Birlasoft delivered a stable Q3 FY26 performance with revenue of $150.8 million, despite seasonal weakness. The company achieved significant EBITDA margin expansion to 18.2% and robust deal wins of $202 million TCV, driven by a strategic shift towards outcome-based and AI-led engagements. While cautious on Q4 revenue growth due to vertical-specific headwinds and fewer working days, management expressed confidence in continued strong order booking and future growth drivers.
vs Q4 FY26
| Metric | Value | YoY |
|---|---|---|
| Revenue (USD) | 150.8 million | — |
| Revenue (INR) | ₹1.3K Cr | — |
| EBITDA (USD) | 27.4 million | +42.1% YoY |
| EBITDA (INR) | ₹244.8 Cr | +49.8% YoY |
| EBITDA Margin | 18.2% | — |
| Normalized PAT (USD) | 20.2 million | — |
Segment Breakdown
| Metric | Latest | Trend |
|---|---|---|
| Revenue(million) | 13289 | |
| EBITDA(million) | 24.2 | |
| EBITDA Margin | 18.5% | |
| DSO(days) | 54 | |
| Revenue (USD)(million) | 145.3 | |
| Revenue (INR)(crores) | 1348.6 |
Total Value
USD 202 million
as of 2025-12-31
Inflow this qtr
USD 202 million
Composition
Pipeline
deal pipeline tcvFocus on shoring up deal pipeline and generating pipeline and signings.
Cancellations / Deferrals
"The company is focused on pipeline creation, order booking, and revenue growth, with a strong performance in Q3 TCV and expectation for better signings in Q4."
| Category | Headline | |
|---|---|---|
Liquidity | Cash ₹2,491 crores |
| Category | Target | Priority |
|---|---|---|
| Profitability | Sustainable EBITDA Margin→about 15% | Medium |
| Headcount | Wage Hike→will do a wage hike | High |
| Order Book | Q4 Signings→better than Q3 signings | High |
| Order Book | Q4 Order Booking→better than Q3 | High |
| Order Book | Q1 Signings→not be able to deliver at the same levels of signings as 4Q | Medium |
| Order Book | Future Signings Growth→10%-20% extra signings over and above Q3 | Medium |
| Revenue Growth | Manufacturing Vertical→continue to face headwind, turn around sometime Q1 or Q2 onwards | Medium |
| Revenue Growth | Financial Services Vertical→steady, will see growth | High |
| Revenue Growth | E&U Vertical→continue the growth momentum | High |
| Revenue Growth | Life Sciences Vertical→headwind, stabilize, grow | Medium |
| Revenue Growth | Data & Digital→will be back in Q4, show growth | High |
| Revenue Growth | Infrastructure→strong growth area | High |
| Revenue Growth | ERP Business→continue to lag, softness for another quarter, turns around | Medium |
| Pricing | Healthcare Pricing Pressure→immense pricing pressure, pressure continuing | High |
| # | Metric | |
|---|---|---|
| 01 | Manufacturing Vertical Turnaround | |
| 02 | Life Sciences Vertical Stabilization & Growth | |
| 03 | ERP Business Turnaround | |
| 04 | Q4 FY26 Order Booking Performance | |
| 05 | Wage Hike Implementation |
| Severity | Risk |
|---|---|
medium | Constrained Demand Environment Customers continue to focus on optimizing spends, and discretionary spending remains constrained. Management |
medium | Headwinds in Manufacturing & ERP Verticals Manufacturing and ERP verticals are expected to face headwinds in Q4 FY26, with a turnaround expected in Q1/Q2 FY27 for Manufacturing and after one more quarter for ERP. Management |
medium | Pricing Pressure in Healthcare/Life Sciences The Healthcare/Life Sciences segment is expected to face immense pricing pressure in Q4 FY26 and partly in Q1 FY27 due to tariff uncertainties, though no volume degrowth is expected. Management |
low | Lower Working Days in Q4 Q4 FY26 has three fewer working days compared to Q3, which will have some impact, though mitigated by a shift towards outcome-based work. Management |
medium | Renewals at Lower Margins Existing business renewals are expected to be at lower margins due to pricing pressures, contributing to the target steady-state margin of 15%. Management |
Birlasoft reported a stable Q3 FY26 with revenue at $150.8 million, growing 0.3% QoQ in constant currency and 0.1% in dollar terms. This performance was achieved despite the quarter being seasonally soft with furloughs. The company achieved significant EBITDA margin expansion of 212 basis points QoQ, reaching 18.2%, driven by improved revenue quality, increased offshore work, operational efficiencies, and one-off📎 gains.
The company secured Total Contract Value (TCV) of $202 million in Q3 FY26, marking an 89% QoQ increase. Nearly half of this TCV, $94 million, originated from new engagements, many of which leveraged AI-led capabilities and domain expertise. Management highlighted a strategic shift away from staff augmentation towards more outcome-based and fixed-price work, which also facilitated a higher offshore mix.
While Manufacturing and ERP verticals experienced some growth in Q3 due to earlier deal ramp-ups, they are expected to face headwinds in Q4 FY26, with a turnaround anticipated in Q1/Q2 FY27 for Manufacturing and after one more quarter for ERP. Life Sciences is also projected to see headwinds in Q4 FY26. Conversely, Financial Services, E&U, Data & Digital, and Infrastructure are expected to show steady growth, with Infrastructure identified as a strong growth area.
Management guided for a sustainable steady-state EBITDA margin of 'about 15%' going forward⏳, after accounting for accelerated investments. The reported 18.2% EBITDA margin in Q3 included a 70-80 basis points benefit from forex tailwinds and a 110 basis points one-off📎 gain from write-backs of prior provisions, which are not expected to recur. A one-time📎 provision of $4.6 million (Rs. 40.7 crore) related to Labor Code changes impacted EBIT.
Birlasoft maintained a robust track record in cash flow generation, achieving its highest quarterly collection for the financial year, leading to an improved DSO of 54 days. Cash and cash equivalents increased to Rs. 2,491 crore, up 6% QoQ. The company is actively rationalizing less profitable businesses and focusing on a smaller number of high-potential clients, evidenced by an increase in million-plus clients from 78 to 85.
Management expressed cautious optimism for Q4 FY26, citing expected headwinds in certain verticals and three fewer working days compared to Q3. While no specific revenue guidance was provided, the company is confident that Q4 signings will be better than Q3. Investments in sales, capability building, and a focus on outcome-based work are expected to drive growth in future quarters, with a wage hike planned for FY27.