Ceinsys Tech — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Ceinsys Tech reported a strong Q2 and H1 FY26, marked by record revenue and EBITDA, driven by successful project execution and a strategic focus on higher-margin technology solutions. The company saw significant growth across its Technology Solutions and Geospatial segments. While working capital cycle remains elevated due to government project disbursements, management anticipates improvement in coming quarters, alongside progress on strategic acquisitions and a robust deal pipeline.

Highlights

  • Q2 FY26 operational revenue grew by 82% YoY to Rs. 164 crores.

  • Q2 FY26 EBITDA grew by 112% YoY to Rs. 36 crores, with a margin of 21.77% (310 bps improvement).

  • Q2 FY26 net profit stood at Rs. 26 crores, representing 120% growth YoY, with PAT margins at 15.72%.

  • H1 FY26 operational revenue grew by 95% YoY to Rs. 320 crores.

  • H1 FY26 EBITDA increased by 119% YoY to Rs. 66 crores, with a margin of 20.56% (226 bps improvement).

  • Total order book stands at Rs. 1,092 crores as of September 2025.

  • Technology Solutions projects revenue rose 2.5-fold to Rs. 88 crores in Q2 FY26, contributing 54% of total turnover.

  • Geospatial and Engineering Services projects grew 39% YoY to Rs. 75 crores in Q2 FY26.

Key financials

2 periods

Q2

  • Operational Revenue
    ₹164 Cr
    YoY +82%
  • EBITDA
    ₹36 Cr
    YoY +112%
  • EBITDA Margin
    21.8%
  • Net Profit
    ₹26 Cr
    YoY +120%
  • PAT Margin
    15.7%

H1

  • Operational Revenue
    ₹320 Cr
    YoY +95%
  • EBITDA
    ₹66 Cr
    YoY +119%
  • EBITDA Margin
    20.6%
  • Net Profit
    ₹57 Cr
    YoY +143%
  • PAT Margin
    17.9%

What they filed

Q1 FY27: revenue up 0.6%, net profit down 3.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue90 112 142 157 163 +81%170 +52%171 +20%158 +1%
EBITDA17 21 27 30 36 +112%40 +90%40 +48%38 +27%
Net profit12 18 22 32 26 +117%39 +117%37 +68%31 −3%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Revenue (Q2)
₹163 Cr Total
  • Technology Solutions ₹88 Cr 54.0%
  • Geospatial and Engineering Services ₹75 Cr 46.0%

Order book

high confidence

Total value

₹1,092 Cr

as of 2025-09-30 quantified

Execution

On an average, it is around 18 to 24 months. Some of the projects, as we already mentioned in the past, there are O&M revenue, O&M inbuilt into that, which will go up to, let's say, two to five years thereafter. So effectively, the project CapEx lifecycle will be between 18 to 24 months, average.

Composition

Mix 3 contract types
  • O&M Order Book ₹78 Cr 34.7%
  • AEC software development project ₹21 Cr 9.3%
  • Project management consulting contracts ₹126 Cr 56%

Share of order book by contract type, derived from disclosed amounts

Pipeline

deal pipeline tcv

Major sign-off expected in Q3/Q4 FY26 from a substantial pipeline.

The company has a strong order book and a substantial pipeline, with major sign-offs expected in the coming quarters, particularly in Q3 and Q4.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Technology innovation and business development in the U.S. market (capitalized portion) ₹8 Cr
    We invested Rs. 21 crores towards technology innovation and business development to further expand our presence in the U.S. market, with Rs. 13 crores out of this already expensed out towards the profit-loss account during this quarter. ... The overall CapEx from the last, I would say, since July 2024, because that was the time when we acquired the VTS business, since then, we have capitalized hardly Rs. 8 crores, which is basically the IP and the future prospects of business which we have acquired for. That is the total CapEx. Otherwise, every quarter, whatever business development, promotions, etc., which we do, they are expensed out. So, Rs. 36 crores is something which is expensed out, and Rs. 8 crores is what is capitalized. Nothing beyond that.
  • M&A VTS (geospatial business) Acquisition · Integrated

    Acquired to expand geospatial business in the telecom domain and leverage capabilities in the US market across various domains.

    The acquisition was a business takeover, not an amalgamation. The company is now leveraging VTS capabilities beyond telecom into water, utilities, and road transportation in the US market.

    In the year 2024, we acquired a geospatial business of VTS in USA, which was majorly operating in the telecom domain. Since then, we are identifying some more targets for inorganic growth to expand our horizons into the domains where the company is already operating... That was a business takeover. This was an SH takeover. So, it was not an amalgamation. VTS telecom business was taken over as a business.
  • M&A Undisclosed Acquisition Targets (2) Acquisition · Pending regulatory

    To expand in geospatial engineering solutions and technology upgradation, complementing existing offerings.

    Two targets are in the due diligence phase, with an announcement expected within the next one to two months or by Q3/Q4 FY26. Targets are expected to have potential to generate Rs. 50-200 crores in revenue.

    As already explained last time, two of the targets have been kind of on the complete due diligence part. We are expecting some kind of way forward within the next one or two months... Hopefully, by Quarter 3 or Quarter 4, we will be able to give some kind of announcement about the acquisitions which we are pursuing... We are looking at companies which have a potential of either generating a revenue of Rs. 50, 100, 200 crores is what we are looking at.
  • Liquidity Cash ₹47 Cr
    We also continue to maintain a solid financial position with an operational cash surplus of Rs. 47 crores.

Guidance & targets

Working Capital

  • Working Capital Cycle Working Capital · coming quarters · Medium confidence 120-130 days
    We anticipate the cycle to reduce to approximately 120 to 130 days in the coming quarters.

    — Kaushik Khona

Profitability

  • EBITDA Margin Profitability · future · Medium confidence continuously, steadily improve
    We expect this to continuously, steadily improve.

    — Kaushik Khona

Order Book

  • Major Sign-offs Order Book · Quarter 3, Quarter 4 · High confidence Rs. 700-800 crores
    Our pipeline is substantial, and we expect in the Quarter 3, Quarter 4, some major sign-off happening in the range of around Rs. 700-800 crores was already clarified during the Quarter 1 call.

    — Kaushik Khona

Acquisitions

  • Announcement of Acquisitions Acquisitions · next one or two months / Q3 or Q4 FY26 · Medium confidence some kind of way forward within the next one or two months / Quarter 3 or Quarter 4
    We are expecting some kind of way forward within the next one or two months... Hopefully, by Quarter 3 or Quarter 4, we will be able to give some kind of announcement about the acquisitions which we are pursuing.

    — Kaushik Khona

US Business

  • Revenue absorbing costs US Business · as soon as Q4 · Medium confidence revenue will be substantially improving, which will absorb the cost
    No, I think what I expect is the revenue will be substantially improving, which will absorb the cost. ... And this is likely to happen as soon as Q4, you are saying? That is what I think.

    — Kaushik Khona

What to watch in Q3 FY26

Working Capital Cycle Reduction

coming quarters
Current 160 days
Target 120-130 days

Why it matters

Improvement in working capital cycle is crucial for cash flow and operational efficiency.

We anticipate the cycle to reduce to approximately 120 to 130 days in the coming quarters.

Risks & concerns

  • Elevated working capital cycle due to government project receivables

    medium

    Working capital cycle at 160 days, higher than the target of 120-130 days, primarily due to delayed disbursements from government projects.

    Management acknowledged

  • Short-term consolidated EBITDA impact from US investments

    medium

    Consolidated EBITDA is lower than standalone due to heavy investments in US business development and expensing of IP, expected to yield results from Q4 FY26.

    Management acknowledged

  • Delays in JJM scheme funding and approvals

    medium

    A lull in JJM schemes due to government review, though the review is now complete and disbursements are expected.

    Management acknowledged

Q&A highlights

7 direct
ESOP allotment to Prashant Kamat and KMP share selling Partial
If I can just submit, first of all, let me clarify, the ESOPs to all so far has all been allotted only at par. There have not been any differential pricing. That is point number one. ... So, I don't think the selling of shares is what we are required to be providing to the investors because it is once the shares are allotted, it is up to the shareholder whether he wants to retain or he wants to sell.

Analyst questioned transparency and fairness of ESOPs and KMP share sales, which management clarified as per policy and shareholder discretion.

Asked by Harshal Mehta

Reduction of working capital cycle Direct
In fact, in the operational highlights in our investor presentation also, we have mentioned that during the first two quarters, typically, the recoveries are slow because many of these recoveries are due from the Government projects. ... We anticipate the cycle to reduce to approximately 120 to 130 days in the coming quarters.

Analyst sought clarity on steps to improve working capital, a key operational efficiency metric, with management providing a clear timeline and reason for current state.

Asked by Jyoti Singh

Future EBITDA margin targets Direct
I think it is only because the old projects which had lower margins are getting completed, and the new projects which are having higher margins are being executed. And we also have the statement which we mentioned in the beginning, opening statement, that our focus on the technology advanced projects like IoT or artificial intelligence, ML projects are going to contribute a higher margin.

Analyst inquired about sustainability of margin expansion, and management linked it to strategic shift towards higher-margin technology projects.

Asked by Jyoti Singh

Recovery of unbilled revenue and pending receivables Direct
Actually, our 80% debtors which we have is less than 6 months only. Balance 10% is more than 6 months, and rest all is more than one year. So, 80% of the chunk of debtors is less than 6 months. ... Sir, it is expected that we will be getting funds more in the month of March and February, where most of the government departments do get funds. So, we will be able to recover this during the year-end, financial year-end.

Analyst probed on the aging and recovery timeline of receivables, a critical liquidity concern, with management providing a breakdown and expected recovery period.

Asked by Nikhil Choudhary

Traction in water projects and JJM schemes Direct
So, if I can answer that, we have already seen that there was a lull in the last two quarters because the JJM schemes were also being kind of reviewed by the government. However, the complete review is over. And that is where we saw the first tranche of major recoveries happening in the last week of October.

Analyst sought an update on government project execution, which management clarified was impacted by government reviews but is now seeing recovery.

Asked by Nikhil Choudhary

Acquisition strategy and timeline for new deals Direct
As already explained last time, two of the targets have been kind of on the complete due diligence part. We are expecting some kind of way forward within the next one or two months. ... Hopefully, by Quarter 3 or Quarter 4, we will be able to give some kind of announcement about the acquisitions which we are pursuing.

Analyst pressed for details on inorganic growth plans, and management provided an update on the status and expected timeline for acquisition announcements.

Asked by Ayush Agarwal

Discrepancy between standalone and consolidated EBITDA Direct
I got it. Let me attempt to answer this. We have also clarified that the subsidiary which has not been reporting positive performance is only because we are investing heavily into the business development over there. So, the kind of EBITDA losses which you see are more to do with investment into the business development and some of the efforts into the IP, which we are expensing out.

Analyst highlighted a key financial discrepancy, which management explained as strategic investment in US business development rather than operational underperformance.

Asked by Ayush Agarwal

Execution status of the river linking project Direct
So, what has happened is that earlier execution process has been a little deviated, and we have completed the Phase-1 which they wanted us to complete. And all the documents, DPR, have been submitted. So, I think we have achieved, and that was a good milestone where government client has also appreciated that.

Analyst questioned perceived delays in a major project, and management clarified that the project's phasing changed due to client requirements, with Phase-1 successfully completed.

Asked by CA Garvit Goyal

3 min read 6 chapters

Detailed narrative

Strong Financial Performance in Q2 and H1 FY26

Ceinsys Tech delivered robust financial results for Q2 FY26, with operational revenue growing 82% year-on-year to Rs. 164 crores. EBITDA increased by 112% to Rs. 36 crores, achieving a margin of 21.77%, a 310 basis points improvement. Net profit surged 120% to Rs. 26 crores, with PAT margins at 15.72%. For the first half of FY26, operational revenue reached Rs. 320 crores (up 95% YoY), EBITDA was Rs. 66 crores (up 119% YoY) with a 20.56% margin, and net profit was Rs. 57 crores (up 143% YoY) with a 17.93% PAT margin.

Strategic Shift Towards Higher-Margin Technology Solutions

The company's improved profitability is attributed to the completion of older, lower-margin projects and a strategic focus on new, higher-margin technology-advanced projects. Technology Solutions revenue in Q2 FY26 saw a 2.5-fold increase to Rs. 88 crores, now contributing 54% to the total turnover. This shift towards AI and ML-enabled applications and solutions is expected to further enhance margins and drive turnover growth, reflecting a commitment to innovation and competitive advantage.

Robust Order Book and Pipeline Visibility

As of September 2025, Ceinsys Tech's total order book stands at Rs. 1,092 crores, indicating strong demand. The company anticipates major sign-offs from its substantial pipeline, estimated between Rs. 700-800 crores, during Q3 and Q4 FY26. Management expects a high win probability of 70-80% for these pipeline projects, particularly those in niche technology areas. The average execution timeline for projects is 18 to 24 months, with O&M contracts extending up to five years.

Working Capital Management and Receivables Recovery

The working capital cycle currently stands at 160 days, primarily due to slower disbursements from government projects, which typically occur in Q3 and Q4. Management expects this cycle to reduce to approximately 120-130 days in the coming quarters, with significant recoveries anticipated in November, December, and January. Approximately 80% of the company's debtors are less than 6 months old, with the remaining 20% being older, which are expected to be recovered by the financial year-end.

Strategic Investments and Acquisition Outlook

Ceinsys Tech continues to invest in technology innovation and business development, particularly in the US market. Out of Rs. 21 crores invested this quarter, Rs. 13 crores were expensed, and Rs. 8 crores were capitalized for IP and future business prospects. While these investments contribute to a short-term EBITDA impact at the consolidated level, they are expected to drive a bigger pipeline and improved revenue absorption of costs from Q4 FY26. The company is actively pursuing two acquisition targets in geospatial engineering and technology upgradation, with announcements expected in Q3 or Q4 FY26.

Geospatial and Engineering Services Growth

The Geospatial and Engineering Services segment demonstrated healthy growth, increasing 39% year-on-year to Rs. 75 crores in Q2 FY26. This growth is driven by an increased focus on water, IoT, and enterprise solutions. The company also highlighted its expertise in geospatial engineering and other engineering services, offering a broad range of geospatial intelligence services including data creation, analytics, and decision support systems.

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