Digitide AI revenue doubles to Rs 30.5 crore in Q2 FY27

Digitide reported Rs 30.5 crore of AI revenue in Q2 FY27, roughly double the prior-quarter level, as AI reached 4.1% of revenue, represented 29% of Rs 160 crore in annual contract value bookings and built an Rs 170 crore funnel. Management attributed the increase to AI business-process work, platforms and new data, AI and cloud engagements.

What drove Digitide's AI revenue growth in Q2 FY27?

Digitide's AI revenue reached Rs 30.5 crore in Q2 FY27 as AI's share of total revenue rose to 4.1% from 1.9% in Q1. The call did not disclose the Q1 AI revenue amount, although an analyst described the Q2 figure as having doubled. The increase shows that AI-linked work made up a larger share of Digitide's revenue within one quarter.

Digitide's AI revenue came from three delivery areas rather than a single product. Management said AI-enabled business process management, or BPM, services contributed about 35% to 37% of the Rs 30.5 crore, platform businesses contributed around 30% to 35%, and professional services contributed roughly 27% to 28%.

Professional services included six new data, AI and cloud orders signed in Q2, according to management. Management also said six new live implementations were completed between Q1 and Q2, describing them as work that the earlier Digitide was not pursuing or bidding for in international markets. No customer names, order values or individual project scopes were disclosed.

How has Digitide's AI deal mix changed?

Digitide's AI deal mix increased to 29% of Rs 160 crore in annual contract value, or ACV, bookings in Q2 from 14% of Rs 118 crore in Q1. ACV is the annualised value of booked contracts, rather than revenue recognised in a reporting period. Total ACV bookings rose by Rs 42 crore quarter on quarter while the AI share more than doubled.

Digitide's AI funnel rose from around Rs 100 crore in Q1 to Rs 170 crore in Q2, which management described as almost 70% quarter-on-quarter growth. A funnel represents prospective opportunities, not signed contracts or recognised revenue. The increase in both the funnel and AI share of ACV bookings indicates a greater AI contribution to new business activity in Q2.

Management also said the wider booking mix shifted toward technology, digital and international work. In discussing roughly Rs 400 crore of total contract value, or TCV, management said platform orders generally take 10 to 16 weeks to move into revenue, compared with four to six weeks for BPM orders. TCV represents a contract's value over its full term, so its conversion timing differs from ACV and reported revenue.

Where does Digitide's AI revenue come from?

Digitide generated its Rs 30.5 crore of Q2 AI revenue across AI BPM services, platforms and professional services, with no category representing a majority. AI BPM services were the largest stated component at about 35% to 37%, followed by platforms at around 30% to 35%. Professional services, at roughly 27% to 28%, included the six new data, AI and cloud orders.

The BPM component sits within a portfolio where India BPM represents about 50% of Digitide's overall wallet share and international BPM about 6% to 7%, according to management's broad breakdown. In India, management said client discussions focus on outcome-based and output-based delivery models. In international BPM, management said customers more often seek human-in-the-loop delivery supported by AI systems.

Platform-related AI work includes an insurance platform supported by a delivery capability centre in Canada and an employee experience management, or EXM, platform supported from Chennai. Management said the EXM business produces about Rs 150 crore to Rs 160 crore of business and is being expanded into the Middle East and Southeast Asia, with a small-and-medium-business sales focus added to a historically enterprise-led operation.

How is Digitide building its AI delivery capacity?

Digitide has created an AI lab in Bangalore and an AI centre of excellence in Coimbatore, hiring more than 25 people to work on AI projects. Management presented the lab, centre of excellence and two delivery capability centres as the people-and-operating base for its platform strategy. The delivery centres support the Canada-based insurance platform and Chennai-based EXM platform.

Digitide also added strategic alliances with Amazon Web Services, or AWS, and Anthropic in Q2. Management said the partnerships can provide joint go-to-market solutioning, marketplace access and channels to create new funnels. Digitide achieved AWS advanced-tier status in Q2, while management said teams from both companies were working toward premier-partner status.

Management said acquisitions could also be used to scale platform operations, but it did not identify a target, announce a deal or provide a timetable. Its stated acquisition principles are that a transaction should relate to current operations and either fill a white space or open a new market. The disclosed plan therefore centres on hiring, delivery capacity, partnerships and selected platform expansion opportunities.

What could turn Digitide's AI pipeline into revenue?

Digitide said its Rs 170 crore AI funnel could support further activity in Q3 and more in Q4 of the fiscal year, but it gave no AI revenue forecast. Management based that expectation on the live funnel and the six new data, AI and cloud implementations completed between Q1 and Q2. Not all funnel opportunities necessarily become signed contracts or revenue.

For the broader roughly Rs 400 crore TCV discussed on the call, management said it had provided for more than 30% to 35% to convert into revenue during the fiscal year. Consulting work can convert more immediately, BPM orders take about four to six weeks and platform orders take about 10 to 16 weeks. Management did not say that this company-wide conversion assumption applies specifically to the Rs 170 crore AI funnel.

AI expansion is taking place alongside a broader operating programme that includes contract repricing, lower-return business exits or restructuring, cost reduction and a shift toward technology, digital and international work. Headcount declined from about 53,000 in Q1 to almost 50,000 in Q2, an almost 7% quarter-on-quarter reduction, while management said revenue per staff increased by almost 12%.

Conclusion

Digitide's Q2 FY27 disclosure establishes AI as a reported revenue category worth Rs 30.5 crore and as a larger component of new business, accounting for 29% of Rs 160 crore in ACV bookings. The revenue base spans BPM services, platforms and professional services, while the Rs 170 crore funnel is larger than the approximately Rs 100 crore reported in Q1.

The next update to watch is Digitide's Q3 disclosure on the six new data, AI and cloud implementations, AI booking mix and funnel conversion. Management said it expects AI activity to increase in Q3 and more in Q4, while the timing of revenue will depend on whether work is delivered through consulting, BPM or platform contracts.