Xtglobal Infotech Ltd (NSE: XTGLOBAL) Q1 2026 Earnings Call dated Aug. 14, 2025
Corporate Participants:
Unidentified Speaker
Ramarao Mullapudi — CEO, President & Director
Raghuram Kusuluri — Chief Financial Officer
Sridhar Pentela — Company Secretary & Compliance Officer
Analysts:
Unidentified Participant
Madhu Sharma — Analyst
Keshav Sharma — Analyst
Divya Mehta — Analyst
Presentation:
operator
Ladies and gentlemen, you have been connected for XT Global Infotech Limited conference call. Please stay connected, the call will begin shortly. Ladies and gentlemen, you have been connected for XT Global Infotech Limited conference call. Please stay connected, the call will begin shortly. Ladies and gentlemen, good day and welcome to the XT Global Infotech Limited Q1FY26 earnings conference call hosted by Rick Capital. We have with us today from the XT Global Infotech Limited Management Mr. Rama Rao, CEO President and Director Mr. Raghuram Kusaluri, Chief Financial Officer Mr. Sridhar Pentela, Company Secretary and Compliance Officer. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. Before we proceed with this call, I would like to take this opportunity to remind everyone about the disclaimer related to this conference call. Today’s discussion may be forward looking in nature based on management’s current beliefs and expectations. It must be viewed in conjunction with the risk that our business faces that could cause our future results, performance or achievements to differ significantly from what may be expressed or or implied by such forward looking statements.
I now hand the conference over to Mr. Raghu Ram Kusaluri, Chief Financial Officer for his opening remarks. Thank you. And over to you sir.
Raghuram Kusuluri — Chief Financial Officer
Thank you. Good evening and thank you for joining the XT Global Infotech Limited quarter one financial year 2526 earnings conference call. We appreciate your time and presence today. At first you have had the opportunity to review the financial results, investor presentation and press release available on our website as well as the NSE and BSE portals. To begin, I will provide a brief update on the current sector trends followed by an overview of the company’s operational and financial performance. In mid-2025, the world economy is moving through a phase of moderate growth though momentum remains uneven across regions.
In the United States, expansion is holding at around 2% as higher interest rates temper corporate spending even as the labor market stays robust. Europe faces sluggish activity due to stubborn services inflation, weak manufacturing output in Asia. India stands out with GDP growth above 6% supported by strong domestic demand in government capital expenditure while China’s economy is stabilizing after a slow post pandemic recovery. Although global inflationary pressures have eased, underlying price growth is developed. Markets persists keeping central banks cautious about interest rates. To capture these opportunities, we are strengthening our AI and intelligent automation offerings, expanding into premium consulting services and broadening our client portfolio to reduce geographic dependency.
We believe the combination of our sector recovery, targeted positioning and operational discipline provides a solid foundation for sustained growth in the coming quarters. Next for operational performance, XT Global began financially at 26 on a strong note regarding both quarter on quarter and year on year growth in revenue and profitability. This momentum was supported by the addition of 10 new client accounts, improved margins and greater operational efficiency. Even as we continue to invest in retaining key talent and strengthening our strategic capabilities, our core offerings remain centered on automation through the Subplus platform, cloud and ERP services, and finance and accounts outsourcing.
These focus areas are well aligned with the broader industry recovery, particularly in bfsi, healthcare, manufacturing and digital transformation. Employee costs for the quarter were 46 crore 52 lakh on a consolidated basis, higher due to SRP expenses, ESOP expenses and targeted investments in specified talent. However, in our industry, the global IT services sector is entering a major recovery in financial year 26. After a softer financial year 25, we are witnessing a pickup in large deal activity driven by the restart of digital transformation programs, faster cloud adoption and the growing use of artificial intelligence and process automation.
Enterprises are also focusing on cost efficiency prompting greater outsourcing to India. With bfsi, healthcare and manufacturing emerging as the most active growth verticals, we remain alert to the challenges ahead including pricing pressure, wage inflation, currency fluctuations and geopolitical trade measures. Recent U.S. tariff changes on select technology imports could raise hardware costs for American clients and delay certain infrastructure projects. However, this also enhances the appeal of offshore managed services as businesses look to contain expenses and preserve project viability. Looking forward, we are aiming for margin enhancement as utilization improves, attrition levels stabilize and hiring remains disciplined.
Our strong deal pipeline is concentrated in high potential areas such as cloud services, automation and AI diverse solutions. We also see meaningful growth potential in the offshoring of finance and accounting roles from US Companies. Disciplined cost management helped support margin recovery. We’ll scale our intelligent automation capabilities through Oracle and Microsoft partnerships. Capture the growing US Offshoring opportunity in finance and accounting accounts outsourcing to build high margin recurring revenue and maintain an agile delivery model to enhance client responsiveness. The while sustaining operational excellence Coming to company financial performance during the first quarter of financial year 2026, XT Global posted strong consolidated results.
Revenue came in at 92 crore 30 lakhs up 6% from 87 lakh 87 crore 4 lakh in the previous quarter and 87.2% higher than 49 crore 30 lakh a year ago. The sharp growth was driven by higher demand in automation and finance and account outsourcing along with new client wins. Consolidated EBITDA was 66 crore 61 lakhs up 61.1% from last quarter and 18% from last year with margins improving 7.2%. EBIP rose to 4 crore 91 lakh more than double last quarter and 34.7% year on year while net of PIP reached 3 crores 73 lakhs, almost triple the last quarter and 72.4% higher than last year.
Margins improved thanks to better efficiency and cost control though they were slightly lower than last year because of higher employee expenses including ESOP costs. On a stand alone basis, revenue was 17 crores 77 lakh, a 2% increase from 17 crore 43 lakhs last quarter but 3.5% lower than the same quarter last year. The company’s focus on automation, platforms, cloud migration and targeted sector specific solutions helped keep revenue stable despite the year. On year day, standalone profitability improved sharply. EBITDA jumped to 2 crore 52 lakhs from 88 lakh last quarter. Almost tripling margins improved to 14.2% from 5% last quarter due to better utilization and tighter cost control.
Epic rose to 1 crore 75 lakh from 8.4 lakh with margins increasing to 9.9% from 0.5%. PAT came in at profit off tax came in at 1 cr 52 lakh a big improvement from last quarter but 23.6% lower than last year due to higher operating costs. This rebound shows better execution and a stronger focus on improving margins. With this I would like to conclude and open the floor for any questions. Thank you all.
Questions and Answers:
operator
Thank you very much sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch. Don’t telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets 1 while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. If anyone wishes to ask a question, may press star and 1. A reminder to all participants, you may press start and want to ask a question. The first question is from the line of Madhu Sharma from SK Capital.
Please go ahead.
Madhu Sharma
Hello. Am I audible?
operator
Yes ma’.
Madhu Sharma
Am. Good evening sir and thank you for the opportunity. So my first question is EBITDA and Pat saw a sharp jump this quarter despite modest revenue growth. Can you break down the operational factors that grow this margin expansion and whether you see it sustaining in the near term?
Raghuram Kusuluri
Do you want to take.
operator
Madam, can you please come again?
Madhu Sharma
Yes. So my question was EBIC and Pat saw sharp jump this quarter despite modest revenue growth. Can you break down the operational factors that drove this margin expansion and whether you see it, it’s sustaining in the near near term.
Raghuram Kusuluri
Yes. Yes. Yeah. So the measure due to cost control even though the margin is marginal revenue growth is standard. You are talking about standalone, am I right?
Madhu Sharma
Yes, sir.
Raghuram Kusuluri
Yes. Okay. Yeah. Let me find the breakup for that. So there is a sharp decline in other expenses that contributed to that margin. Okay. Let me. Last year, last quarter it is 166 lakh other expenses. Now it is 122 lakhs. Okay. And e expenses also last quarter we booked 154lakhs. Now this quarter 60lakhs only that also contributed to the increase in profit.
Madhu Sharma
Yes, sir. Okay, sir. And second question is what were the key. What were the key differentiator factors that help us to win US contract recently? And. And how do you plan to leverage this success for future international government contract?
Raghuram Kusuluri
Yes. Yeah. Mr. Ramalpadi will answer this question about this recent announcement.
Ramarao Mullapudi
Yes. Thanks madam for asking question. So for US government contracts, right. The last. Last year or the last several years we were always focusing on the private sector. Never ventured into. But beginning of last year we had an opportunity to win through a contract for circulus on the government sector. We thought like why don’t we go on the RFP on the government side. So this year we took an effort to start with the proposal and then we were able to win this good contract. And we are actually in the toll industry supporting toll clients. So this what we got is the Texas Department of Transportation.
So that was a good client for us. And then we believe that we will continue to win these kind of opportunities and we’ll continue to focus on government sector which we haven’t ever focused earlier as we are only mainly focusing on the private sector. But we are right now putting assembly team to focus on the government sector as well.
Madhu Sharma
Okay. Thank you.
Ramarao Mullapudi
Thank you.
Raghuram Kusuluri
To add to that further, madam, actually we are strengthening. We have already strengthened our on site sales team to approach different different government sectors. And also to back this big contract. We are focusing that increased expenditure in consolidated to. To that extent is increased that salesforce.
Madhu Sharma
Okay. Thank you.
Raghuram Kusuluri
Thank you.
operator
Thank you. A reminder to all participants. If you wish to ask any questions, you may Press Star and one. Anyone who wishes to ask a question may press Star and one. Now the next question is from the line of Keshav Sharma from VP Advisory. Please go ahead.
Keshav Sharma
Hello. Hello. I’m order.
operator
Yeah. Yes sir. Please go ahead.
Keshav Sharma
Thank you for the opportunity. And first of all sir, congratulations on good set of numbers.
Raghuram Kusuluri
Thank you sir.
Keshav Sharma
And so I can see that on. Consolidated level the revenue jumped 87% year on year from 40 to 92 crores. So is there any new project or acquisition? What is the reason?
Raghuram Kusuluri
Yes. Yeah. Main reason is that consolidated that has been made it clear in the notes. So this year Network objects till now it is an associated company now that has become subsidiary to HD Global Infratech limited US company. So since it has become subsidiary, we have to add the top line as well. So that revenue also added. That is one more one of the factors for that drastic increase in top line.
Keshav Sharma
So this new acquisition, which sector or domain is it is focusing more on?
Raghuram Kusuluri
Yeah, it is also into IT and it. Yes, they are very. They have that expertise in SAP implementations.
Keshav Sharma
Okay. And so can you means give me the margins and profitability of this new acquisition. How it will add to the consolidated.
Raghuram Kusuluri
Yeah, definitely that whatever profits they are going to end, that subsidy is going to earn. 51% belongs to our company 60 global infotech limited so whatever top line. Yeah. So out of that top line is.
Keshav Sharma
About $25 million, right?
Ramarao Mullapudi
Yes. Yes. Yeah. Around 22 ra. $22 million.
Raghuram Kusuluri
$22 million top line per year for the last year.
Keshav Sharma
So sir, what is the means, what is the future growth outlook of this particular acquisition? Can you put some. You can light on it. What will be the revenue growth of this acquisition.
Raghuram Kusuluri
Please? Yeah, there are. There. We are also focusing on this SAP implementations that will also give us. We are not into SAP implementation global in fact. So this will definitely give us definitely leverage to approach other markets into SAP and other ERPs. HD Global Impact is very strong in Oracle implementations. This will definitely add one more famous ERP worldwide that SAP. So that will definitely give us an edge. And we are also. We have our own product surplus. So that can also be integrated with SAP ERPs. Their expertise will also help us to integrate surplus product into that SAP ERPC as well.
This will help us. Yes.
Keshav Sharma
Okay. And so I recently viewed your press release on AI integration. So can you share your thoughts on that?
Ramarao Mullapudi
Yeah, we have. We started in the AA side, right. As a company. We have forecast investing on the AS AA as well as. And we had hired or appointed one of our senior to lead our AI team. And in fact. Right. We are actually submitting a few, quite a few responses in RFPs of the AIA related projects which we expect to win in the near future. So our growth strategy involves digital transformation. AI and Azure are cloud stocks. Right. That’s what our focus area is being with the traditional revenue continue to come. And our the biggest thing we have our product automation software product which is a SaaS product has a lot of opportunity to enhance the product with AI capabilities as well.
So those are the things that we are looking on the AI side right now.
Keshav Sharma
Sir, as you have mentioned that AI it must be using a lot of hardware and costing. So this costing versus the employee cost. What. What do you think that AI or employee cost which would be more beneficial to the company?
Ramarao Mullapudi
Definitely the one that we have right now on the circ list because of the cost of AI is not reduced in the implementation. We believe that the overall operation efficiency wise, when you look at IT is definitely on the client perception wise for our product. Definitely AI would benefit. The fact is that the main product surplus actually uses manpower in India. Because of that, a lot of government sector companies or public sector or nonprofits may not want to have human touch in there. So they outside human types so they tend to sign up. Whereas if we have changed that in the area capabilities with no human tax offshore, that would help us get the product into public sector as well.
So that would be definitely beneficial for us. But as you look at the straightforward cost wise also we believe that there is opportunity to benefit over a period of time. On the cost savings as well. Yeah, on the product.
Keshav Sharma
Yeah. And so my last question is like what other projects are in the pipeline to be expected?
Ramarao Mullapudi
Yes, definitely. We have, I would say ongoing field efforts on several areas. As our CFO has explained, we won 10 new logos last quarter alone in finance and accounting automation as well in the IT side. And we have several RFPs actually that we responded as we speak. Even last week itself we had submitted over $1 million worth of response article which we have chances of winning. And there are quite a few that are ongoing sales efforts which we believe there’s an opportunity to win. And then we continue to maintain or grow our top line as well as bottom line.
Keshav Sharma
Thank you sir for so much great effort explaining.
Ramarao Mullapudi
And one more thing just to add to your thing, right. Most of our the way we build our country, the way our revenue service recognized, what you see is that most of the accounts that we have are continuous in nature. We have very little attrition in the clients or no attrition at all unless they are typically going out of the business. So sustainable revenue is what it is. And quarter on quarter, very rarely we see that long term.
Keshav Sharma
The most of the clients are long term and the revenue growth is sustainable.
Ramarao Mullapudi
That yes, yes we sign most of our accounts that we’re finding services. Right. We sign a three year contract but we only recognize when we do get the revenue. So that’s what you see. But most of our accounts are long term in nature.
Keshav Sharma
Thank you sir. All the best.
Raghuram Kusuluri
Thank you so much.
operator
Thank you. A reminder to all participants, if you wish to ask any questions you may press Star and one. Anyone who wishes to ask a question may press Star and one on their touch tone telephone. The next question is from the line of Divya Mehta from Nine River Capital. Please go ahead.
Divya Mehta
Am I audible sir?
operator
Yes madam.
Divya Mehta
Thank you for the opportunity. Continuing on the same question that previous participants asked the recent your press release on the new significant win of 7 to 10 million 5 years IT modernization project in US could you share some scope, timelines or strategic impact of this engagement and what, what could be this you can see forward.
Ramarao Mullapudi
So yes. So the client itself as a contractual obligation can’t remember the name of the client as an agreement that we sign with them. But this win is they have issued a blanket purchase order for our company with like six other companies with multiple million dollars of worth of thing. And in our contract particularly they have shown five plus million dollars or whatever that amount we shared on the news release. Right. As part of a blanket. We were with the first win just happened last week which we shared and then the actual work has started this one day, two days back and then we believe that we continue to see these opportunities coming up in this contract as per the blanket pivot.
We believe that we will continue to win on an ongoing basis for that. And then not only that, with this win it gives us an opportunity to get the reference that we are looking in the government sector which we haven’t been doing it in the last several years. Our focus has been as I said, private sector. But now with this win we are approaching all the similar businesses in the government with state and federal level to be able to enhance our support for these kind of projects which we believe that we with the given success we will be able to win more on those opportunities.
Divya Mehta
One was on the new AI practice initiative. What kind of how, how would this be contributing to our revenue growth in next 12 to 18 months?
Ramarao Mullapudi
Yes, we as we just started the head of the practice even though we just appointed a head recently but we have been working on AA initiatives for the last several months but not as a dedicated with a dedicated head. We actually as we speak last this Monday itself is admitted over a million dollar plus a RFC response to an existing customer that we believe that there are chances of winning as well as we believe that this AI over a period of next 12 months we would see small wins which that’s how I see and we want to get into that.
We talk about the consulting side and then slowly ramp up in trying to manage. But we believe that the effort that we are doing may take as I said 8 to 12 months to be able to see the results on the revenue. But definitely that’s how we want to see the future of our company both AI and digital transformation.
Divya Mehta
Okay one more question on the current geopolitical and regulatory factors ongoing like you US H1 policy then EU digital sovereignty initiatives. So how would will this impact us or how would you see this shift.
Ramarao Mullapudi
Yes historically right our company in the beginning several years back we were more dependent on the visa related business. What I would say there are a lot of visa based employees within the country but right now our revenue the revenue is Last started in 201618 time frame we are focused has been mostly with the less dependency on the H1B or Mesa related opportunities. So right now when we look at it our revenue in that segment is very less and we have very less number of employees who are actually dependent on that. So that what happens in that immigration the way we our business is structured right now we are mainly focused on delivering our services through offshore teams in India and then on site consulting for non H1B dependent related consulting.
So believe that that’s not going to affect much on us Definitely within the last several years we didn’t bring anybody to us based on its immigration. It’s only dependent employees. So we believe that effect of that for our company is going to be very minimal.
Divya Mehta
Okay sir any I read in Q1 present Q1 press release there even planning to acquire any new company or we were looking for yes acquisition yes.
Ramarao Mullapudi
Yeah yeah anything See as the growing it growing business right Our we definitely have plans and we are always in the lookout for acquisitions as we disclosed earlier and then we have opportunities to send like letter of intents when we deal when we find the right company and we continue to do that and then whether it turns out to be closed acquisition or not. But we are lookout and even as we speak we are in the like process of looking out for acquisitions and there could be but our acquisition strategy is not just it has to fit in either geographic some kind of way it has to blend it into our company either complement our services acquisition.
So those are the ways that we are looking. We are definitely looking in other countries like Europe and other Australia other things when we find the right company at the right price tag and within India also we are looking at site companies that were to grow whatever in your top line as in the bottom line and that’s that’s going to be a continuous transit also.
Divya Mehta
Okay, understood. Thank you sir. And I wish you all the best.
Raghuram Kusuluri
Thank you madam.
operator
Thank you. A reminder to all participants. If you wish to ask any questions you may press Star and one. Anyone who wishes to ask a question may press Star and one. As there are no further questions. On behalf of XT Global Infotech Limited I conclude this conference. Thank you for joining us and you may now disconnect your lines.
Raghuram Kusuluri
Thank you so much. Thank you all. Thank you all.