DIGITIDE

Digitide Solutions reported consolidated revenues of INR764 crores for Q2 FY26, representing a 4% sequential and 7% year-on-year growth. For the first half of FY26, the company achieved a significant milestone by crossing INR1,500 crores in revenues, marking a 6.4% YoY increase. Consolidated EBITDA for Q2 stood at INR85 crores, up 3% sequentially, with a stable margin of 11.1%, while Adjusted PAT was INR17 crores.

The Tech and Digital segment demonstrated robust growth, with revenues surging 16% sequentially and 23% year-on-year to INR228 crores, now contributing 30% of the total revenue, up from 27% in Q1. This growth is primarily driven by AI-led transformation and digital solutions. The company's strategy emphasizes increasing the share of technology and digital offerings to achieve scalable profitability and accelerate international expansion.

Reported PAT for Q2 was INR3 crores, significantly impacted by INR11.4 crores in demerger-related legal and professional fees and INR2.4 crores in stamp duty. Management confirmed that most demerger-related transitions and exceptional costs are now largely behind. They anticipate margin expansion to become evident by the exit of Q4 FY26, with a long-term target of 200-300bps EBITDA margin improvement by FY31 from an FY25 baseline.

Digitide booked INR550 crores in Total Contract Value (TCV) this quarter, marking the third consecutive quarter of TCV exceeding INR500 crores. The company acquired 24 new logos and noted that 50% of new deals are AI-enabled, reflecting its 'AI-first' mantra. Digitide has also become a Tier-1 partner for AWS and Azure, which is expected to unlock deeper collaboration and early access to next-gen AI/ML innovation.

The company is investing heavily in talent development, including expanding its AI Center of Excellence in Bangalore and launching 'DigiAIWave,' an upskilling program targeting 10,000 professionals in Phase 1 for AI scale. Operational excellence is being driven through automation, process optimization, and rigorous execution, aiming to improve revenue per FTE by leveraging a mix shift towards digital/technology, increased international revenue, and automation.

Digitide maintains a strong balance sheet with INR77 crores in cash and INR49 crores in gross debt, resulting in a net cash position of INR28 crores. The company's contract mix is approximately 40% Time and Material, 30-33% Fixed Fee, 20% Transaction-based, and 10% Outcome-based. The median deal term for larger AI-led engagements has shifted to 3 years with options for 1+1 year extensions, reflecting the rapid pace of technology change.

The BPM segment reported revenues of INR536 crores, broadly flat YoY and QoQ, demonstrating resilience despite softness in the BFSI sector, particularly in domestic collections impacted by regional floods. The international business grew 6% sequentially and 4% YoY, now contributing 37% of total revenue, supported by a focus on resilient verticals like Healthcare and Fast Growth Tech.