Hinduja Global Solutions Limited — Q3 FY26 earnings call

Call held 13 Feb 2026

Management summary

Hinduja Global Solutions reported muted revenue growth and sequential margin moderation in Q3 FY26, primarily due to volume ramp-downs and elongated decision cycles amidst a challenging macro environment. Despite this, the company achieved significant new logo additions, particularly in Digital Operations and Technology Services, and demonstrated strong traction in its AI-led solutions, yielding 15-20% margin improvements in onshore delivery. The Digital Media business also showed robust growth with new client wins and subscriber additions under the Mission Bharat initiative, reinforcing confidence in future growth drivers and a strong capital structure with a net treasury balance of ₹5,227 crores.

Highlights

  • Added 21 new logos in Digital Operations and Technology Services in Q3 FY26, enhancing future growth potential.

  • AI-infused delivery resulted in 15-20% margin improvements in onshore locations (US, Canada, UK) and ~10% offshore.

  • CelerityX onboarded five new prestigious logos in Q3, and the broadband vertical is on a strong growth path, connecting 50 new Tier-3 towns and adding ~25,000 subscribers.

  • Client base is structurally diversifying with new public sector clients in Canada, reducing concentration risk.

  • Net treasury balance of ₹5,227 crores indicates strong liquidity and capital structure.

Concerns

  • Operating revenue growth was muted (up 1.1% YoY, down 1.4% QoQ) in Q3 FY26.

  • EBITDA margin sequentially moderated by ~170 bps to 11.2% due to temporary volume softness and one-time cost optimization impact.

  • PBT was a loss of ₹41 crores in Q3 FY26, compared to a profit of ₹14.1 crores sequentially and ₹41.3 crores YoY.

  • Elongated decision cycles and a subdued macro backdrop continue to impact larger deals and may persist for another year or so.

  • Volume ramp-downs in a couple of large accounts moderated overall revenue growth, driven by vendor diversification and in-house transitions.

Key financials

  1. Operating Revenue ₹1,075.4 Cr +1.1%YoY
  2. Total Income ₹1,192.2 Cr
  3. EBITDA ₹133.7 Cr
  4. EBITDA Margin 11.2%
  5. PBT ₹-41 Cr -198.1%YoY
  6. Total PAT ₹34.4 Cr -500%YoY
  7. Depreciation ₹123.3 Cr
  8. Exceptional Item ₹4.5 Cr

What they filed

Q1 FY27: revenue down 0.6%, net profit down 700.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,087 1,064 1,161 1,056 1,091 +0%1,075 +1%1,085 −7%1,050 −1%
EBITDA34 64 142 29 26 −24%17 −73%27 −81%-34 −217%
Net profit-51 -9 -2 11 -27 +47%34 +478%-14 −600%-66 −700%
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

  • Revenue by Source
    55% CX Operations45% Digital and Media Services
  • Revenue by Vertical
    50% Technology, Media, Telecom18% BFSI16% Consumer and Retail7% Healthcare, Life Sciences, and others
  • Revenue by Origination
    39% India28% US14% UK20% Canada, Australia, and others
  • Revenue by Delivery
    42% India26% US and Canada combined14% Philippines17% UK and others

Capital allocation

high confidence
  • Debt Gross ₹1,202 Cr
    The gross treasury balance was approximately Rs. 6,429 crores against debt of Rs. 1,202 crores, resulting in a net treasury balance of Rs. 5,227 crores.
  • Liquidity Cash ₹5,227 Cr Maintains healthy liquidity, disciplined capital allocation, and stable working capital metrics, funding growth initiatives through internal accruals.
    The gross treasury balance was approximately Rs. 6,429 crores against debt of Rs. 1,202 crores, resulting in a net treasury balance of Rs. 5,227 crores. We continue to maintain healthy liquidity, disciplined capital allocation, and stable working capital metrics... and we continue to fund growth initiatives through internal accruals.

Guidance & targets

Margin

  • AI-infused delivery margin improvement (onshore) Margin · Ongoing · High confidence 15-20%
    In delivery locations that are onshore such as the US, Canada, and the UK, particularly in the US and Canada, we have seen margin improvements in the range of 15% to 20%.

    — Venkatesh Korla

  • AI-infused delivery margin improvement (offshore) Margin · Ongoing · High confidence ~10%
    For offshore delivery, the margin improvement is currently around 10%.

    — Venkatesh Korla

Revenue Mix

  • Digital revenue mix shift Revenue Mix · over time · Medium confidence incremental 5-10% shift
    Based on the traction we are seeing from the new logos and the pipeline, we believe this mix can progressively improve, with Digital driving an incremental 5% to 10% shift over time.

    — Mahesh Kumar Nutalapati

Volume

  • Mission Bharat new towns connected Volume · between Q3 and next financial year · High confidence 100 new towns
    Under Mission Bharat, we had committed to connecting 100 new towns between Q3 and the next financial year. I am pleased to share that we have already connected 50 new Tier-3 towns.

    — Vynsley Fernandes

Efficiency

  • Ramp-up cycle time reduction Efficiency · Ongoing · High confidence 30-40%
    From hiring to training to achieving full productivity, the cycle time has reduced by roughly 30% to 40%. That directly translates into margin improvement.

    — Venkatesh Korla

What to watch in Q4 FY26

Conversion of AI pilots to enterprise implementations

Coming year
Current Many proof-of-concept engagements moving into pilot stages
Target Increased activity and conversion into enterprise-grade implementations

Why it matters

Key to realizing the full revenue potential and margin benefits from AI investments and validating the company's strategic focus.

We are seeing a number of proof-of-concept engagements move into pilot stages, with clients testing the waters, and we believe the coming year will see increased activity as these pilots convert into enterprise-grade implementations.

Risks & concerns

  • Subdued macro backdrop and elongated decision cycles

    medium

    The market environment is characterized by a subdued macro backdrop and elongated decision cycles, especially for larger deals, which may persist for another year or so.

    Management acknowledged

  • Volume ramp-downs in large accounts

    medium

    Volume ramp-downs in a couple of large accounts moderated overall revenue growth, driven by vendor diversification and in-house transitions, though these are account-specific.

    Management acknowledged

  • Technology innovation leading to decision hesitation

    low

    The rapid pace of technology innovation is causing clients to hesitate on decisions as they evaluate multiple options, contributing to elongated decision cycles.

    Management acknowledged

Q&A highlights

7 direct
Measurable productivity and margin improvements from AI-infused delivery. Direct
In delivery locations that are onshore such as the US, Canada, and the UK, particularly in the US and Canada, we have seen margin improvements in the range of 15% to 20%. For offshore delivery, the margin improvement is currently around 10%.

Quantifies the direct financial benefits of the company's strategic AI investments and their impact on margins across different delivery models.

Asked by Prisha Shah

Client response to outcome-based pricing for Interaction Intelligence and its commercialization model. Partial
We are seeing good interest. There is a lot of discussion around outcome-based pricing, but when it comes to the procurement stage, not every client is ready to adopt it immediately. For example, with Interaction Intelligence, pricing is currently linked to transaction volumes—in this case, the number of call minutes processed through the platform. We are seeing traction, but it is still at an early stage.

Clarifies the current commercialization approach for AI solutions and indicates that while there is interest, broader adoption of outcome-based pricing is still in early stages.

Asked by Prisha Shah

Adoption of AMLens in the BFSI segment and its potential as a SaaS-style offering. Direct
We are not positioning this as a pure SaaS offering. Instead, we see it as a service-led model—essentially software combined with process, or 'process-as-a-service'—where the platform is bundled with anti-money laundering investigators to deliver an end-to-end outcome for the client. We have already received industry recognition for the solution and have a few clients live on the platform, where we are seeing strong value realization.

Defines the strategic positioning and go-to-market model for AMLens, emphasizing a service-led approach rather than pure SaaS, and confirms early client adoption and value realization.

Asked by Prisha Shah

Impact of 21 new logos in Digital Operations and Technology Services on FY27 growth aspirations. Direct
Typically, both Technology Services and Digital Operations engagements begin as relatively small projects, where the initial focus is on establishing trust and demonstrating proof of value for the client. Once that is achieved, these relationships tend to scale meaningfully... That gives us confidence that the strong logo additions this quarter will support our growth initiatives in the coming fiscal periods.

Provides insight into the long-term revenue potential of new client acquisitions, highlighting the typical scaling pattern and its contribution to future growth.

Asked by Shruti Sharma

Evolution of the Digital and Media services revenue mix, currently at 45% of operating revenue. Direct
Today, Media and Digital together contribute about 45% of our revenue. Based on the traction we are seeing from the new logos and the pipeline, we believe this mix can progressively improve, with Digital driving an incremental 5% to 10% shift over time.

Indicates the company's strategic focus on increasing the contribution of higher-growth digital segments to its overall revenue mix.

Asked by Shruti Sharma

Diversification of the client base, particularly with strong traction in the Canada public sector and education. Direct
Yes, the client base is structurally diversifying. Historically, our public sector exposure was largely concentrated in the UK. We are now adding meaningful public sector clients in Canada, and as we continue to demonstrate value there, we are seeing further diversification of the portfolio. In the past, we had higher customer concentration... With the addition of new logos, that concentration risk is steadily reducing.

Addresses concerns about client concentration and highlights successful geographic and sector expansion efforts, particularly in the public sector.

Asked by Shruti Sharma

Mission Bharat's potential to become a meaningful rural growth engine. Direct
We believe the '100 cities, 100 towns' plan has the potential to scale well beyond the initial 100 locations and become a structural growth driver for us... So overall, you are absolutely right—this is expected to become a key growth engine for us going forward.

Confirms the strategic importance and long-term growth potential of the Mission Bharat initiative in expanding connectivity to underserved rural markets.

Asked by Hina Parekh

Early indicators of operating leverage and productivity gains as volumes ramp up. Direct
What we are seeing particularly in the contact center and CX environment is a meaningful reduction in the time it takes to ramp up operations. From hiring to training to achieving full productivity, the cycle time has reduced by roughly 30% to 40%. That directly translates into margin improvement.

Provides concrete evidence of efficiency improvements and their direct positive impact on margins through reduced operational cycle times.

Asked by Harshal Patil

3 min read 6 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Hinduja Global Solutions reported a total income of Rs. 1,192.2 crores and operating revenue of Rs. 1,075.4 crores for Q3 FY26. Operating revenue saw a marginal increase of 1.1% year-on-year but a sequential decline of 1.4%. EBITDA stood at Rs. 133.7 crores, resulting in an EBITDA margin of 11.2%, which was down approximately 170 basis points sequentially and 780 basis points year-on-year. The company recorded a PBT loss of Rs. 41 crores, compared to a profit in previous periods, and a total PAT of Rs. 34.4 crores, including Rs. 90.5 crores from discontinued operations.

Transformation & AI Strategy Driving Efficiency

HGS is actively undergoing a transformation phase, prioritizing disciplined execution, profitability, and aggressive investment in AI capabilities. The company's HGS Agent X framework, comprising 15 modules and 21 AI assistants, now supports 4.5 million minutes of voice interactions and 3 million minutes of digital interactions. This AI integration has led to significant margin improvements: 15-20% in onshore delivery locations (US, Canada, UK) and approximately 10% in offshore delivery. Solutions like AMLens have demonstrated a 75% reduction in case analysis time and 60% fewer false positives, showcasing tangible benefits.

Digital Media Business & Mission Bharat Expansion

The Digital Media business, encompassing CelerityX and NXTDIGITAL, continues to be a key growth area. CelerityX secured five new prestigious logos in Q3, and the broadband vertical is expanding rapidly. Under the Mission Bharat initiative, HGS has connected 50 new Tier-3 towns and added approximately 25,000 subscribers in Q3, contributing to its goal of 100 new towns by the next financial year. This expansion is driving a shift in customer mix towards higher-bandwidth plans, with the 101-200 Mbps segment increasing from 6% to 9%.

Client and Geographic Diversification Efforts

In Q3, HGS added 21 new logos in Digital Operations and Technology Services, which are expected to support growth in the next fiscal year as they scale. The company is actively diversifying its client base, with public sector exposure expanding into Canada, reducing historical concentration in the UK. This strategic focus on new logos and market expansion is aimed at mitigating client concentration risk, with the top client now accounting for 6.4% of revenue and the top ten for 28.4%.

Market Environment and Outlook

Management acknowledged a subdued macro backdrop and elongated decision cycles, particularly for larger deals, which contributed to muted revenue growth and sequential margin moderation in Q3. These dynamics, along with volume ramp-downs in some large accounts, are expected to persist in the near term, potentially for another year or so. Despite these challenges, HGS maintains a robust sales pipeline, especially in Digital Operations and Technology Services, and anticipates medium-term margin accretion as its AI investments transition from investment to commercialization.

Strong Capital Structure and Liquidity

Hinduja Global Solutions maintains a strong balance sheet with a net worth of Rs. 8,206.5 crores. The company reported a gross treasury balance of Rs. 6,429 crores against a debt of Rs. 1,202 crores, resulting in a healthy net treasury balance of Rs. 5,227 crores. This strong liquidity position, coupled with disciplined capital allocation, enables the company to fund its growth initiatives through internal accruals without significant external financing.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Services earnings calls