Workmates Core2 H1FY27 Results (BSE: 544610)
Signal: Steady quarter
The read
The business is shifting toward a more visible annuity model: recurring revenue grew 43.4% to ₹82.97 Cr and reached 87% of H1 revenue versus 77% a year ago, while PAT grew 32.4% to ₹12.03 Cr; the key inflection is improved revenue quality and raised FY27 guidance, offset by gross-margin compression to 33.5%, negative operating cash flow of ₹4.70 Cr and EPS growth of only 2.6%.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹95.21 Cr | 27.5% | N/A |
| Net profit | ₹12.03 Cr | 32.4% | |
| EPS | ₹9.32 | 2.6% | |
| EBIT margin | N/A |
P&L walk
Consolidated revenue grew 27.5% YoY to ₹95.21 Cr, led by recurring revenue growth of 43.4% to ₹82.97 Cr; gross margin eased to 33.5% from 34.3% as cloud consumption and third-party costs reached 66.5% of revenue, while EBITDA rose 24.0% to ₹16.44 Cr and PAT grew faster at 32.4% to ₹12.03 Cr, although EPS increased only 2.6% to ₹9.32.
Key positives
- Recurring revenue rose 43.4% YoY to ₹82.97 Cr and now accounts for 87% of revenue versus 77% in H1 FY26, improving revenue visibility.
- PAT rose 32.4% YoY to ₹12.03 Cr, faster than revenue growth of 27.5%, and PAT margin improved to 12.6% from 12.2%.
- Average MRR increased to ₹13.8 Cr/month from ₹9.67 Cr/month, while entry MRR reached ₹15.9 Cr/month and expanded 20% versus April 2026.
- Gross annualised churn was only 2.6%, below the company’s 10% ceiling, and the company added 54 new logos, taking customers to 337.
- Employee costs declined to 10.8% of revenue from 11.2% while revenue per employee rose to ₹0.56 Cr from ₹0.44 Cr.
Key concerns
- Operating cash flow was negative ₹4.70 Cr despite PAT of ₹12.03 Cr, as receivables rose to ₹39.50 Cr and debtor days increased to 64 from 62.
- Gross margin declined 80bps to 33.5% as cloud consumption and third-party costs rose to 66.5% of revenue from 65.7%.
- EPS increased only 2.6% to ₹9.32 while PAT grew 32.4% to ₹12.03 Cr; the filing does not explain the divergence.
- Project revenue declined 27% YoY to ₹12.24 Cr, leaving H2 execution dependent on converting new recurring business and projects from the ₹110 Cr weighted pipeline.
- BFSI contributed 40.6% of revenue and the top 20 clients contributed 71%, leaving material customer and vertical concentration despite improvement from 73% for the top 20 clients in FY26.
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