IRIS Regtech Solutions Q2 FY27 Results (NSE: IRIS)
Signal: Margin expansion
The read
The operating inflection is real but still early: consolidated revenue accelerated to ₹3,874.11 lakh, +35.6% YoY, and derived operating margin expanded 444bps to 4.96%, led by RegTech's turnaround and lower employee-cost intensity; however, ₹109.37 lakh PAT is not comparable with the prior-year ₹11,685.04 lakh exceptional-item base, and negative operating cash flow of ₹605.64 lakh plus higher receivables remain the key quality concern.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹38.74 Cr | +35.6% | +18.3% |
| Net profit | ₹1.09 Cr | -99.1% | |
| EPS | ₹0.53 | -99.1% | |
| EBIT margin | 4.96% |
P&L walk
Revenue increased to ₹3,874.11 lakh, +35.6% YoY and +18.3% QoQ; derived operating margin rose to 4.96% from 0.52% YoY as employee-cost intensity fell, while PAT of ₹109.37 lakh compares with last year's ₹11,685.04 lakh exceptional-item gain.
Segments
RegTech was the main momentum driver, with revenue up 49.0% YoY to ₹1,583.21 lakh and segment result improving to ₹355.05 lakh from a ₹109.74 lakh profit YoY and a ₹138.74 lakh loss in Q1; DataTech continued to drag with a ₹150.36 lakh loss versus a ₹60.91 lakh loss YoY.
Key positives
- Revenue from operations rose 35.6% YoY to ₹3,874.11 lakh, accelerating from 33% YoY reported in the prior Q1FY27 business update.
- RegTech revenue grew 49.0% YoY to ₹1,583.21 lakh and its segment result improved to ₹355.05 lakh from a ₹138.74 lakh loss in Q1FY27.
- Derived operating margin expanded to 4.96% from 0.52% YoY as employee benefits grew 24.7%, below the 35.6% revenue growth rate.
- ARR was reported up 11% since March 31, 2026, indicating improving recurring-revenue momentum.
Key concerns
- Operating cash flow was negative ₹605.64 lakh for H1FY27 despite ₹12.25 lakh H1 continuing-operations PAT, with trade receivables rising to ₹4,393.20 lakh from ₹2,748.64 lakh at March 31, 2026.
- DataTech remained loss-making at ₹150.36 lakh in Q2FY27 versus a ₹60.91 lakh loss YoY, while unallocated expenses were ₹626.07 lakh.
- Depreciation rose 267.3% YoY to ₹186.20 lakh and finance costs rose 471.9% to ₹47.18 lakh, increasing the conversion risk from operating profit to PAT.
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