust and strong. I think we are okay for next year. Sir, any rough idea about the numbers? It would be really helpful. I don't have that handy at my fingertips, but maybe for the next call, I'll keep that number ready. Okay, sir. And sir, one more question. It is about three years that we are working with the hyperscalers. Yes. Are we expecting any big amount to come from that? Yeah. So we are working closely with both Microsoft, Google and Salesforce. On the Salesforce front, we have got some large deals in the pipeline, and we are hoping that they will materialize very soon. A few deals have already closed, which is very good, and a few larger ones are still in the pipeline. The company we acquired called Dextara, their average deal size ranges between $50,000 to $70,000. Our average deal sizes are now ranging between $500,000 to $1 million. So we have got a significant uptick. As far as Google is concerned, we have engaged with Google on all our agentic AI platforms. So our TruAI and FINATO are all using the Google technology. The underwriting technology is all Google. And also the FINATO. Kaiøre is another one where we are using that for legacy modernization. And that again, uses a combination actually of Google, Microsoft, and Claude. It is a mixture of multiple things working together. All these hyperscalers, I think, are panning out quite well, and more from a technology perspective. But given the technology, I think we will get a good traction because they have the heft in the market to pull business. That is really good, sir. One more question. I have seen a component in other non-current financial assets. There was the unbilled revenue. Yes. Could you just light up something like when are these revenues going to come back? It is a part of the regular cycle. As part of the services we provide, the services while the billing may happen at a future date, specifically for the fixed price engagements, based on the milestone achievements, while the revenue is recognized on percentage completion basis, the invoicing happens in the future dates. We do not see any issues in terms of from a collectability perspective on the unbilled that we are having. There is no exposure per se. But sir, from past three years, it is increasing only. One of the reasons what you see is in terms of our AFC business, which is the government business that we have. We have the terms which are agreed. There is an annuity component which is there, which is basically the billing will be done in the future dates. That is the reason you see a slightly higher amount because of that reason. As and when we are completing it, some portion we collected and some portion is deferred to the future collection while the work is delivered. That is the reason you see a slightly increasing trend right now. It will taper down in next one year timeframe, it will start to taper down then. We will start invoicing it. Okay. Thank you, sir. Thank you so much. Thank you. The next question is from the line of Jadashah, an individual investor. Please go ahead. Hi, sir. Congratulations on a good set of numbers. Thank you. Just had a question regarding the TNQ Tech acquisition. We are supposed to finish it up by July. Yeah. Has the valuation changed significantly, the balance payment, and what would be that figure, if you can give it out? Yeah. The valuation has increased, their performance has been very good. The balance payments that we had to do, we had a variable component which would go up or down based on business performance. Because the performance was good, we are buying out at a little higher value than what we had originally planned. If you see the total exceptional items, our total exceptional items comes to about INR 65 crores, out of which INR 24 crores is for the labour code and about INR 41 crores is for the payouts. Not all INR 41 crores is excess, but some of it is excess. Actually, we did many more than what we had planned just because their business performance has been better. We have done the fair valuation of the contingent consideration which was payable, and that's the impact which has been taken in the books. Ideally, what would have happened is in a very traditional model, this would have been an investment in the old accounting rules. The new IND AS accounting rules require us to write it in the P&L. These comes as exceptional items in the P&L. As I understand, this INR 40 crores approximately is for the contingent, like the balance payout. Yes. Contingent consideration. Correct. Okay, contingent. Will there be an impact in the next quarter as well, or it is all now factored in? We are not expecting anything material in that. All right. As I understand, this year closes the TNQ acquisition and now we 100% own it. That is correct. The transaction is that we will pay out in July, but because the payout is for the financial year ending March 2026, that is already behind us, and therefore there is no more payout. But the payout cash flow will happen in July. All right. Okay. Thank you, sir. Thank you. Welcome. Thank you. The next question from the line of Jay Ahuja, an individual investor. Please go ahead. Hello. Hello. Yes. I was having one question about the Digital Technologies and Experiences segment. We have been facing a decline in revenue and EBITDA margin for the past two quarters. Could you just enlighten anything about it? The digital technologies has been really scheduled project completions. That has been the major driver in digital technologies. However, we have maintained the margin in digital technologies even though we had a degrowth in top line. As far as digital experiences is concerned, we mentioned in even earlier 2 quarters of quarterly calls that we were expecting some customers to move to their captive units. That materialized, and that is why you see a dip, and that has also impacted the margin. However, we have signed a few large deals in the last quarter of the year, and those will start ramping up now. I think this year will be a better year because we will have the ramp-up of those deals that we have signed. The scale-down has already happened. Also, sir, in the digital operations segment, we have consolidated the results of TNQ. Is that why the EBITDA margins have been improved because of the TNQ business we are getting? Because their EBITDA margins are about 24%-25%. If I am not- It has improved for both reasons. Partly the TNQ and partly our own operational efficiency and automation that we have done. Both have increased. Okay. Can you just give a guidance about the organic and growth from acquisitions for the next 3-4 years? That would be very helpful. The next one year is around the high single digits that we talked about earlier in the call, about 8%. Going 2 years, 3 years down the line, we do not know yet. Having said that, we are in dialogue with some companies from an acquisition point of view, but none of them have matured to the stage where it needs any announcement. We have a strong cash reserve, and we will use that for growth and M&A. Would it be fine to assume that we grow organically 4% and the other 4% to 5% comes from acquisitions? Would that be fine? No. I am talking about organic growth is about high single digits, around 8%. Then on top of that would be the M&A. Okay, sir. Thank you. Thank you. Reminder to all the participants that you may press star one to ask a question. Reminder to all the participants that you may press star one to ask a question. As there is no further question from the participants, I now hand the conference over to management for closing comments. Yeah. Thank you very much for participating on this call. We have had a good year, and I am very hopeful and bullish about our year going forward. So I look forward to speaking to all of you again next quarter. Thank you once again. Ladies and gentlemen, on behalf of Datamatics, that concludes this conference. Thank you for joining us, and you may disconnect your lines. Thank you.