💰 Financial Performance

Revenue Growth by Segment

Standalone revenue from IT services and hardware sales grew 29% YoY to INR 266.63 Cr in FY 2024-25. Consolidated revenue reached INR 288.38 Cr, a 28.5% increase from INR 224.30 Cr in FY 2023-24, driven by new service contracts and timely delivery of software projects.

Geographic Revenue Split

Domestic operations contributed 86.3% (INR 248.93 Cr) of consolidated revenue in FY 2024-25, while Export revenue contributed 13.7% (INR 39.45 Cr). Standalone domestic revenue grew 32.4% YoY to INR 248.22 Cr.

Profitability Margins

Net Profit Margin (PAT Margin) improved from 7.56% in FY 2024-25 to 8.41% in FY 2024-25. Consolidated PAT for Q2 FY26 rose 69.55% YoY to INR 7.46 Cr, with PAT margins expanding by 284 bps to 8.72% due to a higher mix of software services.

EBITDA Margin

EBITDA margin for Q2 FY26 stood at 16.14%, a significant improvement of 390 bps from 12.24% in Q2 FY25. This was driven by a 50.66% surge in EBITDA to INR 13.80 Cr, reflecting better absorption of fixed overheads and higher-margin software service contracts.

Capital Expenditure

Not explicitly disclosed in absolute INR Cr for future periods, but the company reported a 235% increase in its Debt-Equity ratio in FY 2024-25 to fund business expansion and operational working capital requirements.

Credit Rating & Borrowing

The company maintains an IVR BBB/Stable (Long Term) and IVR A3+ (Short Term) rating. Borrowing costs are reflected in interest rates of 9.00% to 9.30% p.a. on advances to subsidiaries like Silvertouch Technologies Inc. and Canada Ltd.

⚙️ Operational Drivers

Raw Materials

Hardware components including computers and peripherals represent the primary 'sale of goods' cost, though specific percentage of total cost per item is not disclosed.

Capacity Expansion

The company operates with 764 employees as of March 31, 2025, and 50 apprentice trainees. Expansion is focused on human capital and service delivery rather than physical manufacturing capacity.

Raw Material Costs

Cost of goods sold relates to computer hardware; however, the shift toward software services (which fetch higher margins) reduced the relative impact of hardware procurement costs on the bottom line in FY 2024-25.

Manufacturing Efficiency

Operational efficiency is measured by the improvement in operating margins from 11.52% in FY24 to 13.72% in FY25, driven by better utilization of the skilled workforce in software services.

📈 Strategic Growth

Expected Growth Rate

13-15%

Growth Strategy

Growth is targeted through expansion in e-Governance, enterprise technology, and digital transformation. The company is leveraging its healthy order book and increasing its presence in international markets like the USA, UK, and France to drive higher-margin export revenue.

Products & Services

IT solutions, software services, e-Governance platforms, enterprise technology solutions, and sale of computer hardware and peripherals.

Brand Portfolio

Silver Touch

New Products/Services

New service contracts in software services contributed to the 29% revenue growth in FY25; specific new product names are not listed.

Market Expansion

Expansion is focused on international subsidiaries in the USA, UK, France, and Canada to diversify revenue away from the 86% domestic concentration.

Strategic Alliances

The company operates through wholly-owned subsidiaries: Silver Touch Technologies INC (USA), Silver Touch Technologies UK Ltd, and Silver Touch Technologies SAS (France).

🌍 External Factors

Industry Trends

The industry is shifting toward digital transformation and cybersecurity. Silver Touch is positioning itself by increasing its EBITDA margins to 16.14% in Q2 FY26 through specialized IT services.

Competitive Landscape

The IT industry is highly competitive with low entry barriers for services, though the company's established relationship with government entities provides a defensive advantage.

Competitive Moat

The moat is built on the 20+ years of experience of promoter Mr. Vipul H. Thakkar and a strong track record in e-Governance, which creates high switching costs for government clients.

Macro Economic Sensitivity

Highly sensitive to government IT spending and digital India initiatives, as a significant portion of revenue is derived from domestic government agencies.

Consumer Behavior

Increased demand for digital transformation and automated e-Governance services is driving the 14.25% YoY revenue growth seen in Q2 FY26.

Geopolitical Risks

Global uncertainties and trade disruptions could impact the export segment and the procurement of hardware peripherals.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with data protection laws and industry-specific regulations is mandatory; adapting to new regulations necessitates significant investments in legal resources and system upgrades.

Taxation Policy Impact

The company noted that changes in corporate tax rates or digital services taxes could erode profit margins. Current tax compliance is managed through prescribed accounting standards.

Legal Contingencies

The company reported no pending cases for holding benami property and no whistle-blower complaints were received during the year.

⚠️ Risk Analysis

Key Uncertainties

Technology obsolescence and cybersecurity threats are primary risks. A major security breach could impact reputation and lead to legal liabilities, potentially impacting revenue by over 20%.

Geographic Concentration Risk

High geographic concentration with 86.3% of revenue coming from the domestic Indian market.

Third Party Dependencies

Dependency on government tenders for a significant portion of the order book introduces business risk and revenue volatility.

Technology Obsolescence Risk

The company faces high risk from rapidly evolving technologies; failure to upgrade skills could lead to a loss of market share to more agile competitors.

Credit & Counterparty Risk

Counterparty risk is considered low due to the company's association with reputed government clientele, though receivable periods remain high.