Birlasoft reported a 0.3% increase in constant currency revenue for Q3 FY26, with Manufacturing growth offsetting furloughs. EBITDA margin expanded by 212 basis points to 18.2% due to improved revenue quality and cost optimization. The company secured new deals worth $202 million, half of which are new engagements. Looking ahead, Birlasoft anticipates continued investment in capabilities to enhance revenue growth.
Financial Performance Highlights
Birlasoft announced its Q3 FY26 financial results, demonstrating resilience in a seasonally weak quarter:
- Revenue grew 0.3% in constant currency and 0.1% in dollar terms, reaching $150.8 million.
- Manufacturing vertical growth compensated for furloughs and weaker performance in BFSI.
- EBITDA margin significantly expanded by 212 basis points to 18.2%.
- TCV for the quarter reached $202 million, up 89% quarter-on-quarter, with nearly half from new engagements.
Key Margin Drivers
The significant margin expansion was driven by:
- Improved revenue quality
- Ongoing cost optimization efforts
- Favorable revenue mix shifts (fixed price & offshore)
- Exchange rate tailwinds
- One-off gains
Birlasoft anticipates a steady-state EBITDA margin of around 15%, considering planned investments. Adjusted PAT for the quarter was $20.2 million, a 20.4% increase quarter-on-quarter.
Deal Wins and Strategic Focus
Notable deal wins include:
- Strategic engagement with a payments client to build conversational AI for its eGRC platform.
- Multi-year engagement to deploy AI agents across a customer’s manufacturing ecosystem.
- Deployment of AI-enabled Smart Manufacturing material tracking solution.
The company is focused on strengthening its deal pipeline, driving order book, and building domain and technology capabilities.
Vertical Performance and Outlook
While Manufacturing showed growth this quarter, Birlasoft anticipates continued headwinds in the near term. The company expects E&U and Financial Services to maintain growth momentum.
Cash Flow and DSO
Birlasoft maintained strong cash flow generation, resulting in improved DSO (Days Sales Outstanding) of 54 days. Cash and cash equivalents increased to ₹2,491 crore, up 6% quarter-on-quarter and 21% year-on-year.
Source: BSE
