Concall AI

Saksoft Limited — Q3 FY26 earnings call

Call held 3 Feb 2026

Management summary

Saksoft reported a steady performance for the first 9 months of FY26 with strong year-on-year revenue and EBITDA growth. However, Q3 FY26 saw a sequential revenue decline of 3% due to temporary slowdowns from two large customers, impacting margins. The company remains confident in its long-term vision of achieving US$500 million in revenues by 2030, driven by strategic investments in AI, capability building, and expanding client engagements, particularly in the US market.

Highlights

9M FY26 Operating Revenues of INR 758 crores, up ~18% YoY.
9M FY26 EBITDA of INR 142 crores, up ~29% YoY, with margins at 18.7%.
Q3 FY26 EBITDA of INR 45 crores, up ~19% YoY, with margins at 18.1%.
Secured a multi-year digital transformation engagement in the logistics segment.
Established a joint AI innovation lab with a leading technology distributor in the commerce vertical.

Concerns

Q3 FY26 revenues declined ~3% sequentially due to temporary slowdown from two large customers.
Q3 FY26 EBITDA margins impacted at 18.1% due to revenue softness and continued investments.
Exceptional provision of INR 4.86 crores made in Q3 FY26 for new labor code requirements.
Top 10 clients contribute 58% of total revenue, indicating client concentration.

Key financials

2 periods

Q3 FY26

Revenue
₹250 Cr
YoY +11% QoQ -3%
EBITDA
₹45 Cr
YoY +19%
EBITDA Margin
18.1%
Net Profit
₹29 Cr
YoY +7%

9M

FY26 Operating Revenues
₹758 Cr
YoY +18%
FY26 EBITDA
₹142 Cr
YoY +29%
FY26 EBITDA Margin
18.7%
FY26 Net Profit
₹97 Cr
YoY +24%

What they filed

Q1 FY27: revenue down 2.4%, net profit up 31.6% against the same quarter last year.

₹ Cr · quarterly

Line item	Q2 FY25	Q3 FY25	Q4 FY25	Q1 FY26	Q2 FY26	Q3 FY26	Q4 FY26	Q1 FY27
Revenue	63	109	117	125	128 +103%	121 +11%	118 +1%	122 −2%
Expenses	52	91	96	99	100	100	97	99
EBITDA	10	19	20	27	28 +180%	21 +11%	20 +0%	23 −15%
Margin	17%	17%	17%	21%	22%	18%	17%	19%
Other income	5	7	3	2	14	-3	4	13
Interest	1	2	2	2	2	1	1	1
Depreciation	1	3	3	3	2	2	2	2
Profit before tax	14	21	19	25	38 +171%	15 −29%	21 +11%	33 +32%
Tax rate	18%	21%	28%	23%	25%	24%	24%	23%
Net profit	11	17	14	19	29 +164%	11 −35%	16 +14%	25 +32%
EPS	0.84	1.27	1.03	1.42	2.15	0.86	1.20	1.91

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

9M FY26 Geographical Mix
50% Americas Revenue Share29% Europe Revenue Share21% Asia Pacific & Other Revenue Share
9M FY26 Vertical Mix
31% BFS Revenue Share47% Emerging Verticals Revenue Share14% Logistics Revenue Share8% Commerce Revenue Share
9M FY26 Onsite/Offshore Mix
44% Onsite Revenue Mix56% Offshore Revenue Mix
Employee Metrics
2,673 Total Employee Count2,454 Technical Employees83% Utilization (excl. trainees)

Order book

medium confidence

Pipeline

deal pipeline tcv

Increased participation in large deals and RFPs, including those around AI and vendor consolidation.

Cancellations & deferrals

deferred: Temporary slowdown in spending from two large customers due to timing and reprioritization of budgets.

Management noted increased participation in larger deals and RFPs, with an improving win ratio, despite a temporary slowdown from two large customers.

Source: Prepared remarks

Guidance & targets

Revenue

Revenues Revenue · 2030 · Medium confidence US$ 500 million

We remain confident of progressing steadily towards our vision 2030 goal of achieving US$ 500 million in revenues. ... it's aspirational, can we get to 500 million? Now let's say we can't get to 500 million. At least we will hit 400 million. Which is 3.5x-4x where we are today, which is not bad. I am not for a minute saying that we will not aspire to hit 500 million. All the effort will be to hit 500 million.

— Aditya Krishna

Revenue Growth

Organic Revenue Growth Revenue Growth · year-on-year · High confidence 15% to 20%

we are growing 15% to 20% year-on-year organically.

— Aditya Krishna

Margin

EBITDA Margin Margin · mid to long term · Medium confidence around 18% or so

Previously 19%-20% → around 18% or so

The steady state would be around 18% or so, considering the investments which we are doing both in a number of areas in terms of capability, feet on the ground and a lot of other avenues. So, I think 18% would be a more realistic margin.

— Niraj Kumar

Headcount

Total Headcount Headcount · if we want to go 4X revenue · Medium confidence 12,000

if we want to go 4X revenue, we will have to take our headcount to 12,000.

— Aditya Krishna

Revenue Mix

Vertical Revenue Mix (BFS, Logistics, Emerging, Commerce) Revenue Mix · next 2 years or so · High confidence approximately at the same level as it is today

We would expect it to be approximately at the same level as it is today. Only thing to note is BFSI is not our focus area. It's BFS. There's no "I". So, we are not focused on the insurance sector. ... Yes. Our mix would remain about the same.

— Aditya Krishna

Geographical Focus

Geographical Focus Geographical Focus · coming years · High confidence maximum focus on the US geography

I would put maximum focus on the US geography, huge market, lots of potential, biggest market for the tech industry. So, if I had Rs. 100 to put, I would put Rs. 95 in the US market, just as an example.

— Aditya Krishna

What to watch in Q4 FY26

Recovery of spending from top two clients

next few months

Current Temporary slowdown in Q3 FY26

Target Spending recovering, sequential growth

Why it matters

Directly impacts sequential revenue growth and overall short-term financial performance.

both the clients have started to spend or the spending is recovering. So, it was just a temporary blip and we are very hopeful that over the next few months, this will correct.

Risks & concerns

Temporary slowdown in client spending
medium

Q3 FY26 sequential revenue declined by ~3% due to temporary slowdown in spending from two large customers, driven by timing and budget reprioritization.

Management acknowledged
Margin impact from investments and revenue softness
medium

Q3 FY26 EBITDA margins were impacted at 18.1% due to revenue softness and continued investments in growth initiatives and capability building.

Management acknowledged
Client concentration
medium

Top 10 clients contribute 58% of revenue, which management expects to dilute as the business scales.

Analyst acknowledged
Talent acquisition and cost
medium

Talent is becoming expensive, posing a challenge for a growing company, requiring continuous investment in people and capability.

Management acknowledged
Pricing pressure in large deal wins
low

Won a vendor consolidation RFP by offering a 20% discount on rates, which management views as 'the name of the game' and plans to offset with efficiency over the 3-year contract.

Management acknowledged

Q&A highlights

7 direct

Client dependency and spending recovery outlook Direct

both the clients have started to spend or the spending is recovering. So, it was just a temporary blip and we are very hopeful that over the next few months, this will correct.

Addresses the reason for the sequential revenue decline in Q3 and provides management's expectation for recovery from key clients.

Asked by Jyoti Singh

AI implementation strategy and product-based recurring revenue Direct

We don't build any products. So, there is no license revenue from any products that we build because we don't have products. But where we use Al is to deliver more efficiency to our clients, both existing customers as well as prospects.

Clarifies Saksoft's AI strategy is focused on enhancing service delivery efficiency and client value, rather than developing product-based recurring revenue streams.

Asked by Bharat Gulati

Realism of US$500M revenue target and details of new contracts Direct

it's aspirational, can we get to 500 million? Now let's say we can't get to 500 million. At least we will hit 400 million. Which is 3.5x-4x where we are today, which is not bad. I am not for a minute saying that we will not aspire to hit 500 million. All the effort will be to hit 500 million.

Provides a more nuanced perspective on the ambitious long-term revenue target and offers specific details on the nature and impact of recent significant deal wins.

Asked by Vikas Srivastava

Shift in nature of work and its impact on margins Direct

The texture of our revenue has changed considerably towards outcome in the last, I would say 4-5 years. And our goal is to continue to move in that direction to get to the upper end of the value chain.

Explains the strategic shift from staff augmentation to outcome-based projects, which is a key factor contributing to improved margins and higher value chain positioning.

Asked by Priyam Srivastav

AI's impact on service delivery and potential cannibalization Direct

We are not worried about it for the simple reason that AI is not a nice to have. It's a must-have. Al has to be prevalent in anything that we do for our customers whether it is application development whether it is testing. If we don't use AI and the improvement in the workflows that Al provides, customers will no longer want to deal with us.

Addresses concerns about AI disrupting traditional IT services, with management asserting AI as an essential tool for relevance and efficiency rather than a threat.

Asked by Rohit

Vendor consolidation trend and AI's impact on SaaS companies Direct

yes there is vendor consolidation in most customers who are using multiple suppliers and we see this as a big opportunity because we feel we are right sized, we have the right capabilities and we have the right Al frameworks to drive an efficiency in the process and win these longer term contracts.

Confirms the industry trend of vendor consolidation and outlines Saksoft's strategy to capitalize on this by leveraging its capabilities and AI frameworks to secure larger, longer-term contracts.

Asked by Akshat Rohatgi

Headcount trends and onshore/offshore mix strategy Direct

As of this point Vikas, it will be proportional as revenue grows. So, if revenue grows 4X, headcount will go up 4X... our focus is to increase onsite for two reasons, one revenue vis-à-vis headcount and second, if you are working onsite with a customer, we also have more intelligence on that account because that person can give us more intelligence.

Provides insight into the company's future headcount growth strategy, linking it to revenue targets and emphasizing the strategic importance of increasing onsite presence for higher revenue per employee and deeper client engagement.

Asked by Vikas Srivastava

2 min read 6 chapters

Detailed narrative

Q3 FY26 Performance and Sequential Decline

Saksoft reported Q3 FY26 revenues of INR 250 crores, reflecting an 11% year-on-year growth. However, the quarter experienced a sequential decline of approximately 3% in revenues compared to Q2 FY26. This dip was primarily attributed to a temporary slowdown in spending from two large customers, driven by timing and budget reprioritization rather than project cancellations. Management expressed optimism for recovery in the coming months, noting that both clients have started to increase spending.

Strategic Vision 2030 and Growth Drivers

The company reaffirmed its long-term vision to achieve US$500 million in revenues by 2030, targeting 15-20% organic year-on-year growth. Key strategic drivers include scaling AI-led engineering, data operations, and intelligent operations, alongside expanding managed services and platform-led delivery models. Saksoft also plans to invest in agentic AI and industry accelerators, and aims for increased multi-year engagements and vendor consolidation wins. Management indicated a willingness to consider tuck-in acquisitions of 250-300 crore size to accelerate this growth trajectory.

Operational Progress and Client Engagements

Saksoft achieved notable operational progress across its verticals. In logistics, a multi-year digital transformation engagement was secured with a leading U.S.-based carrier. The commerce vertical saw a partnership to establish a joint AI innovation lab with a technology distributor. Furthermore, the company won a significant vendor consolidation RFP with a US carrier, which led to an increase in team size from 50 to over 100 people, despite a 20% discount on rates, demonstrating its capability in securing larger contracts.

Margin Outlook and Investment Strategy

For the 9 months of FY26, EBITDA margins stood at 18.7%, with Q3 FY26 margins at 18.1%. Management guided for a steady-state EBITDA margin of 'around 18% or so' in the mid to long term, adjusting from a previous range of 19-20%. This outlook factors in continued investments in strengthening front-end sales capabilities, senior leadership, and capability building for the future, which are deemed essential for long-term growth and positioning as an AI-led digital transformation partner.

AI Adoption and Business Transformation

Saksoft views AI as a 'must-have' hygiene factor, essential for delivering more efficient and cost-effective services to clients. The company's AI strategy focuses on improving efficiency in application development and testing, enabling smaller teams (e.g., 30-35 members instead of 50) to achieve the same output. This shift towards outcome-based projects, where clients focus on service level agreements rather than resource numbers, has significantly transformed the company's revenue texture over the past 4-5 years, contributing to higher value realization.

Geographical Focus and Onsite Strategy

The Americas contributed 50% of Saksoft's total revenues for the 9 months FY26, with Europe at 29% and APAC at 21%. Management intends to maintain this vertical mix for the next two years. Strategically, the company plans to place maximum focus on the US geography, recognizing it as the largest market for the tech industry. The onsite revenue mix was 44%, and management aims to increase this proportion to enhance revenue per headcount and gain deeper intelligence from working closely with customers.

This is an AI-generated summary of a publicly available earnings call transcript.

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