Flat revenue, sharply lower operating margin define Excelsoft's Q2
Costs rose despite broadly unchanged revenue, while management cited higher employee costs and continued investment in expansion and products.
Filed 05 Nov 2026, 18:00 IST · after market close · Excelsoft Technologies Ltd (EXCELSOFT)
Key takeaways
- Operating margin fell from 30.27% in Q4FY26 to 16.35% in Q2FY27 as expenses rose to Rs 67.67 cr while revenue was Rs 80.9 cr.
- Other income of Rs 5.73 cr was a large component of consolidated profit before tax of Rs 11.17 cr.
- Excelsoft's 16.35% operating margin matched the median of 69 reported IT-sector peers.
Price around the results
Revenue held near the previous quarter, but profitability dropped
Consolidated revenue was Rs 80.9 cr in Q2FY27, close to Rs 81.16 cr in Q4FY26, but operating profit fell from Rs 24.57 cr to Rs 13.23 cr. Expenses increased from Rs 56.59 cr to Rs 67.67 cr, leaving operating margin at 16.35% versus 30.27% previously. This is the third reported quarter in the supplied trend only in the sense that Q4FY26 is the sole prior-quarter data point, so the direction is a sharp quarter-on-quarter deterioration rather than an established multi-quarter pattern.
Higher employee costs and other income shaped the quarter
Management said profitability was affected by higher employee costs, including external consultants supporting programme delivery. Other income of Rs 5.73 cr was a large component of profit before tax of Rs 11.17 cr, making reported net profit less representative of operating performance. The tax rate was 25.94%.
Margin was in line with the reported IT peer median
Excelsoft's 16.35% operating margin matched the median for 69 Information Technology peers that had reported the same quarter. That places the company around the sector midpoint on this measure, despite the sharp decline from its 30.27% margin in Q4FY26.
Management points to execution, expansion and new products
Management said first-half FY27 revenue was driven by Education Technology Services and continued demand for digital learning and assessment solutions. It said the company remains on track for its committed FY27 top-line growth and is focused on execution, efficiency and converting opportunities into sustainable growth. The presentation flags a Rs 9.70 cr investment to expand international market coverage and Rs 4.50 cr of new product and technology investments expensed during FY27, alongside an AI taskforce with a UK awarding body.
Results were filed after market close
The consolidated results were filed after market close on 5 November 2026. The stock's post-results reaction is therefore not yet available to assess against its past results.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 |
|---|---|
| Revenue | ₹81 cr |
| Other income | ₹6 cr |
| Expenses | ₹68 cr |
| Operating profit | ₹13 cr |
| Operating margin (%) | 16.35% |
| Interest | ₹1 cr |
| Depreciation | ₹7 cr |
| Profit before tax | ₹11 cr |
| Tax | ₹3 cr |
| Net profit | ₹8 cr |
| EPS (₹) | ₹0.72 |
Operating margin of 16.35% compares with a Information Technology sector median of 16.35% across 69 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Excelsoft reported a healthy first-half FY27 revenue performance driven by momentum in Education Technology Services and sustained demand for digital learning and assessment solutions.
Guidance & outlook
- Excelsoft remains on track to deliver its committed top-line growth for FY27.
- Excelsoft says it remains focused on executing existing programs, improving efficiency and converting opportunities into sustainable growth.
- Strategic investments are expected to strengthen capabilities and deliver long-term benefits.
Expansion
- Excelsoft is investing in international expansion to build capabilities for its next growth phase.
- The company plans to expand international market coverage through its overseas sales team, with an investment of ₹9.70 crore.
New products
- Saras School AI is identified as an AI-first product combining school management capabilities with AI-enabled teaching tools.
- Saras Assessments in-a-Box enables secure examination delivery where internet connectivity is limited or unavailable.
New initiatives
- Excelsoft has formed a joint AI taskforce with a leading UK awarding body.
- The company is investing ₹4.50 crore in new product development and technology investments expensed during FY27.
Problems & risks
- Profitability was affected by higher employee costs, including external consultants supporting program delivery.
What to watch
- Whether operating margin recovers from 16.35% after the cost increase.
- Whether expenses moderate from Rs 67.67 cr relative to revenue of Rs 80.9 cr.
- How much other income contributes relative to profit before tax of Rs 11.17 cr.