Xelpmoc Design And Tech Limited — Q2 FY26 earnings call

Call held 14 Nov 2025

Management summary

Xelpmoc Design and Tech Limited reported a challenging Q2 FY26 with consolidated operating revenue at INR7.6 million, a significant decrease YoY and QoQ, leading to increased net losses of INR19.3 million. The company is strategically shifting focus to corporate segments and in-house products like RELY and DocuXray, aiming for profitability/breakeven in the next couple of quarters. While investments in portfolio companies grew, the broader startup ecosystem continues to face headwinds, impacting the company's traditional venture studio model.

Highlights

  • Investment in portfolio companies stood approximately INR703.4 million as of 30 September 2025 as compared to INR572.7 million as on 30th September 2024.

  • Mihup currently has contracted ARR of INR1 billion.

  • Pencil... have signed USD 950,000 service deals with Alphabet for a period of 36 months.

  • Woovly... is achieving an impressive 3.2 million ARR in USD with 245 brands utilizing the platform and operating at an EBITDA positive status.

  • TSIM has secured new clients including Siemens and Flutter. It has recorded a revenue of INR3 crores in H1 FY '26.

Concerns

  • Consolidated operating revenue for the quarter was recorded INR7.6 million for Q2 FY '26 as compared to INR16.3 million in Q2 FY '25 and INR7.8 million in Q1 FY '26, representing a significant YoY and QoQ decline.

  • Operating EBITDA adjusted for the quarter was negative INR16.1 million, worsening from negative INR10.2 million in Q2 FY '25.

  • Net losses for the quarter was INR19.3 million, an increase from INR11.1 million in Q2 FY '25.

  • Challenges persist in the start-up sector due to volatility in funding and heavy headwinds for new ventures.

Key financials

  1. Consolidated Operating Revenue 7.6 Mn -53.4%YoY
  2. Adjusted Operating EBITDA -16.1 Mn +57.8%YoY
  3. Net Loss -19.3 Mn +73.9%YoY
  4. ESOP Expenditure 2.5 Mn

What they filed

Q1 FY27: revenue up 23.1%, net profit down 23.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue2 1 1 1 1 −50%1 +35%1 +19%1 +23%
EBITDA-1 -2 -1 -2 -2 −109%-2 +0%-2 −23%-2 −4%
Net profit-3 -2 -2 -2 -2 +26%-2 −7%-2 −11%-2 −23%
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

Composition

Mix 2 product clientses
  • DocuXray Clients 2 count 33.3%
  • Data Science Clients 4 count 66.7%

Share of order book by product clients, derived from disclosed amounts

Pipeline

qualified rfp

RELY pilot projects to be signed

We are seeing interest from corporate clients for our services and the solutions what we are building. However, the conversion is expected to take some time, hence, we expect our revenues to gradually start getting traction over the next few quarters.

Source: Prepared remarks

Capital allocation

high confidence
  • M&A Zoop.Money Investment · Announced · Consideration ₹8 Cr (undisclosed)

    Zoop.Money is in process of raising INR8 crores from various source at a valuation of INR80 crores, marking a 4.4x valuation uplift.

    Zoop.Money is now in process of raising INR8 crores from various source at a valuation of INR80 crores, marking a 4.4x valuation uplift.
  • M&A OsteoForge Investment · Announced · Consideration ₹2 Cr (cash)

    investing INR2 crores for a 10% stake in OsteoForge, an IIT Hyderabad spinout developing India's first silk reinforced, fully resorbable implant platform.

    Biome is also investing INR2 crores for a 10% stake in OsteoForge

Guidance & targets

Revenue

  • Revenue Traction Revenue · next few quarters · Medium confidence gradual traction
    we expect our revenues to gradually start getting traction over the next few quarters.

    — Srinivas Koora

Product Monetization

  • RELY Product Monetization Product Monetization · Q3, Q4 FY '26 end · Medium confidence monetize
    expect it to monetize by Q3, Q4 FY '26 end.

    — Srinivas Koora

  • RELY Monetization Product Monetization · Q4 FY26 · Medium confidence monetization by Q4
    monetization, you might see only by Q4 that is -- which is the next quarter.

    — Sandipan Chattopadhyay

Operating Costs

  • Operating Costs Stability Operating Costs · from here on · High confidence stable
    We expect our operating costs to be stable from here on.

    — Srinivas Koora

Profitability

  • Profitability/Breakeven Profitability · next couple of quarters · High confidence profitability or breakeven
    the target is next couple of quarters, we should turn to profitability or breakeven.

    — Srinivas Koora

Market Conditions

  • Startup Ecosystem Recovery Market Conditions · new financial year · Low confidence turning the corner
    But post that, maybe in the new financial year, I think there could be different themes coming up, which would be going there.

    — Sandipan Chattopadhyay

  • Startup Resurgence Market Conditions · next 2, 3 quarters · Low confidence happen
    The resurgence in start-ups and in other parts will also happen in the next 2, 3 quarters.

    — Sandipan Chattopadhyay

What to watch in Q3 FY26

Profitability/Breakeven

next couple of quarters
Current Negative EBITDA and Net Loss
Target Profitability or Breakeven

Why it matters

Achieving profitability is a key management target and crucial for financial stability.

the target is next couple of quarters, we should turn to profitability or breakeven.

Risks & concerns

  • Volatility in startup funding

    high

    Challenges persist in the start-up sector due to volatility in funding within the emerging technology sector.

    Management acknowledged

  • Headwinds for new startups

    high

    New start-ups are facing consistently heavy headwinds, not expected to turn the corner in the next 3 months.

    Management acknowledged

  • ESM Stage impact on market cap

    high

    ESM stages prevent market cap from crossing INR500 crores, potentially hindering institutional investment and shareholder returns.

    Analyst deflected

  • Policy paralysis in education sector for AI adoption

    medium

    Schools are skeptical about AI adoption due to policy paralysis and concerns about its impact on children.

    Management acknowledged

Q&A highlights

5 direct, 1 evasive
AgeTech industry dynamics and RELY product response Direct
The aging of the grain market in India is estimated currently at close to about $15 billion. Now when I start up the $15 billion market size, this includes whether you have aging at home, which is the home health care setup or you have aging in communities, whether it is a part of senior independent living or whether it is assisted living communities.

Provides market size and opportunity for their new AgeTech product, RELY, indicating a significant addressable market.

Asked by Abhishek Agrawal

Business model and deal size for RELY Direct
RELY essentially is SaaS for operators... The business model is typically if you are in the senior independent space, you have customers that would that either operators or the property manager of these spaces would pay you on a per apartment per month basis.

Clarifies the SaaS-based revenue model and long-term contract nature for their new RELY product.

Asked by Abhishek Agrawal

Status of legal tech product (DocuXray) Direct
So we have built a framework, which is our DocuXray And that, along with the kind of setup learning that we do for a specific problem and then go for the class, that is in motion and some of the contracts have already started coming in, as Srini was mentioning as well as some of them are in POC.

Confirms ongoing development and initial traction for their legal tech product, DocuXray, highlighting its broader applicability beyond legal tech.

Asked by Abhishek Agrawal

Revenue split between AI/non-AI solutions and startups, and margins Partial
Al is kind of a current buzzword and philosophy. The all-encompassing part is data science. And in data science is where Xelp has always been focused... But when we look at our work, it is data science, and that's what it's going to be of all parts.

Clarifies the company's core competency as data science, encompassing AI/ML, and its strategic focus on corporate segments and in-house products over traditional startup investments.

Asked by Raghavendra Rao

Profitability timeline Direct
So right now, we are looking at to be profitable. That's the focus for next 2 quarters. And basically, we want to make Rely and this DocuXray, which we are building the framework to be successful. Once we come out of that, then we can really look at margins, etc.

Provides a clear, short-term target for achieving profitability/breakeven, linking it directly to the success and monetization of their new products.

Asked by Raghavendra Rao

Update on Signal and Soultrax Studio Direct
As far as the Soultrax Studios is concerned, Soultrax Studio, we wanted to go ahead with the content, etc, in the kids space, which did not worked out... As far as the Signal is concerned, Signal, we are still exploring how to take it to the market on the education space.

Gives an update on the status of two older portfolio companies, indicating one has been written off and the other is still seeking market fit, impacting resource allocation.

Asked by Om Prakash Shah

IPO plans for Mihup and Woovly, and turning EBITDA positive Partial
as far as Mihup is concerned, Mihup is looking at all possible ways that in case if everything goes well as per the plan, they should be able to go subject to their Board approval and shareholders' approval.

Addresses potential monetization of portfolio company investments through IPOs, specifically for Mihup, which could unlock significant value.

Asked by Siddharth

Impact of ESM stages on market cap and shareholder value Evasive
So I think the best to answer this is once the shareholders start seeing the performance, especially in terms of numbers, I think that should be taken care by the markets.

Highlights an analyst's concern about regulatory constraints (ESM stages) potentially limiting the company's market valuation and institutional investment, with management deferring to future performance.

Asked by Siddharth

2 min read 6 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

Xelpmoc reported consolidated operating revenue of INR7.6 million for Q2 FY26, a significant decrease from INR16.3 million in Q2 FY25 and INR7.8 million in Q1 FY26. Adjusted operating EBITDA was negative INR16.1 million, worsening from negative INR10.2 million in Q2 FY25. The company posted a net loss of INR19.3 million for the quarter, partly due to INR2.5 million in ESOP expenditure, compared to a net loss of INR11.1 million in Q2 FY25 and INR18.8 million in Q1 FY26.

Strategic Shift to Corporate Segment and In-house Products

The revenue decline is attributed to a strategic transition from the startup segment to the corporate segment and a heightened focus on in-house products. Management noted continued challenges in the startup sector due to funding volatility within the emerging technology sector. The company is now concentrating its efforts on the corporate segment, particularly in data science, artificial intelligence, and machine learning solutions, expecting gradual revenue traction in the coming quarters.

AgeTech and LegalTech Product Development

Xelpmoc is actively developing new in-house products, including RELY for the AgeTech industry and DocuXray for legal tech applications. RELY, a SaaS product designed for senior independent and assisted living, is expected to monetize by Q3-Q4 FY26 end, with pilot projects slated for signing in November/December. DocuXray, a framework, already serves a couple of clients and is being applied across real estate, accounting, and finance sectors.

Portfolio Company Updates and Investments

The fair value of investments in portfolio companies increased to INR703.4 million as of September 30, 2025, from INR572.7 million a year prior. Notable portfolio companies include Mihup, which has contracted ARR of INR1 billion, and Woovly, achieving USD3.2 million ARR. Pencil secured USD950,000 service deals with Alphabet over 36 months, and TSIM recorded INR3 crores in revenue for H1 FY26. Biome, their venture studio, is investing INR8 crores in Zoop.Money and INR2 crores for a 10% stake in OsteoForge.

Outlook on Profitability and Startup Ecosystem

Management aims to achieve profitability or breakeven within the next couple of quarters, driven by the successful scaling and monetization of RELY and DocuXray. While the broader startup ecosystem continues to face significant challenges and headwinds, Xelpmoc is not actively onboarding new startups unless exceptional opportunities arise. The company believes the market is increasingly recognizing the value of their data science and AI expertise, leading to renewed interest and conversions from corporate clients.

Update on Older Portfolio Companies

Regarding older portfolio companies, Soultrax Studios' content strategy in the kids' space did not work out, and the investment has been written off. For Signal, the company is still exploring how to take it to market in the education space, facing challenges like policy paralysis and skepticism from schools regarding AI adoption. Management expects some clarity and movement for Signal by December or January.

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