eMudhra Q1 FY26 Results (NSE: EMUDHRA)
Signal: Margin pressure
The read
Revenue growth of 29.5% YoY is solid, driven by Trust Services (+35.4%), but the OPM has contracted for the 3rd consecutive quarter (Q4FY25 -900bps, Q1FY26 -500bps) due to employee cost (+44.8% YoY) and D&A (+78.1% YoY) surging from the consolidated acquisitions — a classic integration cost headwind. Standalone business shows a dramatic margin expansion (OPM +1030bps to 25.1%) as employee costs fell, indicating the parent company is leaner; the group's margin drag is entirely in the subsidiaries. The sequential revenue dip (-1.4% QoQ) is small and likely seasonal; overall the trajectory is growth with margin pain that should ease as acquisitions scale.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹190.72 Cr | 29.5% | -1.4% |
| EBIT | ₹38.17 Cr | 22.9% | |
| Net profit | ₹32 Cr | 27.9% | |
| EPS | ₹3.91 | 28.2% | |
| EBIT margin | 24.0% |
P&L walk
Revenue grew 29.5% YoY to ₹1,907.15 million, driven by Trust Services (+35.4% YoY, ₹1,254.64 million) which now accounts for 66% of total revenue. Operating expenses rose slower (+23.6%) than revenue, but employee costs surged +44.8% YoY and D&A jumped +78.1% YoY, compressing OPM by 500bps to 24.0%. Net PAT grew 27.9% to ₹319.97 million, tracking EBIT growth of 22.9%.
Segments
Trust Services segment is the key growth driver (₹1,254.64 million, +35.4% YoY, 66% of total revenue) and the higher-margin business (segment result margin 20.5%); Enterprise Solutions (₹652.51 million, +19.4% YoY, 34% of revenue) grew slower but contributed higher segment margin (50.1%) — together they lifted group EBIT 22.9% YoY; the gap between standalone PAT (₹124.19 million) and consolidated PAT (₹321.46 million) confirms significant profit contribution from subsidiaries, particularly the Trust Services (Cryptas, Certinext etc.) acquisition.
Key positives
- Standalone OPM expanded +1030bps to 25.1%, demonstrating strong operating leverage at the parent level.
- Trust Services revenue grew +35.4% YoY to ₹1,254.64 million, now 66% of consolidated revenue, confirming the strategic pivot to the higher-growth digital trust segment.
- Consolidated PAT grew +27.9% YoY and EPS +28.2% YoY, roughly in line with revenue growth, and free of exceptional items.
Key concerns
- Consolidated OPM contracted 500bps YoY to 24.0% as employee expenses grew +44.8% YoY and D&A +78.1% YoY, marking the 3rd consecutive quarter of margin compression.
- Revenue sequentially declined -1.4% QoQ from ₹1,933.96 million to ₹1,907.15 million, the first QoQ dip in the series; Enterprise Solutions revenue fell -10.6% QoQ.
- Finance costs jumped +495% YoY to ₹11.96 million (from ₹2.01 million), indicating higher debt burden from acquisition funding.
Research and educational content only. Not investment advice.