Cyber Media Research & Services Ltd — Q2 FY26 earnings call

Call held 11 Dec 2025

Management summary

CMRSL reported strong Q2 and H1 FY26 results, demonstrating significant revenue and EBITDA growth driven by both international and domestic business expansion. The company is pursuing a strategic merger with Cyber Media (India) Limited (CMIL), which is expected to enhance shareholder value, improve liquidity, and generate annual cost savings. Management is also focusing on AI adoption and new customer acquisition for its key platforms, CMGalaxy and AuxoAds.

Highlights

  • H1 FY26 top line of ₹43.55 crore, a YoY growth of 20.4%.

  • H1 FY26 EBITDA of ₹2.69 crore, a YoY growth of 46.2%.

  • EBITDA margin for H1 FY26 improved from 5.1% to 6.2%.

  • Q2 FY26 revenue of ₹21.31 crore, a YoY growth of 19.2%.

  • International business expanded about 30%, and domestic business grew by 22%.

Concerns

  • CMIL's net worth was reported as negative, though management clarified this was due to past write-offs and asset valuation differences.

  • CMIL's rights issue was not fully subscribed, reaching 82.38%.

Key financials

2 periods

Q2 FY26

  • Revenue
    ₹21.31 Cr
    YoY +19.2%
  • EBITDA
    ₹1.26 Cr
    YoY +41.6%

H1

  • FY26 Revenue
    ₹43.55 Cr
    YoY +20.4%
  • FY26 EBITDA
    ₹2.69 Cr
    YoY +46.2%
  • FY26 EBITDA Margin
    6.2%
  • FY26 PBT
    ₹2.34 Cr

What they filed

Q1 FY27: revenue up 132.6%, net profit up 55.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue11 10 14 15 15 +34%14 +37%17 +23%34 +133%
EBITDA0 0 1 1 1 +124%1 +159%1 +57%2 +69%
Net profit0 0 1 1 1 +109%0 +33%1 +76%1 +55%
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

  • International Business
    30% Growth
  • Domestic Business
    22% Growth
  • CMIL Media Business (H1)
    ₹43.14 Cr Revenue33% YoY Growth₹35.73 Cr Previous H1 Revenue

Capital allocation

high confidence
  • Debt Debt disclosed
    If you look at the properties that are available with the us, the net worth is actually not negative. Because the properties available with us are about INR 27 crore as per valuation, which in our books are shown as INR 3.24 crore. The second reason is that the negative net-worth has happened because of the losses that we incurred in our operations in the U.S. business. We have shared this earlier. Further, we have written off all the investments that were made in U.S., which was a substantial figure. All the claims pertaining thereto have been settled. In the year 2020, we had written off worth INR 25 crore, and thereafter another INR 8 crore of liabilities. These written offs were made few years back. Therefore, there is no impact thereof on the current cash flow. Further, this had been mentioned earlier to our investors and in filings to stock exchange, there are pending no previous liabilities of any nature. All of them have been settled, whether it was with the banks or whether it was with various statutory authorities, etc. Everything has been absolutely resolved and there is a clean slate now.
  • M&A Cyber Media (India) Limited (CMIL) Merger · Announced

    Strategically position CyberMedia as a single entity for marketing solutions, larger market capitalization, cost savings, better liquidity for CMRSL shareholders (main board listing), stronger balance sheet, improved cash flow, optimized management bandwidth.

    For every 08 shares of CMRSL, investors will get 35 shares of CMIL. Management expects cost saving of at least INR 1 crore annually. CMIL's balance sheet includes immovable assets with a fair market value of approx. INR 27 crore.

    As all of you may know that the Board of Directors has recommended the merger of CMRSL with Cyber Media (India) Limited (CMIL). In fact, this was also a recommendation that was raised in the previous calls by the investors. We have taken cognizance of this and based on our evaluation, and believe that this would be highly beneficial for the organization as well as its investors. CMIL is the largest investor of CMRSL with a holding of 38.17%. Based upon valuation, the merger proposal suggests that for every 08 shares of CMRSL, investors of CMRSL will get 35 shares of CMIL.

Guidance & targets

Merger

  • Merger Completion Timeline Merger · next financial year · Medium confidence approx. six to nine months
    The merger is likely to take approx. six to nine months' time, subject to approvals from relevant authorities involved. It is expected that the merger will complete in the next financial year.

    — Dhaval Gupta

Cost Savings

  • Annual Cost Savings from Merger Cost Savings · annually · High confidence at least INR 1 crore
    But in case, we look at the cost-saving part, as Mr. Dhaval Gupta has mentioned, cost saving will be at least INR 1 crore per year.

    — Pradeep Gupta

  • Merger Cost Repayment Timeline Cost Savings · post-merger · High confidence within the first six months
    So, the merger cost is going to repay itself within the first six months.

    — Pradeep Gupta

Profitability

  • EBITDA Margin Profitability · ongoing · Medium confidence double-digit margin
    We are continuing to work towards, and we ideally want to move in the direction of double-digit margin and basically make sure that we are adding more value.

    — Dhaval Gupta

Performance

  • Financial Year Performance Performance · current financial year · Medium confidence best financial year performance
    We expect to deliver CMRSL's best financial year performance.

    — Dhaval Gupta

What to watch in Q3 FY26

Merger Progress & Regulatory Approvals

next quarter
Current Board recommended, internal integration processes started
Target Regulatory approvals obtained, merger signed/closed

Why it matters

This is a transformative event impacting financial structure, liquidity, and strategic direction.

The merger is likely to take approx. six to nine months' time, subject to approvals from relevant authorities involved. It is expected that the merger will complete in the next financial year.

Risks & concerns

  • CMIL's Negative Net Worth

    medium

    Analyst raised concern about CMIL's reported negative net worth impacting the merger. Management clarified it was due to past write-offs from US operations and undervaluation of assets in books, stating all liabilities are settled and it's a 'clean slate now'.

    Analyst acknowledged

  • Merger Valuation Fairness

    medium

    Analyst questioned if market price-based valuation was fair to CMRSL shareholders given CMIL's negative net worth. Management explained it followed SEBI guidelines for listed entities, using the market approach (VWAP) as standard.

    Analyst acknowledged

  • CMGalaxy Commercialization Stage

    low

    Analyst inquired about specific customer numbers for CMGalaxy. Management indicated it's in an 'early rollout phase' and 'strategy phase' for GTM, suggesting it's not yet a major revenue contributor and specific metrics will be shared later.

    Analyst acknowledged

Q&A highlights

5 direct
CMIL's Negative Net Worth Direct
If you look at the properties that are available with the us, the net worth is actually not negative. Because the properties available with us are about INR 27 crore as per valuation, which in our books are shown as INR 3.24 crore. The second reason is that the negative net-worth has happened because of the losses that we incurred in our operations in the U.S. business... Everything has been absolutely resolved and there is a clean slate now.

Clarifies the reasons behind CMIL's reported negative net worth, attributing it to asset valuation differences and past write-offs, and assures that all liabilities are settled.

Asked by Bhavesh Choudhary

CMIL's Rights Issue Subscription Direct
We had a positive response to the rights issue from CMIL's shareholders. It was subscribed as 82.38%. It is again showing a vote of confidence in comparison to the history.

Provides an update on the rights issue, indicating a relatively strong subscription rate despite initial concerns.

Asked by Bhavesh Choudhary

Merger Valuation Structure Direct
The valuation has been done as per the SEBI formula. In the valuation, we have applied only the market approach where the share price of CMRSL was compared with the share price of CMIL. So, share swap ratio has been worked out based on the relative market price in a particular period... As listed entities, we are not supposed to make future projections, etc. That is the reason why we have not done DCF.

Explains the methodology for the merger valuation, justifying the use of market price over other methods like NAV or DCF as per SEBI guidelines for listed entities.

Asked by Muzammil Husain

Merger Timeline and Integration Direct
Absolutely. That is correct. In fact, let me further add to that in January, we are doing a strategic get-together of the businesses, the team, the management to work out the way forward in terms of how we are going to smoothly take things forward... while the merging process is going to take time of six to nine months, we have already started our internal processes of the merger exercise, which includes restructuring of teams, training of the teams, cultural alignment, HR alignment, etc.

Confirms the 6-9 month merger timeline and reveals that internal integration activities have already commenced, indicating proactive management.

Asked by Bhavesh Choudhary

Estimated Cost of Merger Direct
The total merger cost is estimated between INR 40 Lakh to INR 50 Lakh. But in case, we look at the cost-saving part... cost saving will be at least INR 1 crore per year. So, the merger cost is going to repay itself within the first six months.

Quantifies the expected merger costs and highlights the significant and rapid financial return through anticipated annual cost savings.

Asked by Bhavesh Choudhary

CMGalaxy Customer Onboarding and GTM Partial
On CMGalaxy... we will look at onboarding more and more customers, and we are in line to do that... I don't want to sort of break up at this stage. So, it may be next year onwards that we may start sharing the specific information as far as that is concerned... I think that in the next call, we will be in a much better position to add more details. Right now, it is in strategy phase. It is in early rollout phase from a GTM point of view.

Indicates that CMGalaxy is still in its early commercialization phase, with specific customer metrics not yet ready for disclosure, suggesting it's not a significant revenue driver currently.

Asked by Bhavesh Choudhary

Dividend Payout Ratio Post-Merger Partial
Yes. We believe that the merged entity will have a much stronger balance sheet. We will have cost savings, and therefore, we expect continued dividend payout to investors. Being a forward-looking statement, we cannot give an absolute assurance.

Addresses shareholder concerns about maintaining dividend payouts post-merger, with management expressing optimism due to improved financial health and cost savings, but with a caveat.

Asked by Muzammil Husain

2 min read 5 chapters

Detailed narrative

Strong Q2 and H1 FY26 Financial Performance

CMRSL delivered robust financial results for Q2 and H1 FY26. For H1 FY26, the company reported a top line of INR 43.55 crore, marking a 20.4% YoY growth, with EBITDA reaching INR 2.69 crore, a 46.2% YoY increase. The EBITDA margin improved significantly from 5.1% to 6.2% compared to the previous financial year. PBT for H1 FY26 stood at INR 2.34 crore, up from INR 1.45 crore last year. Q2 FY26 alone saw revenue of INR 21.31 crore (19.2% YoY growth) and EBITDA of INR 1.26 crore (41.6% YoY growth), indicating steady improvement.

Strategic Merger with Cyber Media (India) Limited (CMIL)

The Board has recommended a merger of CMRSL with CMIL, with a proposed share swap ratio of 35 CMIL shares for every 8 CMRSL shares. This merger is expected to complete in approximately six to nine months, pending regulatory approvals. Management anticipates significant benefits, including enhanced liquidity for CMRSL shareholders (listing on main board), a stronger combined balance sheet (CMIL's immovable assets valued at INR 27 crore), and annual cost savings of at least INR 1 crore, with merger costs of INR 40-50 Lakh expected to be recouped within six months.

Business Segment Growth and International Expansion

CMRSL's international business expanded by approximately 30%, supported by new business development manpower focused on Southeast Asia and the Middle East. The domestic business also grew by 22%. Specific growth areas include programmatic advertising, leveraging relationships with Google DV360, PubMatic, and Magnite, and market research, which continued to deliver high-value insights to enterprise customers like AWS, Qualcomm, and HP. CMIL's media business also showed strong growth, increasing revenue from INR 35.73 crore to INR 43.14 crore in H1 FY26, a 33% YoY growth.

CMGalaxy & AuxoAds Platform Development

CMGalaxy remains an area of investment, with plans to onboard new customers in the coming quarter. Management noted positive feedback from demos and early adopters, focusing on AI integration and addressing data silo issues. AuxoAds, which contributes around 20% of the top line and generates double-digit margins, is being scaled up by adding more publishers and demand partners in international markets like Southeast Asia and the US. Both platforms are seen as critical for product-driven growth and margin improvement.

Focus on Efficiency, AI Adoption, and Financial Health

CMRSL is actively adopting AI technology across various functions (finance, operations, sales) to improve business outcomes and efficiency. The company is also implementing new policies and protocols to streamline costs, including a career planning framework, IT and password policy, credit and vendor management policies, and an ECL policy. Management emphasized that the merged entity will have a much stronger balance sheet and improved cash flow, enabling better debt management and continued dividend payout to investors.

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