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iGTB is the business with the highest margin, followed by iGCB.
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A major deal has been signed with a UK broker for multiple AI products. This ₹200 crore deal will be executed over the next three years, with only one month of revenue recognized in Q4.
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North America, Europe, and Canada contribute 45% of the business, which is expected to increase to 50% next year.
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The remaining 55% is contributed by India and the rest of the world, resulting in a very balanced business in terms of both product and geography.
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The base business cost is ₹500 crore per quarter, plus an additional ₹15 crore cost for Central1. Adding another ₹20–25 crore for AI investment brings the quarterly fixed cost run rate to approximately ₹560–575 crore.
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With ₹700 crore in revenue and ₹200 crore EBITDA, even with the added AI costs, the EBITDA margin remains at 25%.
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The target for the next 12 months is to cross ₹800 crore in revenue with a 24–25% EBITDA margin.
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License revenue currently contributes 50%. Over the next 2–3 years, the aim is to increase this to 60%.
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Over the next 2–3 years, margins could rise to 28–30% as more license revenue is added.
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Additionally, they have identified another significant investment opportunity emerging from GeM. While the potential is not yet clear, management appears optimistic about it.
Overall, it has been a great quarter, as Mr. Jain has been saying for the last 2–3 quarters. Although they have reported strong PAT, it is unlikely to be repeated in Q2/Q3 because some large deals, which could not be signed in earlier quarters (as per previous commentary), contributed to this quarter’s results. However, as they move into Q4 FY26, it is very likely that they will report higher profitability, similar to what has been demonstrated this year.
They have not provided much commentary on the progress of the Central1 deal, but this could be an outstanding acquisition if they can successfully integrate and cross-sell multiple products to them.
From H2 onwards, they should start seeing some revenue from the distribution agreements signed with HCL Tech, LTIMindtree, and others, as it typically takes 4–6 quarters for new sales to materialize. This has the potential to boost their license revenue, as partners will handle implementation (which carries lower margins than licenses), helping the company move towards its 30% margin target.
Note- Invested
