CEINSYS

Ceinsys Tech reported its best-ever quarterly and full-year performance for Q4 FY26 and FY26. Q4 operational revenue grew 20% YoY to INR 171 crores, with EBITDA increasing 50% YoY to INR 40 crores, leading to a 475 bps expansion in EBITDA margins to 23.6%. Net profit for Q4 surged 70% YoY to INR 37 crores, and PAT margins expanded by 641 bps to 21.8%. For the full year FY26, operational revenue stood at INR 661 crores, a 58% YoY growth, and net profit reached INR 133 crores, marking a 111% YoY increase, with PAT margins surpassing 20% for the first time.

The company is actively pursuing inorganic growth opportunities, with a current focus on due diligence for potential acquisitions or joint ventures expected to close in the next 1-2 quarters. An earlier earmarked amount of INR 235 crores for acquisition and expansion has been restructured to include joint ventures. This strategy aims to acquire new capabilities and expand into new domains, building on past acquisitions like Allygrow's mobility business in 2022 and VTS's geospatial business in 2024.

Ceinsys closed FY26 with a healthy order book of INR 876 crores as of March 31, 2026, which is executable over the next 12-18 months. New orders booked in Q4 FY26 aggregated to INR 62 crores. While FY26 order intake was less than INR 400 crores, management expressed confidence in a strong pipeline, particularly in infrastructure (road, metro, building construction), with 3 projects currently in L1 status. They anticipate matching or surpassing FY26 order inflow by Q2/Q3 FY27.

The Geospatial Engineering Services segment saw robust growth, with Q4 revenue increasing 75% to INR 102 crores and FY26 revenue growing 76% to INR 359 crores. The Technology Solutions segment, while experiencing a slight decline in Q4 revenue to INR 68 crores, still grew 41% YoY for the full year to INR 301 crores. Management clarified that the Q4 decline in Technology Solutions was temporary, attributed to milestone recognition, and the overall mix of technology solutions in contracts remains strong.

The company maintained discipline in working capital, with the cycle marginally improving to 157 days from 162 days. Strong cash generation was a key highlight, with the net cash balance increasing significantly to INR 248 crores as of March 31, 2026, up from INR 123 crores a year ago. Management addressed concerns about increased unbilled revenue (INR 350 crores), explaining it's due to milestone-based billing on government projects and expects substantial conversion in Q1 and Q2 FY27.

Ceinsys is committed to international expansion, aiming to reduce dependency on government business from an average of 70% to less than 50% over the next 2-3 years. The VTS subsidiary, acquired in 2024, generated INR 7-8 crores in FY26 and was EBITDA negative due to business development expenses. However, management projects VTS revenue to exceed INR 20 crores with positive EBITDA in FY27. The company expects its loss-making subsidiaries to achieve breakeven in FY27.

The company is investing in product solutions focused on infrastructure and emerging technologies, particularly AI and Machine Learning. Two IPs have already been developed and applied for registration, with commercial utilization underway. For the current year, an expenditure outlay of INR 12-15 crores is targeted for developing at least 3 major IPs, which is part of the revenue expenditure. This vertical aims to enhance delivery and maintain a competitive edge in the dynamic technological landscape.