Xtglobal Infotech Limited has reported a robust financial performance for the first quarter, marked by significant revenue growth and improved profitability. The company's strategic moves, including the integration of Network Objects as a subsidiary, have contributed to its strong showing.

Financial Highlights

Xtglobal Infotech posted consolidated revenue of ₹92.30 crores in Q1, representing an impressive 87.2% year-on-year growth from ₹49.30 crores in the same quarter last year. The company also achieved a 6% quarter-on-quarter growth from ₹87.04 crores in the previous quarter.

The company's profitability saw substantial improvements:

• Consolidated EBITDA rose 61.1% quarter-on-quarter to ₹6.61 crores, with a 7.2% margin improvement.
• Net Profit After Tax (PAT) reached ₹3.73 crores, nearly tripling from the previous quarter and 72.4% higher year-on-year.

Key Growth Drivers

The significant revenue increase was primarily attributed to Network Objects becoming a subsidiary from an associated company, contributing approximately $22 million in annual revenue. This strategic move has expanded Xtglobal's capabilities, particularly in SAP implementations.

During the quarter, Xtglobal added 10 new client accounts, demonstrating its growing market presence. The company also secured a notable win with the Texas Department of Transportation, landing a $7-10 million, 5-year IT modernization project.

Operational Developments

Employee costs increased to ₹46.52 crores due to ESOP expenses and targeted investments in specialized talent. Despite this, the company managed to improve its operational efficiency and margins.

Xtglobal is expanding its service offerings, with a particular focus on AI services. The company has appointed a senior executive to lead its AI team and is actively pursuing AI-related projects. This initiative is expected to enhance the company's Circulus product, a SaaS-based automation platform, with AI capabilities.

Market Outlook and Strategy

Ramarao Mullapudi, CEO, President, and Director of Xtglobal, expressed optimism about the IT services sector recovery, driven by digital transformation and cloud adoption. The company is strategically positioning itself to capture opportunities in high-potential areas such as cloud services, automation, and AI-driven solutions.

Xtglobal is also exploring acquisitions in Europe, Australia, and India to complement its services and expand its geographic presence. The management's focus on operational discipline and targeted positioning is expected to provide a solid foundation for sustained growth in the coming quarters.

Future Prospects

With a strong deal pipeline and expanding capabilities in AI and intelligent automation, Xtglobal Infotech is well-positioned for future growth. The company's entry into government contracts, as evidenced by the recent win with the Texas Department of Transportation, opens up new avenues for expansion.

As Xtglobal continues to leverage its strengths in automation, cloud migration, and sector-specific solutions, it aims to capitalize on the growing demand for digital transformation and AI-driven services in the global IT market.

Xtglobal Infotech has announced a significant business development along with its Q1 financial results, marking a period of growth and expansion for the IT services company.

Major Contract Win

Xtglobal Infotech has secured a landmark IT modernization project from a U.S. State Agency following a competitive Request for Proposal (RFP) process. This multi-year contract represents a major milestone in the company's strategic expansion into the government sector.

Key points of the contract include:

• Project duration: Five years
• Initial sub-project value: USD $119,000 (starting August 2025)
• Total projected revenue: Estimated between USD $7 million to $10 million

The company has appointed Ganga Sharyala as Development Head and Vasanth Vee as Account Director to oversee the project's execution.

Q1 Financial Highlights

Xtglobal Infotech also reported its Q1 financial results, showcasing strong growth:

The company's EBIT margin improved to 9.90%, while the PAT margin rose to 8.60%, reflecting enhanced operational efficiency and cost control measures.

Consolidated Performance

On a consolidated basis, Xtglobal Infotech reported:

• Revenue: ₹9,230.60 lakhs (6.00% QoQ growth)
• EBITDA: ₹661.40 lakhs (61.10% QoQ growth)
• PAT: ₹373.50 lakhs (2.80x QoQ growth)

Management Commentary

Ramarao Mullapudi, CEO, President & Director of Xtglobal Infotech, commented on the results: "We have had a strong start to the fiscal year, with revenue reaching ₹1,777 lakhs, an upward movement of 2.00% QoQ, reflecting demand recovery, strong client trust, and the consistent efforts of our team."

He added, "The IT sector is showing early signs of recovery, driven by digital transformation and cost optimization. The accelerating adoption of AI presents a strategic opportunity that we are actively pursuing."

Future Outlook

Xtglobal Infotech remains focused on driving revenue growth, enhancing profitability, and expanding margins. The company is confident in its ability to sustain momentum and create long-term value for shareholders while scaling efficiently and responsibly.

With its recent contract win and strong financial performance, Xtglobal Infotech appears well-positioned to capitalize on opportunities in both the government and enterprise sectors, leveraging its expertise in IT modernization and digital transformation.