Virtual Galaxy

Virtual Galaxy reported robust financial performance for H1 FY26, with revenue from operations growing 20.27% year-on-year to INR 86.13 crores. This growth was primarily driven by consistent traction in CBS implementations for cooperative banks, increased SaaS adoption, and expanded exports, particularly in new markets. EBITDA for the period stood at INR 38.82 crores, marking a 26.04% YoY increase, while PAT grew 15.11% to INR 22.02 crores, maintaining a healthy PAT margin of 25.57%.

The company is aggressively pursuing an 'AI-first' strategy, integrating AI across all its products and developing new AI-based solutions like conversational AI (Virtual VANI) and surveillance systems. Management emphasized significant investment in these technologies and a dedicated sales effort to secure AI-based orders, believing this focus will propel the company to its 'next leap and next orbit.' This strategic direction aims to empower institutions to modernize operations and enhance compliance.

Virtual Galaxy continues to expand its footprint, now operating in 20 states across India, Africa, and the GCC region. The company has successfully added 10-15 new clients in H1 FY26, with BFSI contributing approximately 91% of new client acquisitions. Management highlighted the vast untapped market in cooperative banking in India and the 'virgin market' opportunities in Africa, where margins for export business are high.

Demonstrating a commitment to transparency, Virtual Galaxy voluntarily adopted quarterly financial reporting, exceeding SME listing requirements. The board also approved a dividend distribution policy and declared a 10% interim dividend, equivalent to Rs 1 per equity share of face value Rs 10. These measures, along with the engagement of a public relations and investor relations agency, aim to reinforce investor confidence and communication.

Out of the INR 81.34 crores received from the IPO (after expenses), INR 43.69 crores have been utilized, with INR 37.65 crores remaining for future deployment. Key utilization areas include INR 3 crores for debt repayment, INR 5.5 crores for GPU/server storage, and investments in working capital. A new term loan of INR 23 crores was secured for data center expansion, which will be reclassified to plant and machinery in the coming half.

The company currently holds an order book of INR 103 crores and anticipates doubling its pipeline to approximately INR 200 crores in H2 FY26. Management expects around 50% of the current order book to be executed within the current financial year. Despite analyst queries regarding specific revenue figures, the company expressed '200% confidence' in achieving its full-year targets and similar growth rates for the next two to three years.