The Board of Directors of XTGlobal Infotech approved the unaudited standalone and consolidated financial results for the quarter ended June 30, 2026 (Q1FY27). The Hyderabad-based IT services company reported improved profitability across both standalone and consolidated metrics compared to the previous fiscal year. Management discussed these financial results during the Q1 FY27 Earnings Conference Call held on Monday, August 17, 2026, at 5:00 pm (IST), in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Consolidated net profit after tax rose to ₹3.89 crore in Q1FY27, up from ₹3.74 crore in Q1FY26. This marks a 27% year-on-year increase. On a sequential basis, profit also expanded from ₹3.74 crore in the preceding quarter (Q4FY26). Standalone net profit was ₹1.82 crore, an increase of 20% from ₹1.52 crore recorded in the corresponding quarter of FY26.

Revenue and Cost Dynamics

Consolidated income from operations reached ₹93.30 crore, a modest 1% growth over the ₹92.31 crore reported in Q1FY26. Sequentially, revenue increased by 4% from ₹89.52 crore in Q4FY26. Standalone revenue from operations was ₹19.19 crore, up 8% YoY from ₹17.77 crore.

Employee costs remained the largest expense component. Consolidated regular employee costs were ₹44.64 crore, slightly lower than the ₹45.92 crore incurred in Q1FY26. However, costs for technical subcontractors rose to ₹36.17 crore from ₹34.92 crore in the prior year period, indicating a shift in resource utilization.

Standalone results showed similar trends. Total expenses were ₹17.88 crore, compared to ₹17.36 crore in Q1FY26. Financial costs increased to ₹73.35 lakh from ₹42.31 lakh in the prior year, while depreciation remained stable at ₹78.54 lakh.

Operational Shifts and Margin Expansion

Management attributed the modest top-line growth to a strategic shift from onsite to offshore delivery models. While onsite resources cost approximately $70, offshore resources in India cost around $35, leading to higher margins despite lower revenue per resource. This structural change contributed to a significant improvement in operating profitability.

Consolidated EBITDA increased to ₹7.06 crore, representing a 7.8% year-on-year increase. More significantly, earnings before interest and depreciation improved by 64.2% quarter-on-quarter, with the margin moving to 7.6% from 4.8% in Q4FY26 and 7.1% in Q1FY26. Consolidated earnings before interest stood at ₹6.15 crore, a 25.2% year-on-year growth.

On a standalone basis, EBITDA was ₹2.82 crore, a 76.3% year-on-year increase from ₹1.60 crore in Q1FY26. The standalone EBITDA margin expanded by 571 bps to 14.7%, compared with 9% in the prior year quarter. Earnings before interest and tax stood at ₹3.08 crore, up 75.6% year-on-year, with margins at 16%.

What the Numbers Show

The divergence between modest revenue growth and sharp profit expansion highlights the impact of the company's service mix transformation. While consolidated revenue grew only 1% YoY, consolidated EBITDA margins improved to 7.6% from 7.1% in Q1FY26, and standalone EBITDA margins jumped to 14.7% from 9%. This indicates that the shift toward higher-margin offshore finance and accounting services, alongside recurring product revenue (which carries a 25% margin), is driving profitability more than volume growth. The company noted that product and finance/accounting services constitute significant recurring revenue streams with sustainable margins.

Business Developments and Market Expansion

During the quarter, the finance and accounting services practice added seven new engagements across Australia, the United States, and Ireland. The company entered the Irish market through its first finance and accounting outsourcing engagement, establishing an offshore finance support function from India. In the US, management secured general admission into bidding for government contracts, marking an expansion beyond the private sector.

Internally, the company continued its paperless transformation with 90% completion of Zoho implementation across 13 products and modules. Management expects Australia and Ireland revenues to grow significantly, potentially reaching million-dollar levels in local currencies over the next year, though these markets currently contribute less than 10% of total revenue.

Corporate Developments and Compliance

The board meeting, held on August 13, 2026, also addressed operational updates. The company exited its Special Economic Zone (SEZ) unit in Visakhapatnam, with approval granted by SEZ authorities on September 22, 2025. Consequently, XTGlobal Infotech terminated its land lease agreement with the government and purchased the land in July 2026, transferring the title to the company.

Regarding regulatory compliance, the company evaluated the impact of the four Labour Codes notified by the Government of India on November 21, 2025. Management concluded that there is no significant material impact on employee benefits under Ind AS 19.

The unaudited results were reviewed by statutory auditors C. Ramachandram & Co., who issued unmodified opinions on both standalone and consolidated statements. The consolidated figures include wholly owned subsidiary XT Global Inc and subsidiary Network Objects Inc. Promoter holding remains at 61.99%, with no pledged shares.

XTGlobal Infotech has secured its first Finance & Accounting Outsourcing engagement in Ireland worth €11600, marking its entry into the Irish market. The publicly listed IT/ITES company announced the signing of the deal on June 21, 2026, as part of its strategy to expand its IT Consulting and Finance & Accounting services footprint across Europe. This engagement is expected to contribute recurring revenues through ongoing service delivery and strengthens the company's presence in the European market.

The engagement involves establishing and operating a dedicated offshore finance support function from XTGlobal's delivery centers in India. The scope of services includes management accounts support, accounts payable supervision, employee onboarding, HR administration, and ongoing finance function support. This win demonstrates XTGlobal's growing capabilities in delivering high-quality Finance & Accounting outsourcing services to international clients and validates its global delivery model.

Ramarao Atchuta Mullapudi, Managing Director of XTGlobal, highlighted the strategic importance of this development. “This engagement marks an important milestone for XTGlobal as our first customer engagement in Ireland and strengthens our growing international portfolio,” he said. Mullapudi added that the company views this as a crucial step in expanding its presence across Europe and building long-term relationships with clients seeking scalable and efficient business process services.

Key Details of the Engagement

The company focuses on delivering measurable business outcomes through structured execution, engineering excellence, and scalable global delivery models. With over two decades of experience, XTGlobal serves clients across sectors such as Transportation, Public Sector, Healthcare, Finance, Retail, and Manufacturing.