Summary
Silver Touch Technologies Limited - Q3 FY26 Earnings Call Summary Monday, January 19, 2026 4:00 PM
Event Participants
Executives 2 Minesh Doshi (Whole-Time Director), Vipul Thakkar (Managing Director)
Analysts N/A (Questions were submitted via chat box during the Valueportal Event; individual names not specified)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Order Book | ₹650 crores | Cumulative orders to be billed over 3-5 years; Provides strong multi-year revenue visibility. |
| Revenue CAGR | 20% - 25% | Consistent growth over the last 3 years; Driven by digital India and e-governance mandates. |
| Domestic Revenue | 85% - 90% | Primary revenue driver; Focused on Indian government and PSU digital transformation. |
| International Revenue | 10% - 15% | Sourced from USA, UK, and Canada operations; Provides stability against domestic fluctuations. |
| Workforce | 1,500+ count | Technology-focused workforce; 61 fresh IT graduates onboarded in the current cycle. |
| Capex (FY25) | ₹21 crores | Investment in plant/machinery for Gujarat land records and automated testing centers. |
Geographic & Segment Commentary
- Software Services: This segment contributes 51% of total revenue. Focus is on custom software development, AI, and cloud services for 2,000+ global clients.
- E-Governance Services: Accounting for 20% of revenue, this segment handles mission-critical projects like the India Disability Portal and Unified Labor Code. Contracts are typically long-term (5-10 years) providing high stability.
- System Integration (SI): Represents 15% of revenue. Focuses on IT infrastructure, security management, and data center operations, including recent security mandates for 15 Indian airports.
- Business Consulting: Contributes 9% of revenue. Focuses on ERP (SAP, Odoo, Oracle) and analytics for manufacturing and wholesale clients in North America and the UK.
- Cloud & Facility Management: Currently 5% of revenue. Management plans to scale this segment through potential acquisitions in cloud security and migration services.
Company-Specific & Strategic Commentary
- AI & Pharma Innovation: Launched “AI4 Pharma” subsidiary with 5 proprietary AI products for manufacturing compliance. Target market includes 25,000 global pharma plants with expected recurring revenue of ₹1-₹5 crore per plant.
- Strategic Acquisitions: Management is actively looking for acquisition targets in the Cloud and Security space to bolster the current 5% revenue contribution from these services.
- Product-Led Growth: Transitioning from pure project-based services to recurring SaaS models, particularly within the pharmaceutical AI vertical.
- Quality Accreditation: Maintaining high delivery standards through CMMi Level 5, ISO 27001, and ISO 20000 certifications to compete for sensitive defense and government contracts.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Cash Flow | Improved by Mar-26 | Management expects operating cash flow to normalize after the initial high-capex phase of BOT projects. |
| Growth Strategy | 20-25% CAGR | Sustained by AI-led transformation requests from the existing 2,000+ client base. |
| Revenue Model | 40% New Orders | Strategy to maintain 50-60% repeat business while adding 40% new long-term contracts annually. |
Risks & Constraints
| Risk | Context |
|---|---|
| Working Capital Intensity | Build-Operate-Transfer (BOT) projects require significant upfront capital expenditure (₹21cr recently), which has pressured operating cash flows in the short term. |
| Global Hardship | While 85-90% of revenue is domestic, the 10-15% international segment remains exposed to global “turmoil” and economic shifts in the US and UK. |
| High Concentration | Heavy reliance on Indian Government and PSU contracts (Digital India) makes the company sensitive to changes in public sector spending or policy shifts. |
Q&A Highlights
Business Model and Order Book
- Question: What is the revenue model split and order book visibility?
- Answer: Order book stands at ₹650 crores. For a typical ₹100 order, ₹50-₹60 is billed in Year 1, with the remainder spread over 4-5 years of Operations & Maintenance. (Minesh Doshi)
AI and Pharmaceutical Strategy
- Question: How does the AI product for Pharma work and what is the market size?
- Answer: Developed AI/ML models to prevent FDA warning letters by alerting quality managers of anomalies in real-time. Addressable market is 25,000 plants globally with a SaaS-based recurring revenue model. (Minesh Doshi)
Capex and Cash Flow
- Question: Why has working capital increased and harmed cash flow?
- Answer: Recent large projects are Build-Operate-Transfer (BOT) in nature, requiring significant initial capital. Cash flow is expected to improve significantly after March 2026 as these projects transition to the O&M phase. (Vipul Thakkar)
Defense and Infrastructure Projects
- Question: What are the details of the Navy and Airport projects?
- Answer: The Navy project involves migrating 100,000+ personnel to an AI-led HR/Payroll system. The Airport project involves securing data transmission networks for 15 airports. (Minesh Doshi)
Key Takeaway
Silver Touch Technologies demonstrated a steady transition from a traditional IT service provider to an AI-led digital transformation partner, maintaining a 20-25% revenue CAGR. The company’s strength lies in its ₹650 crore order book and deep-rooted relationships with the Indian Government, evidenced by its 51% revenue share from Software Services and 20% from E-Governance. Strategic focus has shifted toward high-margin recurring SaaS revenue through its “AI4 Pharma” subsidiary and potential acquisitions in the cloud security space. While significant upfront capex of ₹21 crore for BOT projects has temporarily constrained operating cash flows, management expects a reversal by the end of FY26. The company remains a primary beneficiary of India’s digital infrastructure push while cautiously expanding its 10-15% international footprint. Silver Touch is positioned for stable growth driven by long-term 5-year contract cycles and AI-led upgrades within its existing 2,000-client ecosystem.
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