FCS Software Solutions Limited announced its unaudited financial results for the quarter ended December 31, 2025, showing mixed performance across standalone and consolidated operations. The IT services company faced challenges in standalone operations while demonstrating growth in consolidated revenue.

Standalone Financial Performance

The company's standalone operations reflected a challenging quarter with significant deterioration in profitability metrics. Key financial highlights demonstrate the impact of operational challenges and regulatory changes on the business.

The company reported a standalone net loss of ₹240.52 lacs for Q3 FY26 compared to a net profit of ₹49.01 lacs in the corresponding quarter of the previous year. Revenue from operations declined marginally by 2.66% to ₹766.75 lacs from ₹787.70 lacs year-over-year.

Nine Months Performance Analysis

For the nine months ended December 31, 2025, standalone operations showed a substantial decline in financial performance. The company reported a net loss of ₹598.34 lacs compared to a net profit of ₹181.84 lacs in the corresponding period of FY25. Revenue from operations for the nine-month period decreased to ₹1,990.00 lacs from ₹2,535.72 lacs, representing a decline of 21.52%.

Consolidated Financial Results

Consolidated operations presented a different picture with significant revenue growth despite profitability challenges. The consolidated results include performance from subsidiaries and associate companies.

Consolidated revenue from operations surged by 60.59% to ₹1,485.81 lacs from ₹925.17 lacs in Q3 FY25. However, the company posted a consolidated net loss of ₹197.21 lacs compared to a profit of ₹125.78 lacs in the previous year's quarter.

Exceptional Items Impact

The financial results were significantly affected by exceptional items totaling ₹120.55 lacs in standalone financials and ₹120.70 lacs in consolidated financials. These exceptional items primarily relate to increased gratuity liability arising from the implementation of new Labour Codes notified by the Government of India on November 21, 2025.

The Labour Codes consolidate twenty-nine existing labour laws into a unified framework covering employee benefits during employment and post-employment. The company assessed the incremental impact based on guidance from the Institute of Chartered Accountants of India, resulting in the substantial increase in gratuity liability.

Segment Performance

Geographical segment analysis reveals varied performance across markets:

Standalone Segment Results:

• India: ₹367.98 lacs (Q3 FY26) vs ₹371.00 lacs (Q3 FY25)
• Outside India: ₹398.77 lacs (Q3 FY26) vs ₹416.70 lacs (Q3 FY25)

Consolidated Segment Results:

• India: ₹1,087.04 lacs (Q3 FY26) vs ₹508.47 lacs (Q3 FY25)
• Outside India: ₹398.77 lacs (Q3 FY26) vs ₹418.70 lacs (Q3 FY25)

The domestic market showed remarkable growth in consolidated operations, more than doubling from the previous year, while international operations remained relatively stable.

Corporate Structure

FCS Software Solutions Limited operates through multiple subsidiaries and one associate company. The subsidiary companies include FCS Software Solutions GmbH (Germany), FCS Software (Shanghai) Co., Ltd. (China), Insync Business Solutions Limited (India), Stablesecure Infraservices Pvt. Ltd. (India), and Bloom Healthcare & Hospitality Management Pvt Ltd. (India) with 71.01% holding. The company also holds 48.94% stake in associate company Enstaserv Eservices Ltd.

The Board of Directors approved these unaudited financial results in their 227th meeting held on February 9, 2026, at the corporate office in Noida. The results have been reviewed by the audit committee and auditors, with limited review reports issued by SPMG & Company, Chartered Accountants.

FCS Software Solutions Limited conducted its 227th Board meeting on February 09, 2026, at its corporate office in Noida, where directors approved significant updates to the company's Related Party Transaction Policy. The meeting commenced at 04:00 PM and concluded at 04:35 PM, demonstrating efficient governance processes.

Board Meeting Outcomes

The Board of Directors considered and approved amendments to the Related Party Transaction Policy in accordance with Regulation 30 and 23 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015. The updated policy has been made available on the company's website at https://fcsitd.com/investors/policies .

Policy Revision History

The Related Party Transaction Policy has undergone several revisions since its inception, reflecting the company's commitment to regulatory compliance and governance best practices.

Key Policy Features

The updated policy establishes comprehensive materiality thresholds for related party transactions. Material transactions are defined as those exceeding thresholds prescribed under Schedule XII of the Listing Regulations. Specifically, transactions involving payment of royalty or brand usage fees are treated as material if they exceed 5% of the annual consolidated turnover.

Approval Framework

The policy outlines a three-tier approval structure:

• Audit Committee: Prior approval mandatory for all related party transactions and material modifications
• Board of Directors: Approval required for transactions not in ordinary course of business or not at arm's length
• Shareholders: Special resolution required for material related party transactions under Regulation 23

Disclosure Requirements

The policy incorporates SEBI Industry Standards issued on February 14, 2025, establishing specific disclosure requirements. Related party transactions exceeding ₹10 crore or 1% of annual consolidated turnover require detailed disclosures, while transactions not exceeding ₹1 crore during a financial year are exempt from Industry Standards disclosures.

Regulatory Compliance

The policy ensures compliance with the Companies Act, 2013, and SEBI Listing Regulations, with automatic application of any future amendments to applicable laws. The Board of Directors, on recommendation of the Audit Committee, will review this policy once every three years or earlier if required due to regulatory changes.