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    Saksoft Limited

    SAKSOFT
    Information Technology·11 Nov 2025
    Management Summary

    Saksoft Limited delivered a robust Q2 FY26, showcasing strong revenue and profit growth alongside significant margin expansion. The company is actively investing in AI-led transformation and expanding its product portfolio. While management expects margins to normalize due to increased sales costs, they remain confident in achieving ambitious growth targets through organic expansion and strategic acquisitions, despite client caution and vendor consolidation risks.

    Highlights

    5

    • Robust performance with strong sequential and YoY revenue growth (~20% YoY in Q2, ~22% YoY in H1 FY26).

    • Significant margin expansion with Q2 operating EBITDA margin at 19.58% (up 250 bps YoY) and H1 at ~19% (up 175 bps YoY).

    • Strong net profit growth of ~38% YoY in Q2 and ~32% YoY in H1 FY26.

    • Expansion of intelligent products portfolio with new AI accelerators (SakMod, SakCelerate) and platforms (Conversational AI, Emergency Care Agent).

    • Confidence in future growth driven by increasing wallet share with existing $1M+ clients and active pursuit of strategic acquisitions.

    Concerns

    3

    • EBITDA margin of 19.58% in Q2 is not sustainable; expected to normalize to 17-18% in coming quarters due to sales cost catch-up (new Chief Growth Officer, open sales positions).

    • Client discretionary spending shows caution, leading to projects being broken into smaller parts, which reduces predictability.

    • Risk of vendor consolidation by large clients, potentially leading to loss of accounts, though management is actively mitigating this.

    What Changed1

    vs Q3 FY26

    Risks discussed5 → 4 (-1)
    Key financials

    Metrics

    12

    Periods

    2

    Q2 FY26

    5
    • Revenue
      ₹258 Cr
      YoY+20%
    • Operating EBITDA
      ₹51 Cr
      YoY+38%
    • EBITDA Margin
      19.6%
    • Net Profit
      ₹36 Cr
      YoY+38%
    • PAT Margin
      13.9%

    H1 FY26

    7
    • Revenue
      ₹508 Cr
      YoY+22%
    • Operating EBITDA
      ₹96 Cr
      YoY+34%
    • EBITDA Margin
      19%
    • Net Profit
      ₹68 Cr
      YoY+32%
    • PAT Margin
      13.5%

    Segment breakdown

    Geographic Mix (H1 FY26)
    44% US21% Europe35% Asia Pacific & Other
    On-site/Offshore Mix (H1 FY26)
    44% On-site56% Offshore
    Vertical Mix (H1 FY26)
    31% BFS47% Emerging Verticals14% Logistics8% Commerce
    List

    Order Book

    medium confidence

    Pipeline

    deal pipeline tcv

    Deal pipeline is decent

    "Deal pipeline is decent, with lots of conversations happening with existing customers and prospects, supporting revenue guidance."

    Source:
    Q&A

    Capital allocation

    2
    high confidence
    CategoryHeadline
    M&A

    Deal

    acquisition · announced

    M&A

    Deal

    acquisition · pending regulatory

    Guidance & targets

    6
    CategoryTargetPriority
    Revenue
    Annual Revenue
    INR 1,000 crores to INR 1,100 crores
    		High
    Profitability
    Operating EBITDA Margin
    17% to 18%
    		High
    Profitability
    PAT (Net Profit)
    around INR200 crores
    		Medium
    Growth
    Annual Revenue Growth
    25%, 30% year-on-year
    		Medium
    Tax Rate
    Effective Tax Rate
    24% to 25%
    		High
    Headcount
    Headcount Growth
    25% to 30% CAGR
    		High

    EBITDA Margin Stabilization

    Next quarter (Q3 FY26) and coming quarters
    Current19.58% in Q2 FY26
    Target17-18%

    Why it matters

    To confirm if the margin normalizes as guided due to increased sales costs, impacting overall profitability.

    The EBITDA is higher this quarter because there is some sales cost, which will catch up📎 in the coming quarters⏳... 17% to 18% is more the norm that we should be looking at in the coming quarters⏳ and the coming years.

    How to verify

    key_financials.metrics[label='EBITDA Margin']

    Risks & concerns

    4
    RiskSeverity

    Vendor Consolidation by Clients

    Risk of large clients consolidating their vendor base, potentially leading to loss of accounts. Mitigated by close client relationships, agility, and responsiveness. — Management acknowledged

    medium

    Reduced Predictability from Client Spending Patterns

    Clients are breaking large projects into smaller ones due to caution, which reduces predictability for Saksoft, though the company adapts by focusing on stickiness. — Management acknowledged

    medium

    Global Macro Uncertainty

    Despite ongoing global macro uncertainty, the company has demonstrated robust performance. — Management acknowledged

    medium

    Sales Cost Catch-up Impact on Margins

    The current high EBITDA margin is temporary; sales costs, including a new Chief Growth Officer and open sales positions, will catch up, normalizing margins to 17-18%. — Management acknowledged

    medium

    Q&A highlights

    8

    “The EBITDA is higher this quarter because there is some sales cost, which will catch up in the coming quarters... So while there is an EBITDA of 19%, we must not take that as the EBITDA that we can expect going forward. 17% to 18% is more the norm that we should be looking at in the coming quarters and the coming years.”

    Clarifies that the reported high margin is not sustainable and provides a more realistic future margin expectation, indicating potential near-term compression due to increased sales costs.

    asked by Vikas Srivastav

    2 min read6 chapters

    Detailed Narrative

    01

    Q2 FY26 Performance Overview

    Saksoft Limited reported a robust Q2 FY26 with revenue of INR 258 crores, marking a ~20% year-on-year growth. Operating EBITDA stood at INR 51 crores, growing ~38% year-on-year, with the EBITDA margin improving by 250 basis points to 19.58%. Net profit also saw strong growth of ~38% year-on-year, reaching INR 36 crores. For the first half of FY26, revenue was INR 508 crores (up ~22% YoY) and operating EBITDA was INR 96 crores (up ~34% YoY), with a margin of ~19%.

    02

    AI-led Transformation and Product Portfolio

    The company is actively pursuing AI-led transformation, expanding its intelligent products and platforms portfolio. New accelerators like SakMod (for legacy modernization and system integration) and SakCelerate (unified AIOps and FinOps automation) were introduced. Recent platform releases include Conversational AI and Emergency Care Agent, enhancing customer and employee experiences and intelligent support. Approximately 75% of the AI focus is on productivity improvements, with the remaining 25% on building agents for workflow automation and customer experience.

    03

    Revenue Growth and Geographic/Vertical Mix

    In H1 FY26, the U.S. contributed 44% of total revenues, Europe 21%, and Asia Pacific/other regions 35%. The revenue mix maintained a balance with 44% on-site and 56% offshore. Vertically, BFS accounted for 31%, emerging verticals 47%, logistics 14%, and commerce 8%. The company's growth is primarily driven by increasing wallet share with existing customers, with 95% of growth coming from these accounts.

    04

    Client Strategy and Risk Mitigation

    Saksoft is addressing the risk of vendor consolidation by maintaining close proximity to clients, being agile, and responsive to their needs. They focus on making clients successful by bringing cutting-edge technology and use cases, such as a logistics agent demo for a leading customer. While clients are cautious with large spending, they are breaking projects into smaller, more manageable parts, which Saksoft views as beneficial for stickiness and reducing predictability.

    05

    Growth Outlook and Acquisition Strategy

    The company aims for an annual revenue of INR 1,000-1,100 crores for FY26, targeting 25-30% year-on-year growth for the next 3-4 years to achieve its Vision 2030 goal of $500 million. This growth is expected to be a mix of organic expansion (75-80%) and strategic acquisitions. Saksoft is currently in early discussions with two potential acquisition targets, with a focus on companies generating $10-15 million in top line with good EBITDA.

    06

    Capital Allocation and Shareholder Returns

    Saksoft maintains a consistent dividend policy, aiming for a 10% consolidated profit payout, balancing shareholder returns with capital needs for growth. The company is actively seeking acquisitions to support its long-term growth targets, prioritizing capability-building deals that fit within its financial capacity without significant capital dilution. The effective tax rate is expected to be between 24-25% for FY26.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.