R Systems Q3 profit rises 82% as EBITDA margin reaches 20.2%

R Systems International Limited reported net profit of Rs 64.183 crore for Q3 2026 ended September 30, 2026, up 81.6% from Rs 35.341 crore a year earlier, as revenue rose 23.4% and adjusted EBITDA margin reached 20.23%, compared with 16.94% in Q3 2025.

How did R Systems perform in Q3 2026?

R Systems increased quarterly revenue, operating profit and reported profit in Q3 2026. Revenue from operations rose to Rs 615.2 crore from Rs 498.617 crore in Q3 2025, a 23.4% increase in rupee terms, and from Rs 601.701 crore in Q2 2026. In US dollar terms, revenue was US$64.35 million, up 12.5% year on year.

Profit before tax increased to Rs 88.053 crore from Rs 53.485 crore a year earlier, while net profit rose to Rs 64.183 crore from Rs 35.341 crore. Sequentially, net profit was higher than Rs 55.57 crore in Q2 2026. Basic earnings per share, which is not annualised, rose to Rs 5.42 from Rs 2.99 in Q3 2025.

Total income reached Rs 617.78 crore in Q3 2026, including Rs 2.58 crore of other income, compared with Rs 500.357 crore in Q3 2025. Total expenses increased to Rs 529.727 crore from Rs 446.872 crore, while the increase in total income of Rs 117.423 crore exceeded the Rs 82.855 crore increase in expenses.

What drove R Systems' EBITDA margin expansion?

R Systems' adjusted earnings before interest, tax, depreciation and amortisation, or adjusted EBITDA, margin expanded by 3.29 percentage points year on year to 20.23% in Q3 2026. Adjusted EBITDA increased 47.4% to Rs 124.443 crore from Rs 84.444 crore in Q3 2025, growing faster than the 23.4% rise in rupee revenue.

Gross margin was 38.60% in Q3 2026, compared with 35.54% in Q3 2025, though it declined from 39.23% in Q2 2026. Selling, general and administrative expenses accounted for 18.37% of revenue, against 18.61% a year earlier and 19.16% in the preceding quarter. These movements resulted in adjusted EBITDA margin of 20.23%, slightly above Q2 2026's 20.07%.

Cost of revenues rose to Rs 377.724 crore from Rs 321.396 crore, while selling, general and administrative expenses increased to Rs 113.033 crore from Rs 92.777 crore. Employee benefits expense under the statutory statement was Rs 361.103 crore, including Rs 3.225 crore of restricted stock unit, or RSU, expense, compared with total employee benefits expense of Rs 329.4 crore in Q3 2025.

How did R Systems perform in the first nine months of 2026?

R Systems reported 27.7% revenue growth and 49.7% adjusted EBITDA growth for the nine months ended September 30, 2026. Revenue rose to Rs 1,791.669 crore from Rs 1,403.097 crore in the comparable 2025 period, while adjusted EBITDA increased to Rs 360.858 crore from Rs 240.996 crore.

The nine-month adjusted EBITDA margin increased to 20.14% from 17.18% a year earlier. Adjusted net profit after tax rose 54.0% to Rs 205.138 crore from Rs 133.212 crore; this measure excludes RSU expense and non-recurring items net of tax. Revenue was US$190.74 million, up 17.5% from US$162.27 million in US dollar terms.

Reported nine-month net profit was Rs 185.167 crore, compared with Rs 149.788 crore in the prior-year period. The 2025 comparison included Rs 43.595 crore of profit from the sale of land, building and certain other assets at R Systems' Noida office. Other income therefore declined to Rs 17.183 crore in the 2026 period from Rs 50.627 crore a year earlier.

What adjustments and costs affected R Systems' earnings?

R Systems reported adjusted net profit of Rs 66.455 crore in Q3 2026, compared with reported net profit of Rs 64.183 crore. The adjusted figure excludes RSU expense and non-recurring items net of tax. Adjusted basic earnings per share were Rs 5.61, compared with Rs 5.31 in Q2 2026 and Rs 3.67 in Q3 2025.

The Rs 1.201 crore non-recurring expense in Q3 2026 consisted of severance payments, according to the filing. Q2 2026 also included severance payments, while Q3 2025 included Rs 1.592 crore of legal costs for a proposed acquisition. Q3 2026 RSU costs were Rs 3.225 crore, down from Rs 7.056 crore in Q3 2025.

Finance costs increased to Rs 9.581 crore in Q3 2026 from Rs 3.723 crore a year earlier, while depreciation and amortisation rose to Rs 22.917 crore from Rs 16.611 crore. Even after these charges, earnings before interest and tax before non-recurring costs rose to Rs 98.301 crore from Rs 60.777 crore in Q3 2025.

What did R Systems disclose about demand, deals and liquidity?

R Systems management said Q3 2026 revenue growth of 12.5% in US dollar terms reflected enterprise demand moving from artificial intelligence experimentation to scaled adoption. Managing Director and Chief Executive Officer Nitesh Bansal said the company is using EXIQO, its artificial intelligence studio, reusable industry templates and agent frameworks to build enterprise-grade artificial intelligence solutions.

The company disclosed five engagements during the quarter, without contract values or expected revenue timing. They include cloud modernisation for a European telecommunications operator, a data lakehouse for a Middle East housing and real-estate organisation, and core-lending platform work for a Saudi Arabian financial-services provider. The filing also listed a Salesforce engagement for a global entertainment company and payment-operations modernisation for a multinational insurer.

Cash and bank balances, net of short-term borrowing and amounts set aside for dividend, were Rs 348.7 crore at September 30, 2026, compared with Rs 272.6 crore at December 31, 2025. Total equity attributable to shareholders increased to Rs 1,077.9 crore from Rs 1,032.3 crore. R Systems declared and subsequently paid an interim dividend of Rs 8 per share, equal to 800% of face value, in Q3 2026.

Conclusion

The Q3 results show that revenue growth was accompanied by a larger increase in adjusted EBITDA and reported net profit, with margin improving both from Q3 2025 and Q2 2026. For the first nine months, adjusted profit growth exceeded reported profit growth because the prior-year period included a Rs 43.595 crore gain on asset sales.

The next point to watch is whether R Systems can maintain its 20.23% Q3 adjusted EBITDA margin while continuing investments in talent, innovation and artificial intelligence capabilities. Management identified EXIQO, reusable templates and agent frameworks as mechanisms for pursuing scaled enterprise artificial intelligence work, while the disclosed engagements did not provide contract values or delivery schedules.