Aurionpro Solutions Limited — Q3 FY25 earnings call

Call held 28 Jan 2025

Management summary

Aurionpro Solutions reported strong Q3 FY25 results, driven by robust revenue growth and healthy margins across its Banking & Fintech and Technology Innovation Group segments. The company is focused on global expansion, particularly in the US and Europe, supported by strategic acquisitions and consistent R&D investments. Management expressed confidence in achieving full-year guidance and maintaining strong growth momentum, despite acknowledging higher receivable days inherent to its product-led business model.

Highlights

  • Revenue for Q3 FY25 stood at ₹306 crores, marking a strong 32% increase year-on-year.

  • Profit after tax (PAT) for the quarter was ₹48 crores, achieving a healthy PAT margin of 16%.

  • EBITDA margin for Q3 FY25 was 21%, aligning with the midpoint of the guided range of 20-22%.

  • Banking and Fintech segments demonstrated robust growth of 41% for 9M FY25, reaching ₹474 crores.

  • The Technology Innovation Group (TIG) also showed strong performance with 23% growth for 9M FY25, reaching ₹372 crores.

  • The US market is experiencing significant progress, with revenue from US clients now in double digits and expected to grow 70-80% this fiscal year.

Key financials

  1. Revenue ₹306 Cr +32%YoY
  2. PAT ₹48 Cr
  3. PAT Margin 16%
  4. EBITDA Margin 21%

What they filed

Q1 FY27: revenue up 6.2%, net profit down 11.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue278 306 327 337 358 +29%371 +21%346 +6%358 +6%
EBITDA56 64 66 68 72 +29%75 +17%67 +2%61 −10%
Net profit46 48 51 51 56 +22%44 −8%61 +20%45 −12%
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

SegmentGrowthRevenue
Banking and Fintech (9M FY25)41%₹474 Cr
Technology Innovation Group (TIG) (9M FY25)23%₹372 Cr
TIG Data Center35%—

Order book

high confidence

Inflow this quarter

₹250 Cr

Pipeline

deal pipeline tcv

Demand environment remains exceptionally strong for both segments (Banking & Fintech, TIG).

The order book is in a very strong position, with strong wins on both sides of the business, purely organic this quarter.

Source: Prepared remarks

Capital allocation

high confidence
  • M&A Fenixys Acquisition · Pending regulatory · Consideration ₹[object Object] (undisclosed)

    Strengthen presence in European markets, provide strong foothold and delivery capabilities, help ramp up delivery capacity in Europe.

    Not expected to materially move the needle for current year guidance.

    A key development in this area is our expected closure of Fenixys acquisitions this quarter. This acquisition will significantly strengthen our presence in the European markets, providing us with a strong foothold and delivery capabilities in the region.

Guidance & targets

Revenue

  • FY25 Revenue Growth Revenue · FY25 · High confidence higher than 30%
    So, we have guided to a growth higher than 30%

    — Ashish Rai, Group CEO & Vice Chairman

  • US Geography Growth Revenue · FY25 · High confidence 70-80%
    So, I think this year will probably grow between 70% and 80%, I think, from that geography.

    — Ashish Rai, Group CEO & Vice Chairman

  • US & Europe Revenue Share Revenue · by close of FY26 · High confidence north of 10% each
    by the time we get to the close of FY26, I think we are getting to both Europe and U.S. being north of 10% of the revenue share.

    — Ashish Rai, Group CEO & Vice Chairman

  • Banking Business Growth Revenue · FY25 · Medium confidence 40-50%
    We may get to 50%, but I think what I was saying is we will land up something between 40% and 50%.

    — Ashish Rai, Group CEO & Vice Chairman

Profitability

  • FY25 EBITDA Margin Profitability · FY25 · High confidence 20-22%
    and EBITDA between 20 -22%

    — Ashish Rai, Group CEO & Vice Chairman

  • FY25 PAT Margin Profitability · FY25 · High confidence 15-16%
    and PAT between 15 - 16%.

    — Ashish Rai, Group CEO & Vice Chairman

Working Capital

  • Receivable Days Working Capital · FY26 and FY27 · Medium confidence 100 days
    I would say 100 odd days is where the sort of midpoint of the range lies, depending on project values and all. Now, from time to time, it may actually go up to 110, 115, and I think there may be times it drops below 100.

    — Ashish Rai, Group CEO & Vice Chairman

R&D

  • R&D Investment as % of Revenue R&D · next financial year · High confidence 8% or more
    We remain committed to innovation, consistently investing 8% or more of our revenues in R&D, a trend that we expect to continue going into the next financial year.

    — Ashish Rai, Group CEO & Vice Chairman

What to watch in Q4 FY25

Fenixys Acquisition Closure

next quarter
Current Expected closure in Q4 FY25
Target Acquisition closed

Why it matters

Confirms the completion of a strategic acquisition aimed at strengthening European presence and delivery capacity.

A key development in this area is our expected closure of Fenixys acquisitions this quarter.

Risks & concerns

  • Capacity Ramp-up for Project Delivery

    medium

    The challenge on the banking side is delivering projects fast enough, requiring ramp-up of capacity, which is more complex in product businesses.

    Management acknowledged

  • Higher Receivable Days due to Product Business and Growth

    low

    Receivable days are inherently higher than pure IT services due to product deliveries and rapid growth (35-40%), but cash flows are expected to be strong by year-end.

    Management acknowledged

  • AI Disruption (DeepSeek AI)

    low

    While frontier AI models are advancing rapidly, management believes value capture is in specialized AI models and sees minimal material impact on India-centric data center demand.

    Management downplayed

Q&A highlights

7 direct
Fenixys Acquisition Timing and Impact on Guidance Direct
Yes, that is correct. ... we will close it sometime in Q4, and I do not really expect that to really move the needle.

Clarifies the timing of the acquisition and its minimal impact on the current fiscal year's organic guidance.

Asked by Vimal Jamnadas Gohil

TIG Segment Cash Flow and Growth Outlook Direct
So, on the cash flow, Anmol, this quarter was pretty good. ... TIG is back into strong growth, and it will accelerate into Q4. ... I am fairly confident by the time we get to March 31st, I think the picture will be reasonably strong, both the growth number as well as the cash flow and anything else that we look at.

Provides positive outlook on TIG's performance and overall cash flow generation by year-end, addressing prior concerns about negative cash flow in H1.

Asked by Vimal Jamnadas Gohil

US Banking and Transit Business Progress Direct
So, look in the U.S., we have actually made significant progress on the banking side. ... I think overall, the share of revenue from U.S. clients is now up to double digits. So, I think this year will probably grow between 70% and 80%, I think, from that geography.

Highlights strong growth and increasing revenue contribution from the US market, validating the company's expansion strategy.

Asked by Vimal Jamnadas Gohil

Receivable Days Target for Future Fiscal Years Direct
I would say 100 odd days is where the sort of midpoint of the range lies, depending on project values and all. Now, from time to time, it may actually go up to 110, 115, and I think there may be times it drops below 100.

Provides a specific target range for receivable days, offering clarity on working capital management expectations.

Asked by Anmol Garg

DeepSeek AI Impact on Aurionpro's Business and Data Centers Direct
I honestly don't think that's a material impact for us because, one, for us, most of the design and build happens in India. ... So, a lot of the data center demand is coming out of the latent demand for compute and latent demand for storage that exists in India as a nation. So, I don't think that goes away.

Addresses concerns about AI disruption, clarifying management's view that specialized AI and India-centric data center demand are less susceptible to immediate negative impacts.

Asked by Darshini

Data Center Segment Revenue Share, Services, and Margins Direct
data center is roughly a third of TIG. ... The business operates at 5 or 6 points below the enterprise margin at the moment and it is growing roughly between 30 and 40% overall.

Provides specific financial details and growth metrics for the data center segment, which is a key part of the TIG business.

Asked by Lakshya Agarwal

Indian Data Center Capacity and Competitive Landscape Direct
it's not really a demand issue for us, it is more a about how much we want to do and what capacity we have. ... we tend to focus on very selective, very complex projects which are high margin, where we can add a lot of value.

Explains the company's strategic approach to the competitive Indian data center market, focusing on high-value projects rather than broad participation.

Asked by Lakshya Agarwal

3 min read 7 chapters

Detailed narrative

Strong Q3 FY25 Financial Performance

Aurionpro Solutions delivered robust financial results for Q3 FY25, with revenue reaching ₹306 crores, representing a significant 32% year-on-year increase. The company reported a Profit After Tax (PAT) of ₹48 crores, translating to a healthy PAT margin of 16%. Furthermore, the EBITDA margin for the quarter stood at 21%, comfortably within the guided range of 20-22%, underscoring the stability and strength of its business model.

Segmental Growth and Strategic Wins

For the nine-month period of FY25, the Banking and Fintech segments demonstrated strong momentum with 41% growth, contributing ₹474 crores in revenue. The Technology Innovation Group (TIG) also performed well, growing by 23% to ₹372 crores. Key wins during the quarter included deals with two leading banks in Saudi Arabia for transaction banking and prestigious metro projects in India, such as phases of Delhi Metro and Chennai Metro, highlighting the company's capability in complex urban transit systems.

Global Expansion and Capacity Building Initiatives

Aurionpro is actively pursuing global expansion, particularly in the US and European markets. Revenue from US clients has now reached double digits and is projected to grow between 70-80% this fiscal year. The company expects to close the Fenixys acquisition in Q4 FY25, which will significantly bolster its presence and delivery capabilities in Europe, facilitating cross-selling of banking products in the region. The goal is for both US and Europe to contribute north of 10% of total revenue by the end of FY26.

Commitment to R&D and Innovation

The company maintains a strong focus on innovation, consistently investing 8% or more of its revenues in R&D, with current annual R&D expenditure estimated at ₹110-115 crores. This sustained investment has led to noteworthy launches like AryaXAI, an explainable AI platform with global relevance. Management emphasized that this focus on building cutting-edge IP will drive value for the next 10 years and is a core part of Aurionpro's DNA.

Data Center Business and Market Approach

The data center segment constitutes approximately one-third of the TIG revenue and primarily involves design and build services. This business operates at margins 5-6 points below the enterprise average but is growing robustly at 30-40% overall. Management clarified that India's data center demand is largely driven by latent compute and storage needs, not primarily by AI compute, and the company selectively targets high-margin, complex projects rather than pursuing every opportunity in the market.

Receivables and Cash Flow Outlook

While the company's product-oriented business model and rapid growth (35-40%) inherently lead to higher receivable days, with a target midpoint of 100 days for FY26/FY27, management expressed confidence in its cash flow position. They anticipate a strong cash flow picture by March 31st, 2025, as a significant portion of deliveries and collections typically materialize in the second half of the fiscal year.

FY25 Guidance and Future Outlook

Aurionpro reiterated its FY25 guidance for revenue growth higher than 30%, EBITDA margin between 20-22%, and PAT margin between 15-16%. Management stated that both Banking and TIG segments are expected to contribute to strong overall growth in the coming years. The company plans to provide specific guidance for FY26 in May, following the release of its full-year results.

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