India ▾

C2C Advanced — Q1 FY27 earnings call

Call held 4 Aug 2026

Company page: C2C Advanced share price, financials & guidance record

Management summary

C2C Advanced Systems Limited reported its H2 FY26 results, highlighting a significant miss in revenue and PAT compared to prior guidance, with H2 FY26 revenue at ₹90 crores and PAT at ₹18 crores. The company addressed concerns regarding outstanding receivables, expecting to collect 80% of overdue amounts by September 2026, and clarified the auditor's IFRS provision of ₹14.5 crores. Management emphasized a strategic shift towards risk-averse contracts, global expansion with higher margins, and a commitment to improved financial transparency and governance.

Highlights

  • Management expects to collect a minimum of 80% of the receivables outstanding beyond 180 days by the end of September 2026.

  • The ₹14.5 crore IFRS provision is expected to be nullified by year-end (2026) as collections occur.

  • The company has won an 80 crore drone order, with cash expected by September or October 2026.

  • Promoters are increasing their equity stake by 5% per annum, up to 10% over two years, via a preferential raise to convert existing loans.

  • The company commits to publishing audited quarterly results after March 2027, moving towards greater transparency.

Concerns

  • H2 FY26 revenue of ₹90 crores significantly missed the prior guidance of ₹150 crores.

  • FY26 PAT of ₹18 crores was substantially lower than the ex-CFO's projection of ₹40 crores.

  • India revenue for FY26 declined by 38% to ₹70 crores from ₹112 crores in FY25.

  • Consistent delays in EPF dues payments were attributed to liquidity issues.

  • Promoter loans to the company currently stand at ₹55 crores, with ₹44-45 crores at FY26 year-end.

Key financials

3 periods

Headline

  • India Revenue FY26
    ₹70 Cr
    YoY -38%
  • India Revenue FY25
    ₹112 Cr
  • PAT FY26
    ₹18 Cr
  • IFRS Provision
    ₹14.5 Cr
  • Promoter Loans (Current)
    ₹55 Cr
  • Borrowings (March 2026)
    ₹43 Cr
  • Cash & Bank Balance (June 30, 2026)
    ₹11 Cr
  • Receivables Collected (March-Aug 2026)
    ₹22.5 Cr
  • Work in Progress (March 2026)
    ₹25 Cr
  • License Revenue FY26
    ₹5.5 Cr

H2

  • FY26 Revenue
    ₹90 Cr

FY26 End

  • Promoter Loans
    ₹44.5 Cr

What they filed

₹ Cr · quarterly
Line itemQ2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue43 72 66 80
EBITDA14 28 29 -6
Net profit10 19 24 -5
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.

Order book

high confidence

Inflow this quarter

₹80 Cr

Execution

Management's strategy is not to take on any contract that will ever exceed 180 days for payment terms.

Pipeline

qualified rfp

Potential bids worth over ₹1,000 crores.

Cancellations & deferrals

  • awaiting order: A defense border-fencing command-and-control post project, valued at ₹6 crores, has been accepted and cleared but is still awaiting the final order.
The company has a healthy pipeline of qualified opportunities, with a strategic focus on not taking contracts with payment terms exceeding 180 days.

Source: Q&A

Capital allocation

high confidence
  • Debt Gross ₹55 Cr Cost 10%
    • New borrowing Promoter loans to the company, currently ₹55 crores, with ₹44-45 crores at FY26 year-end. Auditors insisted on 10% interest. ₹55 Cr
    About 55 crores currently, as of right now. I don't know what it was at the end of the year, only Ganapathy can tell you that, but somewhere close to about 44 or 45 crores. ... We did not charge any interest till last year, but the auditors have insisted that, as per government rules, an interest has to be put on it. To the best of my knowledge, I think we put in 10%.
  • Liquidity Cash ₹11 Cr Cash and bank balance as of June 30, 2026, was between ₹10-12 crores.
    As of 30th June, as of today, it'll be closer to somewhere in the region of about 10 to 12 crores.

Guidance & targets

Receivables

  • Collection of >180 days outstanding receivables Receivables · by September 2026 · High confidence Minimum 80%
    Now, what do we expect? We expect to collect a minimum of 80% of the receivables outstanding beyond 180 days by the end of September 2026.

    — Commander LSS Narendra

Profitability

  • IFRS provision nullification Profitability · by end of this year (2026) · High confidence Nullified
    By the end of this year this provision will be nullified; the entire amount would have been collected.

    — Mr. Ganapathy Subramanian

Margin

  • Net Margin (India) Margin · Ongoing · High confidence Not to exceed 25%
    In India, the margins are not going to exceed more than 25% net; margins overseas are much better.

    — Mr. Krishna Chandra

Contract Terms

  • Maximum payment terms for new contracts Contract Terms · Ongoing · High confidence 180 days
    my strategy as CEO is not to take on any contract that will ever exceed 180 days, because 180 is a reasonable number in our industry for the time being unless you're doing technology consulting. So, anything less than 180 is all we are looking at today as we take contracts on.

    — Mr. Krishna Chandra

Shareholding

  • Promoter stake increase Shareholding · this year and next year · High confidence 5% per annum, up to 10%
    Whatever the limit is, it's 5% per annum, so we can increase it only by 10%, assuming 5% money comes this year and 5% comes next year.

    — Mr. Krishna Chandra

Reporting

  • Audited results frequency Reporting · after March 2027 · High confidence Quarterly
    Thereafter, every quarter we will publish our results, audited.

    — Mr. Krishna Chandra

Cash Flow

  • Drone order cash realization Cash Flow · by September or October (2026) · High confidence Cash received
    By when, sir? By September or October, the contract will close.

    — Mr. Krishna Chandra

Revenue Mix

  • License revenue share of total revenues Revenue Mix · Always · High confidence About 10%
    License will always be about 10% of your total revenues; it won't be bigger than that.

    — Mr. Krishna Chandra

What to watch in Q2 FY27

Receivables Collection Target

by September 2026
Current ₹20-25 crores collected since March 2026
Target Minimum 80% of >180 days outstanding collected

Why it matters

Successful collection of overdue receivables is crucial for improving liquidity and financial health.

Now, what do we expect? We expect to collect a minimum of 80% of the receivables outstanding beyond 180 days by the end of September 2026.

Risks & concerns

  • Receivables Aging and Collection Delays

    high

    Receivables were delayed due to material hold-backs, software integration complexity, and bugs, extending delivery timelines. Management is actively working on collection.

    Management acknowledged

  • Working Capital Stress and Liquidity Issues

    high

    The company faced liquidity issues, leading to consistent delays in EPF dues payments. Management is now adopting a strategy to avoid contracts with payment terms exceeding 180 days.

    Management acknowledged

  • Misinterpretation of Auditor's Observation

    medium

    The auditor's conditional observation on receivables was misread by the market as a going-concern qualification, which management clarified was incorrect and standard practice for high receivables.

    Management clarified

  • Challenges with Indian Government Contracts

    medium

    Working with the Indian government involves NCNC clauses, competitive bidding (GeM bids), and lengthy processes for decision-making and payments, making it a difficult market.

    Management acknowledged

  • Project Execution Delays due to Complexity

    medium

    Delivering strategic, first-of-a-kind systems involves inherent complexities like software integration bugs, which can extend project timelines and are considered an expected part of such programs.

    Management acknowledged

Q&A highlights

5 direct
Segmental Reporting Discrepancy for Malaysian Sales Partial
Look, I'll check with the auditors and get back to you on this, as to why they classified it the way they did. It's not within our control as to how they classified it.

Analyst questioned why ₹70 crores of Malaysian sales were not reported under 'other geography' despite being invoiced from India, highlighting a potential reporting inconsistency.

Asked by Amit Sheth

FY26 PAT Miss vs. Guidance and IFRS Provision Impact Direct
The 14 crores was put on the IFRS requirement; we've put 14 crores in suspense, which is collectible; of course it went there. And secondly, our delivery cost in the US for that period was higher, and that might have an impact in the next half.

Analyst challenged the significant miss in FY26 PAT (₹18 crores vs. ₹40 crores guidance), prompting management to explain the impact of the ₹14.5 crore IFRS provision and higher US delivery costs.

Asked by Nitin Wason

Interest Rate on Promoter Loans Direct
We did not charge any interest till last year, but the auditors have insisted that, as per government rules, an interest has to be put on it. To the best of my knowledge, I think we put in 10%.

Analyst questioned the 10% interest rate on promoter loans, leading management to clarify it was an auditor-mandated requirement for compliance, not a voluntary charge.

Asked by SK

Receivables Discounting for Cash Flow Partial
None of the defense clients in India will give you a sign-off on anything. You go to the Ministry of Defense and ask them to sign off on anything; they will never do it. ... Number two, any foreign bills are not discountable in India, so unless you have specific banking arrangements globally, we're too small for that.

Analyst suggested receivables discounting to improve cash flow and market confidence, but management explained the practical difficulties with defense clients and foreign bills.

Asked by Sourabh Jain

Independence of IR Company Direct
I will definitely consider what you've said, which I think is very relevant. One thing I'm very clear about in my mind: from a compliance and governance point of view, I believe the company should be the best.

Analyst raised a governance concern regarding the IR company's prior relationships and potential shareholding, prompting management to commit to reviewing the IR relationship for independence.

Asked by Chintan Parikh

Clarity on Industrial IoT Product Differentiation Direct
I'm not interested; we don't see any value in being in the Honeywell space or Allen Bradley space. ... What we're into is the command and control of the entire enterprise. We are agnostic to sensors. ... And there's a third area in IIoT, which has to do with perimeter security and so on, which is very complex.

Analyst pressed for more specific details on C2C's industrial IoT offerings, questioning its differentiation from existing solutions, leading management to clarify their focus on command & control, AI/ML, and perimeter security across diverse sensors.

Asked by Chintan Parikh

Quality of AI/ML Resources Direct
AI/ML in our space is not junior people, because it's a very complex process. ... The space we're in, which is the OT area, has very few people, and it can only be done by senior people in the company, because it's very complex.

Analyst questioned the quality of C2C's AI/ML talent based on junior profiles seen on job websites, prompting management to emphasize the complexity of their OT-focused AI/ML work requiring senior expertise.

Asked by Shashank Jha

H2 FY26 Revenue Miss vs. Guidance Partial
I don't believe the balance sheet says 90 crores. It says we have a branch office in the US, so we did billing through that, and that's not a subsidiary number, right? ... Yes, sir, in revenue only, I'm saying. Our US office is nothing but a branch office; it's not even a subsidiary. So, if I bill from there, that is also included in my Indian revenues.

Analyst highlighted a significant miss in H2 FY26 revenue (₹90 crores vs. ₹150 crores guidance), leading management to clarify that the reported ₹90 crores includes billing from their US branch office, which is not a separate subsidiary.

Asked by Shashank Jha

2 min read 6 chapters

Detailed narrative

H2 FY26 Financial Performance and Misses

C2C Advanced Systems Limited reported H2 FY26 revenue of ₹90 crores, significantly missing prior guidance of ₹150 crores. The company's India revenue for FY26 stood at ₹70 crores, marking a 38% decline from ₹112 crores in FY25. FY26 PAT was ₹18 crores, falling short of the ex-CFO's projection of ₹40 crores, primarily due to a ₹14.5 crore IFRS provision and higher delivery costs in the US. Management clarified that the ₹90 crore revenue includes billing from their US branch office, which is not a separate subsidiary.

Receivables and Liquidity Management

The company faced significant challenges with receivables, attributing delays to material hold-backs and software integration complexities. Management expects to collect a minimum of 80% of receivables outstanding beyond 180 days by September 2026, with ₹20-25 crores already collected since March 2026. The ₹14.5 crore IFRS provision, made due to long outstandings, is expected to be nullified by year-end as collections materialize. Liquidity issues also led to consistent delays in EPF dues payments, which are now being addressed.

Strategic Shift in Business Model and Contract Selection

C2C is implementing a more risk-averse strategy, declining contracts with unfavorable payment terms or those involving complex Indian government processes. The company aims to avoid contracts with payment terms exceeding 180 days. While India margins are targeted not to exceed 25% net, overseas markets offer significantly better margins, driving a focus on global expansion. The company has a pipeline of over ₹1,000 crores in potential bids and recently secured an ₹80 crore drone order.

Promoter Funding and Governance

Promoters have provided loans to the company, currently totaling ₹55 crores (₹44-45 crores at FY26 end), with an auditor-mandated 10% interest rate. To address concerns about related-party transactions and strengthen the balance sheet, promoters plan to increase their equity stake by 5% per annum, up to 10% over two years, through a preferential raise converting these loans. Management also committed to reviewing the independence of its IR company and ensuring robust governance practices.

Technology and Market Positioning

C2C positions itself as a pioneer in AI/ML platforms for sensor-integrated autonomous systems, particularly in the OT (Operational Technology) space for defense and industrial applications. Their MAGI-C5ISR platform is highlighted for command and control, AI/ML layering, and perimeter security, differentiating them from traditional SCADA or sensor manufacturers. The company emphasizes that its complex AI/ML work requires senior expertise, not junior resources, and that its solutions are highly repeatable across different sensor types and platforms.

Future Outlook and Transparency

Management expressed bullishness on the company's future, with plans to publish audited quarterly results after March 2027 to enhance transparency. They are also considering providing CA-certified statements for receivables in their press releases to build investor trust. The Dubai Experience Centre is operational, facilitating demonstrations and establishing relationships in the Middle East, further supporting global market penetration.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Capital Goods earnings calls