💰 Financial Performance

Revenue Growth by Segment

The company operates in a single business segment: IT and IT enabled Services. Revenue from operations for H1 FY26 reached INR 4,112.4 Lakhs, a 31% YoY increase from INR 3,149.7 Lakhs. For Q2 FY26, revenue grew 41% YoY to INR 2,283.2 Lakhs, driven by increased demand for web and mobile app development and maintenance services.

Geographic Revenue Split

The company maintains a presence across India, the Middle East, and the US. While specific percentage splits are not disclosed, management describes this tri-regional presence as a 'balanced engine of growth' that reinforces sustainable global performance.

Profitability Margins

Net Profit for H1 FY26 was INR 851.4 Lakhs, up 20% YoY. Net Margin for H1 FY26 was 21%, compared to 23% in the previous year. For Q2 FY26, Net Margin was 18% on a profit of INR 416.7 Lakhs. The slight margin compression in H1 is attributed to investments in global expansion and AI integration.

EBITDA Margin

EBITDA for H1 FY26 was INR 1,297.9 Lakhs, up 32% YoY, with the EBITDA margin improving to 32% from 31% YoY. Q2 FY26 EBITDA grew 43% YoY to INR 648.7 Lakhs with a 28% margin, reflecting strong operational efficiency in project delivery.

Capital Expenditure

Not explicitly disclosed in absolute INR Cr for future periods, but the company reported positive cash flow from operating activities of INR 83.1 Lakhs in FY21 and continues to invest in AI and digital platforms to energize performance.

Credit Rating & Borrowing

The company reported finance costs of INR 2.3 Lakhs for H1 FY26, down from INR 2.6 Lakhs YoY. Standalone cash and cash equivalents stood at INR 422.0 Lakhs as of September 30, 2025, indicating a low reliance on external debt for immediate operations.

⚙️ Operational Drivers

Raw Materials

As an IT services company, the primary 'raw material' is human capital. Employee benefits expense was INR 819.8 Lakhs in FY21, representing approximately 40% of total operating revenue (INR 2,059.5 Lakhs).

Import Sources

Not applicable as the company is a service provider; however, talent is sourced primarily from India to serve global markets in the US and Middle East.

Key Suppliers

Not applicable for IT services; the company relies on technology infrastructure and software vendors rather than traditional raw material suppliers.

Capacity Expansion

Capacity is measured by workforce and technological capability. The company is currently integrating Artificial Intelligence (AI) across its development and delivery operations to enhance operational agility and efficiency.

Raw Material Costs

Employee costs are the primary driver. In FY21, these costs were INR 819.8 Lakhs. Management focuses on 'Resource Utilization Levels' which improved significantly in FY21 to drive a 100% YoY increase in EBITDA.

Manufacturing Efficiency

Efficiency is tracked via 'Resource Utilization Levels.' The company achieved its highest-ever quarterly EBITDA of INR 1.3 Cr in Q4 FY21 by optimizing staff allocation to projects.

Logistics & Distribution

Distribution is digital. Costs are categorized under 'other expenses' and international expansion costs, which support the 31% YoY revenue growth.

📈 Strategic Growth

Expected Growth Rate

31%

Growth Strategy

Growth is targeted through the integration of AI across all development operations to increase delivery speed. The company is expanding its portfolio in the Middle East and US markets to create a 'balanced engine' of performance and is focusing on sustainable, long-term value through digital platform innovation.

Products & Services

IT and IT enabled Services including web and mobile app development, software consultancy, maintenance, testing, and related ancillary services.

Brand Portfolio

DRC Systems

New Products/Services

Integration of AI-driven development tools and digital platforms is expected to energize the existing portfolio, though specific revenue contribution % for new products is not disclosed.

Market Expansion

Targeting deeper penetration in the US and Middle East markets. The company is leveraging its GIFT City, Gandhinagar headquarters to facilitate international service exports.

Strategic Alliances

The company enters into and maintains commercial agreements and strategic transactions, though specific partner names for the current period were not listed in the provided text.

🌍 External Factors

Industry Trends

The industry is rapidly adopting AI. DRC is positioning itself by integrating AI into its core delivery operations to stay competitive and maintain its 30%+ growth rate.

Competitive Landscape

The company operates in a highly competitive global IT services market, competing on the basis of technical expertise in web/mobile apps and operational agility.

Competitive Moat

The moat is built on 'operational excellence' and a diversified geographic presence. Operating from GIFT City provides a competitive cost and regulatory advantage for international IT exports.

Macro Economic Sensitivity

Highly sensitive to global economic conditions and the rate of Internet growth, which dictate the capital expenditure budgets of its international clients.

Consumer Behavior

Shift toward digital-first interactions is driving demand for the company's mobile and web development services.

Geopolitical Risks

Operations in the Middle East and US expose the company to trade policies and world events that could cause actual results to differ materially from forward-looking statements.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company adheres to Ind AS-108 for segment reporting and maintains strict policies on the 'Preservation of Documents' and 'Materiality for Disclosures.'

Environmental Compliance

Not a major cost factor for IT services; ESG compliance is managed through corporate governance policies available on the company website.

Taxation Policy Impact

The company notes that the 'extent to which we owe taxes' is a factor that could cause results to differ; it complies with standard Indian corporate tax norms and Ind AS-108.

Legal Contingencies

The company reported 0 complaints filed, 0 disposed, and 0 pending for the financial year. Statutory audit fees were INR 1.50 Lakhs and limited review fees were INR 1.50 Lakhs.

⚠️ Risk Analysis

Key Uncertainties

Foreign exchange volatility and changes in government policies are primary risks. Management of rapid international growth (31% YoY) poses an execution risk if resource utilization is not maintained.

Geographic Concentration Risk

Revenue is spread across India, Middle East, and the US, reducing the risk of 100% concentration in any single economy.

Third Party Dependencies

Dependent on the maintenance of commercial agreements and strategic transactions to sustain its expanding portfolio.

Technology Obsolescence Risk

High risk in the IT sector; mitigated by the proactive integration of Artificial Intelligence into development and delivery operations.

Credit & Counterparty Risk

Receivables quality is managed through the Audit Committee; the company reported a positive cash flow from operations of INR 83.1 Lakhs in its last full-year cycle.