IKS Health net debt rose to Rs 5,280.8 crore in Q2 FY27

IKS Health reported net debt of Rs 5,280.8 crore at September 30, 2026, up from Rs 265.4 crore at June 30, 2026, in Q2 FY27, which included 82 days of TruBridge consolidation. Operating cash flow rose 35.4% year on year to Rs 393.4 crore, while free cash flow increased 16.6% to Rs 262.1 crore.

Why did IKS Health net debt rise in Q2 FY27?

IKS Health’s net debt increased by Rs 5,015.4 crore between June 30, 2026 and September 30, 2026. The September-end balance of Rs 5,280.8 crore also compared with Rs 412.5 crore at September 30, 2025, following a period in which Q2 FY27 results included 82 days of TruBridge consolidation.

The presentation does not give a borrowing-proceeds breakdown or quantify how much of the net-debt movement relates directly to the TruBridge transaction. It does state that IKS Health acquired liabilities for acquisition expenses incurred by TruBridge before acquisition and paid them after acquisition, affecting quarterly cash flow by Rs 96 crore.

The comparison shows that net debt fell by Rs 147.1 crore between September 30, 2025 and June 30, 2026, before the September-quarter increase. IKS Health does not disclose debt maturities, borrowing rates, repayment plans or leverage covenants in the presentation, leaving the composition and scheduled servicing of the September 30 balance unspecified.

Did IKS Health generate more cash in Q2 FY27?

IKS Health generated higher operating cash flow and free cash flow in Q2 FY27 than in Q2 FY26. Operating cash flow, or OCF, rose by Rs 102.9 crore to Rs 393.4 crore, while free cash flow, or FCF, increased by Rs 37.3 crore to Rs 262.1 crore.

FCF growth was below OCF growth, with FCF up 16.6% against OCF growth of 35.4%. IKS Health said FCF was affected by tax payments exceeding the tax charge during the quarter, which it said would be recovered against future tax obligations; the presentation gives neither the recoverable amount nor a recovery date.

IKS Health also reported FCF yield of 122.9% in Q2 FY27, compared with 124.4% in Q2 FY26 and 89.9% in Q1 FY27. The presentation does not define the calculation of FCF yield, but the reported OCF and FCF figures show positive quarterly cash generation alongside the Rs 5,280.8 crore September-end net-debt balance.

How did TruBridge consolidation change IKS Health revenue and margins?

IKS Health reported revenue of Rs 1,592.5 crore in Q2 FY27, up 103.9% year on year from Rs 781.1 crore and 78.2% quarter on quarter from Rs 893.6 crore. The quarter incorporated 82 days of TruBridge consolidation, and revenue was US$169 million, up 87.3% from Q2 FY26.

Earnings before interest, tax, depreciation and amortisation, or EBITDA, increased 62.5% year on year to Rs 441.5 crore, but its margin declined to 27.7% from 34.8% in Q2 FY26. The margin was also below the 33.0% reported in Q1 FY27, meaning revenue growth exceeded EBITDA growth in both comparisons.

Employee benefit expense excluding employee stock option plan, or ESOP, cost rose 97.8% year on year to Rs 786.1 crore, while other expenses increased 196.6% to Rs 355.9 crore. Adjusted EBITDA, defined by IKS Health as EBITDA adjusted for ESOP expense, rose 63.2% to Rs 459.1 crore, while its margin declined to 28.8% from 36.0% a year earlier.

What happened to IKS Health profit and finance costs?

IKS Health reported profit attributable to shareholders of Rs 217.6 crore in Q2 FY27, up 20.4% year on year from Rs 180.7 crore and 12.3% quarter on quarter from Rs 193.7 crore. Profit before exceptional items and tax increased 19.2% year on year to Rs 273.2 crore, while earnings per share rose to Rs 13.0 from Rs 10.8 in Q2 FY26.

Finance cost was Rs 101.9 crore in Q2 FY27, compared with Rs 16.1 crore in Q2 FY26 and Rs 10.1 crore in Q1 FY27. Depreciation and amortisation rose to Rs 89.8 crore from Rs 30.1 crore a year earlier, while interest income increased to Rs 23.4 crore from Rs 3.7 crore.

Adjusted profit for the period was Rs 273.4 crore, up 36.0% year on year from Rs 201.1 crore. IKS Health adjusts this measure for acquisition-related intangible-asset amortisation and ESOP cost, net of tax, which it describes as non-cash expenses; the Q2 FY27 adjustments included Rs 42.4 crore of amortisation and Rs 13.4 crore of ESOP cost.

How did IKS Health customer concentration change after consolidation?

IKS Health’s top 10 customers contributed Rs 341.8 crore, or 21.5% of Q2 FY27 revenue, compared with Rs 480.8 crore, or 53.8%, in Q1 FY27. Top-five customer revenue was Rs 242.6 crore, representing 15.2% of Q2 FY27 revenue, versus Rs 375.9 crore and 42.1% in the preceding quarter.

The reduced contribution percentages coincided with total revenue increasing by Rs 698.9 crore quarter on quarter to Rs 1,592.5 crore. Top-10 customer revenue itself declined by Rs 139 crore from Q1 FY27, while IKS Health reported more than 450 enterprise-level customers in Q2 FY27.

Average client age for the top 10 customers was 5.99 years in Q2 FY27, compared with 5.76 years in Q1 FY27. The top-five average was 7.61 years, up from 7.41 years, while the presentation does not provide contract renewal rates, contract terms or revenue-retention measures.

Conclusion

IKS Health combined higher Q2 FY27 revenue, profit and operating cash flow with a substantially higher September-end net-debt balance. Revenue rose 103.9% to Rs 1,592.5 crore and OCF rose 35.4% to Rs 393.4 crore, but net debt increased from Rs 265.4 crore at June-end to Rs 5,280.8 crore at September-end during the quarter containing 82 days of TruBridge consolidation. EBITDA margin declined by 7.1 percentage points year on year to 27.7%.

The next reported periods will indicate how IKS Health converts the enlarged revenue base into cash while carrying the September 30, 2026 debt position. Management disclosed a Rs 96 crore post-acquisition cash-flow effect from acquired TruBridge expense liabilities and said higher tax payments affecting FCF would be recovered against future tax obligations, but it did not provide a debt-reduction target, maturity schedule or tax-recovery timetable.