iValue Infosolutions Limited Q3 FY26 Earnings Call Summary

Summary

iValue Infosolutions Limited - Q3 FY26 Earnings Call Summary Wednesday, February 04, 2026 6:30 p.m. IST

Event Participants

Executives 3 Krishna Raj Sharma (Executive Director), Sunil Pillai (Chairman and Managing Director), Swaroop Muvvala (Chief Financial Officer)

Analysts 8 Amar (Lucky Investment Managers), Baidik Sarkar (Unifi Capital), Darshil Jhaveri (Crown Capital), Karthik (RK Investments), Nikhil (Kizuna Wealth), Nitesh (Lucky Investment Managers), Patanjali (Nuvama), Rajakumar Vaidyanathan (RK Investments), Shravan Thakkar (Kriis PMS)

Financials & KPIs

Geographic & Segment Commentary

• Cybersecurity: Remained the primary growth engine, increasing >30% YoY for the 9-month period. Management maintains 70-75 OEM partnerships in this space, focusing on AI-driven threat detection and OT-aware security operation centers (SOCs).
• Data Center Infrastructure (DCI): Grew 16% YoY in 9M FY26. Strategic shift towards supporting high-density compute (GPUs) and edge nodes as India’s data center capacity is projected to reach 8,000 MW by 2030.
• Information Lifecycle Management (ILM): Recorded 23% YoY growth in 9M FY26. Increasing demand is driven by the need for AI-ready data governance and regulatory compliance in OT-heavy sectors like manufacturing and energy.
• Application Lifecycle Management (ALM) & Cloud: Experienced a decline due to a transition from Total Contract Value (TCV) to Annual Contract Value (ACV) billing. Management expects a recovery to 70-75% of budget in Q4 as they correct for 25% ACV recognition versus historic 60% levels.

Company-Specific & Strategic Commentary

• AI + OT Convergence: Strategically pivoting toward the “AI plus OT inflection point” where AI moves into physical systems like power grids and factories. Management estimates India’s AI market will reach $17 billion by 2027, creating demand for deterministic networking and low-latency edge architectures.
• Annuity Scaling: Annuity business EBITDA margins are 100-150 bps higher than new sales due to lower sales effort. The segment now accounts for nearly 42% of gross sales, providing a cushion against deal-based cyclicality.
• Service Expansion: Investing in pre-sales, post-sales, and Centers of Excellence to win complex multi-OEM deals. This capability serves as a differentiator against pure-play distributors by focusing on solutioning rather than just fulfillment.

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Pipeline & Win Rates

• Question: What is the win rate for the current ₹4,500 crore pipeline? (Nikhil)
• Answer: Historically, the win rate is 30-35% for clean, qualified deals. The current pipeline is significantly better than the ₹2,500 crore reported the previous quarter (Swaroop Muvvala).

AI Impact on System Integrators (SIs)

• Question: Does AI threaten the relevance of SIs and iValue’s business model? (Patanjali)
• Answer: AI adoption at large enterprises is complex and requires human logic. Even if SIs were bypassed, iValue remains relevant to the end-customer for infrastructure protection and data governance. Management views AI as an opportunity to sell deeper into existing accounts (Sunil Pillai/Krishna Raj Sharma).

Data Center Market Share

• Question: What is iValue’s market share in the projected 8,000 MW data center capacity? (Amar)
• Answer: iValue typically supplies high-end routing, switching, and storage, making up sub-20% of a data center’s total infra spend. The company focuses on GPU-led, high-density AI data centers rather than generic facilities (Sunil Pillai).

Margin Profile of Annuity Business

• Question: Why does annuity business margin not flow directly to PBT? (Baidik Sarkar)
• Answer: While sales effort is lower, renewals still require operational support, finance, and office overheads. EBITDA margins are 100-150 bps higher than the standard business (Swaroop Muvvala).

Key Takeaway

iValue Infosolutions delivered a resilient performance in 9M FY26, with Gross Sales up 22.4% and normalized PAT up 26.9% YoY, despite a sequential Q3 dip following an exceptionally strong Q2. The company is strategically pivoting toward the convergence of AI and Operational Technology (OT), positioning its Cybersecurity and Data Center Infrastructure segments to capture the next multi-year tech cycle in India. The annuity-led business, now comprising 41.9% of sales, provides high revenue predictability and superior margins. Management reiterated its FY26 guidance of 18% top-line and 20-22% bottom-line growth, supported by a robust ₹4,500 crore qualified pipeline. While large deal lumpiness and tax-related cash flow timing remain watch points, the company’s expansion into AI-ready infrastructure and stabilized 51-day working capital cycle signal strong fundamental health. iValue remains well-positioned to benefit from India’s accelerating data center and cyber-physical security demand.