Excelsoft Technologies Limited (EXCELSOFT) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, Good day and welcome to Q2 and H1 FY27 Earnings Conference call of Excelsoft Technologies Limited. As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and zero on your touchtone phone. Please note that this conference is being recorded. I would now hand the conference over to Mr. Yash Sanghavi from Adfactors PR. Thank you and over to you sir.

Yash Sanghavi:

Thank you Muskan. Good afternoon everyone and Happy Diwali. Welcome to the Q2 and H1 FY27 Earnings Conference call of Excelsoft Technologies Limited. Today from the management side, we have with us Mr. Dhananjaya Sudhanva, Chairman and Managing Director, Mr. Doreswamy Paliniswamy, Chief Executive Officer, Mr. Poonacha Paruvangada, Chief Financial Officer, Mr. Prashanth H. M, Chief Strategy Officer and Head Investor Relations and also the AdFactors IR team. We will begin the call with the opening remarks from the management, after which we shall open the forum for the Q&A session. I must remind you that this conference may include forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the management as on the date of this call. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. I now hand over the conference call to Mr. Dhananjaya Sudhanva for his opening remarks. Thank you, and over to you, sir.

Dhananjaya Sudhanva:

Good afternoon, Vishal. Good afternoon, everybody. My name is Dhananjaya Sudhanva as Vishal already said. I am Chairman and Managing Director of Excelsoft Technologies Limited. We're taking this call out of our offices in Mysore. Thank you very much for this opportunity. As I have experienced this over the last three quarters and look forward to further quarters as well. Good afternoon to everyone who has joined the call. It is a pleasure to address you today and share our results for the second quarter of FY27. I would like to thank our shareholders, customers, employees and all our stakeholders for their continued trust and support. We have delivered a strong revenue growth during the quarter. Revenue from operations grew 25.2% year-on-year to INR80.9 crores in value. For the first half, revenue grew 33.9% to INR161.2 crores. This demonstrates that the business continues to grow. Our opportunities continue to -- our customers continue to trust us and engage with us more closely and the demand for our technology and services remains very encouraging. The testimony is that we have not lost any significant customer. On the other hand, we have been able to garner more business from our existing customer customers and also add a few customers even though the last few months were not very conducive, particularly, in the economies that we operate in. The decision-making was not as fast and swift enough as it was in the previous quarters, that is when we are working with large organizations, particularly

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Excelsoft Technologies Limited November 06, 2026 trusts which are government-owned, decision-making has been slow. Hopefully, now things will improve. The numbers I talked about, this demonstrates that the business continues to grow. Our customers continue to trust us and engage with us and the demand for our technology and services remains very encouraging. The testimony is that we have not lost any significant customer. I know I repeated this paragraph, but I think it is to emphasize that we are not in the habit of losing customers. Once we get a customer, we are very sticky. We use the presence and the anchor of the customer to do more business with the customer and the customer grows. As outlined in our earlier earnings calls and meets, we have taken steps in the context of our longterm future of the business. First, we are expanding our international presence. Two quarters ago, we started the process of strengthening our presence in the United States and the United Kingdom. We are building local sales, account management and customer engagement capabilities. Earlier to this, our approach to engaging with customers in these geographies, which are important for us and which have large opportunities, was travel from here and work with-- engage with customers there. Sometimes workshops, sometimes a call which can be just a day or two. Now we have set up teams in the UK, we have set up teams in the US, we have in the Middle East and a team in Singapore, so that and we are in the process of setting up subsidiary in Canada so that they can also address not only our Canadian customers, but they can also address the U.S. market. At that point in time when we made this decision, it wasn't still easy to travel to the U.S. I would suppose as of today it still is not very easy. So, the Canadian entity will come in handy. So that's the last two quarters of trying to be in the proximity of the customers so that we are in the same time zone and it's easy to engage with them as often as they want. Larger global customers generally expect their technology partners to be close to them in the proximity, understand their requirements, respond quickly to it and provide continuous support and collaboration. Many times their requirements change and it's not very easy to explain those change in requirements over phone and our local presence has helped us be fleet-footed in responding to such changes in the customer requirements. Larger global, With stronger local capabilities, we can compete for larger, more strategic and longer duration engagements. When we are there, when they can see our people often, not only at their offices but also at local conferences, they feel more confident that they're only a phone call away and they will quickly react to situations that may emerge. These investments have an upfront cost, which was discussed even during the previous earnings call that strategically if we have to grow over the next few quarters and grow significantly over the next few quarters and years, it is important that we establish presence, our own teams in markets that matter, like the UK, the US, the Middle East and Singapore.

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Excelsoft Technologies Limited November 06, 2026 It is not only frontline sales, it's also customer success executives and that was the most important takeaway from our previous calls and we have actually made the investment, set up the team, set up the infrastructure which is in the territory where our important customers are. Yes, these are investments and expenditure which we will have to commit upfront before it starts to deliver results in terms of revenues and margins. But then there is no return without investment and hence we went ahead and did this. This was also discussed during the previous Earnings call. Second, we are deepening our engagement with existing customers, while continuing to expand our customer base. Large customers have more to offer. We have more wallet share that we can take, so we are engaging with them closely. In some customers, we've managed to increase the wallet share for ourselves. We have a meaningful opportunity to increase our wallet share across many customers in these territories. Our strategy is not simply to win a project and complete it. We want to become a long-term technology partner across assessments, learning platforms, proctoring, content and learner success solutions as you will notice also in the customer list and the vintage of customers. Because of this, we have been a fairly sticky vendor it's not very easy that they can say, no, look, let's move on to some other vendor. This creates opportunities for repeat business, cross-selling and deeper customer relationships. Third, we are strengthening our technology and product capabilities, particularly through AI. The whole world is talking about AI and its benefits, we are fairly deep tech AI. We have our own AI hardware infrastructure which we have invested into and LLMs, including our ability to fine-tune LLMs for our customers and now even to build our own SLM. So, our capability in AI is fairly mature and comparable to the best-in-class companies out of India. Our strategy is not simply to win a project and complete it. We want to become a longterm technology partner. This creates opportunities for repeat business. Third we are strengthening our technology and product capabilities through AI. I talked about it. AI itself can be a fairly detailed conversation which will take 10 minutes to 15 minutes, but it suffices to say our capability in AI and AI tech is mature. We have already delivered AI-enabled or AI-native applications to some of our customers and we are building a few large-scale, AI-enabled products for our customers at this point in time. This will allow us to expand our addressable market, creating differentiated offerings and compete for opportunities that may not have been accessible to us earlier. The fact that we have embraced AI and done it fairly quickly gives us opportunities to organizations where there is not so much of competition. Fourth, we are building an organization capable of handling a large business. We have added leadership bandwidth, international sales resources and specialized talent. These investments are being made ahead of the revenue that we expect these capabilities to generate. This should

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Excelsoft Technologies Limited November 06, 2026 be viewed as a deliberate transition from a relatively smaller operating model to more globally integrated and scalable technology organization. That's the transformation Excelsoft is going through. These approaches have led to healthy order inflows during the quarter, particularly in platform-led engagements with higher strategic value. The business is growing and I strongly believe that this growth is sustainable. Also important to note that there is no structural change in the margin profile of the business. It is only that there have been investments made. In addition, there have been some deferment of revenue to the next quarter due to customer readiness dependencies, which our CFO will explain. In view of the above, EBITDA margin has declined compared with corresponding quarter last year and we will again explain that. That's mostly because of the investments and the expenditure we have made on talent, toplevel talent, which we had to get not only here in India but also in geographies where our customers are present. We endeavor that early every investment translates into measurable business outcomes, stronger sales and improved margins over a few quarters. Our investment into sales teams has started to yield benefits already. There is a healthy growth in the pipeline. We have a healthy balance sheet, no borrowing, and the financial flexibility to support this strategy. We must use that strength, responsibility to achieve the kind of growth and ambitions that we want to -- we have in front of ourselves. Now, I'm positive about the long-term opportunity before Excelsoft. We are confident of our execution, delivery efficiency and the conversion of pipeline into profitable revenue. With this perspective, I would now like to invite our CEO Mr. Doreswamy to take you through the business performance, customer developments, growth opportunities, and operational priorities and also answer any of the questions that you may have. Thank you very much for the patient listening. I know I went off the script a little bit, I hope you will excuse me for that. Doreswamy P:

Thank you, sir.

Dhananjaya Sudhanva:

Thank you and Happy Diwali to all.

Doreswamy P:

Thank you, sir. (They are on mute right now and then they will open up once we have a question and answer session). Good afternoon, everyone. I will take you through the operational performance, business developments and growth opportunities during the Q2 and H1 FY27. Let me begin with the overall business support solutions. We recorded a revenue of INR80.9 crores in Q2 compared with the INR64.61 crores in Q2 last year. H1 revenues stood at INR161 crores approximately, representing a growth of 34%. Our growth continues to be driven primarily by education technology services, which has demonstrated strong momentum. However, I would like to explain some important developments behind the numbers. One of our most important strategic initiatives over the last few quarters has been expanding our global sales and customer engagement capabilities. We are strengthening our presence in the

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Excelsoft Technologies Limited November 06, 2026 US and UK because these markets offer opportunities to participate in larger technology programs, government-related assessment projects, university platforms and long-term customer engagements. The objective is not merely to increase the number of sales people. It is to improve our ability to identify opportunities early, engage with the decision makers, understand customer requirements and convert larger opportunities. Our local presence also helps us provide better fund management and customer support. We are beginning to see the benefits of this approach to improved customer engagement, new opportunities and a broader qualified pipeline. We should recognize that these investments have a longer gestation period. Sales resources need time to build relationships, develop opportunities, participate in procurement process and convert them into a signed contract. Therefore, the cost of building these teams is visible immediately, whereas the revenue contribution develops progressively. That timing difference is one of the important reasons for the current pressure on operating margins. Compared to last year, the pipeline has improved by 20%, that's actually very encouraging and then very positive. Our existing customers remain one of our biggest growth opportunities as you all know, aware of this one. We have established a relationship with the large organizations across education assessment and digital learning. Our focus is to increase the share of technology spending that we capture from these customers. We are also pursuing opportunities across assessment and examination platforms, e-marking and digital evaluation, online proctoring, learning management and student success platforms, content development and digital learning, AI-powered assessment and content solutions. This strategy is important because expanding an existing customer relationship can create better long-term revenue visibility and reduce the time and cost associated with acquiring an entirely new customer. We're also focusing on platform-led engagements rather than limiting ourselves to individual development assignments. Platform engagements provide an opportunity to deepen customer relationships and generate recurring or repeat business over time depending on the contract structure. One of our important strategic engagements with AQA, the e-marketing program is progressing through a phased implementation. The modules delivered so far have received encouraging customer feedback. However, the program has experienced delays in customerside user acceptance testing, etcetera. AQA represents an important strategic opportunity for Excelsoft. AQA gives Excelsoft an opportunity to establish credentials in large-scale, high-stake digital assessment infrastructure and in e-marking. Successful phased deployment can strengthen our position for future work with the customer and improve our credentials when approaching other examination authorities.

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Excelsoft Technologies Limited November 06, 2026 Revenue recognition was deferred in some cases due to delays from customer side, UAT and acceptance, pending security clearances, implementation readiness and delivery milestones. These are timing-related delays, not a lack of demand. We are strengthening project governance and customer coordination to accelerate execution, acceptance and billing. Our proctoring business has an important opportunity in the US. We just won a contract with the University of Memphis and that's very important for us to start in the US market. We're also pursuing integration with the large university LMS players. We have already integrated with D2L, Blackboard, Canvas, etcetera. We are looking for a few more integrations in the current year. The strategic significance is that this may create access to a broader university ecosystem through a technology and digital distribution relationship. If you look at the Tennessee alone, the Tennessee board of regions has 43 colleges. We started one now. We are actively engaged with three more at this point of time. And beyond the immediate revenue opportunity, such relationships can also provide a channel for future customer acquisition. We're also seeing promising opportunities in other markets including the Philippines, Malaysia and other international geographies. There are opportunities under development and should not be treated as a contracted revenue until they reach an appropriate stage. Our chairman has mentioned about AI investments. AI is an important growth opportunity for Excelsoft. We are working towards AI-enabled assessment, item banking, content generation and learning solutions. We also have an assessment in a box pilot being developed with the prospective customers. We have shipped out a couple of demo machines and boxes in the last quarter. It is under POC at this point of time, and then we hope to get to see enough positive feedback from these customers. Our objective is to move beyond providing only customized technology solutions and develop solutions that can be deployed across a wider customer base. Dhananjaya Sudhanva:

Sorry. There are palm-held servers, the size of the palm and it's got the ability to host our entire assessment stack, software stack and be able to connect to 200 devices concurrently and deliver exams. So these devices or I can confidently say not available elsewhere. First time in the world. We already have customer interest, we already have orders and we've started shipping these boxes. We would love to show them. We have four different products in this area where we have shrunk the entire operating system and the application along with all the Wi-Fi, Bluetooth and all other ports into something which is which sits on your palm and we are very proud of that innovation. Thank you. Dore please move ahead.

Doreswamy P:

All right, sir. Thank you, sir. Thanks for adding those important points here. We believe AI can create three important benefits. First, it can improve our product differentiation. Second, it can help us address the customers and market segments that may not have been commercially viable for our traditional solutions. Third, it can improve internal productivity and delivery efficiency.

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Excelsoft Technologies Limited November 06, 2026 We're also exploring AI-powered offerings for the mid-market segment, which can potentially expand our addressable market. These initiatives require continued investment in product engineering, specialized talent and customer pilots. Commercial success will depend on converting pilots into deployments and repeatable products. Looking ahead, we remain confident in our ability to deliver this top-line growth, committed for FY27. Our contractor programs provide a strong execution base supported by additional business opportunities. Our focus is on disciplined execution, timely delivery and converting the pipeline into sustainable revenue growth. Going forward, our priorities are very clear. First, accelerate conversion of existing qualified pipeline into signed orders. Second, deepen relationship with the strategic customers and increase wallet share. Third, strengthen our presence in the US and the UK and expand through partnerships into an additional international market. These two markets are very important for us and it matters to us, so we are investing disproportionately into this market. Fourth, scale our assessment and proctoring solutions through our larger institutional engagements. The last quarter we have seen an increased demand for these proctoring solutions. So, we were able to do demos, multiple demos in these two geographies and we see still there's an active participation. Fifth, convert AI pilots and new product development into commercial deployable solutions. Sixth, improve implementation readiness, UAT coordination and customer sign-off process to reduce delays between delivery and billing. Finally, improve the quality of growth. We must evaluate new opportunities not only by their revenue potential but also their gross margin, resource requirements, delivery model and long-term customer value. Our ambition is to build a business that is larger, more diversified, more platform-led and capable of generating sustainable profitability. I would like to emphasize that we are confident about our business, but we also recognize that the responsibility now lies with us to convert this opportunity into execution and financial performance. With that, I will hand over to our CFO to explain the financial performance, margin improvements, cost structure and the financial priorities for the coming quarters. Thank you all. Happy Diwali. Poonacha Paruvangada:

Thank you, sir. Good afternoon, everybody. I'm pleased to present Excelsoft Technologies' financial performance for Q2 and the first half of FY27. Coming to Q2 FY27 performance, revenue from operations increased by 25.2% year-on-year to INR80.9 crores compared with INR64.6 crores in Q2 FY26. EBITDA stood at INR13.2 crores with a margin of 16.35% compared with INR18.8 crores and a margin of 29.3% in the corresponding quarter last year. Profit after tax was INR8.3 crores compared with INR10.6 crores. Coming to the half-year FY27 performance, For the first half, revenue grew by 33.9% to INR161.2 crores compared with INR120.3 crores last year. EBITDA was INR26.3 crores compared with INR28.9 crores in H1 FY26. Profit after tax increased by 6.2% to INR17.5 crores compared with INR16.5 crores. Coming to the cost and

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Excelsoft Technologies Limited November 06, 2026 margins, the increase in employee costs reflects our continued investment in international sales teams, leadership, specialized talent and recruitment. It also includes the impact of annual salary increments and statutory contributions following the change in labor laws. Our expenses increased mainly due to higher consultant costs supporting project delivery and our expansion of business in US and UK, along with some provisions for expected credit losses. We are actively reviewing resource utilization, consultant deployment and project-level profitability to improve our operating efficiency. Coming to overall business, education technology services contributed to 60.75% of Q2 revenue and recorded year-on-year growth of 41.9%. Product business contributed to the remaining 39.25%. During FY27, we have made strategic investment of approximately INR20.3 crores in sales expansion, leadership, talent development and product development. These investments are intended to strengthen our capabilities and support future growth. Coming to cash flows, we continue to maintain healthy balance sheet with cash and bank balances of approximately INR407 crores with no borrowers. Our half-yearly operating cash flow stood at INR34.7 crores. We remain focused on delivering our FY27 growth commitments by improving utilization, controlling costs and progressively strengthening margins. With that, I conclude my financial performance commentary. Thank you all and now open the floor for questions. Happy Diwali to one and all. Moderator:

Thank you very much. We will now begin the question and answer session. Any one who wishes to ask question may press star and 1 (one) on their touchdown telephone. If you wish to remove your cell phone question queue you may press star and 2(two). Participants are requested to use handset while asking the question. Ladies and Gentlemen will wait for a moment while the question to assemble. The first question is from the line of Mahesh Kumar from MU Investments. Please go ahead.

Mahesh Kumar:

Thank you for taking my question, sir. So firstly, sir, congratulations on the revenue growth. And my question is regarding the profitability. So despite we have good revenue growth, our EBITDA has declined and I just wanted to understand what pressure is from one-time strategic investments versus the recurring operating cost and what is the normalized EBITDA margin we can see going ahead?

Doreswamy P:

Sure. Good afternoon everyone. Thanks for the question. Basically, it is actually the investments what they are making in the sales team and some of the training, etcetera, which is what charged to the P&L, but otherwise there is no pressure on the margin. Of course, like generally like because of the war time, there is some pressure on the renewals and etcetera, but that is not significant at this point of time.

Mahesh Kumar:

Okay. And sir any sustainable margin you're looking at EBITDA?

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Excelsoft Technologies Limited November 06, 2026 Doreswamy P:

Once the investments have started yielding, we are expecting the margin to like EBITDA like reach between 22% to 25%. That's what we believe at this point of time and we will achieve that.

Mahesh Kumar:

Okay. Okay. And sir my second question is on the customer concentration we have. Around nearly 75% is the top five customers that we have in our business. So, are we looking to diversify this risk and also are there any risks around contract renewals or price negotiation with these large customers that could impact growth or profitability?

Doreswamy P:

Okay, I'll answer one by one. The first question the concentration, yes, we agree that one and then management has taken a note of that one and then we are working towards adding more customers and then diversifying into the different geographies as well, not only in the US. So in that way, we have one or few customers in the current quarter like in the AQA is a large win, the British Council, Ascentis and some of the new customers coming up. So hopefully we have a kind of 5-year plan to reduce this customer concentration to less than 25% to 30%. We are working on that one. So, hopefully we can see some changes in the coming year itself.

Dhananjaya Sudhanva:

One large customer that we are talking about is actually multiple business divisions, each division having its own managing director who is responsible for the P&L of that division. We work with multiple divisions of this company. When you put it all together, it looks very big, but decision-making on the client side is taken each division at a time, each P&L owner or a division. They're fairly large divisions and the risk of losing all of them or a significant number of them is very remote. On the contrary, we, over a period of time have become quite sticky to the customer. So when we've built their core products, any new product that has to be built, the first opportunity will come to us and if it is not in our domain, we will get an opportunity to do system integration. So yes on paper when we look at it syntactically, it looks like a large percentage, large concentration of revenue. However, the reality is from a contracting perspective is what I explained. In spite of that it's a very good point you've made and we are very aware of it and we do not want as Dore was saying earlier we wouldn't want any customer to have more than about 20% of our revenue share and all. We are working towards that. We've won many small customers who are small at this point in time, but they have the ability to give us 10x to 20x the business that they are giving us now. Unfortunately, I can't name some of these customers now, but hopefully by next quarter I will be able to name them. Thank you, sir. It was a very, very valid question.

Mahesh Kumar:

Okay. Okay. Thank you, sir, for the detailed answer. And one of my last question is on AI business. So we have developed around 16 prototypes. Just wanted to understand, when can we see a meaningful contribution to overall revenue from that particular point?

Dhananjaya Sudhanva:

In two quarters, sir, we will see AI-specific revenues being an increased percentage of our total revenues in the coming quarter, that is the quarter we are running now, because there is quite a

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Excelsoft Technologies Limited November 06, 2026 lot of AI work which is already happening, which is customer-centric AI work, but to see a significant impact will be one more quarter. Mahesh Kumar:

Okay. Thank you so much for taking my question and all the best and I will join back. Thank you.

Dhananjaya Sudhanva:

Thank you sir. Happy Deepavali..

Mahesh Kumar:

Happy Deepavali.

Moderator:

Thank you. The next question is from the line of Juzar Daruwala from Aavya Asset. Please go ahead.

Juzar Daruwala:

Hello, thank you for the opportunity, sir. Happy Dussehra to the whole entire team of Excelsoft. I got some sort of clarity on our margin front. I have a few questions on our order pipeline. So, if you see, how is the like order pipeline shaping up and what is the visibility of converting the existing pipeline into the revenue over the next you know like 12 to 18 months?

Doreswamy P:

We actually track our pipeline for about 5 years. so that's how the company historically manages right now. So the current half year, when we started our year FY26-27, our pipeline was around INR900 crores and the last 6 months we have grown up to INR1,200 crores right now. That's the pipeline which looks the one. Of course, there is some final negotiations are there, but it's still very healthy and we are very confident of converting this into the delivery and then making sure that revenue has been booked on a year-on-year basis.

Dhananjaya Sudhanva:

And I would attribute a good percentage of the increase in the pipeline and the diversity that we have in the pipeline across geography to the sales and account management teams which are already present in the locations where our customers are present and that's probably the primary reason to drive more entries into our order book, and to our pipeline.

Juzar Daruwala:

Okay, got it, sir. So my next question is which geographies are expected to drive the incremental growth, sir, particularly given the company's plan to strengthen the overseas sales team?

Doreswamy P:

This year we are seeing higher growth would come from UK and Europe and then, of course, US is still growing and the third one is going to come from Southeast Asia. We were expecting some amount of growth from Middle East, but as you know, the last 1 year is not a great year for us in the Middle East. So, these three markets are growing right now and, of course, this will contribute more to our good revenues.

Juzar Daruwala:

Okay, got it. Thank you for the detailed explanation, sir, and that's all from my side. Happy Diwali to you.

Dhananjaya Sudhanva :

Happy Diwali. Thank you.

Moderator:

Thank you. The next question is from the line of Poonam Jain from Jain Investment. Please go ahead.

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Excelsoft Technologies Limited November 06, 2026 Poonam Jain:

Hi, am I audible?

Moderator:

Yes, ma'am.

Poonam Jain:

So my first question is that the revenue growth remains strong for this quarter, but EBITDA margins declined significantly year on year. So when do we expect the margins to improve?

Doreswamy P:

Poonam ji, we have mentioned this multiple times wherein we are investing and at least in the short term next 2 to 3 years and we need to do a meaningful investment in the geographies where we are strong or want to be strong. So that doesn't mean that the revenue of the margin will go further down, but this investment on a smaller base looks very odd at this point of time and then has an impact on a percentage basis, but on a good day it should reach between like around 22% to 25% EBITDA margin. That's what we are expecting and that could happen in the next couple of quarters.

Dhananjaya Sudhanva:

And will that sustain?

Doreswamy P:

Yeah, it will sustain. Yes, that's a sustainable one.

Poonam Jain:

Okay, sir, got it. And my second question is around that the employee costs and external consultant expenses have increased this quarter. Are these costs largely linked to current project execution, or do they represent a higher ongoing cost structure?

Doreswamy P:

One is on the salary front. Basically, we are hiring a more international team, so that one is significantly higher even though headcount is on the lower side, but the cost looks pretty high on a smaller base and the consultants, which have been there in the near shore, these consultants will be there and then we have added few more consultants in the current, in the last two to three quarters. So that's the reason it looks higher, but otherwise it is going to remain constant.

Dhananjaya Sudhanva:

I think the target hiring we wanted to do in the UK and the US is pretty much all done, including consultants. We need to hire in the Middle East. We have already hired in Singapore. I think we maxed in Singapore, but in Middle East we will have to hire.

Poonam Jain:

Okay, sir. Got it. Thank you so much for answering and all the best for the future.

Doreswamy P:

Thank you. Thank you, Poonam ji.

Moderator:

Thank you. The next question is from the line of Jinisha from SK Investments. Please go ahead.

Jinisha:

Hello, good evening. So my first question was on the employee cost that they have increased despite of a broadly stable headcount. So what is driving the increase and are further investments in the manpower expected?

Doreswamy P:

This is basically the international expansion what we mentioned in the call, as I explained in the previous question wherein some of the sales team which we hired in the UK and the US

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Excelsoft Technologies Limited November 06, 2026 and some other places looks pretty high. Apart from that, we have no intention to add more people in the Indian markets. Jinisha:

Okay and what is the expected return from the investments made in the near shore operations, global sales, and AI capabilities?

Doreswamy P:

Want a percentage or absolute number?

Jinisha:

Percentage

Doreswamy P:

It has to be another 20%, 25% of our growth should come from existing contracts where they have been deployed and then they've been used.

Jinisha:

Okay. Thank you.

Moderator:

Thank you. The next question is from the line of Abhishek Kamdar from Value Plus Advisors LLP. Please go ahead.

Abhishek Kamdar:

Hi, thank you for the opportunity. My first question is around revenue, so are we still on track for a INR350 crores top line by end of this financial year?

Doreswamy P:

Yes, we are.

Abhishek Kamdar:

Okay and I just wanted to understand on AQA, What is the, how is the ramp-up going and what is the expectation for this year?

Dhananjaya Sudhanva:

We have done two significant things. We've moved forward on e-marking. To explain that briefly, marking in the AQA case has to be automated largely and we made significant progress. We've tried it on a large number of answer scripts and we have a 98.6% accuracy in marking answers, handwritten answers on several thousand answer scripts. So we've moved significantly on the marking part. We're now focusing on the extraction part, which is from handwriting to machine-readable text is the second phase. So, the movement with AQA is significant and we've had several workshops back and forth right now as we speak, we have a workshop with the examinations team in the UK the AQA examinations team in the UK. We had 14 of them here recently looking at the technology in detail. So yes, summary is significant progress.

Abhishek Kamdar:

All right and as far as AQA is concerned, we are doing this across subjects and languages, the transcription?

Dhananjaya Sudhanva:

Yes.

Abhishek Kamdar:

Okay. Thank you. All the best.

Dhananjaya Sudhanva:

Thank you. Happy Deepavali.

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Excelsoft Technologies Limited November 06, 2026 Moderator:

The next question is from the line of Divya Reddy from Sunshine Investments. Please go ahead.

Divya Reddy:

Hello, Good evening. Am I audible?

Moderator:

Yes, ma'am.

Doreswamy P:

Yes ma'am.

Divya Reddy:

So, I want to know what is the progress on the VTCT skills engagement and the Saras e-testing platform?

Dhananjaya Sudhanva:

VTCT, I think the first one VTCT.

Doreswamy P:

I'll answer this. Ma'am, is first one is the VTCT?

Divya Reddy:

Yes. Yes

Doreswamy P:

Okay, we had gone live in the month of September. We started around 500 tests per month in the month of September and then last month, October, we have conducted roughly around 25,000 tests so far. So, our expectation is 30,000 per month. So we're almost reaching the expected assessments to happen. It is very much on track at this point of time. Second question is on Saras in a box is what your question is. Am I correct?

Divya Reddy:

Yes.

Doreswamy P:

Okay, so that's-- we have delivered a few temporary devices to some of the customers for a POC and to test it. Last month, some of them sent it to Africa, some in UK and in some other places, Scotland, etcetera. So, currently right now, it is actually in a testing mode. Once all the integration is done, we might get an order from our customers.

Divya Reddy:

Okay.

Dhananjaya Sudhanva:

The piloting.

Doreswamy P:

The piloting, yeah. Sorry

Divya Reddy:

And educational technology services has been the key growth driver. So how sustainable is this momentum and where do you see the next leg of growth coming from?

Doreswamy P:

Okay, I'll answer the first one, ma'am, wherein the ETS-- this contract, what we're referring is there for the last 21 years. As Chairman mentioned, it is with 12 different business divisions operating, but of course this looks like one customer and wherein we have built certain products based on our platform. And then we are managing certain customer products as well and it's a very sticky and then a deep integrations with their systems. Also on the other side, if this business is sustainable we are taking certain activities to retain this customer. How we can grow with them in the future,

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Excelsoft Technologies Limited November 06, 2026 that's on a different strategy which has been worked out by our team and then we may be in a better position to update in the coming quarter on that front as well. But we are definitely sure to address this concern. The second question what you asked is what else like in other opportunities. We are in the near shore onboarded, we have expanding our technology services business to another customer. We have onboarded- we are in the verge of onboarding in a few new customers and that is actually progressing very well. And, We're also adding in some sales team in that direction where we don't want to do simply in a body shopping, but we do on a work which comes from our domain expertise and then we are able to manage the complete product or build some of the products for our customers. So something you will hear it in near future. Divya Reddy:

Okay, so as the company has outlined strategic investments of somewhat around INR20 crores, so are these investments going to support what all you just said or there is some incremental business opportunities that they are looking out for?

Doreswamy P:

Both. Both the sides. One is our strategy discussion retain the existing customers. Some investments were required to have a near shore team and then we also built a new sales team which has been in the field for the last three to four months, like some of them. So they're building a relationship with their existing customers as well as the new customers. And then we also building some amount of our talent which is actually acting as customer success managers. So that's a new investment which we are making, making sure that the customer requirements have been addressed as well as we participate with their growth journey. So this investment is supporting all these new initiatives and then some sales will also like going to happen or like I would say majority of them going into the sales and that will have an impact on the revenue in the coming years.

Divya Reddy:

Ok. So….

Dhananjaya Sudhanva:

If I can add, we always maintain decent cash reserves via internal accruals and none of the spend we intend to spend will come from the internal accruals. Internal accruals are not going to be touched for the quantum of investment that we talked about.

Divya Reddy:

Okay. So, my last question is that how quickly does management expect the investments in the overseas sales team and leadership positions to translate into measurable revenue growth?

Doreswamy P:

This is a bit of a tricky question because we are into an enterprise sale. It's not like an SaaS or something like that where we add on a sales team and then give a target to about 100 customers in a month. So, this is going to take time. So we have to work within our customers, we have to understand the requirements and then we need to position our products, etcetera. So that's going to take some time. So average like three to four months like conversions and then the deployment takes another 3 to 6 months time or like in 8 months time. It's a long journey. We cannot just say that in the next 3 months we'll do our magic , that would be wrong. It's going to take some time.

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Excelsoft Technologies Limited November 06, 2026 Divya Reddy:

Okay, yeah, yes, it makes sense. Yes, that's it and all the best for your future. Happy Diwali.

Doreswamy P:

Happy Diwali to you.

Dhananjaya Sudhanva:

Happy Deepavali.

Moderator:

Thank you. A reminder to all the participants, you may press star and (one) to ask question. As there are no further questions from the participants, I would now hand the conference over to Mr. Dhananjaya for closing comments. Over to you, sir.

Dhananjaya Sudhanva:

Thank you very much, very well organized, a very pertinent questions. Some of the questions we will have to work deeper and I guess that's what the spirit of the Earnings call is that it opens blind spots. We are so close to the business when you come with these questions, these blind spots do open up. We hope to work on all this and during the next Earnings call, be able to give you a plan to plug any gaps that you may have seen in this Earnings call. Very happy to have participated. Happy Dussehra and Happy Deepavali, Diwali to all of you and your families. Thank you very much.

Doreswamy P:

Thank you so much. Thanks a lot. Thanks everyone.

Moderator:

Thank you. On behalf of Excelsoft Technologies Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.

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