Delaplex Ltd — Q2 FY26 earnings call

Call held 19 Nov 2025

Management summary

Delaplex reported a solid H1 FY26 with 5% YoY revenue growth and significant margin expansion, driven by strategic acquisitions and the emergence of new solutioning businesses. The company is focused on execution, operational efficiency, and expanding its market position in high-growth areas like AI consulting and edge computing, while adapting to a challenging global economic environment.

Highlights

  • Consolidated revenue of INR 390 million, up 5% YoY from INR 373 million in H1FY25.

  • EBITDA of INR 92 million, up 13% YoY from INR 81 million in H1FY25.

  • PAT of INR 72 million, up 13% YoY from INR 64 million.

  • EBITDA margin expanded 172 bps to 23.5%, from 21.8% in H1 FY25.

  • Blueberry Systems contributed INR 9.21 crores in revenue and INR 2.35 crores in PAT.

Concerns

  • Standalone business margin dropped by 400 bps due to ESOP expense and solutioning costs.

  • Acknowledged global turmoil leading to more value-conscious client spending.

Key financials

  1. Consolidated Revenue 390 Mn +5%YoY
  2. EBITDA 92 Mn +13%YoY
  3. PAT 72 Mn +13%YoY
  4. EBITDA Margin 23.5%
  5. PAT Margin 18.4%

What they filed

Q4 FY26: revenue up 16.4%, net profit up 16.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY23Q2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue26 28 27 36 32 +22%37 +33%32 +16%
EBITDA4 6 5 7 7 +86%7 +11%6 +27%
Net profit3 5 5 6 6 +97%7 +43%6 +16%
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

  • Core Supply Chain Services & Software Development
    43% Revenue Contribution
  • Cloud Services
    36% Revenue Contribution
  • New Solutioning Business (Micro Data Center & Enterprise Solutions)
    16% Revenue Contribution
  • Blueberry Systems (UK Entity)
    ₹9.21 Cr Revenue₹2.35 Cr PAT

Order book

high confidence

Pipeline

deal pipeline tcv

Paid proof-of-concepts with PSUs and enterprise clients for edge micro datacenters, expected to convert to full-scale deployments.

We are targeting on a solid pipeline but instead of announcing the order book, we are more like inclined towards announcing the achieved numbers, because order books are forward-looking things, rather than that if we announce the achieved numbers that gives us more clarity on actuals what have happened. We are still in the SME exchange. So, we would want to make sure that whatever we announce it is not too much like of a marketing thing rather whatever we have done on actuals if we announced it on an ongoing basis that would build more trust amongst the investors and thank you so much for being an investor with us.

Source: Q&A

Capital allocation

high confidence
  • Capex Capex disclosed
    • Investment in four micro data centers (two in Hyderabad, two in other states)
    Right now, we have four data centers, two at Hyderabad and two at the other different states, where these data centers are invested by us.
  • M&A Blueberry Systems Acquisition · Integrated

    Provided AI-enabled low-code platforms, enhanced service delivery capabilities, and European market access.

    Contributed INR 9.21 crores in revenue and INR 2.35 crores in PAT during the period.

    Our Blueberry integration, which is a 100% Delaplex-owned entity in the UK, progressed well. With this entity contributing INR 9.21 crores in revenue and INR 2.35 crores in PAT during the period.
  • M&A Celestia Crew Consultancy Acquisition · Integrated

    Improved delivery efficiency, particularly in supply chain consulting, and complemented existing capabilities with specialized expertise.

    Contributed approximately 2% to revenue.

    Operational synergies from our Celestia Crew Consultancy acquisition are improving our delivery efficiency, particularly in supply chain consulting where we have specialized expertise complements our existing capabilities.

Guidance & targets

Revenue

  • H2 Revenue Contribution to Annual Revenue Revenue · H2 FY26 · High confidence 55-60%
    Historically, both for the IT services industry and specifically for Delaplex. H1 typically contributes around 40% to 45% of the annual revenues while H2 accounts for 55% to 60%.

Profitability

  • Micro Datacenter EBITDA Contribution Profitability · Short run · Medium confidence 34-40%
    The current target what we are estimating is like from 34% to 40% of the EBITDA. So, it should be contributed by these micro datacenters in the short run.

    — Nitin Sachdeva

Shareholder Returns

  • ESOP Dilution in First Year Shareholder Returns · First year · High confidence 40%
    if I talk in absolute numbers, this is 40% in the first year and gradually, it could be less because next four years, we will see only 15%, 15%, 15%, and 15%.

    — Nitin Sachdeva

  • ESOP Dilution in Subsequent Years Shareholder Returns · Next four years · High confidence 15% per year
    and gradually, it could be less because next four years, we will see only 15%, 15%, 15%, and 15%.

    — Nitin Sachdeva

What to watch in Q3 FY26

Conversion of BSNL micro datacenter POCs to full deployments

H2 FY26
Current Paid POCs in progress
Target Significant portion converted to full-scale deployments

Why it matters

Successful conversion of POCs is a key H2 growth driver for the micro datacenter business and validates the BSNL partnership.

We are currently progressing with several paid proof-of-concepts with PSUs and enterprise clients and based on the positive feedback and technical validation we are receiving, we expect a significant portion of these POCs to convert to full-scale project deployments in H2 which should contribute meaningfully to our second half performance.

Risks & concerns

  • Global economic slowdown and client spending consciousness

    medium

    Global turmoil is making clients more value-conscious, leading to some slowdown in spending, though Delaplex is adapting with value-driven offerings.

    Both acknowledged

  • Margin compression in standalone business

    low

    Standalone margins impacted by one-time ESOP expenses and initial costs for new solutioning business, which are expected to normalize.

    Analyst acknowledged

  • ESOP dilution impact on shareholders

    low

    Initial ESOP dilution is 40% in the first year, but subsequent years will be lower (15% for four years) and is primarily for key employee retention and motivation.

    Analyst downplayed

Q&A highlights

7 direct
Revenue drivers and geographic contribution Direct
So, as you can see, our support from India has also increased. So, as we have partnership with BSNL, our increased revenue growth is majorly from our Indian direct services, which is a growth of 26%. Our solutioning businesses, as mentioned in the call earlier by Nitin sir, is also the primarily growth factor.

Clarifies the key growth engines for the quarter, highlighting domestic market strength and new solutioning business.

Asked by Ankit Redekar

Client spending slowdown and Delaplex's strategy Direct
Yes. With the global turmoil happening, everyone is aware, the client has become more conscious about value-driven spending. So, definitely, we are already prepared for it, and with the low-code platform, we are providing services to those clients, wherein they are getting better value delivered in a short span of time.

Addresses a key macro concern and explains how the company is adapting to changing client behavior.

Asked by Ankit Redekar

New vs. existing client revenue contribution Direct
So, just to answer that, if we can see the addition of the new vertical, which contributes around 16% is generally through new clients addition only. These are the servicing business and the normal churn as Nitin sir mentioned, but the solutioning business is 100% from the new clients only. I think out of 16%, 15% of 15.5% is all new clients.

Provides insight into the source of growth, indicating strong traction with new clients for the new solutioning vertical.

Asked by Ankit Redekar

Capital investment for BSNL-partnered micro datacenter business Partial
Right now, we have four data centers, two at Hyderabad and two at the other different states, where these data centers are invested by us. And they are in early stage. But depending on the business, we will get back to you once we have more business, which has traction and we will update. And we are also planning to have some partnership model after next year.

Clarifies current investment status and future strategy for scaling the micro datacenter business, indicating a cautious approach to CAPEX.

Asked by Prashant Kale

Standalone business margin drop explanation Direct
So, a major portion of it is due to the ESOP expense. This is for around, like, 1,21,800 shares this year, which would be allocated to people after the completion of the 12-months period as per the ESOP scheme that we have. Standalone from the last six months have not dropped. Revenue rather has increased, but additional expenses for ESOP and the solutioning for the micro data center expenses have gone into it. So, that is one major thing which contributes to that 400 bps drop.

Explains the reason for margin compression in the standalone business, attributing it to specific, non-recurring ESOP expenses and new solutioning costs.

Asked by Pujit Agarwal

Future ESOP dilution impact Direct
No, this is the initial ESOP. And then as per the ESOP plan, the second dilution would be less. It would be spread across four years. So, need not worry significantly. This is to make sure that our key people, like, if I talk in absolute numbers, this is 40% in the first year and gradually, it could be less because next four years, we will see only 15%, 15%, 15%, and 15%.

Provides clarity on the long-term impact of ESOPs, reassuring investors that future dilution will be lower and spread out.

Asked by Pujit Agarwal

Micro datacenter specifications and benchmarking Direct
So, we term it in terms of the virtual machines. It is like it can run on a 3 KVA power backup basically. So, it is not too much. To tell you in simple words, box size is like 4 feet/2 feet/4 feet height. In that, you have all things embedded into it. And the capabilities are like, you can run 450 virtual machines from a basic box. And you can house from 250 terabyte to 9 petabyte of storage in these boxes.

Offers technical details and capabilities of their micro datacenter solution, differentiating it from mega data centers.

Asked by Pujit Agarwal

Order book disclosure policy Direct
We are targeting on a solid pipeline but instead of announcing the order book, we are more like inclined towards announcing the achieved numbers, because order books are forward-looking things, rather than that if we announce the achieved numbers that gives us more clarity on actuals what have happened. We are still in the SME exchange. So, we would want to make sure that whatever we announce it is not too much like of a marketing thing rather whatever we have done on actuals if we announced it on an ongoing basis that would build more trust amongst the investors and thank you so much for being an investor with us.

Clearly states the company's policy on not disclosing specific order book numbers, emphasizing focus on achieved results and building investor trust.

Asked by Pujit Agarwal

3 min read 6 chapters

Detailed narrative

Strong H1 FY26 Performance Driven by Strategic Initiatives

Delaplex delivered solid financial results for H1 FY26, with consolidated revenue growing 5% year-on-year to INR 390 million from INR 373 million in H1FY25. EBITDA increased 13% to INR 92 million from INR 81 million, and PAT also rose 13% to INR 72 million from INR 64 million. This performance was underpinned by significant margin expansion, with EBITDA margin improving by 172 basis points to 23.5% and PAT margin by 132 basis points to 18.4%. The company attributes this to focused execution and strong operational performance.

Strategic Acquisitions and New Solutioning Business Fuel Growth

The Blueberry Systems acquisition in the UK contributed INR 9.21 crores in revenue and INR 2.35 crores in PAT during H1 FY26, enhancing service delivery with AI-enabled low-code platforms and providing access to European markets. The Celestia Crew Consultancy acquisition improved delivery efficiency, particularly in supply chain consulting, and contributed approximately 2% to revenue. A new solutioning business, including micro data centers and enterprise solutions, emerged as a significant new revenue stream, contributing 16% to total revenue, entirely from new clients.

Micro Datacenters and BSNL Partnership as Key Future Drivers

Delaplex is actively progressing with paid proof-of-concepts for its edge micro datacenters with PSUs and enterprise clients, expecting significant conversions to full-scale deployments in H2 FY26. The company has invested in four micro data centers (two in Hyderabad and two in other states) and aims for this business to contribute 34-40% of its EBITDA in the short run. This initiative, alongside the BSNL partnership, positions Delaplex in the rapidly growing edge computing market, projected to reach USD3 billion by 2033.

Adapting to Global Turmoil and Client Spending Shifts

Management acknowledged the global turmoil and increased client consciousness towards value-driven spending. Delaplex is adapting by leveraging its low-code platform, new edge technology, and cross-skilling initiatives to deliver better value and maintain operational efficiency. This approach has allowed the company to achieve a 9% reduction in employee costs without layoffs, by optimizing resource utilization and upskilling existing team members.

ESOPs and Intangibles Impact Standalone Margins

The standalone business experienced a 400 basis point margin drop, primarily due to ESOP expenses for 1,21,800 shares allocated this year and initial costs associated with the new micro data center solutioning. Management clarified that this is an initial ESOP, with future dilution spread over four years (40% in the first year, then 15% annually for the next four years). Intangible assets of approximately INR 2.5 crores were recorded, mainly related to goodwill from the Blueberry acquisition and investments in AI-enabled platforms and project tracking tools.

H2 FY26 Expected to Outperform H1 Due to Seasonal Patterns

Delaplex anticipates H2 FY26 to be stronger than H1, aligning with historical seasonal patterns where H2 typically contributes 55-60% of annual revenues, compared to H1's 40-45%. This pattern is largely driven by budget approvals and new project agreements materializing from January onwards in the US market, which is Delaplex's largest geography. The micro datacenter and solutioning businesses are expected to be key growth drivers for H2, contributing meaningfully to the second half performance.

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