Birlasoft Limited has received a penalty notice from Belgium's Federal Agency for Occupational Risks, imposing a fine of €11,797.91 for non-compliance with mandatory occupational accident insurance requirements. The company disclosed this development to stock exchanges on January 13, 2026, under Regulation 30 of the SEBI (LODR) Regulations, 2015.

Penalty Details and Regulatory Action

The Federal Agency for Occupational Risks (FEDRIS), Belgium, issued the penalty notice in connection with mandatory occupational accident insurance requirements. The violation pertains to Birlasoft's failure to enter into an insurance contract against the risk of occupational accidents with an authorized insurance company under Belgian Law on occupational accidents.

Regulatory Compliance and Impact Assessment

The penalty stems from Birlasoft's failure to comply with Belgian occupational safety regulations, specifically the requirement to maintain insurance coverage against workplace accidents. This represents a regulatory compliance gap in the company's Belgian operations, where such insurance coverage is mandatory under local law.

Birlasoft has assessed the financial and operational impact of this penalty and concluded that it will not materially affect the company's business activities. The company stated in its disclosure that "there is no material impact on financials, operations or other activities of the Company."

Disclosure and Transparency Measures

The company has fulfilled its regulatory disclosure obligations by informing both BSE Limited and the National Stock Exchange of India about the penalty imposition. The disclosure includes comprehensive details as required under SEBI regulations:

• Complete information about the issuing authority
• Nature and specifics of the regulatory action
• Date of receipt of the penalty notice
• Detailed explanation of the alleged violation
• Assessment of impact on company operations

Birlasoft has also committed to hosting this information on its official website at www.birlasoft.com , ensuring transparency and accessibility for stakeholders and investors. The disclosure was signed by Sneha Padve, Company Secretary & Compliance Officer, demonstrating proper corporate governance procedures in handling regulatory communications.

Birlasoft Limited (ISIN: INE836A01035) has released its financial results for the second quarter of fiscal year 2026, showcasing a mixed performance with significant margin improvement despite revenue challenges.

Key Financial Highlights

• Revenue: $150.70 million, a marginal 0.1% quarter-on-quarter growth
• EBITDA: $24.20 million, up 29.9% quarter-on-quarter
• EBITDA Margin: Expanded to 16.00% from 12.40% in Q1 FY26
• Total Contract Value (TCV) of deals signed: $107.00 million

Revenue and Profitability

Birlasoft reported a modest revenue growth of 0.1% quarter-on-quarter, reaching $150.70 million in Q2 FY26. In rupee terms, the revenue stood at Rs. 13,289.00 million, representing a 3.4% sequential growth. The company's EBITDA saw a substantial improvement, increasing by 29.9% quarter-on-quarter to $24.20 million.

The EBITDA margin expanded significantly from 12.40% in Q1 to 16.00% in Q2, driven by operational efficiencies, rationalization of low-profitability accounts, and some one-time benefits. Adjusting for one-offs and exchange rate gains, the steady-state EBITDA margin would be around 13.50%.

Sector Performance

• BFSI and Life Sciences & Services (LSS) verticals showed sequential growth
• Manufacturing vertical experienced weakness
• ERP business faced challenges, with revenue declining from previous quarters

Deal Wins and Future Outlook

Birlasoft reported a Total Contract Value (TCV) of $107.00 million in Q2 FY26. The company expects sequential revenue growth in both Q3 and Q4 of FY26, despite Q3 typically being a seasonally weak quarter due to furloughs.

Angan Guha, CEO and Managing Director of Birlasoft, stated, "We have delivered a healthy operating quarter with a strong margin performance. We expect that there will be sequential growth in the remaining two quarters of the year, as in Q3 and Q4."

Strategic Initiatives

The company is focusing on:

1. Building a strong deal pipeline
2. Transitioning from staff augmentation to outcome-based engagements
3. Leveraging advanced AI-led capabilities, including Agentic AI
4. Improving operational efficiencies and rationalizing low-profitability accounts

Management Commentary

Chandrasekar Thyagarajan, Chief Financial Officer, commented on the margin improvement: "The robust margin expansion was led by a combination of factors including better operational efficiency, some rationalization of low profitability tail accounts resulting in better average margin, exchange rate tailwinds, as well as some one-offs."

Conclusion

While Birlasoft faces revenue growth challenges, particularly in its Manufacturing and ERP segments, the company has demonstrated strong margin improvement through operational efficiencies and strategic initiatives. The management remains confident about sequential growth in the coming quarters and is focused on building a robust deal pipeline to drive future growth.

Investors and analysts will be closely watching Birlasoft's performance in the second half of FY26, particularly its ability to convert its deal pipeline into revenue growth while maintaining the improved margin levels.