R Systems International reported a year-on-year rise in consolidated revenue to ₹6,017.01 million for the quarter ended June 30, 2026 (Q1FY27), while net profit declined to ₹555.70 million from ₹758.54 million in the corresponding period of the previous year. The divergence between top-line growth and bottom-line contraction was driven by higher operating expenses and finance costs, despite an expansion in EBITDA margin. The Board of Directors also approved a postal ballot for the appointment of three new independent directors.

Financial Performance

Consolidated revenue from operations grew significantly to ₹6,017.01 million in Q1FY27, compared to ₹4,620.15 million in Q1FY26. This represents a robust top-line expansion, supported by growth in both Information Technology Services and Knowledge Services segments. However, consolidated net profit for the quarter fell to ₹555.70 million, down from ₹758.54 million year-ago. The decline in profitability occurred despite EBITDA rising to approximately ₹1,107.28 million (derived from segment results before tax/interest adjustments) from lower levels previously, indicating increased below-the-line costs or tax impacts.

The following table highlights key consolidated financial metrics:

Standalone revenue rose to ₹3,425.40 million from ₹2,922.66 million in Q1FY26. Standalone net profit decreased to ₹358.09 million from ₹682.98 million in the same period last year. The standalone basic earnings per share were ₹3.02, compared to ₹5.77 in Q1FY26.

Segment and Operational Details

The Information Technology Services segment contributed ₹5,437.01 million to consolidated revenue, up from ₹4,134.41 million in Q1FY26. The Knowledge Services segment generated ₹596.69 million, compared to ₹502.02 million previously. Statutory auditor Deloitte Haskins & Sells LLP issued an unmodified limited review report on the consolidated results and an unmodified audit opinion on the standalone results.

Corporate Actions and Governance

At its meeting held on August 04, 2026, the Board approved the audited standalone and unaudited consolidated financial results for the quarter and six months ended June 30, 2026. The Board also initiated a postal ballot process seeking shareholder approval for the appointment of the following individuals as Independent Directors for a term of five years commencing June 29, 2026:

• Shailesh Sharad Kekre (DIN: 07679583)
• Sangeeta Kapil Jit Singh (DIN: 06920906)
• Srikanth Balachandran (DIN: 02815932)

Additionally, the Board approved the appointment of Pranav Damani (DIN: 11416778) as a Non-Executive Non-Independent Director. The Postal Ballot Notice will be circulated to shareholders in accordance with SEBI Listing Regulations.

What the Numbers Show

The significant drop in net profit despite strong revenue growth suggests margin pressure or one-off expenses impacting the bottom line. Finance costs increased to ₹94.77 million from ₹21.41 million in Q1FY26, contributing to the lower net profit. Furthermore, other income declined sharply to ₹13.68 million from ₹469.67 million in Q1FY26, largely due to the absence of the ₹435.95 million gain on asset sales recorded in the prior year. This non-recurring item in the comparative period distorts the year-on-year profit comparison, making the operational performance appear weaker than it might be on a like-for-like basis.

R Systems International reported consolidated revenue from operations of ₹6,017.01 million for the quarter ended June 30, 2026 (Q2FY27), reflecting a 30.2% increase compared to ₹4,620.15 million in the corresponding period of the previous fiscal year. While statutory net profit fell 26.8% to ₹555.70 million due to the absence of one-time asset sale gains recorded in the prior year, the company’s adjusted EBITDA surged 51.4% to ₹1,207.50 million. The strong operational performance was driven by sustained demand for AI-first engineering services, improved utilization rates, and a rise in trailing twelve-month (TTM) annual contract value (ACV) bookings excluding renewals to $82.9 million.

The Board of Directors approved these results at its meeting held on August 04, 2026. For the first half of FY27 (H1FY27), consolidated revenue reached ₹11,764.69 million, up 30.1% year-on-year. Adjusted EBITDA for the half-year stood at ₹2,364.15 million, representing a 51.0% growth, with margins expanding to 20.1% from 17.3% in H1FY26. Management attributed the margin expansion to operating leverage from its platform-led model, disciplined cost management, and higher utilization, particularly in offshore operations.

Key Financial Metrics

The variance between statutory and adjusted profitability highlights the impact of non-recurring items. In Q2FY26, other income included a ₹435.95 million gain on the sale of land, building, and other assets at the company’s Noida office. In contrast, Q2FY27 included severance payments and share-based payment expenses of ₹62.37 million related to restricted stock units (RSUs). Excluding these items, adjusted net profit grew 35.4% to ₹628.74 million. The company also adopted cash flow hedge accounting under Ind AS 109 effective January 1, 2026, recording a gain of ₹90.79 million in Other Comprehensive Income for the quarter.

Operational Highlights and AI Strategy

Nitesh Bansal, Managing Director & CEO, stated that Q2FY27 reflects the continued focus on an AI-native strategy as mid-market enterprises scale from experimentation to production-grade AI adoption. Revenue grew 17.7% year-on-year in US$ terms for the quarter, driven by sustained demand for services enabled by EXIQO, the company’s AI Studio leveraging the OptimaAI platform. R Systems was recognized as a Horizon 2 GCC Accelerator in HFS’ Horizons: GCC Services, 2026 Report, validating its AI-first Global Capability Center (GCC) model.

Key deal wins during the quarter included engagements with a leading global telecommunications company for advanced analytics, a U.S. small business lender for an AI-powered GCC, and a global insurance provider for AI-powered quality engineering. Additionally, the company partnered with a U.S.-based AdTech firm to modernize its core advertising platform using AI-powered software engineering. TTM ACV bookings excluding renewals rose to $82.9 million in Q2FY27 from $74.0 million in Q2FY26, indicating strong new business momentum.

Revenue Mix and Utilization

Revenue from the Technology, Internet, Platforms & Services (TIPS) vertical remained the largest contributor at 41.39%, followed by Banking, Finance & Insurance (BFSI) at 20.47%. Geographically, the Americas accounted for 71.50% of revenue, while APAC contributed 15.28%. Client concentration remained stable, with the top 10 clients contributing 24.39% of revenue.

Utilization rates showed improvement, with blended utilization standing at 81.13%. Offshore utilization rose to 78.95% from 80.70% in the prior year period, though it slightly declined from 78.23% in Q1FY27. The total employee count decreased slightly to 5,270 from 5,303 in March 2026, with technical staff numbering 4,728. Days Sales Outstanding (DSO) on billed invoices improved to 55 days in Q2FY27 from 63 days in Q1FY27, signaling better collection efficiency.

What the Numbers Show

The divergence between statutory net profit decline and adjusted EBITDA surge underscores the normalization of earnings after the one-time asset sale in the prior year. The expansion in adjusted EBITDA margin from 17.3% to 20.1% indicates genuine operational leverage rather than just top-line growth. Furthermore, the robust cash generation is evident from the increase in cash and bank balances (net of short-term borrowing) to ₹3,351 million as of June 30, 2026, from ₹2,726 million at the end of December 2025. Total equity attributable to shareholders also strengthened to ₹10,983 million.

Deloitte Haskins & Sells LLP served as the statutory auditor for the standalone results and conducted a limited review of the consolidated results, issuing an unmodified report. The company continues to implement Ind AS 109 for cash flow hedges, recording a gain of ₹90.79 million in Other Comprehensive Income for the quarter.