C.E. Info System

C.E. Info System reported a robust sequential recovery in Q4 FY26, with revenue growing by 54.8%, EBITDA by 141%, and PAT by 171% compared to Q3 FY26. EBITDA margin expanded 460 bps year-on-year to 44.6%, and PAT margin expanded 230 bps year-on-year to 31.3%. Management expressed optimism for a renewed upward trajectory in FY26-27, supported by a strong order pipeline exceeding INR1,750 crores and improved visibility, signaling confidence in future growth momentum.

Despite the strong Q4, the full fiscal year FY26 saw muted overall revenue growth of 1-2% compared to a 5-year CAGR of 24%. The C&E vertical experienced a 3% decline for the full year, primarily due to delayed or deferred government contracts, while the A&M segment grew 9%. Management clarified that a Q4 revenue miss of INR20 crores in IoT and other government orders was due to customer-related delays and regulatory hurdles, not execution capability, which impacted the overall FY26 performance.

The company holds approximately INR600 crores in cash and equivalents. In FY26, INR120 crores were allocated for organic growth, focusing on government business, IoT, and intellectual property, along with a small acquisition. Investments in the IoT segment are critical as it operates on an opex model for customers, with hardware treated as a fixed asset depreciated over three years. The government business also requires working capital support due to potential delayed payments, necessitating internal capital allocation.

C.E. Info System maintains its long-term revenue target of INR1,000 crores for FY28, though management noted that the timing of achieving this target remains subject to annual review. The open order book stood at over INR1,750 crores. In FY26, approximately 17-18% (INR270 crores) of the INR1,500 crores open order book at the beginning of the year was converted into revenue, with INR780 crores in new orders booked, of which INR200 crores converted to revenue in FY26.

Accounts Receivable increased from INR133 crores in March '25 to INR176 crores in March '26, raising analyst concerns given the flat revenue. Management acknowledged the increase but stated it is typical for government business, which they carefully select to avoid write-offs, and expressed confidence in the flow of collections. The government business, now operationalized under Mappls DT, achieved over INR100 crores in billing and INR200 crores in open orders, despite inherent payment delays.

The IoT segment's margin for FY26 was 16%, an increase from 14% in the previous year, with Q4 FY26 seeing a strong 33% margin. Management attributed this expansion to operating leverage and a better SaaS mix, rather than inventory gains, despite rising prices for IoT devices. They confirmed that price inflation is accounted for in their overall solution pricing, which combines hardware and SaaS components, ensuring sustained profitability.