Datamatics Q2FY27 EBITDA Margin Reaches 21.1%, Up 301 bps

Datamatics reported a 21.1% earnings before interest, tax, depreciation and amortisation (EBITDA) margin in Q2FY27, 301 basis points above Q2FY26, as EBITDA rose 30.0% to Rs 115.5 crore and revenue from operations increased 11.5% to Rs 546.6 crore in the consolidated financial summary.

What drove Datamatics’ Q2FY27 margin expansion?

Datamatics’ presentation does not identify a specific cost or revenue driver for the expansion, but it shows EBITDA growing faster than revenue in Q2FY27. EBITDA increased 30.0% year on year from Rs 88.8 crore in Q2FY26 to Rs 115.5 crore, while revenue from operations rose 11.5% from Rs 490.2 crore to Rs 546.6 crore. The difference took the EBITDA margin to 21.1% from 18.1%, an increase of 301 basis points, where 100 basis points equal one percentage point.

The sequential comparison also showed faster EBITDA growth than revenue. Revenue from operations rose 6.4% from Rs 513.9 crore in Q1FY27, while EBITDA rose 14.3% from Rs 101.1 crore. Consequently, the EBITDA margin rose by 147 basis points from 19.7% in Q1FY27 to 21.1% in Q2FY27.

The first-half results showed a similar pattern. H1FY27 revenue from operations rose 10.7% to Rs 1,060.6 crore from Rs 957.8 crore in H1FY26, while EBITDA increased 31.4% to Rs 216.6 crore from Rs 164.8 crore. H1FY27 EBITDA margin was 20.4%, compared with 17.2% a year earlier, representing a 322-basis-point increase.

How did Datamatics’ operating profit and net profit change?

Datamatics’ earnings before interest and tax (EBIT) increased 33.8% year on year to Rs 92.2 crore in Q2FY27, and its EBIT margin reached 16.9%. This compared with EBIT of Rs 68.9 crore and a 14.1% margin in Q2FY26, producing a 281-basis-point margin increase. Sequentially, EBIT rose 17.6% from Rs 78.4 crore in Q1FY27 and its margin increased from 15.3%.

For H1FY27, EBIT rose 36.1% to Rs 170.6 crore from Rs 125.4 crore in H1FY26. EBIT margin increased to 16.1% from 13.1%, or by 300 basis points. The reported rise in EBIT exceeded the 31.4% increase in H1FY27 EBITDA, based on the company’s consolidated summary.

Profit before tax rose 18.9% year on year to Rs 95.8 crore in Q2FY27, while its margin increased to 17.2% from 15.9%. The sequential trend differed because profit before tax grew 4.1% from Rs 92.0 crore in Q1FY27, but the margin declined by 8 basis points from 17.3%. Other income was Rs 9.9 crore in Q2FY27, compared with Rs 18.2 crore in Q1FY27 and Rs 15.7 crore in Q2FY26.

Profit after tax after non-controlling interest rose 16.1% year on year to Rs 73.4 crore in Q2FY27, slower than EBITDA’s 30.0% increase. Its margin rose 69 basis points to 13.2% from 12.5% in Q2FY26, but declined 40 basis points from 13.6% in Q1FY27. The presentation reports these movements but does not provide a further breakdown explaining the difference between EBITDA and profit-after-tax growth.

Which Datamatics segment led Q2FY27 performance?

Datamatics’ Digital Operations segment was the largest reported segment in Q2FY27, generating Rs 314.9 crore of revenue and recording a 21.8% EBIT margin. Segment revenue increased 15.6% from Rs 272.5 crore in Q2FY26 and 6.1% from Rs 296.8 crore in Q1FY27. Its margin rose from 16.7% year on year and from 19.3% quarter on quarter.

Digital Technologies generated Rs 166.6 crore of revenue in Q2FY27, up 8.8% both year on year and quarter on quarter. Its EBIT margin was 9.5%, compared with 10.8% in Q2FY26 and 8.9% in Q1FY27. Digital Experiences generated Rs 65.1 crore, increasing 0.8% from Rs 64.6 crore a year earlier and 1.7% from Rs 64.0 crore in the preceding quarter.

Digital Operations led the three segments on both reported revenue and reported EBIT margin in Q2FY27. Its Rs 314.9 crore revenue was higher than the combined Rs 231.7 crore generated by Digital Technologies and Digital Experiences, while its 21.8% margin exceeded Digital Experiences’ 12.0% and Digital Technologies’ 9.5%. Digital Experiences’ margin nevertheless increased from 10.8% in Q2FY26 to 12.0% in Q2FY27.

What should readers monitor after Datamatics’ Q2FY27 results?

Datamatics reported net cash and investments, net of debts, of Rs 557.0 crore at Q2FY27, compared with Rs 639.2 crore at FY26 and Rs 415.3 crore at FY25. Days sales outstanding, a measure of collection timing, were 66 days at Q2FY27. That was higher than 63 days at FY26 and 57 days at FY25, but below the 67 days reported at FY24.

Management’s disclosed strategy includes investment in artificial intelligence, stronger customer relationships, greater market presence and awareness in the US and Europe, proprietary products and platforms, and collaboration with hyperscalers. The geographic revenue mix in Q2FY27 was 57% USA, 24% UK and Europe, 12% India and 7% rest of the world.

Education and Publishing was the largest reported industry vertical at 29% of Q2FY27 revenue, followed by BFSI, or banking, financial services and insurance, at 19%. Technology and Consulting represented 18%, Manufacturing, Infrastructure and Logistics 13%, Retail 9%, Not for Profit or Government 9%, and Other 3%. These mixes provide context for management’s stated focus on the US, Europe, artificial intelligence and proprietary platforms.

Conclusion

Datamatics’ Q2FY27 results combined double-digit revenue growth with a faster rise in operating profit, while EBIT margin reached 16.9% and Digital Operations delivered the highest reported segment revenue and margin. The first-half figures also showed EBITDA growth of 31.4%, compared with 10.7% revenue growth, extending the margin expansion beyond one quarter.

Next, readers can monitor execution against management’s plans for artificial intelligence investment, proprietary products and platforms, customer relationships, US and European market presence, and hyperscaler collaboration. Collection timing is also relevant after days sales outstanding reached 66 days in Q2FY27, versus 63 days at FY26, alongside Digital Operations’ 21.8% Q2FY27 EBIT margin.