Delaplex Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Revenue up 5%, new streams emerge: Core supply chain and software development held steady, while a new solutioning business (micro data centers and enterprise solutions) contributed 16% of revenue, a stream that did not exist a year ago.
• Margins expand on cost discipline, not cuts: EBITDA grew 13% with a 172 bps margin expansion, driven by a 9% reduction in employee cost achieved through upskilling and cross-skilling, not headcount reduction.
• Blueberry acquisition opens Europe: The wholly-owned UK entity contributed INR 9.21 crores in revenue and provided an AI-enabled low-code platform, while also granting access to the European market.
• BSNL partnership advances to paid POCs: The relationship has moved from pilot stage to paid proof-of-concepts with multiple PSUs and enterprise clients, positioning micro data centers as a key H2 growth driver.
• What to watch next quarter: Conversion of micro data center POCs into full-scale deployments, the pace of H2 revenue acceleration toward the 55-60% annual target, and any quantification of the California-based global IT partnership.

Revenue Mix & Margin Walk

• New solutioning stream materializes: Micro data center and enterprise solutions contributed 16% of revenue, a completely new stream, while core supply chain services and software development remained stable at 43% and 36% respectively.
• Cost optimization via capability, not cuts: A 9% reduction in employee cost was achieved by cross-skilling and upskilling the existing team, reducing bench cost and improving resource leverage, with the Blueberry UK entity streamlining roles and eliminating duplication across geographies.
• Premium pricing unlocked: A shift in engagement mix toward full end-to-end solution engagements allowed premium pricing compared to traditional staff augmentation, contributing to the 172 bps margin expansion.
• Standalone margin drop is optical: The 400 bps sequential drop in standalone margin was driven largely by ESOP expenses (1,21,800 shares allocated) and solutioning expenses for the micro datacenter business; standalone revenue has actually increased over the last six months.
• Utilization headroom exists: HR capacity utilization runs north of 85%, while solutions capacity sits at 50-60% spare capacity, deliberately held back to give people time to upskill and cross-skill.

Nitin Sachdeva: "It is not by removing people, rather it is by upskilling and cross-skilling them and giving them proper tools, wherein we were able to utilize our existing team members for better delivery."

Micro Data Center & BSNL Partnership

• Four centers operational, early stage: Two micro data centers are in Hyderabad and two in other states, all invested in by Delaplex, and are in the early stages of operation.
• BSNL fronts sales in joint arrangement: The partnership, announced on September 27th at a national event in Guwahati, operates as a joint selling arrangement where BSNL handles the front-end sales.
• Paid POCs underway with PSUs and enterprises: The engagement has advanced from pilot stage to paid proof-of-concepts with multiple PSUs and enterprise clients, with significant POC-to-deployment conversion expected in H2.
• Targeting 34-40% of EBITDA: Management's current target is for micro data centers to contribute 34% to 40% of EBITDA in the short run.
• Market spans beyond government: The offering is positioned not just for PSUs and government entities, but also for MSMEs and GCCs seeking backup and disaster storage.
• Capital deployment gated on confirmed demand: Retail business with BSNL operates mostly on the basis of advanced bookings from a confirmed client before CAPEX is involved; management declined to quantify the capital investment needed for FY26 and FY27, saying they will update once more traction develops.

Nitin Sachdeva: "So, these mega data centers are consolidation of space for different clients at one location. What we have is, we have these DelaOne Micro Data Centers, these provide secure, scalable, and high-performance solutions, offering dedicated resources, and the flexibility of virtual servers without the complexities of managing the physical hardware."

Acquisitions & Partnerships

• Blueberry Systems UK integration progressing: The 100% owned entity contributed INR 9.21 crores revenue and INR 2.35 crores PAT, bringing an AI-enabled low-code platform that enhances service delivery and reduces development time, while opening doors to European clients.
• Celestia Crew Consultancy delivering synergies: Operational synergies from this acquisition are improving delivery efficiency in supply chain consulting.
• California-based global IT partnership in vetting stage: The partner is evaluating Delaplex's capabilities in cybersecurity and master data management; wrappers around the MDM solution are being showcased to prospective clients by the partner. Management declined to share a revenue number, saying they will share once the partnership grows.
• Additional alliances formed: Partnerships with global IT companies for an MDM platform, and alliances with product companies offering SaaS-based solutions.
• Major work order secured: A significant engagement from India's leading oil and gas company, plus an expanded managed service engagement with a US-based global technology leader with additional orders in the pipeline.

Productized Solutions & Intangibles

• Pivot underway from services to productized solutions: Management plans to shift toward solutions that do not need to be rebuilt for each end client, as an intermediate step before moving to full products.
• Intangibles reflect this pivot: The increase in intangibles includes goodwill from the Blueberry acquisition, the AI-enabled low-code platform, and a project tracking tool being built while serving customers, with a plan to take this as a SaaS product for other services companies and end clients. Some portion is for the datacenter. Amortization will follow accounting policies in subsequent years.
• Blueberry platform creates stickiness: Once people are onboarded onto the AI-enabled low-code platform, some SaaS revenue is maintained, and data hosted on the platform increases the probability of longer-term client continuation.

Nitin Sachdeva: "So, from the traditional services business what we have done is we have pivoted and there is a plan to pivot to products. But before going to products we are shifting towards productized solutions."

Client Environment & H2 Outlook

• Clients are value-conscious, not cutting: With global turmoil, clients have become more conscious about value-driven spending, but Delaplex is prepared with its low-code platform delivering better value in a short span.
• Client count stable, no associate departures: General business scales up and down per industry standards with no remarkable shift; some cost optimization from clients' end, but the number of clients remains almost similar to the last six months and no associates have left.
• H2 seasonality expected to normalize: Industry average and Delaplex's average has H2 always being better; last year was an exception due to Blueberry acquisition cost optimization. This year H2 is expected back to industry average and better, driven by milestone-based fixed bid projects with enterprise clients at year-end.
• H1 typically 40-45% of annual revenue: The seasonal pattern is driven by the US market, where budget approvals and new project agreements materialize from January onwards, making H2 account for 55-60% of annual revenues.

Nitin Sachdeva: "Yes. With the global turmoil happening, everyone is aware, the client has become more conscious about value-driven spending. So, definitely, we are already prepared for it, and with the low-code platform, we are providing services to those clients, wherein they are getting better value delivered in a short span of time."

Guidance & Commitments

Key Metrics