Ace Software September profit falls 28% as costs rise

Ace Software Exports Limited reported consolidated profit after tax of Rs 1.31 crore for the quarter ended September 30, 2026, down 28% from Rs 1.83 crore a year earlier, as total expenses rose 8% to Rs 13.65 crore. Revenue from operations increased 3% to Rs 14.37 crore, but higher costs exceeded the income increase.

What did Ace Software report for the September quarter?

Ace Software reported total income of Rs 14.96 crore for the September 2026 quarter, compared with Rs 14.41 crore in the September 2025 quarter, while profit before tax declined to Rs 1.31 crore from Rs 1.83 crore. Revenue from operations rose by Rs 0.36 crore year on year, but other income fell to Rs 0.09 crore from Rs 0.40 crore.

The September-quarter profit was higher than the Rs 1.18 crore reported in the June 2026 quarter. Revenue from operations also increased marginally from Rs 14.29 crore in June to Rs 14.37 crore in September, while total income was nearly unchanged at Rs 14.96 crore versus Rs 14.91 crore. The sequential increase in profit occurred despite other income falling from Rs 0.61 crore in June.

Ace Software’s basic earnings per share fell to 70 paise for the September 2026 quarter from Rs 1.43 a year earlier. Profit attributable to owners was Rs 1.29 crore, compared with Rs 1.82 crore in the September 2025 quarter, while non-controlling interests were attributed Rs 0.02 crore, compared with Rs 0.01 crore.

Why did Ace Software’s profit decline despite revenue growth?

Ace Software’s profit declined because total expenses increased by Rs 1.06 crore year on year, exceeding the Rs 0.54 crore increase in total income. Employee benefit expense rose to Rs 7.49 crore from Rs 7.37 crore, finance costs increased to Rs 0.39 crore from Rs 0.25 crore, and depreciation and amortisation expense rose to Rs 0.42 crore from Rs 0.23 crore.

Other expenses accounted for the largest increase among reported cost lines, rising to Rs 5.85 crore in the September 2026 quarter from Rs 4.10 crore a year earlier. Changes in inventories provided a Rs 0.51 crore credit in the latest quarter, compared with a Rs 0.64 crore expense in the September 2025 quarter, but this movement did not offset the increase in other expense categories.

Ace Software recorded no current or deferred tax expense in either the September 2026 or September 2025 quarter. Reported profit before tax therefore matched profit after tax at Rs 1.31 crore in the latest quarter and Rs 1.83 crore a year earlier. The company said provision for taxation, if any, would be made at the year end.

How did Ace Software perform in the first half?

Ace Software reported revenue from operations of Rs 28.76 crore for the six months ended September 30, 2026, compared with Rs 27.26 crore in the corresponding six months of 2025. First-half profit after tax declined to Rs 2.49 crore from Rs 3.05 crore, while total expenses increased to Rs 27.37 crore from Rs 24.92 crore.

First-half total income rose by Rs 1.89 crore to Rs 29.86 crore, but total expenses rose by Rs 2.45 crore. Other expenses increased by Rs 3.02 crore to Rs 11.19 crore, employee benefit expense rose to Rs 14.34 crore from Rs 14.00 crore, finance costs reached Rs 0.76 crore from Rs 0.42 crore, and depreciation and amortisation rose to Rs 0.81 crore from Rs 0.68 crore.

Ace Software identified Computer Software and Services Exports as its sole operating segment in the September 2026 filing. The consolidated results include seven wholly owned subsidiaries, including Ace Infoway Private Limited and QeLearn Private Limited, plus Camerareadyart.com Inc. as a step-down wholly owned subsidiary and QeDigital Australia Pty. Ltd. as a step-down subsidiary.

What changed in Ace Software’s balance sheet and cash flows?

Ace Software reported consolidated total assets of Rs 197.47 crore at September 30, 2026, compared with Rs 149.27 crore at March 31, 2026. Equity including non-controlling interests was Rs 137.49 crore at September-end, compared with Rs 133.35 crore at the March 2026 year-end, while current borrowings increased to Rs 35.76 crore from Rs 14.00 crore.

Cash and cash equivalents were Rs 29.22 crore at September 30, 2026, compared with Rs 21.40 crore at March 31, 2026. For the half year, the cash-flow statement reported net financing cash inflow of Rs 15.58 crore, including Rs 13.80 crore of securities premium received and Rs 1.39 crore from equity shares issued. Net purchases of fixed assets were Rs 10.37 crore in the same period.

The half-year cash-flow statement reported cash generated from operations of negative Rs 0.29 crore, after an increase in current and non-current assets of Rs 34.02 crore and an increase in current and non-current liabilities of Rs 30.59 crore. The statement also reported Rs 7.61 crore of net cash outflow from investing activities and a Rs 7.82 crore net increase in cash and cash equivalents.

What did the auditor say about Ace Software’s consolidated results?

Ace Software’s statutory auditor issued an unmodified limited-review conclusion on the unaudited consolidated financial results approved by the board on November 6, 2026. The auditor said nothing had come to its attention that caused it to believe the statement did not disclose the required information under Regulation 33 of the Securities and Exchange Board of India listing regulations.

The auditor said it did not review the interim financial information of seven wholly owned subsidiaries, whose combined total assets were Rs 100.11 crore at September 30, 2026. Those entities reported aggregate profit after tax before consolidation adjustments of Rs 1.48 crore and total comprehensive income of Rs 1.47 crore for the September 2026 quarter; the conclusion for those entities relied on other auditors’ reports and stated procedures.

Conclusion

Ace Software’s September 2026 filing shows revenue growth did not carry through to consolidated earnings because expense growth outpaced the rise in total income. Revenue from operations increased to Rs 14.37 crore in the quarter and Rs 28.76 crore in the first half, while profit after tax fell to Rs 1.31 crore and Rs 2.49 crore, respectively.

The next reported period will show whether the rise in other expenses to Rs 5.85 crore for the September quarter and Rs 11.19 crore for the half year persists. Full-year reporting will also determine the tax provision, if any, because Ace Software said taxation would be provided at the year end.