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Birlasoft Q3 FY26: EBITDA Margin Jumps to 18.2% and TCV Surges 89% to $202 Million
Birlasoft reported a stable Q3 FY26 with revenue at $150.8 million, representing a 0.3% growth in constant currency despite seasonal furloughs. The company achieved a significant EBITDA margin expansion of 212 bps to 18.2%, driven by operational efficiencies and a shift toward offshore and fixed-price projects. Deal wins were a major highlight, with TCV reaching $202 million, an 89% sequential increase, with nearly half coming from new engagements. While the manufacturing vertical faces near-term headwinds, the company's cash position remains robust at ₹2,491 crore with an industry-leading DSO of 54 days.
Key Highlights
EBITDA margin expanded 212 bps QoQ to 18.2%, though management guides for a 15% steady-state margin after future investments.
Total Contract Value (TCV) reached $202 million, up 89% QoQ, with a strong focus on AI-led capabilities.
Cash and cash equivalents rose to ₹2,491 crore, supported by the highest quarterly collections of the financial year.
Manufacturing vertical grew QoQ due to project ramp-ups, but management expects continued headwinds for at least one more quarter.
Recorded an exceptional item of ₹40.7 crore ($4.6 million) related to one-time provisions for changes in the Labor Code.
💼 Action for Investors
Investors should take confidence in the strong deal momentum and operational efficiency, while keeping in mind that current margins are aided by one-offs. Monitor the manufacturing vertical's recovery in FY27 as a key catalyst for revenue acceleration.
Birlasoft Q3 FY26: EBITDA Margin Expands to 18.2%, Deal TCV Surges 89% QoQ to $202M
Birlasoft reported a resilient Q3 FY26 with revenue growing 1.4% QoQ to ₹13,475 million despite seasonal furloughs and macro uncertainty. A key highlight was the significant EBITDA margin expansion to 18.2%, up from 16.0% in the previous quarter, driven by operational efficiencies and currency tailwinds. Deal signings reached a fiscal-year high of $202 million TCV, representing an 89% sequential increase, with new engagements making up 46% of total wins. The company's cash position remains robust at ₹24,914 million, supported by improved collections and a lower DSO of 54 days.
Key Highlights
EBITDA margin expanded by 212 bps QoQ to 18.2%, marking the second consecutive quarter of strong margin growth.
Total Deal TCV reached $202 million, an 89% increase over Q2, with new deal wins contributing $94 million.
Adjusted PAT (excluding one-time tax and labor code impacts) rose 22.1% QoQ to ₹1,802 million.
Cash and cash equivalents grew to ₹24,914 million, a 21.2% increase year-on-year.
Manufacturing vertical and Infrastructure service lines led growth, rising 3.4% and 9.9% QoQ in dollar terms respectively.
💼 Action for Investors
Investors should take confidence in the sharp margin recovery and the robust deal pipeline, particularly in AI-led engagements. The company's ability to generate strong cash flows and rationalize tail accounts positions it well for long-term value creation.
Birlasoft Q3 FY26 Results: Revenue at ₹13,475M, PAT Grows 3.2% QoQ Despite ₹407M Labour Code Charge
Birlasoft reported a consolidated revenue of ₹13,475.32 million for Q3 FY26, representing a sequential growth of 1.4% over Q2 FY26. Net profit for the quarter stood at ₹1,198.89 million, up 3.2% QoQ, even after accounting for a one-time exceptional charge of ₹406.88 million related to the new Indian Labour Codes. On a year-on-year basis, revenue saw a marginal decline of 1.1% from ₹13,627.03 million in Q3 FY25. The company maintained a stable performance with a basic EPS of ₹4.28 for the quarter.
Key Highlights
Consolidated Revenue from operations reached ₹13,475.32 million, up 1.4% QoQ but down 1.1% YoY.
Net Profit (PAT) for the quarter was ₹1,198.89 million, showing resilience despite regulatory headwinds.
Recognized a significant one-time exceptional item of ₹406.88 million due to the impact of New Labour Codes.
9M FY26 Revenue stood at ₹39,613.33 million, a 2.4% decrease compared to ₹40,583.51 million in 9M FY25.
Basic EPS improved to ₹4.28 in Q3 FY26 from ₹4.16 in the preceding quarter.
💼 Action for Investors
Investors should view the results as steady but cautious, noting that the profit growth occurred despite a large one-time regulatory hit. Monitor the company's ability to return to year-on-year revenue growth in the coming quarters.