💰 Financial Performance

Revenue Growth by Segment

H1 FY26 revenue reached INR 45.49 Cr, a 58% YoY growth from INR 28.78 Cr. Segmental contribution: Gen AI, Cloud & Data Engineering (45%), App Development (38%), and Blockchain & Web3 (17%).

Geographic Revenue Split

The company operates in 4 key global markets: USA, UK, EMEA, and APAC. Foreign exchange earnings in FY25 were INR 61.17 Cr, representing approximately 91% of consolidated revenue, highlighting a heavy reliance on international markets.

Profitability Margins

Profitability has shown a strong upward trend: EBITDA margins improved from 30.9% in FY24 to 38.2% in FY25, and further to 42.2% in H1 FY26. PAT margin for H1 FY26 stood at approximately 40% (INR 19.07 Cr PAT on INR 48.29 Cr total income).

EBITDA Margin

EBITDA margin was 42.2% in H1 FY26, a significant increase from 30.4% in FY23. This expansion is driven by a shift toward high-value services like GenAI and Blockchain, which command higher pricing power and better resource utilization.

Capital Expenditure

In H1 FY26, the company spent INR 0.27 Cr on Property, Plant, and Equipment. In FY25, total CapEx included INR 0.31 Cr for PPE and INR 0.51 Cr for Intangible Assets and development, reflecting a low-asset-heavy service model.

Credit Rating & Borrowing

The company is debt-free with a debt-equity ratio of 0.00. It maintains a high current ratio of 10.79 as of March 2025, indicating exceptional liquidity and no reliance on external borrowing or interest-bearing debt.

⚙️ Operational Drivers

Raw Materials

As a digital engineering firm, the primary 'raw material' is human capital. Employee benefit expenses represent 42.7% of total revenue (INR 19.43 Cr in H1 FY26). Cost of sales (third-party software/services) accounts for 4.7% of revenue (INR 2.16 Cr).

Import Sources

Not applicable as the company is a service provider; however, talent is primarily sourced from its headquarters in Indore, India, with sales leadership based in the UK, USA, and APAC regions.

Key Suppliers

Not specifically disclosed, but includes cloud service providers (Google Cloud, as they are a Google GenAI partner) and software tool vendors necessary for digital engineering.

Capacity Expansion

Current capacity is driven by a team of 270+ members. Expansion is focused on human capital and regional leadership, recently adding heads for EMEA, APAC, and a VP of Sales for the Americas to drive global client acquisition.

Raw Material Costs

Employee costs are the dominant expense, rising from INR 16.49 Cr in H1 FY25 to INR 19.43 Cr in H1 FY26 (an 18% increase), which is lower than the 58% revenue growth, indicating high operational leverage.

Manufacturing Efficiency

Measured by revenue per employee and utilization rates. The company achieved a 27% 3-year revenue CAGR while maintaining a boutique-style approach to ensure high-quality delivery.

Logistics & Distribution

Distribution is digital. Marketing and sales efforts are spearheaded by regional heads in the UK, USA, and APAC to maintain a 95% customer satisfaction rate.

📈 Strategic Growth

Expected Growth Rate

27%

Growth Strategy

Growth is targeted through high-growth tech verticals: GenAI (where they are one of 20 global companies recognized by Google), Web3, and Data Engineering. Strategy includes aggressive expansion in EMEA and Americas via new senior sales leadership and leveraging their 19-year track record to secure larger enterprise contracts.

Products & Services

Custom software development, GenAI platform engineering, Blockchain/Web3 applications, Cloud-native solutions, and Data Analytics platforms.

Brand Portfolio

Systango

New Products/Services

Focusing on AI-powered revenue growth and innovation commercialization for B2B tech, retail, and fintech sectors, expected to sustain the current 58% YoY growth momentum.

Market Expansion

Expanding regional presence in EMEA and APAC markets; recently appointed Pratim Das (Head EMEA) and Sebastian Shimomichi (Head APAC) to drive market entry and innovation.

Market Share & Ranking

Recognized as a leading SME digital engineering firm; specifically noted as one of only 20 global companies recognized by Google for GenAI expertise.

Strategic Alliances

Partnered with Google for GenAI initiatives and Chesamel Group for digital transformation enablement.

🌍 External Factors

Industry Trends

The industry is shifting toward GenAI and Cloud-native architectures. Systango is positioned as an early adopter, with 45% of revenue already coming from these high-growth technology shifts.

Competitive Landscape

Competes with global digital engineering firms and boutique IT consultancies. Competitors include mid-tier Indian IT firms and specialized global digital agencies.

Competitive Moat

Moat is built on a 95% customer satisfaction rate and specialized expertise in niche areas like Web3 and GenAI. This is sustainable due to high switching costs for clients integrated into custom-built digital platforms.

Macro Economic Sensitivity

Highly sensitive to global IT spending, particularly in the US and UK. A slowdown in Western tech budgets would directly impact the 91% foreign revenue stream.

Consumer Behavior

Enterprises are shifting from traditional Web2 to Web3 and AI-integrated platforms to drive efficiency, which aligns with Systango's core service offerings.

Geopolitical Risks

Trade barriers or changes in visa regulations in the UK and USA could impact the offshore delivery model and the ability to deploy consultants on-site.

⚖️ Regulatory & Governance

Industry Regulations

Subject to data protection laws (GDPR in the UK/EU and various US state laws) given their role in managing client data and building digital platforms.

Environmental Compliance

Minimal impact due to the service-based nature of operations; ESG costs are not separately material.

Taxation Policy Impact

Effective tax rate is approximately 18-20% based on H1 FY26 figures (INR 3.00 Cr tax on INR 22.07 Cr PBT).

Legal Contingencies

The company reports zero pending litigations that would impact its financial position as of the latest audit.

⚠️ Risk Analysis

Key Uncertainties

Forex volatility remains the highest risk, with a potential 5-10% impact on the bottom line. Rapid technology obsolescence in the AI space requires constant upskilling of the 270+ member workforce.

Geographic Concentration Risk

High concentration in Western markets (UK/USA), which account for the majority of the INR 61.17 Cr foreign earnings.

Third Party Dependencies

Low supplier dependency, but high dependency on the Google ecosystem for GenAI partnership and lead generation.

Technology Obsolescence Risk

Mitigated by the company's focus on 'Tomorrow’s innovations today,' specifically GenAI and Blockchain, which are currently at the start of their lifecycle.

Credit & Counterparty Risk

Trade receivables stand at INR 15.06 Cr. The Trade Receivable Turnover Ratio decrease to 4.90 suggests a need for tighter collection cycles as the business scales.