Digitide Tech & Digital reaches 32.1% as margin hits 11.1%

Digitide’s Tech & Digital (T&D) business contributed 32.1% of revenue in Q2 FY27 and raised its segment EBITDA margin to 11.1%, from 8.0% in Q1 FY27. T&D revenue rose 6.6% year on year to Rs 243.6 crore, while the larger BPM segment recorded a 4.0% quarter-on-quarter revenue decline to Rs 516.1 crore.

What changed in Digitide’s revenue mix in Q2 FY27?

Digitide’s Q2 FY27 revenue mix shifted toward T&D, whose share increased to 32.1% from 30.6% in Q1 FY27 and 29.9% in Q2 FY26. Business Process Management, or BPM, accounted for the remaining 67.9%, down from 69.4% in the preceding quarter and 70.1% a year earlier.

The movement reflected both T&D growth and BPM contraction. T&D revenue rose by Rs 6.2 crore from Rs 237.4 crore in Q1 FY27, whereas BPM revenue fell by Rs 21.6 crore from Rs 537.7 crore. Total Digitide revenue consequently declined 2.0% sequentially to Rs 759.6 crore and was 0.6% below Q2 FY26.

Management attributed Digitide’s overall revenue decline to disciplined deal selection, including the renegotiation of low-margin contracts. The presentation does not disclose the number of contracts renegotiated or separate the revenue effect of those actions between BPM and T&D.

Did Digitide’s T&D margin exceed BPM’s margin?

No, Digitide’s T&D segment EBITDA margin did not exceed BPM’s in Q2 FY27: T&D reported 11.1% and BPM reported 13.6%. EBITDA means earnings before interest, tax, depreciation and amortisation. T&D nevertheless reduced the margin gap from 6.1 percentage points in Q1 FY27 to 2.5 percentage points in Q2 FY27.

T&D’s margin improved by 315 basis points from 8.0% in Q1 FY27 and by 176 basis points from 9.4% in Q2 FY26. BPM’s margin moved in the other direction, declining by 54 basis points sequentially from 14.1% and by 177 basis points year on year from 15.4%.

T&D segment EBITDA increased to Rs 27.1 crore in Q2 FY27 from Rs 18.9 crore in Q1 FY27 and Rs 21.4 crore in Q2 FY26. BPM segment EBITDA declined to Rs 70.2 crore from Rs 76.0 crore sequentially and Rs 82.3 crore a year earlier, although BPM still generated Rs 43.1 crore more segment EBITDA than T&D during the quarter.

How did the segment shift relate to Digitide’s company profitability?

Digitide’s reported EBITDA margin increased to 10.4% in Q2 FY27 from 9.9% in Q1 FY27, a 45-basis-point sequential improvement. Reported EBITDA rose 2.5% quarter on quarter to Rs 78.8 crore even though revenue fell by Rs 15.5 crore from Rs 775.1 crore.

The segment figures and Digitide’s reported EBITDA are not directly comparable because segment EBITDA excludes unallocated corporate costs. Total segment EBITDA was Rs 97.3 crore in Q2 FY27, compared with reported EBITDA of Rs 78.8 crore. The source does not provide a separate reconciliation of the Rs 18.5 crore difference.

Year on year, reported EBITDA was 7.5% lower than Rs 85.2 crore in Q2 FY26, and the reported EBITDA margin declined by 78 basis points from 11.1%. Management attributed the annual decrease to wage revisions and provisions for older receivables, while the presentation identifies T&D’s margin gain and BPM’s margin decline at the segment level.

Reported profit after tax, or PAT, rose to Rs 8.9 crore in Q2 FY27 from Rs 2.9 crore in Q1 FY27, lifting the PAT margin from 0.4% to 1.2%. For H1 FY27, however, reported PAT was Rs 11.9 crore, down 4.8% from Rs 12.5 crore in H1 FY26, while EBITDA fell 7.2% to Rs 155.7 crore.

What other mix changes did Digitide report in Q2 FY27?

Digitide’s international revenue reached Rs 323 crore, or 42.5% of Q2 FY27 revenue, compared with a 38.1% share in Q1 FY27 and 37.2% in Q2 FY26. The presentation states that international revenue increased 13.5% year on year, while domestic revenue was Rs 437 crore, or 57.5% of the total.

By industry, banking, financial services and insurance represented 51.7% of Q2 FY27 revenue, compared with 51.3% in Q1 FY27 and 51.2% in Q2 FY26. Manufacturing, energy and utility represented 16.5%, down from 17.3% in Q1 FY27; healthcare contributed 4.1%, Fast Growth Tech contributed 6.9%, and other sectors made up 20.8%.

The top 10 clients accounted for 38.2% of Q2 FY27 revenue, rising from 37.4% in Q1 FY27 and 34.1% in Q2 FY26. Clients ranked 11 to 20 represented 13.5%, clients ranked 21 to 30 represented 9.0%, and all other clients accounted for 39.3%.

Which operating measures accompany Digitide’s mix change?

Digitide’s employee count was 49,800 in Q2 FY27, compared with 53,600 in Q1 FY27 and 56,300 in Q2 FY26. Revenue was Rs 759.6 crore in Q2 FY27, below Rs 775.1 crore in the previous quarter and Rs 764.2 crore a year earlier, but the presentation does not allocate employees or productivity measures between BPM and T&D.

Days sales outstanding, including billed and unbilled amounts, rose to 84 days in Q2 FY27 from 82 days in Q1 FY27 and 75 days in Q4 FY26. At 30 September 2026, Digitide reported trade receivables and unbilled revenue of Rs 695 crore, compared with Rs 659 crore at 31 March 2026.

The 84-day measure comprised 53 billed days and 31 unbilled days. Digitide reported net cash of Rs 76 crore and a debt-to-equity ratio of 0.08:1 at 30 September 2026, with total equity of Rs 923 crore and total borrowings of Rs 75 crore across current and non-current balances.

Conclusion

Digitide’s Q2 FY27 figures show a measurable shift toward T&D: its revenue share reached 32.1%, its revenue grew 6.6% year on year, and its segment EBITDA margin reached 11.1%. BPM remained Digitide’s larger segment, contributing 67.9% of revenue and a 13.6% margin, but its revenue, segment EBITDA and margin all declined from Q1 FY27. International business also became a larger part of revenue at 42.5%.

The next reported period will indicate whether management’s stated disciplined deal selection and renegotiation of low-margin contracts support a recovery from Q2 FY27 revenue of Rs 759.6 crore. Measures to watch include T&D revenue after Rs 243.6 crore in Q2 FY27, BPM’s margin after its fall to 13.6%, and days sales outstanding after its increase to 84 days.