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Softtech Engineers Limited — Q4 FY26 earnings call

Call held 2 Jun 2026

Management summary

SoftTech Engineers Limited delivered strong financial results in Q4 and FY26, marked by significant revenue and EBITDA growth, and improved operational efficiency. Key strategic initiatives included securing a mandate from the Airport Authority of India and launching the high-margin Civit TDR platform, contributing to a robust order book and pipeline. While international expansion in Germany shows promise, challenges persist in Oman and the US, and increased provisioning impacted reported profits.

Highlights

  • Revenue from operations for Q4 FY26 increased 50% YoY to INR 46.6 crores, driven by product adoption.

  • EBITDA for Q4 FY26 grew 110% YoY to INR 10 crores, with the EBITDA margin improving to 21% from 15% in Q4 FY25.

  • Full-year FY26 revenue from operations increased 40% to INR 132.9 crores, and EBITDA grew 45% to INR 32.2 crores.

  • The company's total order book is approximately INR 232 crores, supported by a healthy opportunity pipeline of INR 436 crores with over 60% conversion probability.

  • Day Sales Outstanding (DSO) improved significantly from 372 days in FY25 to 260 days in FY26, and the cash collection cycle improved from 270 days to 169 days.

Concerns

  • Provisioning increased from INR 45 lakhs to INR 2.5 crores in FY26, partly due to long-due government receivables and new Labour Act gratuity liability.

  • The Oman order faces delays due to geopolitical factors and higher costing compared to competitors, impacting its finalization.

  • Penetrating the US market with Indian products remains challenging, despite initial traction and successful Proof of Concepts (POCs).

Key financials

2 periods

Q4 FY26

  • Revenue
    ₹46.6 Cr
    YoY +50% QoQ +43%
  • EBITDA
    ₹10 Cr
    YoY +110%
  • EBITDA Margin
    21%
  • PBT
    ₹4.1 Cr
    YoY +720% QoQ +113%
  • PAT
    ₹2.7 Cr
    YoY +2,600% QoQ +133%

FY26

  • Revenue
    ₹132.9 Cr
    YoY +40%
  • EBITDA
    ₹32.2 Cr
    YoY +45%
  • EBITDA Margin
    24%
  • PBT
    ₹8.9 Cr
    YoY +173%
  • PAT
    ₹5.3 Cr
    YoY +300%
  • Day Sales Outstanding
    260 days
  • Cash Collection Cycle
    169 days

What they filed

Q1 FY27: revenue up 23.2%, net profit up 4.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue23 22 31 27 27 +17%32 +51%47 +50%33 +23%
EBITDA6 6 5 7 7 +22%8 +34%10 +111%9 +23%
Net profit0 0 0 1 0 −15%1 +277%3 +3786%1 +5%
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

high confidence

Total value

₹232 Cr

as of 2026-06-02 quantified

Execution

60% of the order book will be booked almost this year in the revenue.

Pipeline

deal pipeline tcv

Opportunity pipeline

The company has a strong order book and a healthy pipeline, with a high conversion rate expected for the pipeline.

Source: Prepared remarks

Capital allocation

medium confidence
  • M&A Unnamed German Company Acquisition · Closed

    To incorporate our 100% subsidiary in Germany and establish business there.

    So we have created a subsidiary, and we have recruited a German sales leader. And we are in the process of recruiting more people there. Of course, the responsibility of creating business will be along with this team only, which is actually a 100% subsidiary of SoftTech Engineers Limited there. But the kind of network, kind of guidance, kind of team support in terms of approaching to the clients, etc., arranging seminars and also a very important aspect of culture of Germany with the language, etc., that all benefits we get through him as our well-wisher an associate partner in terms of establishing business over there. ... Sandy is basically a person there, which was actually holding a company because instead of creating a new company, we just bought that company to incorporate our 100% subsidiary.

Guidance & targets

Revenue

  • Revenue Target Revenue · next three to four years · High confidence INR 300 crores
    Over the next three to four years, I am targeting that we touch a number of about INR 300 crores, as a revenue without really losing the focus onto the profitability

    — Vijay Gupta

  • Revenue Growth Revenue · FY27 · High confidence 25-27%
    I'm not able to give you a check number how much, but INR 130 we have done in FY26, and we are expecting a growth rate of 25-27% in this year.

    — Vijay Gupta

Profitability

  • EBITDA Margin Profitability · long-term · High confidence 25-30%
    which is around the same numbers, like between 25-30% minimum as our EBITDA

    — Vijay Gupta

  • EBITDA Margin Profitability · FY27 · High confidence 28-30%
    So EBITDA on the conservative side, I would say we will always keep maintaining between 28-30%.

    — Vijay Gupta

Revenue Mix

  • CivitPERMIT Revenue Share Revenue Mix · FY27 · High confidence 50%
    So for FY27, the revenue mix would be our flagship product, CivitPERMIT, would be higher side. So this year, CivitPERMIT was 50% of our total revenue, and we expect the same percentage in next FY27 as well.

    — Deepak Bang

  • CivitINFRA Revenue Share Revenue Mix · FY27 · High confidence 25%
    Then the second one would be CivitINFRA, which is 25% this financial year and we hope that it will be at same level or maybe slightly reduced in next financial year.

    — Deepak Bang

  • Other Products/Services Revenue Share Revenue Mix · FY27 · High confidence 15-20%
    And the remaining would be where our rule buddy, our CivitBUILD product, our services like BIM, GIS services. Those will be taken care between 15-20%.

    — Deepak Bang

What to watch in Q1 FY27

Germany Market Penetration

Q3/Q4 FY27 (next 6 months)
Current Prototyping with customers, aligning process mapping
Target Commercial traction and conversion in Germany

Why it matters

Key international expansion market with high potential, crucial for achieving long-term revenue targets.

So we see that another six months would be kind of, order of the period where we can start getting traction on the conversion of this in the commercial sense with authorities there or architectural community there.

Risks & concerns

  • Government receivables and collection delays

    medium

    Trade receivables from government projects are not always encouraging, and collection can take time, sometimes even seven years, leading to increased provisioning.

    Management acknowledged

  • International market competition and geopolitical factors

    medium

    The Oman order is delayed due to war and higher costing compared to competitors, while the US market is generally tough for Indian products.

    Management acknowledged

  • AI competition and replication of solutions

    low

    While competitors might emerge faster in AI, SoftTech's deep penetration, extensive data sets, and real-world enterprise frameworks create significant barriers.

    Analyst downplayed

Q&A highlights

6 direct
Order Book Composition and Pipeline Conversion Direct
our order book is consisting of about INR 200-odd crores. Out of the 60% will be booked almost this year in the revenue. ... about out of INR 400-odd as our pipeline, I will say this is very strong pipeline. ... the probability level of conversions here are very high, more than about 60% is what I can close it with the numbers.

Clarifies the short-term revenue visibility from the order book and the high confidence in converting the sales pipeline.

Asked by Abhi Shah

Germany Market Entry and Potential Partial
Now in next three months, we are aligning to a specific set of, I would say, prototyping customers where we are implementing our products with them for checking it for the complete process mapping. ... So we see that another six months would be kind of, order of the period where we can start getting traction on the conversion of this in the commercial sense with authorities there or architectural community there.

Provides a timeline for commercial traction in the new German market, indicating a cautious but strategic entry.

Asked by Abhi Shah

Oman Order Status and Delays Direct
As far as update on Oman is concerned, this is, of course, taking a significant time and, war has further delayed this, already taken a long time. But we are still standing on L2 level. ... But at the same time, since our costing has gone higher than the other bidder who is from Singapore, the customer is wanting that somehow we negotiate further.

Explains the reasons for the delay in a significant international order, citing external factors (war) and competitive pricing.

Asked by Abhi Shah

US Market Footprint and Breakthrough Partial
On the U.S. front, there are a lot of tractions we're getting into. ... But when we talk about Indian products taken to the U.S. market, it is very, very tough market, I would say. But we have made good dent there. ... And in FY26-27, we see that we will get better revenues in U.S. on that front.

Highlights the challenges of the US market for Indian products but also signals growing traction and future revenue expectations.

Asked by Abhi Shah

Increase in Provisioning Direct
the provisioning is, few is which the policy which we started last year. So TL provisions, there are few provisions which ... in government businesses, the government uphold some 1%, 2% of our invoice values... So that amount will basically recovered in due course. ... there are certain provisions which we had taken against the, gratuity based on the revised Labour Act which came into picture in November 25.

Clarifies the reasons behind the significant increase in provisioning, attributing it to government payment practices and a new gratuity liability, with an expectation of future recovery.

Asked by Abhi Shah

Civit TDR Revenue Model and Market Potential Direct
This is purely a transaction model. This is we get 0.5% of the transactions made on TDR exchange. ... Yes. It is made mandatory from 10th of May. ... This was about INR 8,000 crores.

Details the high-margin revenue model for the TDR platform and quantifies the significant market size in Mumbai, indicating substantial revenue potential.

Asked by Ankur Gulati

EBITDA Margins at INR 300 Cr Revenue Target Direct
So EBITDA on the conservative side, I would say we will always keep maintaining between 28-30%. But it can go up also depending upon the margins which we get on the overseas segment and also the margins which we can get from our TDR initiatives.

Provides clear guidance on expected EBITDA margins as the company scales to its INR 300 crore revenue target, highlighting potential upside from new initiatives.

Asked by Nikhil Chandak

Defensibility of AI-powered Products Direct
the datasets which we have is right now, kind of a gold mine for us. We have been working with the governments for the last 15 years, a lot of permits data sets available. ... But bringing that into the real environment in enterprise frameworks would need a lot of data, which actually is there with us, and we want to leverage that significantly.

Explains the company's competitive advantage in AI, emphasizing its unique and extensive government data as a barrier to entry for competitors.

Asked by Nikhil Gupta

3 min read 8 chapters

Detailed narrative

Q4 & FY26 Financial Performance Overview

SoftTech Engineers Limited demonstrated robust financial growth in Q4 and the full fiscal year 2026. Q4 FY26 revenue from operations surged 50% YoY to INR 46.6 crores, with EBITDA growing 110% to INR 10 crores, improving the margin to 21% from 15%. For the full year, revenue increased 40% to INR 132.9 crores, and EBITDA rose 45% to INR 32.2 crores, with the EBITDA margin expanding to 24%. Profit after tax for FY26 saw a significant jump of over 300% to INR 5.3 crores.

Digital Governance & Infrastructure Focus

The company's core strategy revolves around digital governance and infrastructure development, aligning with government initiatives. SoftTech's solutions aim to improve efficiency, transparency, and decision-making across the project life cycle, from design and approval to build and operate. This focus has enabled the company to penetrate over 1,500 cities and 18 states with its building permit solutions, significantly contributing to India's ease of doing business ranking.

Key Product Innovations & Milestones

SoftTech achieved several key milestones, including a mandate from the Airport Authority of India to develop a digital platform (CivitINFRA) for monitoring airport construction projects, with an initial order of INR 17 crores. The company also launched Civit TDR, a path-breaking exchange platform for online trading of Transferable Development Rights, which has been mandated by Mumbai Municipal Corporation and processed INR 8,000 crores in transactions in FY26. Additionally, CivitTwin, an AI-powered solution for pre-checking building plans, was launched in Mumbai.

International Market Penetration & Strategy

SoftTech is actively pursuing international expansion, particularly in Germany and the US. In Germany, the company has established a subsidiary and is prototyping solutions with customers, expecting commercial traction within six months. The US market, while challenging for Indian products, shows promising leads and revenue generation from the private sector, with better revenues anticipated in FY26-27. The Oman order, however, faces delays due to geopolitical factors and competitive pricing.

Order Book & Pipeline Health

The company reported a strong order book of approximately INR 232 crores, complemented by a healthy opportunity pipeline of around INR 436 crores, with a high conversion probability of over 60%. Management indicated that 60% of the current order book would be recognized as revenue this year. The TDR platform, charging 0.5% of transaction value, is expected to be a significant contributor to future revenue and margins.

Operational Efficiency & Future Outlook

SoftTech significantly improved its operational efficiency, with Day Sales Outstanding (DSO) reducing from 372 days in FY25 to 260 days in FY26, and the cash collection cycle improving from 270 days to 169 days. The company targets INR 300 crores in revenue within the next three to four years, maintaining an EBITDA margin of 25-30%. Future growth will be driven by continuous product innovation, new customer additions, and deeper engagement with existing clients, leveraging technologies like BIM, GIS, blockchain, and IoT.

Competitive Moats & AI Strategy

SoftTech emphasizes its competitive moats, primarily its extensive dataset from 15 years of government partnerships, which serves as a 'gold mine' for AI development. The company's CivitTwin, with its 12 AI agents, leverages this data for proactive support and process-driven simulations. While acknowledging potential competition in the AI space, management believes their deep penetration and real-world enterprise framework implementation create significant barriers to entry for competitors.

Provisioning for Receivables and Gratuity

The company increased its provisioning from INR 45 lakhs to INR 2.5 crores in FY26. This was attributed to a prudent policy for long-due government receivables (typically 1-2% of invoice values) and an increase in gratuity liability due to the revised Labour Act. Management expects these provisions to be recovered in due course, contributing to future revenues.

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