Saksoft Q2 revenue stayed flat as EBITDA margin fell 198 bps

Saksoft reported Q2-FY27 operating income of Rs 248.612 crore, virtually unchanged from Q1-FY27, while operating earnings before interest, tax, depreciation and amortisation (EBITDA) margin fell 198 basis points year on year to 17.60%. Operating EBITDA declined 13.6% year on year to Rs 43.760 crore despite the near-flat sequential revenue result.

How did Saksoft perform in Q2-FY27?

Saksoft’s Q2-FY27 operating income was flat sequentially at Rs 248.612 crore, down 3.8% from Rs 258.493 crore in Q2-FY26. Operating income was Rs 248.619 crore in Q1-FY27, making the quarter-on-quarter difference Rs 7 lakh. Operating EBITDA was Rs 43.760 crore, down 3.6% from Rs 45.396 crore in Q1-FY27 and 13.6% from Rs 50.619 crore a year earlier.

Profit after tax (PAT) was Rs 32.118 crore in Q2-FY27, up 9.6% from Rs 29.292 crore in Q1-FY27 but down 10.7% from Rs 35.967 crore in Q2-FY26. PAT margin was 12.92%, compared with 11.78% in the preceding quarter and 13.91% a year earlier. Total comprehensive income was Rs 37.684 crore, up 5.6% sequentially and down 4.5% year on year.

Why did Saksoft’s operating margin decline?

Saksoft’s operating EBITDA margin declined to 17.60% in Q2-FY27 from 18.26% in Q1-FY27 and 19.58% in Q2-FY26. The sequential movement was a 66-basis-point decline, while the year-on-year movement was a 198-basis-point decline. Expenses rose 0.8% sequentially to Rs 204.852 crore while operating income was unchanged, and expenses were 1.5% below Rs 207.874 crore in Q2-FY26.

Below EBITDA, profit before tax was Rs 42.314 crore, down 0.6% from Rs 42.576 crore in Q1-FY27 and 17.5% from Rs 51.279 crore in Q2-FY26. Other income increased 70.1% sequentially to Rs 2.990 crore from Rs 1.758 crore, while tax fell 23.2% to Rs 10.196 crore from Rs 13.284 crore. These movements accompanied the sequential increase in PAT even as operating EBITDA declined by Rs 1.636 crore.

How did Saksoft’s H1-FY27 performance compare with H1-FY26?

Saksoft’s H1-FY27 operating income fell 2.0% year on year to Rs 497.231 crore from Rs 507.568 crore in H1-FY26. Operating EBITDA declined 7.6% to Rs 89.156 crore from Rs 96.449 crore, and operating EBITDA margin narrowed 107 basis points to 17.93% from 19.00%. EBITDA therefore fell faster than operating income over the two first-half periods.

H1-FY27 PAT was Rs 61.410 crore, down 10.1% from Rs 68.315 crore in H1-FY26, while PAT margin declined 111 basis points to 12.35%. Profit before tax decreased 10.0% to Rs 84.890 crore. Other income fell 50.4% to Rs 4.747 crore, while finance cost declined 49.8% to Rs 2.558 crore from Rs 5.092 crore in the prior-year half.

What did Saksoft’s H1-FY27 revenue mix show?

Saksoft’s emerging vertical was its largest revenue category in H1-FY27 at 45%, down from 47% in FY26. Banking, financial services and insurance (BFS) represented 30%, compared with 31% in FY26. Logistics increased to 16% from 14%, while commerce increased to 9% from 8%. Saksoft notes that only FY24 was recast to current segment information for the vertical analysis.

Saksoft generated 51% of H1-FY27 revenue from the USA, 28% from Europe and 21% from Asia-Pacific and other regions. Offshore delivery accounted for 57% of revenue, up from 56% in FY26, while onsite delivery fell to 43% from 44%. The top 20 clients contributed 72% of revenue, up from 70%, whereas the top five clients’ share declined to 40% from 42%.

What operational actions and outlook did Saksoft disclose?

Saksoft reported 2,203 employees in H1-FY27, down from 2,277 in FY26, with technical employees representing 84% of the workforce. Support employees numbered 190, compared with 217 in FY26. The company had 16 clients generating more than $1 million each and 10 clients in the $0.5 million to $1 million range, unchanged from FY26 in both categories.

Management appointed Gurmeet Chahal as chief executive officer of Saksoft Inc. and said it was using artificial-intelligence investments and accelerators to deepen customer engagement and increase wallet share. Chairman and Managing Director Aditya Krishna said Saksoft was offering free proof of concepts and reduced team sizes to improve customer workflow efficiency through artificial intelligence. He said this could cause short-term revenue cannibalisation, while management expected H2-FY27 performance to be better than H1-FY27.

Conclusion

Saksoft’s Q2-FY27 result combined almost unchanged sequential operating income of Rs 248.612 crore with lower operating profitability, as operating EBITDA margin fell to 17.60% from 19.58% a year earlier. The first-half comparison showed the same direction: operating income declined 2.0%, operating EBITDA declined 7.6% and PAT declined 10.1% from H1-FY26.

The next period will test management’s expectation that H2-FY27 will perform better than H1-FY27. Investors can watch for the reported effects of free proof of concepts, reduced artificial-intelligence-enabled team sizes and the appointment of the Saksoft Inc. chief executive on operating income, margins, workforce levels and customer revenue concentration.