💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 38.4% YoY from INR 71.88 Cr in FY24 to INR 99.50 Cr in FY25. The Global Capability Center (GCC) segment saw explosive growth of 391%, rising from INR 9.18 Cr to INR 45.09 Cr. IT Consulting revenue decreased 14.5% from INR 62.43 Cr to INR 53.38 Cr.

Geographic Revenue Split

In FY25, Export Revenue contributed 54.5% (INR 54.23 Cr), while Domestic Revenue contributed 44.5% (INR 44.24 Cr). This shifted from FY24 where Domestic Revenue was dominant at 74.1% (INR 53.29 Cr).

Profitability Margins

Profit Before Tax (PBT) margin improved from 5.8% in FY24 to 9.5% in FY25. Operating income margin rose from 5.1% to 8.7% YoY, driven by the higher-margin GCC business and operational efficiencies.

EBITDA Margin

Operating income grew 133.8% YoY from INR 3.70 Cr in FY24 to INR 8.65 Cr in FY25. Core profitability improved as the company transitioned toward high-value GCC services and AI-enabled delivery models.

Capital Expenditure

The company undertook a significant capex of INR 12.5 Cr in H1 FY26, primarily for office expansion and infrastructure to support growth. Additionally, INR 3-4 Cr has been deployed into the new leasing business assets.

Credit Rating & Borrowing

Non-current liabilities increased from INR 2.17 Cr to INR 14 Cr in H1 FY26, a 545% jump, primarily due to new loans taken to fund the INR 12.5 Cr capex. Specific interest rate percentages were not disclosed.

⚙️ Operational Drivers

Raw Materials

As an IT services firm, the primary 'raw material' is human capital. Salaries, incentives, and contracting manpower accounted for 52.5% of total revenue (INR 52.29 Cr) in FY25.

Import Sources

Not applicable for IT services; however, talent is primarily sourced from India to serve clients in the US, UK, and Europe.

Key Suppliers

Not applicable for IT services. Key vendors include IT infrastructure and cloud service providers, though specific names were not disclosed.

Capacity Expansion

The company is expanding its physical footprint with a new office and has board approval for a new subsidiary in Canada. It is also building dedicated sales teams for Europe and the Middle East.

Raw Material Costs

Employee benefit expenses rose 146% YoY from INR 9.98 Cr in FY24 to INR 24.57 Cr in FY25, reflecting aggressive hiring for the GCC and AI divisions.

Manufacturing Efficiency

Efficiency is measured by AI implementation in sales and marketing, which management claims will 'increase operational efficiency like crazy' and has already started showing results in project delivery.

Logistics & Distribution

Not applicable; services are delivered digitally or through onsite consulting.

📈 Strategic Growth

Expected Growth Rate

35%

Growth Strategy

The company aims to reach INR 135 Cr revenue in FY26 by expanding its US subsidiary (expected to add INR 5 Cr in H2 FY26), scaling the India-based GCC support business, and leveraging its new leasing business. Growth is also supported by AI-enabled delivery and expansion into Canada and the Middle East.

Products & Services

IT Consulting, Global Capability Center (GCC) management, AI-powered software solutions (Honest AI), and IT asset leasing services.

Brand Portfolio

SA Tech, Honest AI.

New Products/Services

The 'Honest AI' platform and the new IT asset leasing business are expected to contribute significantly to H2 FY26 revenue.

Market Expansion

Targeting Europe and Middle East with new sales teams; Canada subsidiary is board-approved for launch.

Market Share & Ranking

Not disclosed; however, the company holds CMMI Level 5 certification, placing it in a high-tier bracket for process quality.

Strategic Alliances

Actively pursuing strategic partnerships and co-investment models with mid-market enterprises to accelerate market penetration.

🌍 External Factors

Industry Trends

The industry is shifting toward AI-enabled delivery and the 'GCC-as-a-Service' model. SA Tech is positioning itself by integrating Generative AI into its delivery pyramid to lower overhead costs.

Competitive Landscape

Competes with global and Indian IT firms in the GCC and consulting space; differentiates through AI integration and a specialized leasing model.

Competitive Moat

Moat is built on CMMI Level 5 certification and deep integration with US/UK clients who value long-term relationship sustainability. This is durable because switching costs for GCC operations are high.

Macro Economic Sensitivity

Highly sensitive to US and UK economic health, as these regions drive the high-margin GCC and export consulting revenue.

Consumer Behavior

Enterprise clients are increasingly demanding AI-integrated solutions and sustainable, long-term offshore partners rather than short-term vendors.

Geopolitical Risks

Trade barriers or changes in H1-B/visa regulations could impact the IT consulting segment's ability to deploy manpower in the US.

⚖️ Regulatory & Governance

Industry Regulations

Complies with Ind AS and the Companies Act, 2013. Transitioned to a Public Limited status effective November 3, 2023.

Environmental Compliance

Not disclosed as a significant cost for this IT-based business model.

Taxation Policy Impact

The company benefits from tax advantages associated with GCC operations. Deferred tax assets are recognized based on the certainty of future realization.

Legal Contingencies

The company noted remuneration payable in cases of inadequate profit as per Schedule V of the Companies Act, requiring special resolutions. Specific pending court case values were not disclosed.

⚠️ Risk Analysis

Key Uncertainties

The timing of becoming operating cash flow positive (targeted for H2 FY26) is a key uncertainty. Failure to meet the INR 135 Cr revenue target could impact the valuation range.

Geographic Concentration Risk

High concentration in the US and UK markets, which are the primary sources for the GCC and export revenue (54.5% of total).

Third Party Dependencies

Dependency on specialized AI talent and third-party software vendors for delivery frameworks.

Technology Obsolescence Risk

High risk if the company fails to keep pace with Generative AI shifts; mitigated by recent 1-year investment in 'Honest AI'.

Credit & Counterparty Risk

The company uses the indirect method for cash flows; receivables quality is critical as it scales its domestic leasing and international consulting business.