DRC Systems India Limited has delivered impressive financial results for the third quarter and nine months ended December 31, 2025, demonstrating strong operational performance and sustained business momentum. The IT services and consulting company reported significant growth across key financial metrics, reflecting improved execution and operational optimization.

Strong Q3 FY26 Performance

The company's consolidated financial performance for Q3 FY26 showed remarkable growth momentum. Revenue from operations reached ₹2,718.3 lakhs, marking a substantial 60% year-on-year increase from ₹1,695.1 lakhs in Q3 FY25. This growth trajectory was supported by strong performance across business verticals and continued expansion in key market segments.

Nine Months Performance Highlights

For the nine months ended December 31, 2025, DRC Systems maintained consistent growth across all major parameters. Consolidated revenue from operations grew 41% year-on-year to ₹6,830.6 lakhs compared to ₹4,844.8 lakhs in the corresponding period of FY25. Net profit after tax increased 27% YoY to ₹1,350.4 lakhs from ₹1,066.6 lakhs in the previous year.

Margin Profile and Profitability

The company maintained healthy profitability margins despite the strong revenue growth. For Q3 FY26, EBITDA margin stood at 26% while net margin was 18%. For the nine months period, EBITDA margin was 30% and net margin reached 19%, demonstrating the company's ability to scale operations efficiently while maintaining profitability.

Impact of New Labour Codes

The financial results included exceptional items totaling ₹87.3 lakhs related to the statutory impact of new Labour Codes notified by the Government of India on November 21, 2025. These codes consolidate 29 existing labour laws and primarily impact gratuity provisions due to changes in wage definition. The company has assessed this impact based on actuarial valuation reports and guidance from the Institute of Chartered Accountants of India.

Capital Structure and Equity Allotment

During the quarter, DRC Systems allotted 1,00,00,000 equity shares of face value ₹1 each on a preferential basis to investors other than promoters and promoter group. The shares were issued at ₹25 per share (including premium of ₹24), raising ₹2,500 lakhs in cash consideration. The paid-up equity share capital increased to ₹1,440.8 lakhs as of December 31, 2025.

Business Expansion and Technology Focus

The company has been expanding its portfolio in the education and digital learning sector, developing AI-powered solutions including Learning Management Systems integrated with WhatsApp chatbots. DRC Systems is positioning itself in the Learning Experience Platform (LXP) space with new AI-driven learning ecosystem components, bridging the gap between traditional LMS and modern LXP architectures.

DRC Systems has announced a strategic investment decision to strengthen its international operations and expand its footprint in key global markets. The company has approved an investment of up to $1 million in its subsidiary DRC Systems EMEA LLC, marking a significant step in its regional expansion strategy.

Investment Details

The approved investment will be directed towards DRC Systems EMEA LLC, the company's subsidiary focused on operations in the Europe, Middle East, and Africa region. The following table outlines the key parameters of this investment:

Strategic Expansion in Middle East

The investment is specifically targeted at boosting DRC Systems' presence in the Middle East market, a region that has been witnessing significant digital transformation and increased demand for IT services. The company aims to leverage this investment to expand its IT services portfolio and capture emerging opportunities in the region.

The Middle East market presents substantial growth potential for IT services companies, with businesses across various sectors increasingly adopting digital solutions and modernizing their technology infrastructure. DRC Systems' investment in its EMEA subsidiary positions the company to capitalize on these market trends.

IT Services Expansion Strategy

The approved funding will enable DRC Systems EMEA LLC to enhance its service delivery capabilities and expand its IT services offerings in the target markets. This investment aligns with the company's broader strategy to strengthen its international presence and diversify its revenue streams across different geographical regions.

The expansion initiative reflects DRC Systems' confidence in the growth prospects of the Middle East IT services market and its commitment to establishing a stronger operational presence in the region. The investment is expected to support the subsidiary's efforts to build local partnerships, enhance service capabilities, and capture new business opportunities.