MPS Research Solutions lifts ex-AJE margin to 49.25% in Q2

Research Solutions reached a 49.25% earnings before interest, tax, depreciation and amortisation (EBITDA) margin excluding AJE in Q2 FY27, up 2.90 percentage points from Q2 FY26, as revenue on that basis rose 21.71% to Rs 104 crore. Management said AI-enabled production and quality workflows were live in client delivery.

How did Research Solutions' ex-AJE margin change?

Research Solutions' EBITDA margin excluding AJE increased to 49.25% in Q2 FY27 from 46.35% in Q2 FY26. Revenue excluding AJE rose to Rs 104 crore from Rs 85.45 crore, while EBITDA increased 29.31% to Rs 51.22 crore from Rs 39.61 crore. EBITDA therefore grew faster than revenue on the same basis.

The including-AJE figures showed a different revenue-growth rate but also a higher margin. Reported revenue increased 8.56% to Rs 129.82 crore in Q2 FY27, compared with Rs 119.58 crore a year earlier, while reported EBITDA rose 25.26% to Rs 62.53 crore. The reported EBITDA margin rose 6.42 percentage points to 48.17% from 41.75%.

Research Solutions also expanded staffing while the ex-AJE margin increased. Ex-AJE headcount rose 20.42% to 2,565 in Q2 FY27 from 2,130 in Q2 FY26; reported headcount, including AJE, rose 18.02% to 2,666 from 2,259. The presentation describes AJE as resetting by design but does not define AJE or disclose its separate revenue and cost components.

What evidence links AI to Research Solutions' productivity?

Management said AI-enabled production and quality workflows are live in Research Solutions' client delivery and are moving customers to modern, higher-productivity platforms. Its stated mechanism is that research work is priced on output, allowing productivity gains from AI to be reflected in margin. The presentation does not quantify the revenue, cost reduction or margin movement attributable solely to AI in Q2 FY27.

The disclosed productivity measure was EBITDA per employee, which rose 14.6% to Rs 2.17 lakh in Q2 FY27 from Rs 1.89 lakh in Q2 FY26. This increase occurred alongside reported Research Solutions headcount growth of 18.02% and an EBITDA margin of 48.17%, compared with 41.75% a year earlier.

The figures are consistent with management's productivity explanation, but they do not isolate AI from other factors. The presentation gives no split for pricing, customer mix, workflow redesign, employee costs or AJE within the Rs 62.53 crore of reported Research Solutions EBITDA in Q2 FY27.

How did Research Solutions compare with the other segments?

Research Solutions was the largest segment, accounting for 57.9% of Q2 FY27 group revenue, compared with Education at 30.6% and Corporate Learning at 11.5%. Research Solutions reported Rs 129.82 crore of revenue, while Education generated Rs 68.68 crore and Corporate Learning generated Rs 25.79 crore.

Research Solutions also recorded the highest disclosed segment EBITDA margin at 48.17%. Education's margin declined by 11.71 percentage points to 30.42% despite 30.03% revenue growth, whereas Corporate Learning's margin rose by 10.13 percentage points to 24.74% on revenue growth of 17.01%.

At group level, revenue rose 15.35% to Rs 224.29 crore and EBITDA increased 27.39% to Rs 77.03 crore in Q2 FY27. Group EBITDA margin rose to 34.34% from 31.10%, while headcount increased 11.16% to 3,557. Research Solutions' reported headcount growth of 18.02% was therefore higher than the group rate.

Which Research Solutions mandates are scheduled to ramp next?

Research Solutions won peer-review work covering more than 110,000 annual submissions in Q2 FY27. A top-five global publisher is moving those submissions to its Journal Editorial Office between September and December, according to management. The presentation does not disclose the mandate's contract value, expected margin or monthly migration volumes.

The segment was also awarded 42 new journals by its largest customer in Q2 FY27. Management said 25 more journals were due to onboard in Q3 FY27, and a new research-integrity mandate was scheduled to begin billing from November. These are implementation and billing milestones rather than quantified revenue guidance.

The new work is relevant to the output-priced model described for Research Solutions, because it adds submissions and journals to workflows where AI-enabled production and quality processes are already live. However, the presentation gives no incremental revenue target, EBITDA target or headcount plan for the 110,000-plus submissions, the 42-journal award or the research-integrity mandate.

Conclusion

Research Solutions increased its ex-AJE EBITDA margin to 49.25% in Q2 FY27 as EBITDA rose 29.31% and revenue increased 21.71% on that basis. Including AJE, the segment delivered Rs 129.82 crore of revenue, a 48.17% EBITDA margin and 57.9% of group revenue. Management attributes the margin pattern in part to live AI-enabled workflows, although the presentation does not quantify AI's separate financial contribution.

The next disclosed milestones are the September-to-December peer-review migration involving more than 110,000 annual submissions, the onboarding of 25 more journals in Q3 FY27 and research-integrity billing from November. Subsequent Research Solutions revenue, margin and headcount will indicate how these stated ramp events develop, since management disclosed no contract-value or margin target for them.