Concall AI

Ceinsys Tech Limited — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Ceinsys Tech reported a strong Q2 FY26 with significant YoY growth in revenue, EBITDA, and net profit, driven by a focus on higher-margin technology solutions. The company's order book remains robust at ₹1,092 crores, with a substantial pipeline expected to close in Q3/Q4. However, working capital days remain high at 160, and consolidated EBITDA is impacted by ongoing investments in US market expansion and acquisition delays, though management expects improvements in receivables and deal closures in coming quarters.

Highlights

Operational revenue for Q2 FY26 increased by 82% year-on-year to ₹164 crores, driven by strong demand and enhanced delivery capabilities.
EBITDA for Q2 FY26 grew by 112% year-on-year to ₹36 crores, with the EBITDA margin improving by 310 basis points to 21.77%.
Net profit for Q2 FY26 stood at ₹26 crores, a 120% year-on-year growth, with PAT margins at 15.72%, continuing a trend of steady sequential improvement.
The total order book as of September '25 stands at a robust ₹1,092 crores, reflecting healthy demand and strong customer confidence.
Technology Solutions projects revenue saw a 2.5-fold rise in Q2 FY26, from ₹36 crores last year to ₹88 crores this quarter, contributing 54% to total turnover.

Concerns

The net working capital cycle stood at 160 days during the quarter, with improvements expected in the next two to three months to reduce it to 120-130 days.
The consolidated entity is experiencing an EBITDA loss of ₹6-7 crores quarterly, primarily due to heavy investment in business development in the U.S. market.
Acquisition announcements have been delayed, with previous expectations for December now pushed to Q3/Q4, citing the need for thorough due diligence.
Government project funding delays have impacted receivables, with a significant portion of debtors expected to be recovered in March/February.

Key financials

2 periods

Headline

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

FY26 Operational Revenue
₹320 Cr
YoY +95%
FY26 EBITDA
₹66 Cr
YoY +119%
FY26 EBITDA Margin
20.6%
FY26 Net Profit
₹57 Cr
YoY +143%
FY26 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 item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	90	112	142	157	163 +81%	170 +52%	171 +20%	158 +1%
Expenses	73	91	116	126	128	130	130	119
EBITDA	17	21	27	30	36 +112%	40 +90%	40 +48%	38 +27%
Margin	19%	19%	19%	19%	22%	23%	24%	24%
Other income	6	6	6	7	8	6	6	8
Interest	0	0	2	1	1	2	2	1
Depreciation	2	3	3	3	3	3	3	3
Profit before tax	21	24	28	34	40 +90%	41 +71%	42 +50%	42 +24%
Tax rate	44%	26%	23%	7%	35%	5%	11%	26%
Net profit	12	18	22	32	26 +117%	39 +117%	37 +68%	31 −3%
EPS	6.68	10.21	12.54	18.14	14.43	21.79	17.75	14.78

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

₹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

AEC software development project ₹21 Cr 14.3%
Project management consulting contracts ₹115 Cr 78.2%
Project management consulting contracts ₹11 Cr 7.5%

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

Pipeline

deal pipeline tcv

Major order book pipeline expected to close in Q3/Q4

The company has a strong pipeline of orders, with major closures expected in Q3 and Q4, and a high win probability (70-80%) for niche technology projects.

Source: Prepared remarks

Capital allocation

high confidence

Capex ₹21 Cr
- Technology innovation and business development ₹21 Cr
- Capitalized IP and future prospects (since VTS acquisition) ₹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.
M&A VTS geospatial business Acquisition · Closed

Expanded into telecom domain and geospatial business in USA.

In the year 2024, we acquired a geospatial business of VTS in USA, which was majorly operating in the telecom domain.
M&A Future acquisitions Acquisition · Pending regulatory · Consideration ₹[object Object] (undisclosed)

Expand horizons into geospatial and engineering services, and technology solutions.
Targeting companies with potential to generate Rs. 50, 100, 200 crores revenue.

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 is, the geospatial and engineering services and technology solutions, for which the company has already mobilized almost US$228 million. ... So, our target is not to look at Rs. 2, 5, 10 crores company, small companies. 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 Company maintains a solid financial position with an operational cash surplus.

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 Days 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
Working Capital Cycle Days Working Capital · one point of time · Low confidence near 100 days

And therefore, we believe that at one point of time, the working capital cycle would be somewhere near 100.

— Kaushik Khona

Order Book

New Order Closures Order Book · Quarter 3, Quarter 4 · Medium confidence Rs. 700-800 crores

And we also clarified in the previous Investor's Call that 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
New Order Closures Order Book · Q3 and Q4 · Medium confidence Rs. 600-700 crores

Sir, our probable order booking will be 600 to 700 in Q3 and Q4, as you mentioned.

— Raj Sarraf

Acquisitions

Announcement of Acquisitions Acquisitions · Q3/Q4 · Medium confidence within 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. ... I think in the next one or two months or maximum by the next one quarter, we should be able to give some kind of good news.

— Kaushik Khona

US Business Development

Pipeline Growth US Business Development · Q4 of this year and Q1 of next year onwards · Medium confidence bigger pipeline

The result of this is what we are expecting, as we already clarified in the previous investor call, in the Quarter 4 of this year and Quarter 1 of the next year onwards, we should see a bigger pipeline.

— Kaushik Khona

What to watch in Q3 FY26

Working Capital Cycle Days

next quarter

Current 160 days

Target 120-130 days

Why it matters

Reduction in working capital days is crucial for improving cash flow and operational efficiency.

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

Risks & concerns

Government project funding delays
medium

Funding delays from the central government have impacted the recovery of receivables, leading to a higher working capital cycle.

Management acknowledged
High working capital cycle
medium

The net working capital cycle stood at 160 days, higher than the historical average, though expected to improve with government disbursements.

Management acknowledged
Consolidated EBITDA loss due to US investments
medium

The consolidated entity is experiencing a quarterly EBITDA loss of ₹6-7 crores due to heavy investments in business development in the U.S. market, impacting short-term profitability.

Management acknowledged
Acquisition timeline delays
low

Announcements regarding acquisitions have been delayed due to the need for thorough due diligence, pushing expectations to Q3/Q4.

Management acknowledged

Q&A highlights

6 direct

ESOP allotment and Prashant Kamat's resignation Direct

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. The second point is Prashant sir has been granted the balanced ESOPs during June 2025, which is part of the deliverables to him. It is only in respect of the future ESOPs which were expected are not going to be given to him because he himself has clarified that he will be active with the company till December '25. And thereafter, Surej sir, who has already been appointed on the Board, will take over as a part of the operating, the CEO of the company, of the group.

Clarifies the terms of ESOPs, the transition plan for the CEO role, and the timeline for Prashant Kamat's involvement.

Asked by Harshal Mehta

Working capital cycle reduction strategy Direct

Typically, the government projects' disbursements happen during Q3 and Q4 substantially. We have already got one tranche of substantial recovery in the month of quarter, which is after the September end. And we have also got feedback that in the month of November, December, January, we should be able to get a recovery of almost all the overdue debtors. And therefore, we believe that at one point of time, the working capital cycle would be somewhere near 100.

Explains the plan to reduce the 160-day working capital cycle, attributing improvement to expected government disbursements in Q3/Q4.

Asked by Jyoti Singh

Consolidated EBITDA loss and US investments 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. So, if you look at this quarter also, we expensed out around Rs. 7-8 crores.

Addresses the concern about quarterly consolidated EBITDA losses by clarifying they are strategic investments in US business development, with expected future returns.

Asked by Ayush Agarwal

Delay in new order closures and pipeline conversion Partial

However, there is a good buildup of the pipeline, and we have already submitted the bids. Those were not closed, which we were anticipating last quarter. So, those are now coming up in this Q3. Perhaps we may find this quarter with the closures which were pending in Q2. And then again, I said that Q4 will be the largest quarter for us for any closures.

Explains the reasons for delays in converting the pipeline into orders, citing the long tendering and approval cycles, but reaffirms expectations for Q3/Q4 closures.

Asked by CA Garvit Goyal

Acquisition timeline and target size Partial

So acquisitions, we have been working quite actively since the last 3 quarters or 4 quarters. 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. ... So, our target is not to look at Rs. 2, 5, 10 crores company, small companies. 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.

Provides an updated timeline for acquisition announcements (next 1-2 months) and clarifies the target size of companies being pursued.

Asked by Darshil Jhaveri

River linking project execution progress and revised timeline Direct

So, thanks for the question. I had clarified during the call, that there was a change in the approach of the client, the government, and they wanted to first focus on Phase-1, and they changed the whole area of focus. ... But because of the change of the approach of the government, the project has been, I would say, phased out in a manner that it could take another two to three quarters. And we are as per the plan given by the government. So, we are not delayed on that side.

Clarifies the reasons for the adjusted execution timeline of the river linking project, attributing it to a change in government's approach and focus on Phase-1.

Asked by CA Garvit Goyal

Employee cost reduction and efficiency Direct

The overall employee cost has been stagnant from Rs. 35 crores of employee cost last year of same quarter. Sorry, it is around Rs. 33 crores. And today also in this quarter also is around Rs. 33 crores. The overall employee cost is the same. ... This time, on a Rs. 32 crores of employee cost, we achieved a turnover of Rs. 163 crores. This also speaks about the way we want to kind of project for a higher margin business, which is the technology business. And that is why we see that we are trying to optimize.

Explains the significant reduction in employee cost as a percentage of turnover (from 36.9% to 19.9%) is due to better utilization and focus on higher-margin technology business, rather than absolute cost reduction.

Asked by Kaushal Sharma

AI solutions and cost reduction Direct

So, I had already mentioned in my speech that the present AI/ML solutions we are enhancing in-house, where we are trying to improve efficiency and reduce the cost of people, and also increase the turnaround time. So, I think at present, we are not selling this to the customer. However, we have done a good amount of, I would say, POC even for the other customers, and we have been successful with the kind of accuracy more than 95% as required by the customers.

Details the internal application of AI/ML solutions to improve efficiency, reduce costs, and increase turnaround time, with potential for future external offerings.

Asked by Athar Syed

3 min read 7 chapters

Detailed narrative

Strong Q2 FY26 Performance and H1 FY26 Overview

Ceinsys Tech reported a robust Q2 FY26, achieving its best quarter to date with operational revenue growing 82% YoY to ₹164 crores. EBITDA increased by 112% YoY to ₹36 crores, leading to an EBITDA margin of 21.77%, a 310 basis point improvement. Net profit also saw significant growth of 120% YoY, reaching ₹26 crores with a PAT margin of 15.72%. For the first half of FY26, operational revenue grew 95% YoY to ₹320 crores, surpassing the full FY24 consolidated revenue of ₹254 crores, with H1 EBITDA at ₹66 crores (119% YoY growth) and PAT at ₹57 crores (143% YoY growth).

Margin Expansion Driven by Technology Focus

The company's EBITDA margins have shown steady improvement over the last six quarters, with a substantial breakthrough this quarter. This is primarily attributed to the completion of older, lower-margin projects and the successful execution of new, higher-margin technology-advanced projects, particularly in IoT and AI/ML. The focus on high-value digital initiatives, especially within the Technology Solutions segment, which contributed 54% to the total turnover and saw a 2.5-fold revenue increase to ₹88 crores, is a key driver for this margin expansion.

Robust Order Book and Pipeline Health

As of September '25, Ceinsys Tech's total order book stands at ₹1,092 crores, indicating strong customer confidence and healthy demand. The company secured several major contracts during the quarter, including an AEC software development project valued at ₹21 crores and two project management consulting contracts totaling ₹126 crores (₹115 crores and ₹11 crores respectively). Management anticipates major order closures from a pipeline of ₹700-800 crores in Q3 and Q4, with a high win probability of 70-80% for niche technology projects.

Working Capital Management and Receivables Recovery

The net working capital cycle for the quarter stood at 160 days, primarily due to slower recoveries from government projects. However, the company expects significant improvements, with a major tranche of ₹40 crores already recovered in October and further recoveries of ₹20 crores. Management anticipates the cycle to reduce to approximately 120-130 days in the coming quarters, potentially reaching near 100 days, as government disbursements are expected to pick up substantially in Q3 and Q4.

Strategic Acquisitions and US Market Expansion

Ceinsys Tech is actively pursuing inorganic growth, having mobilized $28 million (₹235 crores) for acquisitions. The company is targeting companies with revenues in the range of ₹50-200 crores in geospatial, engineering services, and technology solutions. While acquisition announcements have seen some delays due to thorough due diligence, management expects to finalize deals within the next one to two months (Q3/Q4). Ongoing investments in US business development, amounting to ₹7-8 crores expensed this quarter, are currently impacting consolidated EBITDA but are expected to yield a larger pipeline in Q4 FY26 and Q1 FY27.

River Linking Project Progress and Adjusted Timelines

The river linking project, initially expected to be completed earlier, has seen its timeline adjusted due to a change in the government's approach, which prioritized Phase-1 completion. Ceinsys Tech has successfully completed Phase-1, booking ₹48-49 crores in revenue, and submitted all necessary documents. While the full project execution might extend into next year, management states they are not delayed based on the client's revised plan, which has phased out the project over an additional two to three quarters.

Employee Cost Optimization and AI/ML Integration

The company has significantly optimized its employee costs relative to turnover, reducing it from 36.9% to 19.9%, despite absolute employee costs remaining stable at around ₹33 crores. This efficiency gain is attributed to better employee utilization and a strategic shift towards higher-margin technology business. Ceinsys Tech is also leveraging AI/ML solutions internally to improve efficiency, reduce costs, and enhance turnaround times, with successful POCs demonstrating over 95% accuracy and two patents filed for its process technology.

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

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