CEINSYS

Ceinsys Tech Limited reported a robust Q3 FY26, with operational revenue growing 52% year-on-year to INR 170 crores. EBITDA saw an 88% increase to INR 40 crores, leading to a significant margin expansion of 452 basis points, reaching 23.48%. Net profit for the quarter was INR 39 crores, up 119% year-on-year, with a healthy PAT margin of 22.9%. The company also highlighted strong 9M FY26 performance, with operational revenue up 78% to INR 490 crores and net profit up 133% to INR 96 crores.

The strong Q3 performance was primarily driven by the Geospatial and Engineering Services segment, which grew 122% year-on-year to INR 109 crores. In contrast, the Technology Solutions segment experienced a moderate decline of 3% year-on-year, reaching INR 61 crores. The company booked new orders worth INR 170 crores in Q3, bringing the closing order book as of December 31, 2025, to INR 999 crores. The order book composition is approximately INR 460 crores for technology absorption and INR 520-530 crores for geospatial services, largely driven by the river linking project.

Ceinsys Tech is actively pursuing inorganic growth, having acquired VTS's geospatial business in 2024 and identifying further targets. The company invested INR 24 crores in Q3 in technology innovations and business development, particularly for expanding its presence in the U.S. and other territories, with INR 16 crores of this charged to the P&L. The ongoing inorganic acquisition process, however, has been delayed from an initial 1-2 month timeline to 2-3 months due to compliance and due diligence requirements.

The company maintained its net working capital cycle within the range of 160 to 162 days. Collections in Q3 were strong, matching the operational revenue at INR 170 crores, partly due to significant collections from Jal Jeevan Mission (JJM) projects. Management aims to further reduce debtor days from the current 160-162 to approximately 120-125 days, a level achieved in Q4 of the previous year, anticipating improved government disbursements in Q4.

Order inflows in Q3 were lower than analyst expectations, primarily due to the election-related code of conduct, which caused a standstill in government tender completions for about four months. Despite these delays, management confirmed that no opportunities were lost, and tenders are either published or anticipated to close in Q4 FY26 or Q1 FY27. The company is actively bidding for large government projects, including the INR 1,000 crores-plus land mapping and resurveying projects in various states.

The US subsidiary contributed approximately INR 21 crores to the total top line for the nine months ended December 31, 2025, with an EBITDA margin of around 20%. Management expects the US subsidiary's full-year contribution to be INR 23-25 crores, representing less than 4-5% of the total turnover. The company is investing in building capabilities, data mining from VTS logos, and product development for the infrastructure domain in the US, with more clarity on the strategy expected by Q4 FY26 or Q1 FY27.

Ceinsys Tech maintains a conservative debt profile, with borrowings consisting solely of cash credit. The company is currently utilizing INR 29-30 crores out of an INR 80 crores cash credit limit, indicating significant headroom. Management highlighted a negative net debt to equity ratio, reinforcing its asset-light and financially prudent approach. Investments in technology and business development are primarily expensed to the P&L, with only some elements capitalized.