Xelpmoc Navigates Strategic Pivot: Q2 & H1 FY26 Performance Review

Xelpmoc Design and Tech Limited, a technology partner and consultant specializing in product development, data science, and analytics, has reported its financial results for the second quarter and half year ended September 30, 2025. The period reflects a strategic pivot for the company, moving away from a primary focus on startups towards the more stable corporate segment and the development of in-house products. While this transition has impacted short-term financials, management remains optimistic about future growth and profitability.

For Q2 FY26, Xelpmoc recorded a consolidated operating revenue of INR 0.76 Crore, a notable decrease from INR 1.63 Crore in Q2 FY25. The total income for the quarter stood at INR 0.96 Crore. The company reported an Adjusted Operating EBITDA loss of INR 1.61 Crore and a net loss of INR 1.93 Crore. For the half year (H1 FY26), the revenue from operations was INR 1.54 Crore, with a total income of INR 1.89 Crore, and a net loss of INR 3.81 Crore. This performance underscores the challenges inherent in a strategic transition, particularly amidst a volatile funding environment for startups.

Strategic Re-alignment and Product Focus

Management has explicitly stated that the revenue decrease is a direct consequence of their deliberate shift from the startup segment to the corporate sector, coupled with an increased focus on developing and monetizing in-house products. The startup ecosystem continues to face significant funding challenges, prompting Xelpmoc to re-prioritize its resources. The company is now actively pursuing opportunities in data science, artificial intelligence, and machine learning solutions for corporate clients.

One of the key initiatives is the launch of 'RELY', an AgeTech product designed for senior independent and assisted living. This SaaS solution, localized for the Indian market, aims to streamline operations, care, CRM, billing, and inventory management for elder care enterprises. Management anticipates monetization of RELY by Q3 or Q4 FY26, with pilot projects expected to be signed by December 2025. The expected benefits include 40% faster admin tasks, 25-30% lower operational costs, and higher resident satisfaction.

Another significant in-house development is the 'DocuXray' framework, an AI-driven legal assistant that simplifies contract review, data extraction, and risk identification. This framework is being applied in legal tech and financial legal tech spaces, with initial contracts already secured and several Proof of Concepts (POCs) underway. While the conversion of these POCs into full-fledged revenue streams is taking longer than initially expected, management remains confident in the value proposition of DocuXray.

Portfolio Performance and Global Engagements

Despite the overall financial performance, several of Xelpmoc's portfolio companies have demonstrated strong operational traction. Mihup, the conversation AI platform, has achieved a contracted Annual Recurring Revenue (ARR) of INR 100 Crore and recently secured a multi-million dollar contract with Tata Motors, also onboarding HDFC Bank as a client. Woovly, an e-commerce platform driven by social commerce, reported a current ARR of USD 3.2 million and is operating at an EBITDA positive status.

Snaphunt, a remote talent marketplace, generated USD 109,000 in revenue for July-September 2025 and boasts 8.5 million job seekers and 10,000 employers on its platform. Pencil, a Mumbai-based creator economy startup, has launched AI-generated audio with a grant from Google India and signed a USD 950,000 service deal with Alphabet/Google, with revenue spread over 36 months. The Star In Me, a global career advancement platform, recorded INR 3 Crore in gross revenues for H1 FY26 and received a Gold Award in the 'Startup of the Year' category.

Xelpmoc's venture studio, Biome, has also made strategic investments, including a 5% equity stake in Zoop.Money, a white-label loan platform for home buyers, and a 10% combined stake in OsteoForge, an IIT Hyderabad spinout. Zoop.Money is in the process of raising INR 8 Crore at a valuation of INR 80 Crore, marking a 4.4x valuation uplift. The company's global engagements extend beyond India, with ventures and projects in the USA, UK, Europe, Middle East, and Africa.

Outlook and Management Commentary

Management acknowledges the current challenges but maintains a confident and realistic outlook. They expect operating costs to remain stable and are focused on achieving profitability within the next one to two quarters. The emphasis is on scaling up Xelpmoc's own products and services, particularly in the corporate sector, where interest in their data science, AI, and machine learning solutions is growing. The fair value of the company's investments in its clients has also increased from INR 57.27 Crore as of September 30, 2024, to INR 70.34 Crore as of September 30, 2025, reflecting potential future value creation.

The company's strategic pivot, coupled with the promising traction from its in-house products and key portfolio companies, positions Xelpmoc for a potential turnaround. The management's transparency in addressing current performance and outlining clear future initiatives aims to build investor confidence as they navigate towards sustainable growth and profitability.