HRHNEXT - HRH Next

📊 NSE: HRHNEXT 🏢 Computers - Software - Medium / Small 📅 Last Updated: 12/14/2025 7:48

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment (Contact Center Services). Revenue from operations grew 11% YoY, reaching INR 32.24 Cr in H1 FY26 compared to INR 29.04 Cr in H1 FY25. This growth was driven by increased throughput per agent and the stabilization of the IRCTC contract.

Geographic Revenue Split

Not explicitly disclosed in percentage terms, but the company focuses on the Indian market with a strategic emphasis on capturing growth in Tier-2 and Tier-3 cities to leverage cost efficiencies.

Profitability Margins

PAT margin stood at 6.46% in H1 FY26, a decline from 7.09% in H1 FY25. Profit After Tax (PAT) was INR 2.08 Cr, up 1% YoY from INR 2.06 Cr. The margin compression is attributed to high depreciation from tech investments and increased operational expenses for AI development.

EBITDA Margin

EBITDA margin was 18.10% in H1 FY26, down 11% from 20.26% in H1 FY25. Absolute EBITDA decreased by 1% to INR 5.84 Cr. The decline is due to front-loaded expenses for the 'AINA' AI wing, which the company views as a necessary investment for future margin expansion.

Capital Expenditure

The company made significant investments in servers and software for the development of its AI tool, AINA. This resulted in a 40% YoY increase in depreciation costs, which rose to INR 2.03 Cr in H1 FY26 from INR 1.45 Cr in H1 FY25.

Credit Rating & Borrowing

Total borrowings were reduced to INR 9.79 Cr in H1 FY26 from INR 15.99 Cr in H1 FY25, a decrease of 38.7%. Interest costs for H1 FY26 were INR 0.93 Cr, representing a 5% YoY increase.

⚙️ Operational Drivers

Raw Materials

As a service-based BPO, the primary 'raw materials' are Human Capital (talent) and Technology Infrastructure (Servers and Software). Technology costs are currently elevated due to the development of the AINA platform.

Import Sources

Not disclosed; however, technology infrastructure (servers/software) is sourced to support the Hyderabad-based operations.

Key Suppliers

Not specifically named, but the company procures servers and software for its AINA development wing.

Capacity Expansion

The company is focusing on improving 'throughput per agent,' which saw a 25-30% improvement recently. Physical expansion is targeted at Tier-2 and Tier-3 cities to manage costs.

Raw Material Costs

Total expenses for H1 FY26 were INR 26.42 Cr, up 14% YoY from INR 23.22 Cr. This increase was driven by investments in AI talent and infrastructure.

Manufacturing Efficiency

Operational efficiency is measured by agent throughput, which improved by 25-30%. The company aims to leverage AINA to further automate processes and improve margins by 2-3% conservatively.

Logistics & Distribution

Not applicable as services are delivered digitally/telephonically.

📈 Strategic Growth

Expected Growth Rate

25-30%

Growth Strategy

Growth will be achieved through the monetization of the AINA AI tool starting in H2 FY26, expansion into Tier-2/3 cities, and migration to the Main Board by 2027. The company is also increasing authorized share capital to prepare for potential acquisitions in the AI space.

Products & Services

Contact center services (Inbound/Outbound), vernacular language support, and the AINA AI automation suite for industries like Telecom, Food Tech, Fintech, and Edutech.

Brand Portfolio

HRH Next, AINA (AI tool).

New Products/Services

AINA (AI automation tool) is the primary new product, with revenue generation expected to begin in H2 FY26 and scale significantly by 2027.

Market Expansion

Targeting Tier-2 and Tier-3 cities in India to capture growth while maintaining a lower cost base compared to Tier-1 hubs.

Market Share & Ranking

Self-identified as a leader in the vernacular contact center market in India.

Strategic Alliances

The company maintains a significant association with IRCTC (operational since Feb/March 2025) and Swiggy.

🌍 External Factors

Industry Trends

The global BPO market is shifting toward AI and automation. HRH Next is positioning itself by moving away from traditional labor-intensive models toward AI-integrated services to maintain competitiveness.

Competitive Landscape

Faces competition from both small local players and large multinational BPOs, leading to pricing pressures and potential margin erosion.

Competitive Moat

The moat is built on vernacular language leadership and 24/7 service capability. The sustainability of this moat depends on the successful adoption and proprietary nature of the AINA AI tool.

Macro Economic Sensitivity

Sensitive to the growth of the Indian digital economy (Food Tech, Fintech), as these sectors drive the demand for contact center services.

Consumer Behavior

Increasing demand for 24/7 support and localized (vernacular) communication is driving the need for HRH Next's specialized services.

Geopolitical Risks

General economic and geopolitical uncertainty is noted as a threat to the broader BPO market stability.

⚖️ Regulatory & Governance

Industry Regulations

Compliant with the Companies Act, 2013 and Accounting Standards prescribed under Section 133. Subject to data privacy and telecom regulations relevant to contact centers.

Environmental Compliance

Not disclosed as a significant cost factor for this service-oriented business.

Taxation Policy Impact

The effective tax expense for H1 FY26 was INR 0.79 Cr, a 48% decrease from INR 1.50 Cr in H1 FY25, due to a reduction in inadmissible expenses.

Legal Contingencies

The auditors' report for FY25 provided a true and fair view with no specific mention of material pending litigation values in the provided excerpts.

⚠️ Risk Analysis

Key Uncertainties

The 40% revenue dependency on Swiggy is the primary uncertainty. Any shift in Swiggy's vendor strategy could impact revenue by up to 40%.

Geographic Concentration Risk

Highly concentrated in India, specifically operating out of Hyderabad with a focus on domestic Tier-2/3 expansion.

Third Party Dependencies

High dependency on key clients like Swiggy (40%) and IRCTC for revenue stability.

Technology Obsolescence Risk

Risk that clients develop their own AI tools, rendering third-party BPO services obsolete; HRH is mitigating this by developing its own AINA AI suite.