HRH Next Services Limited Q3 FY26 Earnings Call Summary

Summary

HRH Next Services Limited - Q3 FY26 Earnings Call Summary Wednesday, January 21, 2026

Event Participants

Executives 3 Ankit Sanjay Shah (Managing Director), Gangadhar Sherla (Chief Financial Officer), Supriya Kshirsagar (Head of Service Excellence)

Analysts N/A (Questions submitted via chat/webcast by various participants including “Rahul” and “Madur”)

Financials & KPIs

Geographic & Segment Commentary

• South India (Delivery Centers): Currently operates 8 centers with headquarters in Hyderabad; management plans to expand into North and West markets to support pan-India service delivery.
• Tier-2/3 Markets: Strategic focus on vernacular engagement, utilizing a language-first approach to drive customer experience for telecom, BFSI, and e-commerce sectors.
• AI Services (AINA): Newly launched division focusing on multilingual voice and chatbots; target segment is sector-agnostic with significantly higher margins than traditional BPO services.

Company-Specific & Strategic Commentary

• AINA AI Platform: Proprietary technology focusing on “mirroring human emotions” in 11 vernacular languages. The platform analyzes 200 markers per call to determine intent and sentiment.
• Main Board Migration: Strategic goal to migrate from SME to the Main Board by January 3, 2027, contingent on reaching the ₹100 crore revenue milestone.
• Client Stickiness: High retention driven by deep integration into client lifecycles (e.g., 14 years with Vodafone, 10 years with Swiggy), handling up to 18 different processes per client.
• Margin Expansion: Strategy to shift from seat-based BPO models to high-margin AI service models (per-minute billing) to drive EBITDA toward 20%+.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Business Model & Competition

• Question: How does HRH plan to bridge the EBITDA gap vs competitors doing 25%? (Rahul)
• Answer: We avoid high single-client concentration risks and are pivoting to AI. AI margins are remarkably higher as they don’t require the same real-estate-to-revenue ratio as traditional BPOs (Ankit Shah/Supriya Kshirsagar).
• Question: Do you offer outcome-based pricing? (Finportal)
• Answer: No, we find it too risky for traditional BPO. We stick to predictable per-seat models, though AI will use per-minute billing (Ankit Shah).

AI Strategy (AINA)

• Question: What makes your AI different from “wrapper” services? (Finportal)
• Answer: We aren’t just a wrapper for OpenAI; we developed proprietary tech that handles 200 markers on voice calls for intent and sentiment, specifically for vernacular languages (Ankit Shah).
• Question: How will AI affect pricing? (Finportal)
• Answer: It allows for an advanced payment mechanism (e.g., buying 1 lakh minutes upfront), improving our cash flow compared to the 60-day BPO cycle (Ankit Shah).

Growth & Financials

• Question: What caused the negative cash flow in FY25? (Finportal)
• Answer: It was driven by advances paid for AI software development. We expect this to turn positive this half-year (Gangadhar Sherla).
• Question: What are the expansion plans? (Finportal)
• Answer: We are identifying properties in Mysore and potentially Indore to reach our ₹100 crore revenue target (Ankit Shah).

Key Takeaway

HRH Next Services reported a steady 11% YoY revenue growth in H1 FY26, as it pivots from a traditional vernacular BPO to an AI-first customer experience provider. The company’s strategic roadmap is centered on its proprietary “AINA” AI platform, which aims to drive PAT margins from current ~6% levels to 10-12% by FY27. While revenue remains heavily concentrated among five key “unicorn” clients (87% total), management views this as a strength due to deep process integration and high stickiness, evidenced by a 14-year tenure with Vodafone. The company is aggressively targeting a ₹100 crore revenue milestone by FY27 to facilitate a migration to the NSE Main Board. Success hinges on the successful monetization of AI services to offset traditional working capital drags and high GPU infrastructure costs. Management remains confident in reaching these targets through geographic expansion into Mysore and Indore and a shift toward advance-payment models for AI.