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    IZMO Q4 FY26 earnings call

    IZMO
    Information Technology·2 Jun 2026
    Management Summary

    IZMO delivered a strong Q4 FY26, achieving its highest-ever quarterly revenue of INR109.16 crores, driven by significant contributions from the Izmomicro division and growth in automotive solutions. The company's semiconductor packaging arm, Izmomicro, secured a healthy order book and pipeline, with plans for substantial capacity expansion. While Q4 margins were impacted by one-time project expenses, management anticipates margin accretion in FY27, targeting 20-25% blended EBITDA, as Izmomicro scales up and AI-driven cost optimizations take effect.

    Highlights

    5

    • Q4 FY26 Consolidated Revenue reached INR109.16 crores, marking an 82.5% year-on-year increase and 84.7% quarter-on-quarter increase, the highest quarterly revenue in company history.

    • Q4 FY26 Net Profit came in at INR17.3 crores, representing a substantial year-on-year improvement.

    • Izmomicro achieved a breakthrough in silicon photonics packaging and secured an order book of INR60 crores with an opportunity visibility of over INR100 crores in the next 12 to 18 months.

    • FY26 consolidated revenue grew 26.8% year-on-year to INR284.88 crores, driven by client additions across all divisions and Izmomicro's contribution.

    • The company maintained a class-leading gross revenue retention rate of over 93%.

    Concerns

    3

    • Other expenses jumped to INR69 crores in Q4 FY26 due to a special project, impacting margins, though management expects this to come down next quarter.

    • Izmomicro's Q4 loss was not disclosed, with management stating they could not provide the number offhand.

    • FrogData's revenue was flat for the past year, although management noted a resurgence in Q4 and a strong order pipeline going forward.

    Key financials

    Metrics

    6

    Periods

    3

    Headline

    3
    • Consolidated Revenue
      ₹109.16 Cr
      YoY+82.5%QoQ+84.7%
    • Consolidated Net Profit
      ₹17.3 Cr
    • Gross Revenue Retention Rate
      93%

    Q4 FY26

    1
    • Other Expense
      ₹69 Cr

    FY26

    2
    • Consolidated Revenue
      ₹284.88 Cr
      YoY+26.8%
    • Consolidated Net Profit
      ₹47.56 Cr

    Segment breakdown

    Izmomicro
    ₹18 Cr FY26 Revenue₹9.2 Cr Q4 FY26 Revenue
    List

    Order Book

    high confidence

    Total Value

    ₹ 40 crores

    as of 2026-03-31

    quantified

    Execution

    Current order book will take 9 months to execute.

    Pipeline

    deal pipeline tcv

    Opportunity visibility for Izmomicro

    "Izmomicro's order pipeline from defense, space, telecom and AI hyperscaler customers is healthy and we foresee no slowdown in demand."

    Source:
    Prepared remarks

    Capital allocation

    1
    medium confidence
    CategoryHeadline
    Capex

    ₹125 crores

    Guidance & targets

    8
    CategoryTargetPriority
    Revenue
    Izmomicro Revenue
    INR45-50 crores
    		High
    Revenue
    Izmomicro Revenue
    INR1,200-1,500 crores
    		Medium
    Profitability
    Blended EBITDA Margin
    20-25%
    		High
    Profitability
    Blended EBITDA Margin
    30% plus
    		High
    Profitability
    Izmomicro EBITDA Margin (post-expansion)
    35% plus
    		High
    Growth
    Overall Growth
    20-25%
    		Medium
    Capacity
    Izmomicro New Facility Revenue Flow
    Q3 FY27/FY28
    		High
    Capacity
    Izmomicro Capacity Utilization (post-expansion)
    20% initially, then 50-60%, then 80-90%
    		High

    What to watch in Q1 FY27

    5

    Izmomicro Capex Funding Finalization

    next 30 to 45 days
    CurrentIn process, looking at equity-cum-debt
    TargetClear picture on funding route (equity/debt) and amount

    Why it matters

    Securing funding is critical for Izmomicro's planned capacity expansion and future revenue growth.

    I think in the next 30 to 45 days, we'll have a clear picture on which is the route we'll take and how much of equity, how much of debt. We'll be clear, we'll announce it to the shareholders once we are clear about it.

    Risks & concerns

    4
    RiskSeverity

    Competition in Silicon Photonics

    While global competition exists from Korean, American, and Taiwanese companies, management states there is no competition in India for their specific advanced packaging (stack die, flip-chip) capabilities. They aim to complement, not compete with, larger players. — Analyst downplayed

    medium

    Scaling up Izmomicro without large funding

    Analyst questioned the ability to scale Izmomicro given the high funding requirements in the segment. Management clarified they need INR100-150 crores for packaging capability expansion, not billions, and are in the process of raising equity-cum-debt. — Analyst acknowledged

    medium

    Complexity and difficulty in scaling silicon photonics

    Management repeatedly emphasized the high complexity of silicon photonics packaging, stating it's 'not so easy to scale up either' and that projects can take 3 months to 2 years depending on complexity. — Management acknowledged

    medium

    Impact of one-time expenses on Q4 margins

    A jump in other expenses to INR69 crores in Q4 was due to a special project with pass-through margins and marketing costs. Management expects these expenses to come down next quarter, indicating a temporary impact. — Analyst acknowledged

    low

    Q&A highlights

    7

    “No, it will come down because we have done a special project for a group of clients. That's why the revenue also shot up and a lot of it was passed through revenue. So we made a margin on that, but a lot of it was expenses given to for marketing and all that. So you'll see it coming down next quarter.”

    Analyst questioned the significant decline in margins due to a jump in other expenses; management attributed it to a one-time project and expects it to normalize, indicating a temporary impact.

    asked by Raman Kerti

    2 min read6 chapters

    Detailed Narrative

    01

    Q4 FY26 and Full Year FY26 Financial Performance

    IZMO reported its highest-ever quarterly revenue in Q4 FY26, reaching INR109.16 crores, an impressive 82.5% year-on-year and 84.7% quarter-on-quarter increase. The net profit for Q4 stood at INR17.3 crores, indicating substantial improvement. For the full financial year FY26, consolidated revenue grew 26.8% to INR284.88 crores from INR224.61 crores in FY25. Full-year net profit was INR47.56 crores, broadly in line with the prior year, reflecting investment in Izmomicro and operating cost step-ups.

    02

    Izmomicro: Breakthroughs and Order Book

    The Izmomicro division was highlighted as the 'standout story' of FY26, achieving a breakthrough in silicon photonics packaging in August 2025 with a 32-channel high-density platform. This capability positions IZMO as one of few global companies in this space, enabling the design and manufacture of optical transceiver components for AI data centers. Izmomicro currently holds an order book of INR40 crores, executable in 9 months, with a pipeline visibility of over INR100 crores for the next 12-18 months. The division's revenue for FY26 was INR18-19 crores, with Q4 contributing INR9.2 crores.

    03

    Automotive Solutions Segment Performance

    The automotive solutions business, comprising izmostock, izmocars, and FrogData, demonstrated stable and growing performance. Izmostock, the automotive imagery platform, saw strong traction with its redesigned portal and reinforced market leadership. Izmocars deepened OEM relationships in Europe, notably completing the Stellantis rollout, and sustained strong organic client additions in the U.S. FrogData had an 'outstanding year,' with its decision intelligence tools growing rapidly, and secured a new partnership with Ford to offer solutions through FordDirect's The Shop.

    04

    AI Strategy and Cost Optimization

    IZMO has adopted an 'AI first strategy,' launching an AI factory and completing full AI-based software development within the company. It operates its own LLM infrastructure, designed for its products, to integrate AI into its core software. This AI-driven approach is expected to lead to cost efficiencies and faster development times, contributing to margin benefits and profitability improvement in FY27.

    05

    Expansion Plans and Capital Allocation

    The company plans a capital expenditure of INR150 crores for FY27, with INR125 crores allocated for capex and INR25 crores for working capital, primarily for Izmomicro's expansion. This expansion aims to increase Izmomicro's addressable top-line capacity from INR150 crores to INR1,200 crores. The funding for this investment is currently in process, with management exploring an equity-cum-debt mix and expecting a clear picture within 30-45 days. The new facility is expected to be implemented by mid-next year, with revenue flowing in from Q3 FY27/FY28.

    06

    Outlook and Margin Guidance

    IZMO enters FY27 with strong momentum, expecting overall growth of 20-25%. Management guided for a blended EBITDA margin of 20-25% for FY27, improving to 30% plus in FY28. The primary driver for margin accretion is the scaling of the high-margin Izmomicro business, where gross margins on packaging are 50-60% and silicon photonics are even higher. Post-expansion, Izmomicro's EBITDA margins are expected to be 35% plus.

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