Concall AI

Ksolves India Limited — Q3 FY26 earnings call

Call held 20 Jan 2026

Management summary

Ksolves India Limited reported a strong Q3 FY26 with sequential revenue growth of 6.6% and a significant 194 bps expansion in EBITDA margin to 32.4%. The company maintained a healthy balance sheet and declared a third interim dividend. While 9-month FY26 margins saw a decline due to strategic investments, management expects a return to normalized levels, driven by overseas expansion and reduced event spending. The company also announced the approval of a wholly-owned subsidiary in Australia to support regional growth.

Highlights

Reported strong Q-o-Q revenue growth of 6.6% and Y-o-Y growth of 12.2% in Q3 FY26, reaching ₹42.3 crores.
EBITDA margin expanded sequentially by 194 basis points to 32.4% in Q3 FY26, driven by operating leverage and execution efficiency.
Maintained a healthy balance sheet with strong cash generation, holding cash and cash equivalents of ₹13 crores.
Demonstrated commitment to shareholder returns by declaring a third interim dividend of ₹5 per share, totaling ₹11 per share for FY26.
Achieved 'Great Place to Work' certification for January 2026 to January 2027, reflecting strong employee trust and culture.

Concerns

EBITDA margin for the 9-month FY26 period declined to 29.9% from 37.8% in 9-month FY25.
PAT margin for the 9-month FY26 period dropped to 20.6% from 27.3% in the same period.
Margin compression was primarily due to strategic investments in events and marketing, with some initiatives not yielding expected outcomes.

Key financials

2 periods

Q3 FY26

Revenue
₹42.3 Cr
YoY +12.2% QoQ +6.6%
EBITDA Margin
32.4%
PAT
₹9.8 Cr
PAT Margin
23.2%
EPS
₹4.13

9M FY26

Revenue
₹119.6 Cr
YoY +14.9%
EBITDA Margin
29.9%
PAT Margin
20.6%

What they filed

Q1 FY27: revenue up 6.6%, net profit up 28.2% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	35	38	33	38	39 +13%	41 +11%	42 +26%	40 +7%
Expenses	22	24	24	28	27	28	30	28
EBITDA	13	14	9	10	12 −9%	13 −7%	12 +32%	12 +16%
Margin	38%	37%	27%	27%	30%	31%	29%	29%
Other income	0	0	0	0	0	0	0	1
Interest	0	0	0	0	0	0	0	0
Depreciation	1	1	1	1	1	1	1	1
Profit before tax	13	13	8	9	11 −11%	12 −10%	11 +35%	11 +24%
Tax rate	27%	24%	23%	28%	25%	25%	20%	25%
Net profit	9	10	6	7	8 −9%	9 −11%	9 +40%	8 +28%
EPS	3.89	4.29	2.71	2.79	3.53	3.83	3.80	3.58

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

IT Services (9M FY26)
97.4% Revenue Contribution
Product (9M FY26)
2.6% Revenue Contribution
Overseas Customers (9M FY26)
78% Revenue Contribution
Top 5 Clients (9M FY26)
40% Revenue Contribution
Top 10 Clients (9M FY26)
54% Revenue Contribution
Odoo Business
20% Revenue Contribution to Total80% Overseas Revenue Contribution

Order book

medium confidence

Pipeline

deal pipeline tcv

Active pipeline providing good visibility for the next 2 quarters, supported by new deal wins and deeper engagement with existing accounts.

Management noted a healthy pipeline and strong demand visibility, particularly in the U.S., UAE, and Australia, providing good visibility for the next two quarters.

Source: Prepared remarks

Capital allocation

high confidence

Debt Debt disclosed

We still remain a net debt-free company.
Dividend ₹5/share (interim)

During the quarter, Board declared a third interim dividend of INR5 per share, taking the total dividend for the FY26 to INR11 per share.
M&A Wholly owned subsidiary in Australia New entity formation · Approved

To support growth and scale in that region.

Further, considering the growth potential we see in Australia, the Board has approved the initiation of a wholly owned subsidiary to support growth and scale in that region.
Liquidity Cash ₹13 Cr Company maintains a healthy balance sheet and strong cash generation.

Cash generation remains strong, and our balance sheet continues to be healthy with cash and cash equivalents of INR13 crores.

Guidance & targets

Revenue

Year-on-year revenue growth Revenue · FY26 · High confidence 20%

We remain confident of achieving 20% year-on-year revenue growth in FY '26.

— Ratan Srivastava

Profitability

Medium-term EBITDA margin Profitability · medium-term · High confidence around 30%

We continue to maintain a medium-term EBITDA margin outlook of around 30%.

— Ratan Srivastava
PBT margin Profitability · next quarter · Medium confidence 25% to 30%

So, 25% to 30% - we have given the guideline. We would like to do better than this. But yes, between 25% to 30%, we are confident.

— Ratan Srivastava

What to watch in Q4 FY26

DFM product revenue contribution

next quarter

Current Very small, not quantified

Target Quantified revenue contribution or clearer growth trajectory

Why it matters

Management was evasive about DFM's revenue potential, making it a key indicator of product success and future growth.

I was planning that I will avoid this answer. But if we will be successful, if our luck will be with us, it will be big.

Risks & concerns

Margin compression from strategic investments
medium

EBITDA and PAT margins for 9M FY26 declined due to investments in events and marketing, some of which did not yield expected outcomes.

Management acknowledged
Difficulty in approaching decision-makers for DFM sales
medium

The sales cycle for DFM is long and cumbersome due to the need to engage with decision-makers in large organizations.

Management acknowledged
Talent supply and resource availability
medium

Finding good resources (supply) is a challenge, though management believes AI can help solve this in the next few quarters.

Management acknowledged
Competition in Agentic AI solutions for DFM
low

A potential threat exists if competitors develop a better Agentic AI solution for DFM, though Ksolves believes its current offering is unique.

Management acknowledged

Q&A highlights

4 direct, 2 evasive

DFM revenue contribution potential Evasive

I was planning that I will avoid this answer. But if we will be successful, if our luck will be with us, it will be big.

Management was hesitant to quantify the potential revenue from their DFM product, indicating uncertainty or high aspirations without concrete figures.

Asked by Apoorv

Consideration of buyback or promoter buying to instill market confidence Evasive

No plan. I think we have given good numbers for the confidence. If it is not giving the confidence, then what I can do.

Management dismissed the idea of a buyback or promoter share purchase, suggesting they believe current performance should be sufficient for market confidence.

Asked by Ankur Kumar

DFM product risks, open-source strategy, and 5-year roadmap Partial

So let me answer first question. There was one threat only, which I was saying that Agentic AI, it was missing in our project. We have done a very good job in our product. But I was thinking that if anyone will come up with the Agentic AI solution for this problem, then it can be a problem. But today, we have launched the Agentic AI solution for DFM 2.0.

Analyst probed on the long-term strategy and competitive landscape for the DFM product, highlighting the importance of AI integration and market differentiation.

Asked by Kaustav Bubna

Odoo business details: India revenue, customer profile, recurring revenue potential Direct

More than 80% of our revenue is coming from global clients in Odoo. And overall, it's 78%, but more than 80%, 85% is from the Odoo division that comes from overseas markets. ... Yes. 10% to 15% approximately many times with the licenses or next module implementation or support or whatever, 10% to 15%.

Provided specific insights into the geographic and recurring revenue aspects of a key business segment, Odoo.

Asked by Rajesh Jain

DFM product margins and pricing compared to peers Direct

Manish, if I say 7x to 8x, they are costly, and they have very less feature as compared to us, so is this the correct statement? ... Easily. ... They have a very less feature. ... See, as I said that, no one has this solution. If anyone has this solution, just 10% to 15% solution. And second thing that no one has Agentic AI.

Clarified the competitive positioning and pricing advantage of the DFM product, emphasizing its unique features and lack of direct competition with Agentic AI.

Asked by Raghav

FY26 and FY27 growth outlook and margin guidance Partial

Okay. So, for next quarter, we have pipeline. And if anything will not happen with the world, we will beat the target 20%. And for the next year, Umang, you can answer this. ... Sure. For next year, we'll provide the guidance later on, but we are still having a good pipeline and good visibility for next couple of quarters. But yes, definitely, we are having a good growth.

Analyst sought clarity on future growth and margin targets, with management reaffirming FY26 growth and promising FY27 guidance later.

Asked by Ankur Kumar

Cross-selling success and client mining Direct

Okay. Percentage exactly, maybe Umang can tell you, but it is huge. Many times, customers came for Odoo, they have given us opportunity for AI. Many times, customers came for Salesforce, then they have given us opportunity for Big Data. So cross-sell and upsell is very huge.

Highlighted the company's ability to cross-sell and upsell services to existing clients, indicating strong client relationships and potential for wallet share expansion.

Asked by Rajesh Jain

Agentic AI development: in-house vs. outsourced Direct

We have developed in-house, but detailed answer, Manish, you can give them. ... So yes, short answer is it is all in-house developed. But like Ratan said, right, this Agentic Al needs experience on the product itself. So, you need to know about NiFi before you can actually build some AI or then Agentic AI on top of that. So, we have that knowledge.

Confirmed that the Agentic AI solution for DFM 2.0 was developed in-house, leveraging their expertise in NiFi and open-source technologies, which is a key differentiator.

Asked by Kaustav Bubna

3 min read 6 chapters

Detailed narrative

Q3 FY26 Performance and Growth Drivers

Ksolves India Limited reported a robust Q3 FY26 with revenue reaching ₹42.3 crores, marking a 6.6% sequential growth and 12.2% year-on-year growth. This performance was primarily driven by stable execution across core services, ramp-up of previous large deal wins, and continued traction in overseas markets. Notably, a significant portion of this growth stemmed from wallet expansion within existing clients, reflecting strong client confidence and stickiness. The company's strategy of scalable growth, long-term capability building, and disciplined capital allocation is reflected in these results.

Margin Trajectory and Strategic Investments

While Q3 FY26 saw a sequential EBITDA margin expansion of 194 basis points to 32.4%, the 9-month FY26 EBITDA margin declined to 29.9% from 37.8% in 9-month FY25. This compression was attributed to international investments aimed at strengthening leadership, enhancing brand visibility, and building differentiated product capabilities. Management acknowledged that some strategic investments in events and marketing did not yield expected outcomes but stated that similar intensity of spending is not anticipated going forward. They expect margins to normalize around 30% as overseas initiatives contribute more meaningfully.

Product Strategy: DFM and Agentic AI

The company's Data Flow Manager (DFM) product, built on Apache NiFi, is positioned as a game-changer with unique capabilities not found in competitor products like Cloudera. Ksolves has onboarded two customers for DFM, with a third in trial and three more in the NDA process. A significant development is the launch of Agentic AI solution for DFM 2.0, developed in-house, which management believes is a first-ever. While the DFM product is currently a small contributor (2.6% of 9M FY26 revenue), management sees significant long-term potential, despite challenges in reaching decision-makers and a long customer cycle.

Client and Geographic Concentration

For 9-month FY26, approximately 78% of the company's revenues were derived from overseas customers, underscoring the increasing contribution of global markets. The top 5 clients contributed 40% of the 9M FY26 revenue, and the top 10 clients contributed 54%. The Odoo business, which accounts for over 20% of total revenue, sees more than 80% of its revenue from overseas markets. The company serves over 200 active clients on the services side, with 15-20 large enterprise clients contributing over 60% of the total revenue.

Capital Allocation and Shareholder Returns

Ksolves India Limited remains a net debt-free company with a healthy balance sheet and ₹13 crores in cash and cash equivalents. The Board declared a third interim dividend of ₹5 per share in Q3 FY26, bringing the total dividend for FY26 to ₹11 per share. Capital allocation priorities include selective hiring, capability enhancement, product improvement, and strengthening its overseas footprint. The Board also approved the initiation of a wholly-owned subsidiary in Australia to capitalize on growth potential in that region.

Outlook and Future Growth Drivers

Management expressed confidence in achieving 20% year-on-year revenue growth for FY26 and maintaining a medium-term EBITDA margin outlook of around 30%. Demand across core services like ERP, cloud, data engineering, AI, Salesforce, and enterprise transformation programs remains healthy, particularly in the U.S., UAE, and Australia. The company is embedding Agentic AI and GenAI across business workflows to expand deal scope and improve delivery efficiency, rather than pursuing them as standalone initiatives. The impact of the new labor code on gratuity expense, expected to increase, will be recognized in Q4 but is not material to the EBITDA margin guidance.

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

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