R. S. Software (India) Limited — Q2 FY26 earnings call

Call held 21 Nov 2025

Management summary

RSSOFTWARE reported that its Q2 FY26 performance was impacted by project delays, leading to missed revenue projections and a loss of 6 crores last quarter. Despite this, management expressed strong confidence in significant performance improvement for FY27 and FY28, driven by strategic investments in products, AI, and expanded sales efforts in key geographies. The company highlighted its 'profit positive' and 'cash flow positive' status over the last 3.5 years and its role in UPI integration for 10 countries, but acknowledged that achieving a consistent product revenue stream will take more time.

Highlights

  • Management stated: "We are profit positive, cash flow positive in spite of the fact that we have invested significantly into into enhancing our products."

  • Management expressed confidence: "We feel confident that fiscal 27, fiscal 28 are going to be significantly ahead of fiscal 26 and we will be in a good position for our cash."

  • Company confirmed: "integration of UPI with the 10 countries you're referring to with their real time payment rail. Has all been done by RS Software, so we are gaining revenue from the launch by NPCI of UPI integrated cross-border transactions."

  • Management reported: "Our attrition rates as I believe are actually well below the industry level industry as per the last comp data."

  • Company is actively engaged: "We continue to be engaged in both these markets [Payments Canada and Middle East] and in fact we have increased our sales and marketing effort both through our channel partners and directly."

Concerns

  • Management acknowledged: "this fiscal performance has not been this good."

  • Performance impacted by: "some of our projects that have got delayed in closing... causing. The revenue projections not to be met."

  • Analyst noted: "last quarter's loss was 6 crores."

  • Analyst raised concern: "in another five quarters the cash will evaporate" if current cash burn continues.

  • Management stated: "consistency is not there as yet. It'll take us some more time." for consistent product revenue stream.

Key financials

  1. Loss ₹6 Cr
  2. Employee Cost ₹7.5 Cr
  3. Revenue ₹6 Cr

What they filed

Q1 FY27: revenue down 24.3%, net profit down 107.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue17 13 9 8 6 −65%5 −58%6 −31%6 −24%
EBITDA6 3 -2 -3 -5 −183%-6 −329%-9 −427%-4 −73%
Net profit5 2 -2 -4 -6 −220%-8 −502%-11 −325%-7 −107%
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.

Order book

medium confidence

Pipeline

deal pipeline tcv

At least a couple of bids for cross-border products and Payments Canada is an active pipeline prospect.

Management noted that project delays impacted current fiscal performance, with some projects potentially opening in Q4 FY26 or moving to the next fiscal.

Source: Q&A

Capital allocation

medium confidence
  • Liquidity Cash ₹30 Cr Analyst estimated cash on balance sheet near 30 crores. Management stated they are cash and profit positive over 3.5 years and are very mindful of cash availability.
    if you look at the cash, what you have on your balance sheet, I think it might be near to 30 crores.

Guidance & targets

Performance

  • Overall Performance Performance · next three fiscals · High confidence significant improved performance
    our next three fiscals are going to be a significant improved performance on where we are now

    — Raj Jain

  • Fiscal Performance Performance · fiscal 27, fiscal 28 · High confidence significantly ahead of fiscal 26
    We feel confident that fiscal 27, fiscal 28 are going to be significantly ahead of fiscal 26

    — Raj Jain

Cash Position

  • Cash Position Cash Position · fiscal 27, fiscal 28 · High confidence in a good position for our cash
    we will be in a good position for our cash.

    — Raj Jain

Investor Returns

  • Investor Satisfaction Investor Returns · next three to five years · High confidence happy investors
    over the next three to five years, you'll be happy investors if you stay with us

    — Raj Jain

What to watch in Q3 FY26

Project Closures & Revenue Recognition

Q4 FY26 / Next Fiscal (FY27)
Current Delayed, impacting current fiscal.
Target Some projects opening in Q4 FY26 or moving to next fiscal.

Why it matters

Direct impact on current and next fiscal's revenue and profitability.

It might some of them might open in the last quarter of this fiscal, otherwise they move in next fiscal.

Risks & concerns

  • Project Delays & Missed Revenue Projections

    high

    Some large implementation projects have been delayed, causing current fiscal performance to be 'not good' and revenue projections not to be met.

    Management acknowledged

  • Cash Burn & Liquidity

    high

    An analyst projected that cash could 'evaporate in another five quarters' if the current burn rate continues, given a last quarter loss of 6 crores and cash near 30 crores.

    Analyst acknowledged

  • Inconsistent Revenue Stream from Products

    medium

    Management stated that achieving a 'stable, consistent revenue stream' from products will 'take us a while' due to unpredictable long sales cycles.

    Management acknowledged

Q&A highlights

1 direct, 2 evasive
Director's Contribution and Remuneration Evasive
this is not the forum and it's not even appropriate to discuss any one of our directors.

Analyst challenged management's refusal to discuss the role and compensation of an additional director, highlighting a transparency concern for shareholders.

Asked by Aditya Aggarwal

Payments Canada Revenue Recognition Partial
Payments Canada is a prospect for us. When we continue to have a sales activity there, we are not executing anything for Payments Canada.

Clarified that previous expectations of revenue recognition from Payments Canada were a misunderstanding, indicating no current revenue from this prospect.

Asked by Madan

Cash Burn and Fundraising Plans Evasive
That is always on the agenda for any company. We do not have any plans as of today.

Analyst raised a critical concern about cash burn and potential need for fundraising, which management acknowledged as a general possibility but stated no immediate plans, without directly addressing the cash burn projection.

Asked by Abhijit Mahajan

Business Trajectory and Projections Partial
we're not going to give make projections yet because we need to get to a stable, consistent revenue stream before we start making projections.

Management declined to provide specific financial projections for the next 2-3 years, citing the need for a stable revenue stream first, which could be a concern for investors seeking forward visibility.

Asked by HO GWSSB

Subdued Revenue vs. UPI Growth Direct
product companies, they take time before their revenue stability starts to emerge as consistent revenue stream. You said that in every con call and I'm I'm repeating that even now that for us to get to consistent product revenue stream, it is going to take us a while.

Analyst questioned the disconnect between UPI's growth and the company's subdued revenue, to which management reiterated the long gestation period for product companies to achieve consistent revenue.

Asked by HO GWSSB

2 min read 6 chapters

Detailed narrative

Q2 FY26 Performance and Project Delays

RSSOFTWARE's fiscal performance for Q2 FY26 was reported as 'not good,' primarily due to delays in closing several large implementation projects at a country level. These delays led to missed revenue projections for the current fiscal year. Management indicated that some of these delayed projects might open in the last quarter of this fiscal, while others are expected to move into the next fiscal year.

Strategic Pivot to Products and Long-Term Outlook

The company reiterated its conscious strategic pivot from services to products, initiated in 2015, driven by the advent of digital payments. Management emphasized that product companies typically require 6 to 8 years to demonstrate real and consistent revenue streams. Despite the current challenges, the company remains 'profit positive' and 'cash flow positive' over the last 3.5 years, having invested 'rupees 300 billion' in its products.

Payments Modernization and UPI Integration

RSSOFTWARE is actively involved in payments modernization, having completed the integration of UPI with 10 countries' real-time payment rails, generating revenue for the past three years. The company is also working on cross-border product technology in its Payments Innovation Lab and has 'a couple of bids' for new cross-border products. Payments Canada and Interac are identified as 'active pipeline prospects,' with a full-time sales representative recently appointed in Canada.

AI Adoption and Talent Management

The company has been involved with AI for the past eight years, leveraging its historical work with data and analytics. Its product, RS Intelli Edge, incorporates deep machine learning and AI. Management stated that attrition rates are 'well below the industry level,' and the newly appointed Chief Operating Officer, Samik Roy, is focused on attracting and retaining talent.

FY27 and FY28 Growth Initiatives

Management expressed strong confidence that fiscal 2027 and 2028 will be 'significantly ahead of fiscal 2026,' with the company in a 'good position for our cash.' Three key initiatives underpin this outlook: strengthening the management pillar, expanding sales coverage in North America through new recruitments, and leveraging channel partners in Asia and the Middle East where momentum is building.

Cash Position and Analyst Concerns

An analyst highlighted a 'last quarter's loss was 6 crores' and estimated the cash on the balance sheet to be 'near to 30 crores,' raising concerns that cash could 'evaporate in another five quarters' if the current burn continues. Management acknowledged being 'very mindful of our cash' and stated that they have 'added more cash to the company' over the last three years, asserting confidence in their cash position for FY27 and FY28.

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