Xtglobal Infotech Limited — Q2 FY26 earnings call

Call held 18 Nov 2025

Management summary

XTGlobal Infotech reported robust consolidated growth in Q2 and H1 FY26, with Q2 revenue up 93.7% YoY to ₹94.41 crores and H1 PAT growing 47.1% YoY to ₹718 lakhs. The company declared an interim dividend of 5 paise per share and expanded its global footprint into Australia, securing new projects including a $5 million US public sector RFP. Management is targeting 20-25% revenue growth and 15% EBITDA margin by FY27, leveraging existing infrastructure and a focus on offshore delivery models, despite moderated demand in the broader Indian IT sector.

Highlights

  • Consolidated Q2 FY26 revenue increased by 93.7% YoY to ₹94.41 crores, and H1 FY26 revenue grew 90.4% YoY to ₹186.72 crores.

  • Consolidated H1 FY26 PAT rose by 47.1% YoY to ₹718 lakhs, reflecting strong scale benefits and operational discipline.

  • Standalone Q2 FY26 EBITDA improved by 14.2% QoQ to ₹288 lakhs, with EBITDA margins expanding by 182 basis points.

  • Added 11 new clients (7 in F&A, 4 in IT services) as of November 13, 2025, strengthening market presence.

  • Expanded global footprint by launching operations in Australia with two anchor projects and secured a $5 million public sector RFP in the US.

Concerns

  • The Indian IT sector remains in a phase of moderated demand, with clients deferring discretionary spending due to broader macro uncertainty and U.S. tariff-related noise.

  • Healthcare vertical exhibits cautious sentiment, while retail and automotive sectors face policy-driven pressures, impacting deal flow concentration on cost optimization.

Key financials

  1. Consolidated Revenue ₹94.41 Cr +93.7%YoY
  2. Consolidated EBITDA ₹6.78 Cr +2.5%QoQ
  3. Consolidated EBITDA Margin 7.2%
  4. Consolidated PAT ₹3.44 Cr +26.9%YoY
  5. Consolidated H1 Revenue ₹186.72 Cr +90.4%YoY
  6. Consolidated H1 PAT ₹7.18 Cr +47.1%YoY
  7. Standalone Revenue ₹17.99 Cr +1.2%QoQ
  8. Standalone EBITDA ₹2.88 Cr +14.2%QoQ
  9. Standalone PAT ₹1.76 Cr +4.3%YoY

What they filed

Q1 FY27: revenue up 1.1%, net profit up 4.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue49 49 87 92 94 +94%92 +89%90 +3%93 +1%
EBITDA5 8 4 7 7 +27%9 +11%4 −1%7 +8%
Net profit3 4 1 4 3 +27%4 +1%4 +177%4 +4%
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

Total value

$5 Mn

as of 2025-09-30 quantified

Execution

over a period of five years

Composition

  • Public Sector (Department of Transportation) (client type) $5 Mn

Pipeline

deal pipeline tcv

Expect to win $1 to $1.5 million worth of revenue consistently from this public sector customer over the next few years.

The company added 11 new clients (7 in F&A, 4 in IT services) and secured two anchor projects in Australia, in addition to the US public sector RFP.

Source: Prepared remarks

Capital allocation

high confidence
  • Dividend ₹0.05/share (interim)
    We are pleased to announce that the Board has approved an interim dividend of 5 paise per equity share of face value of ₹1, representing 5% of the face value for the FY25-26, with 21st November 2025 as the record date.

Guidance & targets

Revenue

  • Revenue Growth Rate Revenue · FY26-27 · High confidence 20% to 25%
    We are basically looking at a stabilized at least 20% to 25% growth rate is what our expectation is, our plans are. That is the goal that we have right now in terms of revenue growth.

    — Ramarao Mullapudi

Margin

  • EBITDA Margin Margin · FY27 · High confidence at least 15%
    Yes, at least 10% to 15%. So we are planning to achieve EBITDA margin of at least 15% by increasing our operational efficiency and by utilizing our existing infrastructure and also our capabilities.

    — Raghuram Kusuluri

What to watch in Q3 FY26

Vertical-wise revenue declaration

Next quarter
Current Not declared by vertical
Target Declaration of results by vertical

Why it matters

Provides better transparency and insight into segment performance, aligning with management's stated plan.

As of this last quarter, we are not declaring results by vertical, but going forward from the next quarter, we will be declaring based on the vertical side.

Risks & concerns

  • Moderated demand in Indian IT sector

    medium

    The Indian IT sector remains in a phase of moderated demand, impacting growth.

    Management acknowledged

  • Deferred discretionary spending by clients

    medium

    Clients are deferring discretionary spending due to broader macro uncertainty and U.S. tariff-related noise.

    Management acknowledged

  • Cautious sentiment in specific verticals

    low

    Healthcare exhibits cautious sentiment, while retail and automotive face policy-driven pressures.

    Management acknowledged

Q&A highlights

5 direct
Revenue breakdown by vertical, geography, and service line Partial
As of this last quarter, we are not declaring results by vertical, but going forward from the next quarter, we will be declaring based on the vertical side. ... most of the revenue right now is coming from the US side. ... Around 50% is IT consulting and 50% is product and accounting outsourcing services.

Clarifies current reporting structure and future plans for segment disclosure, and provides insight into current revenue mix.

Asked by Rishabh Sharma

H-1B visa impact and offshore strategy Direct
So we as a company, are not dependent on H-1B. So our H-1, so overall our H-1 revenue is very minimal. ... because of immigration issues that our clients are seeing, mid-market companies are not able to get the talent that is needed. So we are offering that benefit to the customers.

Addresses a key sector risk and highlights the company's strategy to leverage global delivery for growth.

Asked by Diya Jain

Network Objects subsidiary contribution Direct
Right now, about $20 million in revenue and then mainly it is onsite consulting. So the contribution of network objects in terms of our India standalone finances is very minimal. ... They are mostly focused on reaching Vistex as a product support.

Provides clarity on the scale and nature of contribution from a key subsidiary.

Asked by Diya Jain

Revenue and EBITDA margin guidance Direct
We are basically looking at a stabilized at least 20% to 25% growth rate is what our expectation is, our plans are. ... we are planning to achieve EBITDA margin of at least 15% by increasing our operational efficiency and by utilizing our existing infrastructure and also our capabilities.

Provides specific forward-looking financial targets for investors.

Asked by Diya Jain

US government sector business and pipeline Direct
we won our first major RFP that we announced for the public sector, the Department of Transportation. So, in that, it is $5 million over a period of five years is what the award was... we see consistently winning around $1 to $1.5 million worth of revenue coming from this particular public sector customer over the next few years.

Details a new strategic market entry and its expected revenue contribution.

Asked by Divya Dutta

Acquisition strategy Direct
we have been looking for acquisitions, for the right kind of acquisition, over the last several months. ... we are in discussions with a couple of companies. Again, that has to materialize.

Signals potential inorganic growth avenues and strategic priorities for M&A.

Asked by Divya Dutta

UK market progress Partial
we started in the UK also or Europe also, and then we are able to see some traction in the UK market right now or Europe market, but we have not closed anything at this point, but we are looking at it. But opening offices, we are actually pursuing this quarter to be able to open offices in both locations, Australia as well as in Europe or Ireland-based Europe as they go both the locations.

Provides an update on international expansion efforts beyond Australia and future plans for office openings.

Asked by Rishabh Sharma

2 min read 6 chapters

Detailed narrative

Q2 & H1 FY26 Financial Performance Overview

XTGlobal Infotech reported strong consolidated financial results for Q2 and H1 FY26. Consolidated revenue for Q2 FY26 reached ₹94.41 crores, marking a 93.7% year-on-year and 2.3% quarter-on-quarter growth. Consolidated PAT for Q2 FY26 stood at ₹3.44 crores, growing 26.9% YoY. For the first half of FY26, consolidated revenue was ₹186.72 crores (up 90.4% YoY), with PAT at ₹7.18 crores (up 47.1% YoY). Standalone Q2 FY26 revenue was ₹17.99 crores, with EBITDA at ₹2.88 crores, showing a 14.2% QoQ improvement and EBITDA margins expanding by 182 basis points.

Strategic Client Additions & Global Expansion

The company strengthened its market footprint by adding 11 new clients as of November 13, 2025, comprising seven in finance and accounting services and four in IT services. XTGlobal also expanded its global presence by launching operations in Australia, securing two anchor projects. In the public sector, the company won its first major RFP with the U.S. Department of Transportation, valued at $5 million over five years, with an expectation to consistently win $1 to $1.5 million annually from this customer.

Operational Efficiency & Digital Transformation Initiatives

XTGlobal is focusing on margin improvement through better utilization, disciplined hiring, and stable attrition. The company successfully exited its Madhurawada SEZ unit, providing greater operational flexibility and reducing compliance efforts. A new CRM platform is being rolled out to enhance lead visibility and client engagement, scheduled to go live in December 2025. The company also noted its existing infrastructure can support growth up to 2,000 employees without significant additional capital expenditure.

Dividend Policy and Shareholder Returns

The Board approved an interim dividend of 5 paise per equity share for FY25-26, representing 5% of the face value of ₹1, with November 21, 2025, as the record date. Management expressed its intention to provide dividends twice a year, with an interim and one more payout. They anticipate improved profit margins in the coming years, which should enable better dividend payouts.

Industry Outlook & Growth Drivers

Despite a global economy growing at 3% and India's economy accelerating to 7.8% in Q2 FY26, the Indian IT sector faces moderated demand and deferred discretionary spending due to macro uncertainty and U.S. tariff-related noise. XTGlobal sees compelling growth opportunities in cloud, automation, AI-led services, and offshoring demand in finance and accounting. The company's focus on a Global Delivery Center (GDC) model is seen as an advantage, particularly given H-1B visa challenges faced by clients.

Acquisition Strategy and Future Outlook

XTGlobal is actively seeking strategic acquisitions that align culturally and enhance capabilities, whether horizontally, vertically, or geographically. The company is currently in discussions with a couple of potential targets. Management is targeting a stabilized revenue growth rate of 20% to 25% for FY26-27 and aims to achieve an EBITDA margin of at least 15% by FY27, driven by operational efficiency and leveraging its existing infrastructure.

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