HRH Next Services: Navigating Growth with AI and Vernacular Expertise in H1 FY26

HRH Next Services Limited, a prominent player in India's Business Process Management (BPM) sector, recently shared its H1 FY26 operational and financial performance, highlighting a strategic pivot towards AI-driven customer experience solutions. The company reported a revenue from operations of INR 32.24 crore for H1 FY26, marking an 11% increase from INR 29.04 crore in H1 FY25. Despite this top-line growth, the company's EBITDA saw a marginal 1% decline to INR 5.84 crore, and Profit After Tax (PAT) increased by 1% to INR 2.08 crore. This performance reflects a period of significant strategic investment, particularly in its new AI division, AINA, which management believes will be a key driver for future profitability.

The company's core business revolves around providing customer experience solutions through voice and digital platforms, serving diverse industries such as telecom, BFSI, healthcare, e-commerce, government, and utilities. HRH Next has established a strong presence with 8 delivery centers across India, handling millions of customer interactions monthly. A key differentiator for HRH Next is its deep expertise in vernacular languages, supporting over 11 Indian languages, which allows it to connect with consumers in their native tongue and enhance customer satisfaction. This focus on regional languages, combined with human expertise and AI-driven technology, forms the bedrock of its service delivery.

Strategic Initiatives and AI-Driven Transformation

HRH Next is actively pursuing several strategic initiatives to bolster its market position and drive future growth. A significant undertaking has been the onboarding of 300 gig workers across various locations, primarily targeting high-potential verticals like e-commerce, tourism, foodtech, and logistics. This flexible workforce model is designed to enable 30-40% faster deployment during surge volumes, improve Service Level Agreements (SLAs), and reduce fixed manpower costs. Additionally, the company expanded its capacity by adding 250 seats in high-potential sectors such as foodtech, telecom, and fintech, which is expected to generate approximately INR 50 lakhs in annual revenue potential and enhance its ability to secure mid-to-large enterprise deals.

The most transformative initiative is the launch and monetization of AINA, the company's vernacular AI division. AINA, which translates to 'mirror' in Hindi, aims to mirror human empathy and emotions through technology. The company has already gone live with AI Email Bots and AI Call Audits. Email bots are designed to handle 25-35% of routine and semi-complex customer queries, allowing human agents to focus on higher-value interactions, thereby improving productivity by 10-15%. AI Call Audits automate quality management coverage, compliance checks, and insights, enabling 100% call coverage compared to the traditional 2-5% manual sampling. These AI tools are projected to reduce effort by 8-12% and significantly speed up email turnaround times, creating a sustainable, high-margin tech revenue stream.

Financial Performance and Outlook

The H1 FY26 financial results reflect a period of investment. While revenue grew, EBITDA and PBT experienced a slight contraction. Management clarified that the dip in profitability was a direct consequence of substantial investments in AINA's development, including the acquisition of servers and software. These investments are considered crucial for building the AI wing and are expected to yield significant returns in the latter half of the fiscal year.

HRH Next Services Limited: H1 FY26 Financial Summary (INR Crore)

The management expressed confidence in a significant increase in profitability during H2 FY26, projecting that the income generated from AINA will offset the H1 dip. They anticipate beating last year's full-year figures by 20-25% and expect revenue to grow by 25-30% over the next year, primarily driven by AI monetization. Furthermore, they conservatively project a 2-3% improvement in EBITDA margins, with potential for greater expansion as AI deployment accelerates.

Future Outlook and Competitive Edge

HRH Next's strategic vision extends to geographical expansion into Northern and Western India, with plans to establish new centers. Each new center, typically around 300 workstations, is targeted to generate approximately INR 1 crore in monthly revenue, becoming operational within three months and profitable within 8-9 months. While discussions for Middle East expansion are ongoing, the immediate focus remains on leveraging AI to deepen its presence in the Indian market.

The company's competitive moat lies in its deep vernacular expertise and proprietary AI models trained on two decades of local conversation data. This allows for highly contextual and accurate AI interactions in Indian languages, a significant advantage over competitors relying on large language models primarily trained on English data. HRH Next aims to transform from a traditional BPO to an AI-first entity and system integrator, offering a bouquet of AI services that enhance customer stickiness and drive long-term value.

HRH Next Services Limited is navigating a dynamic market by strategically investing in AI and expanding its vernacular capabilities. The H1 FY26 results underscore a period of foundational investment, with management articulating a clear path to enhanced profitability and growth in the coming quarters, driven by technological innovation and a deep understanding of the Indian consumer landscape.