Xchanging Sol. Q1 FY27 Results (NSE: XCHANGING)
Signal: Growth reaccelerated
The read
The quarter shows a sharp consolidated revenue inflection to ₹6,384 lakh, +27.7% YoY versus +6.5% in Q3FY26 and flat Q4FY26, while PAT rose +17.1% YoY to ₹1,612 lakh; however, standalone revenue fell 12.8% and EPS growth of +9.7% lagged PAT, making subsidiary execution and earnings conversion the key trajectory questions.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹63.84 Cr | +27.7% | +24.5% |
| Net profit | ₹16.12 Cr | +17.1% | |
| EPS | ₹1.36 | +9.7% |
P&L walk
Consolidated revenue increased to ₹6,384 lakh, +27.7% YoY and +24.5% QoQ, while employee costs fell 8.8% YoY and project work costs rose 17.1% YoY; PAT reached ₹1,612 lakh, +17.1% YoY, with other income declining 6.1% YoY.
Segments
The company reports one IT services segment, but the ₹6,384 lakh consolidated revenue versus ₹937 lakh standalone revenue and ₹1,612 lakh consolidated PAT versus ₹395 lakh standalone PAT show that subsidiaries are driving the group result.
Key positives
- Consolidated revenue reached ₹6,384 lakh, +27.7% YoY and +24.5% QoQ, accelerating from +6.5% YoY in Q3FY26 and 0.0% in Q4FY26.
- Employee benefits expense declined 8.8% YoY to ₹1,501 lakh while revenue rose 27.7% YoY, reducing employee cost intensity to 23.5% of revenue from approximately 32.9% a year earlier.
- Finance costs declined 16.8% YoY to ₹109 lakh, reducing the below-operating-profit burden.
Key concerns
- Standalone revenue declined 12.8% YoY to ₹937 lakh and standalone PAT declined 16.1% to ₹395 lakh, so the consolidated growth is dependent on subsidiaries.
- EPS increased only 9.7% YoY to ₹1.36 versus PAT growth of 17.1% to ₹1,612 lakh, indicating a material PAT-to-EPS divergence that requires reconciliation.
- Other income declined 6.1% YoY to ₹356 lakh while consolidated PAT still rose 17.1%, suggesting the reported profit growth was not supported by higher treasury or non-operating income.
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