DC Infotech Q2 FY27 Results (NSE: DCI)

5 Nov 2026 · Analysis by Alpha Inflection

Signal: Growth reaccelerated

The read

The trajectory is a revenue rebound but not yet a clean earnings inflection: consolidated revenue rose 38.4% YoY and 27.1% QoQ, while EBITDA margin fell 47bps YoY to 5.05% as gross margin compressed 171bps and finance cost rose 171.7%; the subsidiary loss and negative operating cash flow add quality concerns.

P&L walk

Revenue accelerated to ₹21,248.12 lakh, +38.4% YoY and +27.1% QoQ, but gross margin fell to 8.78% from 10.49% as purchase and inventory costs rose to 91.22% of revenue; finance cost rose 171.7%, leaving PAT growth at 15.9%.

Segments

Products drove the group with ₹18,836.01 lakh revenue and ₹1,575.47 lakh segment result, while Security Software and Services grew 29.3% YoY to ₹2,412.11 lakh and contributed ₹290.66 lakh; the subsidiary loss of ₹53.61 lakh explains why consolidated PAT of ₹580.46 lakh was ₹35.81 lakh below standalone PAT.

Key positives

• Consolidated revenue rose 38.4% YoY to ₹21,248.12 lakh and 27.1% QoQ, reversing the Q1FY27 seasonal decline of 30.1% QoQ.
• Security Software and Services revenue increased 29.3% YoY to ₹2,412.11 lakh and segment result rose 23.7% to ₹290.66 lakh.
• Employee plus other expenses grew 26.1% YoY versus 38.4% revenue growth, providing partial operating-cost absorption despite gross-margin pressure.

Key concerns

• Gross margin compressed 171bps YoY to 8.78% as purchase and inventory costs rose to 91.22% of revenue from 89.51%; the filing does not identify the cause.
• Finance cost rose 171.7% YoY to ₹386.14 lakh, while borrowings reached ₹12,336.85 lakh and net debt increased to ₹9,950.44 lakh.
• Operating cash flow was negative ₹3,484.89 lakh despite ₹1,406.55 lakh H1 consolidated PBT, driven by inventory and other-current-asset working-capital absorption.

View original filing

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