Canarys Automations Soars in H1 FY26: A Deep Dive into Growth and Strategic Shifts

Canarys Automations Limited, a prominent IT solutions provider, has reported a robust financial performance for the first half of fiscal year 2026 (H1 FY26), underscoring its aggressive growth strategy and significant investments in future capabilities. The company's total income surged by an impressive 166% year-on-year, reaching INR 101.7 crore. This remarkable top-line expansion was primarily propelled by its Technology Solutions segment, which witnessed an outstanding 195% year-on-year growth. While the company's EBITDA grew by 89% to INR 13.2 crore and Profit After Tax (PAT) increased by 109% to INR 9.0 crore, profit margins saw a temporary compression, reflecting strategic investments in talent, product development, and global expansion.

The Technology Solutions segment emerged as the primary growth engine, contributing 98% of the total revenue in H1 FY26. This strong performance highlights Canarys' expertise in digitalization, modernization, cloudification, automation, transformation, and intelligence solutions across diverse industries such as BFSI, Healthcare, Manufacturing, and IT. In contrast, the Water Resource Management (WRM) segment accounted for 2% of the revenue. Management has made a strategic decision to reduce focus on WRM projects due to their elongated working capital cycle, which typically involves receivable days ranging from 180 to 300 days. The company plans to pursue new WRM bids with improved terms, aiming for 60-70% upfront payment to mitigate cash flow challenges.

Strategic Expansion and Innovation

A cornerstone of Canarys' H1 FY26 strategy was its global expansion, marked by the acquisition of a 51% majority stake in Fortira Inc., a US-based AI, data, digital engineering, and IT consulting firm, in April 2025. This acquisition significantly strengthens Canarys' footprint in North America, enhancing its capabilities in critical technology areas and opening substantial cross-selling opportunities across Fortira's established client base in banking, financial services, retail, pharmaceutical, and manufacturing sectors. Fortira reported revenues of USD 6.6 million and a profit before tax of USD 0.5 million in H1 FY26, demonstrating immediate value accretion.

Further solidifying its innovation agenda, Canarys launched AURYIS on August 20, 2025. AURYIS is the company's first artificial intelligence-powered software product, designed as an intelligent compliance assessment platform for the pharmaceutical and life science industries. It leverages AI, ML models, and large-language models to evaluate digital content against regulatory and internal compliance rules, aiming to reduce costs, mitigate risks, and ensure audit readiness. The company is currently piloting AURYIS with customers and expects commercialization within the next 6-8 months.

Navigating Margins and Cash Flow

The decline in EBITDA and PAT margins in H1 FY26 was a direct consequence of Canarys' aggressive investment strategy. Management explained that higher employee expenses, coupled with investments in solutions, product development, and global scaling, temporarily impacted profitability. The company is consciously reinvesting profits back into the business to fuel future growth and enhance its value chain, moving from services to solutions and products. This investment phase is expected to continue for the next few quarters, with margins anticipated to stabilize and improve once these initiatives reach an