Pelatro delivered a strong Q3 FY26, with significant year-on-year growth in both revenue and EBITDA, and expanded margins for the nine-month period. Management emphasized the company's strategic positioning in AI as a revenue driver and a disciplined approach to M&A focused on ROCE. Discussions also covered the sustainability of the effective tax rate and long-term growth strategy.
vs Q4 FY26
| Metric | Value | YoY |
|---|---|---|
| Revenue (Q3 FY26) | ₹38.38 Cr | +69.0% YoY |
| EBITDA (Q3 FY26) | ₹8.57 Cr | +119.0% YoY |
| PAT (excl. exceptional, Q3 FY26) | ₹5 Cr | — |
| PAT Margin (excl. exceptional, Q3 FY26) | 13.1% | — |
| Revenue (9M FY26) | ₹99.12 Cr | +62.0% YoY |
| EBITDA (9M FY26) | ₹22.38 Cr | +73.0% YoY |
| Metric | Latest | Trend |
|---|---|---|
| Revenue(crores) | 138.23 | |
| EBITDA(crores) | 31.5 | |
| EBITDA Margin | 22.8% | |
| PAT(crores) | 18.1 | |
| PAT Margin | 13.51% | |
| EPS(Rs) | 17 |
| Category | Headline | |
|---|---|---|
M&A | Estel software business acquisition · integrated |
| Category | Target | Priority |
|---|---|---|
| Margin | EBITDA Margin→26-30% | High |
| Tax | Effective Tax Rate→9-10% | High |
| # | Metric | |
|---|---|---|
| 01 | EBITDA Margin Progression | |
| 02 | Launch of new AI module/platform | |
| 03 | Effective Tax Rate for FY26 |
| Severity | Risk |
|---|---|
medium | Potential threat from AI to SaaS business model Analyst questioned if AI could be a threat to SaaS companies and squeeze margins; management views AI as a revenue growth opportunity for Pelatro, not a cost reduction play. Analyst |
low | Variability and sustainability of effective tax rate Analyst inquired about the low tax rate; management explained it's due to carry-forward losses in a Singapore subsidiary and expects 9-10% for FY26, with some variability based on entity contribution. Analyst |
medium | Risk of costly acquisitions and their impact on financial health Analyst referenced past acquisition issues; management emphasized a disciplined M&A approach focused on synergy, telecom space, and ROCE to avoid past mistakes. Analyst |
low | Succession planning for key management Analyst asked about succession planning; management clarified that the CEO's sons are shareholders but not currently active in the business, with proper planning to occur in the future. Analyst |
Pelatro reported a strong Q3 FY26, with revenue growing 69% year-on-year to INR38.38 crores. This robust top-line growth translated into significant profitability improvements, as EBITDA surged by 119% year-on-year to INR8.57 crores. The company also achieved a PAT of INR5 crores, excluding exceptional item📎s, representing a margin of 13.1% for the quarter.
For the nine-month period ended December 31, 2025, Pelatro's revenue increased by 62% year-on-year to INR99.12 crores. EBITDA for the same period grew 73% year-on-year to INR22.38 crores, with the EBITDA margin expanding to 22.6% from 21.13% in the previous year. Management highlighted that the company has already surpassed its full-year FY25 revenue and PAT figures within these nine months, demonstrating strong momentum.
Pelatro has expanded its reach to 46 telecom networks across 35 countries, collectively managing 1.5 billion subscribers on its platform. The company's revenue model is characterized by a healthy mix of recurring (57% for 9M FY26) and re-occurring (20% for 9M FY26) revenues, totaling 77%. A significant portion, 65-66%, of its customers now utilize managed services, contributing to higher and more predictable revenue streams.
Management views AI as a significant opportunity, positioning it as a revenue growth driver rather than a cost reduction tool. The company is integrating extensive AI capabilities into its products and plans to launch a new, strong AI module or platform in the first week of March at the Mobile World Congress in Barcelona. This strategic focus aims to enhance customer engagement and provide advanced solutions for Telco clients.
Pelatro's acquisition strategy, following the Estel software business acquisition 6-7 months prior, is disciplined and focused on synergy, the telecom space, and valuation aligned with ROCE. Management explicitly stated a commitment to not sacrifice ROCE during acquisitions, drawing lessons from past experiences. This approach ensures that future M&A activities contribute positively to the company's financial health and growth.
The company is targeting an EBITDA margin of 26% to 30% within the next couple of years, driven by non-linearity in the business as more contracts and customers lead to higher revenue without a proportional increase in costs. For the full fiscal year 2026, the effective tax rate is expected to be around 9% to 10%, influenced by carry-forward losses in its Singapore subsidiary.