Vertoz Limited H1 direct-service expense rose 93%, outpacing revenue

Vertoz Limited reported standalone direct-service expense of Rs 29.2195 crore for the half year ended 30 September 2026, up 93% year on year, against a 46% increase in revenue from operations to Rs 54.4638 crore; profit after tax rose 15% to Rs 3.6980 crore.

Why did Vertoz’s H1 profit growth trail revenue growth?

Vertoz’s profit growth trailed revenue growth because direct-service expense absorbed most of the increase in revenue. Revenue from operations increased by Rs 17.2715 crore, from Rs 37.1923 crore in the half year ended 30 September 2025 to Rs 54.4638 crore in the corresponding 2026 period, while direct-service expense increased by Rs 14.0768 crore.

Profit before tax increased 21% to Rs 4.9833 crore from Rs 4.1199 crore, while profit after tax rose to Rs 3.6980 crore from Rs 3.2101 crore. Based on the reported standalone figures, profit before tax was about 9.15% of revenue in H1 2026, down from 11.08% in H1 2025, and profit after tax was about 6.79%, down from 8.63%.

How much did Vertoz’s direct-service cost share change?

Vertoz’s direct-service expense rose to about 53.65% of standalone revenue in H1 2026 from about 40.72% a year earlier. The increase of about 12.93 percentage points followed the 93% rise in direct-service expense, compared with the 46% growth in revenue from operations during the half year ended 30 September 2026.

The filing presents direct-service expense as one line item and does not provide a service, customer or cost-component breakdown for the movement. Vertoz also states that it has one reportable segment under Indian Accounting Standards, or Ind AS, meaning its standalone results do not provide segment-level revenue or margin information.

Total expenses rose 50% to Rs 50.1737 crore from Rs 33.5274 crore, a rate closer to revenue growth than the increase in direct-service expense alone. Employment benefit cost increased to Rs 12.8372 crore from Rs 11.9143 crore, other expenses rose to Rs 4.3667 crore from Rs 3.7685 crore, and depreciation and amortisation increased to Rs 2.1461 crore from Rs 1.7085 crore.

Finance cost increased to Rs 1.6043 crore from Rs 99.34 lakh in H1 2025. Direct-service expense accounted for Rs 14.0768 crore of the total year-on-year cost increase, compared with Rs 92.29 lakh for employment benefits, Rs 59.82 lakh for other expenses, Rs 43.76 lakh for depreciation and amortisation, and Rs 61.09 lakh for finance cost.

How did Vertoz’s September-quarter costs compare with June?

Vertoz’s direct-service expense grew faster than revenue sequentially in the quarter ended 30 September 2026. The expense was Rs 15.5254 crore, up 13% from Rs 13.6941 crore in the quarter ended 30 June 2026, while revenue from operations rose 7% to Rs 28.2046 crore from Rs 26.2592 crore.

That movement took direct-service expense to about 55.04% of September-quarter revenue, compared with about 52.15% in the June quarter. The sequential change was therefore consistent with the H1 comparison, in which the direct-service cost share rose from about 40.72% in the prior-year half.

Against the quarter ended 30 September 2025, September 2026 direct-service expense rose 82% from Rs 8.5384 crore, while revenue increased 48% from Rs 19.1180 crore. The direct-service line increased by Rs 6.9870 crore year on year, compared with a Rs 9.0866 crore increase in quarterly revenue.

Quarterly profit before tax was Rs 2.7386 crore in September 2026, compared with Rs 2.2448 crore in June 2026 and Rs 2.1155 crore in September 2025. Profit after tax was Rs 2.0502 crore, compared with Rs 1.6478 crore in June and Rs 1.6756 crore a year earlier; the September-quarter profit-before-tax-to-revenue ratio was about 9.71%, versus 11.07% a year earlier.

What do Vertoz’s standalone accounts show beyond expenses?

Vertoz reported cash generated from operations of Rs 35.5417 crore for the half year ended 30 September 2026 and taxes paid of Rs 1.2866 crore, resulting in net cash from operating activities of Rs 34.2551 crore. These cash-flow measures differ from the Rs 3.6980 crore profit after tax reported for the same half year.

Cash and cash equivalents stood at Rs 97.19 lakh on 30 September 2026, compared with Rs 51.32 lakh at 31 March 2026. The cash-flow statement records net cash used in investing activities of Rs 31.2331 crore and net cash used in financing activities of Rs 2.5632 crore, producing a net increase in cash and cash equivalents of Rs 45.87 lakh.

Total standalone assets were Rs 248.7003 crore at 30 September 2026, compared with Rs 223.4301 crore at 31 March 2026. Current trade receivables were Rs 33.7877 crore, down from Rs 63.1193 crore, while total equity was Rs 149.15 crore, compared with Rs 144.4822 crore at the previous financial year-end.

The board approved the unaudited standalone and consolidated results on 13 November 2026. Mittal & Associates reviewed the standalone results under Standard on Review Engagements 2410 and reported that nothing had come to its attention to indicate that the financial results had not made the required disclosures or contained a material misstatement.

Conclusion

Vertoz’s standalone H1 results show that its 46% revenue increase did not translate proportionately into profit growth because direct-service expense rose 93% to Rs 29.2195 crore. The direct-service cost share increased from about 41% to about 54% of revenue, while profit after tax increased 15% to Rs 3.6980 crore.

The next result will show whether direct-service expense continues to rise faster than revenue after reaching Rs 15.5254 crore in the September 2026 quarter, versus Rs 13.6941 crore in June. The filing provides neither a direct-service cost breakdown nor segment-level reporting, leaving the underlying source of the movement unresolved.