CMRSL says double-digit FY27 EBITDA margin is unlikely

Cyber Media Research & Services Limited said its EBITDA margin is unlikely to reach double digits in FY27, despite H1 FY27 revenue rising 104% year on year to Rs 88.72 crore, because it prioritised acquiring advertising clients during the IPL period. CMRSL reported EBITDA of Rs 3.79 crore for H1 FY27, up about 60% year on year.

Why is CMRSL unlikely to reach a double-digit EBITDA margin in FY27?

CMRSL said a double-digit EBITDA margin in FY27 is “not a likely situation” because its immediate emphasis is on adding clients rather than expanding margin. Managing Director Dhaval Gupta said breaking into a large number of advertising accounts during the IPL period represented a customer-acquisition cost in H1 FY27.

The advertising agency and programmatic business grew more than 100% year on year in H1 FY27 and contributed slightly less than 50% of CMRSL’s business, according to management. CMRSL added many accounts and increased campaigns during the IPL cycle, but said the newly activated work continued to carry low single-digit margins.

Management said its plan is to deepen recently acquired relationships after winning the accounts. CMRSL intends to pursue more work in programmatic advertising, connected television and marketing technology, although it did not provide a date or numerical target for a recovery in EBITDA margin.

How did CMRSL revenue and EBITDA change in H1 FY27?

CMRSL’s H1 FY27 revenue rose 104% year on year to Rs 88.72 crore, while EBITDA increased about 60% to Rs 3.79 crore. Profit before tax was Rs 3.32 crore, and management described the first half as the company’s best performance to date.

The difference between sales and EBITDA growth shows that profit increased more slowly than revenue during H1 FY27. Based on CMRSL’s reported figures, EBITDA was about 4.3% of revenue, while management said the business mix included both higher-margin and lower-margin operations.

CMRSL’s revenue declined from Rs 46.52 crore in Q1 FY27 to Rs 42.19 crore in Q2 FY27, although both quarters combined produced the 104% H1 increase. Management said domestic operations accounted for about 60% of H1 revenue and international operations for the remaining 40%.

Which CMRSL businesses are affecting the margin mix?

CMRSL identified the advertising agency and programmatic business as the main reason revenue growth has not translated into proportionate EBITDA growth. Management said optimising Google and Meta advertising spend is highly competitive and carries lower margins than some other advertising activity.

Management said programmatic media buying can produce higher margins and is becoming a larger part of the advertising operation. CMRSL also cited connected television and marketing technology as areas of current work, but did not disclose their revenue contribution or profitability.

AuxoAds, CMRSL’s publisher-monetisation business, recorded more than 90% top-line growth in H1 FY27. CMRSL said AuxoAds retained clients, added large publishers and expanded relationships with Google, PubMatic and Magnite, but it did not provide an AuxoAds EBITDA margin.

CMRSL said its core research business was growing ahead of plan and represented a larger revenue share, while CMGalaxy remained small. Management said CMGalaxy has a long sales-conversion cycle that needs further optimisation, leaving advertising as the largest specifically identified lower-margin growth driver.

What would need to change for CMRSL margins to improve?

CMRSL said margins could improve over time if it expands business within the advertising accounts acquired in H1 FY27 and increases the mix of programmatic work. Management said agency commissions are typically in the low double digits, but added that CMRSL is currently being more competitive, contributing to lower margins.

CMRSL is also layering CMGalaxy capabilities onto relationships with external platforms for reporting, data tracking and client data solutions. On publisher monetisation, it said AuxoAds uses automation and artificial intelligence, or AI, to improve yields, cost per thousand impressions, or CPM, and fill rates.

CMRSL said it built and deployed more than six AI projects during H1 FY27, including proposal and case-study tools, client chatbots, research-tracker workflows, advertising-monetisation controls, hiring tools and event-management automation. Management cited improved onboarding and activation in some systems, but disclosed no measured EBITDA, cost-saving or revenue contribution from those projects.

The planned merger with CMIL is another potential cost mechanism. Management expects at least Rs 1 crore of annual savings for the merged entity through lower compliance costs and better tax planning, subject to completing the merger process within FY27.

How does CMRSL’s borrowing position support its growth plan?

CMRSL said it has borrowing capacity to meet working-capital needs as revenue grows. Long-term borrowings increased from Rs 4.41 crore on March 31, 2026, to Rs 7.77 crore on September 30, 2026, while its working-capital loan fell from Rs 31 lakh to Rs 18 lakh.

Trade receivables rose from Rs 34.52 crore to Rs 45.15 crore over the same period, an increase of Rs 10.63 crore. Management said it required about Rs 4 crore of working capital for the gap and reported that debtor days improved to 81 in H1 FY27 from 123 in the previous fiscal year.

CMRSL said total sanctioned borrowing limits were Rs 14.70 crore and actual utilisation was Rs 8.75 crore, leaving nearly Rs 6 crore undrawn. Its H1 FY27 net debt-to-equity ratio was 0.41, which management cited while explaining its capacity to continue funding customer acquisition.

Conclusion

CMRSL’s H1 FY27 performance showed a trade-off between scale and near-term margin: revenue rose 104% to Rs 88.72 crore, while EBITDA increased about 60% to Rs 3.79 crore. Management explicitly linked the slower EBITDA growth to acquiring and activating advertising accounts, a business contributing slightly less than half of activity and operating at low single-digit margins during expansion.

The next indicators are whether newly acquired advertising accounts generate more programmatic, connected-television and marketing-technology work, and whether AuxoAds sustains its more than 90% H1 growth. Investors can also watch the planned CMIL merger within FY27, as management expects at least Rs 1 crore of annual savings from lower compliance costs and better tax planning.