Summary
Takyon Networks Ltd - Q3 FY26 Earnings Call Summary Wednesday, January 21, 2026 4:00 PM
Event Participants
Executives 2 Manish Kumar Sharma (CMD), Vivek Singh (CFO)
Analysts N/A (Virtual event - questions submitted via Q&A box)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (H1 FY26) | ₹42 crores | +5% YoY from ₹41 crores; seasonal business with heavy skew toward Q4. |
| Order Book | ₹56.25 crores | As of Sept 30, 2025; since updated to ~₹54 crores after H2 billings and new wins. |
| EBITDA Margin | 10% - 11% | Consistent range; target to scale to 15% over the medium term. |
| PAT (H1 FY26) | ₹7.57 crores | Significant improvement from FY25 PAT of ₹6.72 crores due to lower interest and manpower costs. |
| Borrowings | -30% YoY | Debt reduced by 30% in FY26 utilizing IPO proceeds and operational cash flows. |
| Revenue CAGR | 28% | Growth trajectory from FY23 to FY25; aiming to double revenue in the next 2 years. |
Geographic & Segment Commentary
- North & Northeast India: Primary operations hub across states like UP, Bihar, MP, and Assam. Management plans to leverage existing reputation in these regions while expanding.
- Government Segment: Currently 65-70% of the business, focusing on public administration, prisons, and utilities. Offers higher EBITDA margins (18-20%) but faces longer payment cycles.
- Corporate & Enterprise: Represents 30-35% of revenue with clients like Accenture and Airtel. Margins are lower (12-14%), but cash flow cycles are superior to government projects.
- Energy and Defense: Energy (NTPC, PGCIL) contributes 20-25% of revenue; Defense (HAL, Eastern Command) contributes 5-7% with significant inquiry growth.
Company-Specific & Strategic Commentary
- Asset-Light Model: The company maintains no inventory, operating on a back-to-back procurement model with OEMs (3-4 week lead time), which minimizes capital lock-up.
- Cybersecurity Pivot: Strategically shifting focus toward high-margin security solutions (Next-Gen firewalls, DDoS protection) to drive 15% EBITDA targets.
- Digital Transformation: Executing proprietary software projects like the ₹15 crore Bihar Fire Services ERP to move beyond simple system integration.
- DPDP Act Readiness: Management is engaging with the Bihar government for Digital Personal Data Protection (DPDP) solutions, expecting revenue impact in FY27.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue (FY26) | ~₹115 - ₹120 crores | Expecting ₹60-₹65 crores of billing in Feb-March 2026. |
| Revenue (FY27) | +25% - 30% Growth | Driven by cybersecurity tailwinds and expansion into BFSI/Corporate sectors. |
| EBITDA Margin | 15% | Medium-term target; contingent on higher services mix and corporate expansion. |
| Sector Mix | 40% Corporate / 60% Govt | Targeted shift for FY27 to improve overall liquidity and working capital cycles. |
Risks & Constraints
| Risk | Context |
|---|---|
| Payment Delays | High dependency on government projects (70%) leads to seasonal cash flow strain and delayed receivables. |
| Project Contingency | Execution-related costs and price fluctuations over 2-year project cycles typically impact margins by 1-2%. |
| Concentration Risk | Regional concentration in North India; expansion into Maharashtra/Karnataka for BFSI is still in the planning phase. |
Q&A Highlights
Revenue & Growth
- Question: What are the bottlenecks for growth beyond the ₹100 crore revenue band? (Investor)
- Answer: Growth was primarily constrained by capital limits; post-IPO funding provides the “fuel” to scale. Management expects exponential growth over the next 3 years as they diversify into enterprise-level cybersecurity. (Manish Kumar Sharma)
Margins & Mix
- Question: Why are blended margins lower than the 18-20% seen in government projects? (Investor)
- Answer: While government margins are high, corporate projects (12-14%) and 1-2% project contingencies (labor shortage, price fluctuations) result in the current 10-11% EBITDA. (Vivek Singh/Manish Kumar Sharma)
New Opportunities
- Question: Can the DPDP Act create revenue opportunities for the company? (Investor)
- Answer: Yes, we are already presenting DPDP solutions to the Bihar government. While implementation is still being understood by customers, we expect material revenue in FY27. (Manish Kumar Sharma)
Sectoral Expansion
- Question: What is the plan for expansion into Maharashtra and Karnataka? (Investor)
- Answer: Expansion into these states will focus specifically on the BFSI and ITES segments rather than government projects to diversify the risk profile. (Manish Kumar Sharma)
Key Takeaway
Takyon Networks reported a stable H1 FY26 with a strategic focus on improving PAT through debt reduction (-30%) and a shift toward high-margin services. While revenue has hovered around the ₹100 crore mark for two years, management is utilizing IPO capital to break this band, targeting 25-30% growth in FY27. The company is successfully transitioning from a pure system integrator to a specialized provider in cybersecurity and AI labs, with the order book currently standing at ₹54 crores. Although government projects remain the primary margin driver (18-20%), the push toward a 40% corporate mix is intended to stabilize cash flows and reduce receivables. Investors should monitor the execution of the ₹60+ crore billing target in Q4 FY26 and the progress of DPDP Act-related contracts in FY27.
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