Xelpmoc FY26 revenue slips 4.1% as Q4 jumps 52.8% YoY

Key numbers from the FY26 update

Xelpmoc Design and Tech Ltd (BOM:542367) reported a mixed set of operating metrics for the quarter and year ended March 31, 2026. Revenue from operations for Q4 FY26 increased to ₹10.8 million from ₹7.1 million in Q4 FY25, reflecting a 52.8% year-on-year rise. But sequentially, Q4 revenue declined versus ₹11.2 million in Q3 FY26. For the full year, operating revenue fell 4.1% year-on-year to ₹37.4 million from ₹39.0 million in FY25. Profitability remained weak, with a negative operating EBITDA reported for the quarter.

Q4 FY26 performance: growth, but margins remain negative

In Q4 FY26, Xelpmoc’s Adjusted Operating EBITDA stood at a loss of ₹15.6 million, slightly wider than the loss of ₹15.3 million in Q4 FY25. The company also recorded a net loss of ₹17.8 million for the quarter. It attributed part of the quarterly loss to ESOP expenditure of ₹2.4 million, which was excluded from adjusted operating EBITDA. Separate quarterly earnings data indicated sales of ₹10.79 million in Q4 FY26 compared with ₹7.06 million a year earlier, and a net loss of ₹17.79 million versus ₹18.57 million. The reported numbers point to revenue improvement year-on-year in the quarter, but continued pressure on operating leverage.

FY26: revenue declines, losses narrow

For FY26, the company reported revenue from operations of ₹37.4 million, down from ₹39.0 million in FY25. Full-year sales were reported at ₹37.35 million compared with ₹38.98 million a year ago. Revenue was reported at ₹44.62 million versus ₹48.03 million in the previous year, alongside a net loss of ₹75.93 million compared to ₹80.81 million. Xelpmoc also reported that it narrowed its adjusted operating EBITDA loss for FY26 to ₹63.0 million. Basic loss per share from continuing operations for FY26 was ₹5.15 compared with ₹5.50 in FY25, with diluted loss per share at ₹5.14 compared with ₹5.49.

Corporate segment focus and AI-led positioning

Xelpmoc said it remains heavily focused on the corporate segment. It reported that 100% of its revenues came from this segment, particularly in data science and AI work. This concentration signals a clear go-to-market focus, but it also means quarterly outcomes depend heavily on enterprise buying cycles and project conversions. The company highlighted that the transition from proof-of-concept (POC) to order booking for data science and AI projects is taking longer than expected. That delay has affected the timing of revenue realisation.

Portfolio companies: ARR traction and operating progress

Xelpmoc highlighted operating traction in two portfolio companies. Mihup, identified as a portfolio company, achieved a contracted ARR of ₹1,000 million and secured clients including Tata Motors and HDFC. Live2.ai, another portfolio company, was described as EBITDA positive and reported an ARR of $1.1 million. These disclosures underline the company’s emphasis on building value through investments alongside services revenue. However, the financial impact of these portfolio metrics on Xelpmoc’s reported P&L is not stated in the provided data.

Investment valuation rises to ₹726.8 million

As of March 31, 2026, Xelpmoc reported that the fair value of its investments in portfolio companies increased to approximately ₹726.8 million. This compares with ₹631.8 million a year earlier, indicating a year-on-year uplift in reported fair value. The company’s narrative suggests portfolio valuation is an important pillar alongside the services business. The valuation change is notable given broader volatility in start-up funding conditions in emerging technology segments.

Operating challenges: funding volatility and sales execution

Xelpmoc flagged ongoing challenges in the start-up sector, citing volatility in funding in the emerging technology space. It also stated that the POC-to-order conversion cycle for data science and AI projects is taking longer than expected. On execution, the company noted it has not yet hired a dedicated sales team for its new products. Instead, it relies on contractual agreements with go-to-market (GTM) companies. These factors together indicate that scaling product-led revenue may take time and could keep near-term profitability under pressure.

Snapshot table: quarter and year metrics

Market impact: what investors typically track here

The results underline a common pattern in small, AI-focused services and venture investment models: quarterly revenue can improve on project wins, while EBITDA remains negative due to a fixed cost base and longer sales cycles. In Xelpmoc’s case, the Q4 year-on-year revenue rise was accompanied by continued adjusted EBITDA losses, and the company pointed to delayed POC-to-order conversion as a direct operational reason. Investors also tend to watch whether the company’s portfolio value growth translates into sustainable cash generation, especially during periods of start-up funding volatility. The disclosed rise in fair value to ₹726.8 million is therefore a key data point from the update. The lack of a dedicated sales team for new products, with reliance on GTM contracts, is another operational factor that can influence the pace of revenue scaling.

Analysis: why the FY26 update matters

Two threads stand out from the FY26 picture. First, the core operating business shows modest scale, with FY26 operating revenue at ₹37.4 million and a meaningful quarterly swing between Q3 and Q4. Second, the company is positioning portfolio companies and AI-led work as long-term value drivers, supported by ARR disclosures for Mihup and Live2.ai and the year-on-year rise in investment fair value. At the same time, the company’s own quarterly adjusted EBITDA loss of ₹15.6 million highlights that profitability has not yet followed revenue growth. With start-up sector funding volatility and slower enterprise conversion from POCs to orders, the immediate focus remains on execution and the speed of monetisation.

Conclusion

Xelpmoc closed FY26 with a 4.1% decline in operating revenue to ₹37.4 million, even as Q4 FY26 revenue rose 52.8% year-on-year to ₹10.8 million. Losses continued in Q4, with adjusted operating EBITDA at (₹15.6 million) and net loss of ₹17.8 million, partly due to ₹2.4 million in ESOP expenses. The company also reported an increase in the fair value of portfolio investments to ₹726.8 million as of March 31, 2026, alongside ARR milestones at Mihup and Live2.ai. The next set of updates investors are likely to track will be whether enterprise AI projects move faster from POC to order booking and whether the company strengthens its sales capacity for new products.