Orient Technologies Limited — Q3 FY26 earnings call

Call held 19 Feb 2026

Management summary

Orient Technologies faced a challenging Q3 FY26 with a 4.17% YoY revenue decline to Rs. 198.23 crores and a net loss of Rs. 14.96 crores, primarily due to global semiconductor shortages, supply chain disruptions, and the loss of a large telecom client. Despite these headwinds, the company secured new contracts, including a significant Rs. 60 crore annual managed services deal with Digital India Corporation, and inaugurated a new service delivery center. Management expects margin normalization and recovery in the coming year as new pricing structures are accepted and existing contracts at old prices conclude.

Highlights

  • 9M FY26 revenue grew by 18.10% year-on-year to Rs. 683.60 crores.

  • Secured a three-year managed services contract from Digital India Corporation worth Rs. 15 crores quarterly, contributing Rs. 60 crores annually.

  • Inaugurated a new service delivery center in Navi Mumbai, Turbhe, to enhance 24x7 monitoring, cybersecurity, cloud, and managed services capabilities.

  • Secured multiple new contracts across government, pharma, utilities, and digital commerce, including a Rs. 2.65 crore data center upgrade and a Rs. 2.8 crore SD-WAN contract.

Concerns

  • Q3 FY26 revenue from operations declined 4.17% YoY to Rs. 198.23 crores.

  • Reported a net loss of Rs. 14.96 crores in Q3 FY26.

  • EBITDA for Q3 FY26 was Rs. 3.02 crores.

  • Global semiconductor shortages and supply chain disruptions led to temporary margin pressure and impacted hardware availability.

  • Loss of a large telecom client impacted Q3 revenue and margins.

Key financials

2 periods

Q3 FY26

  • Revenue from Operations
    ₹198.23 Cr
    YoY -4.2%
  • EBITDA
    ₹3.02 Cr
  • Net Loss
    ₹-14.96 Cr

9M FY26

  • Revenue
    ₹683.6 Cr
    YoY +18.1%
  • EBITDA
    ₹42.31 Cr
  • Profit After Tax
    ₹9.24 Cr
  • EPS
    ₹2.02

What they filed

Q1 FY27: revenue down 6.1%, net profit down 55.1% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue223 207 261 213 273 +22%198 −4%181 −30%199 −6%
EBITDA19 16 19 15 21 +10%2 −88%4 −80%13 −17%
Net profit15 13 13 10 14 −6%-15 −218%-6 −148%5 −55%
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

  • Telecommunication
    2.5% Revenue Share
  • BFSI
    27.4% Revenue Share
  • Government and PSUs
    19.2% Revenue Share
  • ITES
    19.2% Revenue Share
  • Mid-market and others
    31.8% Revenue Share

Order book

high confidence

Total value

₹200 Cr

as of 2026-03-31 quantified

The order book for Q4 includes infrastructure deployment projects as well as cloud and managed services contracts, with an expectation for annuity-style managed services share to increase.

Source: Prepared remarks

Capital allocation

medium confidence
  • Debt Net ₹52.5 Cr
    Okay. So, currently our debt is at Rs. 52.50 Crore.

Guidance & targets

Profitability

  • Margin Pressure Profitability · coming year (FY27) · Medium confidence will not be there
    Yes, so I am very hopeful about, you know, this pressure of margin will not be there in the coming year. The reason being, by that time, most of the customers will start accepting the new prices and will get used to it. And my firm contract, which I have signed, which is till the year end, will get over as well.

    — Ajay Sawant

Order Book

  • Q4 Order Book Order Book · Q4 FY26 · High confidence around Rs. 200 crore
    The current order book for Q4 is of around Rs. 200 crore which includes our infrastructure deployment projects as well as cloud and managed services contracts.

    — Ajay Sawant

Revenue

  • Digital India Corporation Contract Annual Revenue Revenue · yearly, minimum three years · High confidence Rs. 60 crores
    So, Mahesh, of course, it is an annuity-based contract, Rs. 15 crores repeated every quarter this is happening, so yearly this may contribute us Rs. 60 crores of revenue. This is ARR, and this contract is there for minimum three years, extended further.

    — Ajay Sawant

Utilization

  • NOC and SOC Utilization Utilization · next couple of years (24 to 36 months) · Medium confidence 100%
    But from a revenue, quantum of revenue perspective, we expect utilization and ramp up over next 24 to 36 months as the enterprise contracts and the managed services migrations complete and the new SOC deals come on board. The ramp up profiles aligns with our typical managed service contract cycle. So, I expect that 100% utilization of that NOC and SOC should happen in the next couple of years.

    — Ajay Sawant

Market Conditions

  • Semiconductor Challenge Duration Market Conditions · FY27 · High confidence throughout 2027
    So, semiconductor challenge will be throughout 2027. Okay, means the entire FY'27, there will be a challenge.

    — Ajay Sawant

Geographic Expansion

  • US Market Expansion Geographic Expansion · current · High confidence no at present
    Absolutely no at present. Because from an infrastructure space, this is not the right time to go anywhere outside India. There is a huge, huge opportunity in India. Okay, and first we need to capitalize here, then go to the developed countries.

    — Ajay Sawant

What to watch in Q4 FY26

Margin Normalization

next year (FY27)
Current Significant pressure in Q3 FY26
Target Pressure easing as new prices are accepted and old contracts expire

Why it matters

Crucial for recovery of profitability after Q3 loss and temporary margin compression.

Yes, so I am very hopeful about, you know, this pressure of margin will not be there in the coming year. The reason being, by that time, most of the customers will start accepting the new prices and will get used to it. And my firm contract, which I have signed, which is till the year end, will get over as well.

Risks & concerns

  • Global semiconductor shortages and supply chain disruptions

    high

    Impacted hardware availability and led to pricing pressures, expected to continue throughout FY27 due to AI demand.

    Management acknowledged

  • Loss of a large telecom client

    high

    Impacted Q3 revenue and margins, resulting in a one-time net loss of Rs. 14.96 crores.

    Management acknowledged

  • Margin pressure from fixed-price contracts

    medium

    Executing contracts at old prices despite OEM price increases, expected to normalize in the coming year.

    Management acknowledged

Q&A highlights

7 direct
Margin pressure drivers and normalization timeline Direct
Okay, so Mahesh, there are two components to this. One of the components, which is because of the supply chain, the rate contract which we have signed with the customers, we have to execute those contracts at the same price, keeping in mind that our long-term association with the customers, though the OEM has increased the prices, we have to execute the contracts at the same price, which we have signed up earlier and this is there till 31st of March. With even Q4, we have that obligation, and we will be executing certain deals which are of that size. Of course, loss of a hyperscale customer, which is there, which is from a telecom segment, we have lost, but that is a momentary one-time loss, which we have incurred in Q3.

Clarified the dual reasons for Q3 margin pressure (supply chain and client loss) and provided a timeline for expected normalization.

Asked by Mahesh Kumar

Margin profile and annuity nature of Digital India Corporation contract Direct
Fantastic. So, Mahesh, of course, it is an annuity-based contract, Rs. 15 crores repeated every quarter this is happening, so yearly this may contribute us Rs. 60 crores of revenue. This is ARR, and this contract is there for minimum three years, extended further. So, this is annuity-based, number one, and the margin currently is fairly good. And it is basically on the hyperscaler, so there is no component dependency on this. Okay, so we will continue to get margins on this from our hyperscaler vendor.

Highlighted the significant, recurring revenue and good margin profile of a key new contract.

Asked by Mahesh Kumar

Order book for next year (FY27) Direct
Okay. So, Shashi Kant, thanks for asking this. The current order book for Q4 is of around Rs. 200 crore which includes our infrastructure deployment projects as well as cloud and managed services contracts. While project revenue remains significant currently, we expect annuity-style managed services share to increase going forward as NOC and SOC revenue will scale.

Provided visibility into the near-term order book and strategic shift towards annuity-style managed services.

Asked by Shashi Kant

Current status and duration of semiconductor shortage Direct
So, semiconductor challenge will be throughout 2027. Okay, means the entire FY'27, there will be a challenge.

Confirmed a prolonged period of semiconductor supply challenges, impacting hardware availability and pricing.

Asked by Shashi Kant

Recovery from the Rs. 14.96 crore loss due to client exit Partial
From the same customer, probably we will not able to recover anything because he has moved lots of barrels from us to directly on the hyperscaler vendor. So, very honestly, let me tell you, this loss, I am not able to recover it from this customer. But we are trying to recover this loss from the hyperscaler itself. But today, I am not able to promise you anything until and unless I have something in return from the hyperscaler vendor. And once we get it, we can be able to vouch for it.

Indicated that the specific loss from the exited client is unlikely to be recovered directly, but efforts are being made with the hyperscaler vendor.

Asked by Vikas Jain

Pricing pressure in the mid-market IT infrastructure space Direct
So, yes, so the pricing has gone up definitely for all the components and that's why all the OEMs have increased the prices. So, that is very common in our industry. As far as our margins are concerned, just to keep a relationship with the customer, somehow, we are trying to get their budgets in accordance with the new price structure, which nobody has probably thought in while budgeting the year. The pressure is definitely there. Margin pressures are definitely there.

Acknowledged ongoing pricing pressure due to increased component costs and the challenge of aligning customer budgets.

Asked by Prem

Impact of AI boom on semiconductor shortages and operations Direct
Okay, so I will tell you the real scenario. What has happened is, there is a big boom coming on and around Al. Everybody wants to do something in Al. Okay, whether it is a generative Al or whether it is an agentic Al, they want to do something in Al. Now, Al will be operated only on the GPU. And that is where Nvidia plays a very important role. There is so much of infrastructure pull on and around this Nvidia has happened. And those guys are taking lots of RAMs, disks, and other components, where the semiconductor industry is facing the challenge. If they consume so much, as you know Al requires a huge infrastructure. And that is where the shortage has come. And that has increased the prices. And this semiconductor industry, you cannot start overnight. You need to have a minimum 8 to 10 months of time to build your own manufacturing setup of these RAMs or discs or anything. So, if they have to ramp up their production, they need to give at least 8 to 10 months of window.

Explained the underlying cause of the prolonged semiconductor shortage (AI-driven demand for GPUs and components) and its impact on prices and supply.

Asked by Krupa Kamdar

Geographic expansion plans, specifically to the US market Direct
Absolutely no at present. Because from an infrastructure space, this is not the right time to go anywhere outside India. There is a huge, huge opportunity in India. Okay, and first we need to capitalize here, then go to the developed countries.

Clarified the company's current focus on the Indian market for infrastructure services before considering international expansion.

Asked by Krupa Kamdar

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance & Headwinds

Orient Technologies reported a challenging Q3 FY26 with revenue from operations declining 4.17% year-on-year to Rs. 198.23 crores, compared to Rs. 206.85 crores in Q3 FY25. The company recorded an EBITDA of Rs. 3.02 crores and a net loss of Rs. 14.96 crores for the quarter. This performance was primarily impacted by global semiconductor shortages, supply chain disruptions affecting hardware availability and pricing, and the loss of a large telecom client, which led to temporary margin pressure.

9M FY26 Financial Overview

For the nine-month period ended FY26, the company demonstrated stronger growth, with revenue increasing by 18.10% year-on-year to Rs. 683.60 crores, up from Rs. 578.85 crores in nine months FY25. EBITDA for 9M FY26 stood at Rs. 42.31 crores, with profit before exceptional items and tax at Rs. 31.90 crores. The profit after tax for the nine-month period was Rs. 9.24 crores, translating to an EPS of Rs. 2.02.

Strategic Deal Wins & Annuity Business Focus

During the quarter, Orient Technologies secured multiple new contracts across government, pharma, utilities, and digital commerce. A key win was a three-year managed services contract from Digital India Corporation, valued at Rs. 15 crores quarterly, contributing Rs. 60 crores annually, reinforcing the company's presence in mission-critical government projects. Other wins included a Rs. 2.65 crore order for data center storage and infrastructure upgrades for a leading pharma client, a similar-sized contract for a power utility, and a Rs. 2.8 crore SD-WAN contract with an additional Rs. 6 crore for full network deployment in quick commerce.

Service Delivery Center & Managed Services Expansion

The company inaugurated a new service delivery center in Navi Mumbai, Turbhe, to enhance its 24x7 monitoring, cybersecurity, cloud, and managed services capabilities. Management expects this center to achieve 100% utilization within the next 24 to 36 months as enterprise contracts and managed services migrations complete. This initiative is part of a broader strategy to increase the share of annuity-style managed services revenue.

Market Segment Contribution (Q3 FY26)

In terms of segment mix for Q3 FY26, BFSI was the largest contributor at 27.39%, followed by mid-market and others (including healthcare, manufacturing, infrastructure, real estate, logistics, and education) at 31.78%. Government and PSUs contributed 19.19%, while ITES accounted for 19.17%. The telecommunication segment represented 2.47% of the revenue mix.

Semiconductor Shortage & AI Impact

Management indicated that the global semiconductor challenge is expected to persist throughout FY27. This shortage is exacerbated by the significant demand for GPUs and related components (RAMs, disks) driven by the AI boom, leading to increased prices. While acknowledging the challenges, the company views AI as a substantial opportunity for growth in infrastructure sales, managed services, and cybersecurity, for which they are actively preparing.

Margin Outlook & Pricing Strategy

Q3 FY26 experienced significant margin pressure due to the necessity of executing existing contracts at previously agreed prices, despite increases from OEMs. Management expressed optimism that this margin pressure will ease in the coming year (FY27) as customers become more accepting of new pricing structures and current fixed-price contracts conclude. The company aims to maintain strong customer relationships while navigating these pricing challenges.

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