Excelsoft pipeline rises to Rs 1,200 crore in six months

Excelsoft Technologies said its pipeline rose to Rs 1,200 crore from Rs 900 crore in the six months after the start of FY26-27, a Rs 300 crore increase that management primarily attributed to local sales and account-management teams. It said opportunities still in final negotiations must be converted into signed orders, delivery and revenue.

What caused Excelsoft’s pipeline to reach Rs 1,200 crore?

Excelsoft’s pipeline reached Rs 1,200 crore after increasing Rs 300 crore in six months from about Rs 900 crore at the start of FY26-27. Management said it tracks its pipeline over about five years and described the current level as healthy, while noting that some opportunities remain in final negotiations. It did not quantify how much of the pipeline would convert within the next 12 to 18 months.

Management attributed a substantial part of the increase, and greater geographic diversity in the pipeline, to sales and account-management teams based where customers operate. Excelsoft made strategic investments of about Rs 20.3 crore during FY27 in sales expansion, leadership, talent development and product development. Those investments also contributed to higher employee costs through additions to international sales teams and specialised talent.

Which markets does Excelsoft expect to drive pipeline growth?

Excelsoft expects higher growth from the United Kingdom and Europe during FY27, while the United States continues to grow and Southeast Asia is expected to become a third contributor. Management said the Middle East had not been a good market for the company during the preceding year, despite earlier expectations for some growth. Its current regional outlook therefore prioritises the UK, Europe, US and Southeast Asia over the Middle East.

Excelsoft said it is investing disproportionately in the US and UK, where it has conducted multiple demonstrations for proctoring solutions and seen active participation. Management said target hiring in the UK and US, including consultants, was largely complete, while recruitment in Singapore had been maximised. It still expects hiring in the Middle East but said it has no intention to add people in Indian markets.

How does the larger pipeline relate to Excelsoft’s FY27 revenue target?

Excelsoft said it remains on track for its Rs 350 crore FY27 revenue target, but its Rs 1,200 crore pipeline is not booked revenue. Management’s stated priority is to convert the existing pipeline into signed orders, deliver the work and recognise revenue year on year. It also plans to improve implementation readiness, user acceptance testing coordination and customer sign-off processes to reduce the interval between delivery and billing.

Revenue from operations rose 25.2% year on year to Rs 80.9 crore in Q2 FY27 from Rs 64.6 crore in Q2 FY26. First-half FY27 revenue increased 33.9% to Rs 161.2 crore from Rs 120.3 crore a year earlier. Education technology services generated 60.75% of Q2 revenue and grew 41.9% year on year, while product business represented the remaining 39.25%, making services the reported growth driver in the quarter.

What must Excelsoft execute to turn pipeline into profitable growth?

Excelsoft must convert opportunities while managing the cost of overseas expansion, product development and delivery support. Earnings before interest, tax, depreciation and amortisation, or EBITDA, were Rs 13.2 crore in Q2 FY27, with a 16.35% margin, compared with Rs 18.8 crore and a 29.3% margin in Q2 FY26. Management linked the decline mainly to sales-team and training investments charged to profit and loss, alongside consultant costs, salary increments and statutory contributions.

For the first half of FY27, EBITDA was Rs 26.3 crore compared with Rs 28.9 crore in the prior-year period, even as profit after tax increased 6.2% to Rs 17.5 crore from Rs 16.5 crore. Excelsoft said it is reviewing resource utilisation, consultant deployment and project-level profitability. Management expects EBITDA margin to reach 22% to 25% after investments start yielding results, potentially in the next couple of quarters.

What other factors could affect Excelsoft’s pipeline conversion?

Excelsoft’s customer concentration remains a stated issue. An analyst said the top five customers account for roughly 75% of the business, and management said it has a five-year plan to reduce concentration to below about 25% to 30%. Management also said it does not want any customer to account for more than about 20% of revenue, while citing AQA, British Council, Ascentis and other newer customers as diversification additions.

Excelsoft is also seeking commercial output from 16 artificial-intelligence prototypes and other pilots. Management said customer-specific artificial-intelligence work is already under way and expects artificial-intelligence-specific revenue to form an increased share of revenue in the current quarter, with a significant impact expected one more quarter later. Separately, the Saras e-testing platform has temporary devices with customers in Africa, the UK and Scotland for pilots, and management said an order could follow after integration is completed.

Conclusion

Excelsoft’s Rs 300 crore six-month pipeline increase gives it a larger pool of potential work than at the start of FY26-27 and broadens its geographic focus. First-half FY27 revenue rose 33.9% to Rs 161.2 crore and profit after tax rose to Rs 17.5 crore, while EBITDA fell to Rs 26.3 crore as the company funded international sales, leadership and delivery capacity.

The next measures to watch are conversion of the Rs 1,200 crore pipeline into signed orders, progress toward the Rs 350 crore FY27 revenue target, and whether implementation and customer sign-off improvements shorten billing delays. Management also expects EBITDA margin to move toward 22% to 25% in the next couple of quarters and plans to reduce customer concentration over five years.