CyberTech (CYBERTECH) Q2 FY27 Profit Stalls Even as Revenue Jumps 25%
The IT services firm posted robust top-line growth but saw profitability squeezed by rising costs and a sharp drop in other income.
CyberTech's Q2 FY27 revenue surged 24.7% year-on-year to ₹73.3 crore, yet net profit was nearly flat at ₹8.68 crore. The margin squeeze highlights cost pressures in a challenging IT demand environment.
For a mid-tier IT services firm like CyberTech, growth is the test—but profit conversion is the grade. The September quarter saw the company pass the first with flying colors but stumble on the second. Revenue surged ahead, yet profit barely budged, revealing a squeeze that has become the quarter's defining story.
CyberTech's revenue for Q2 FY27 rose 24.7% year-on-year to ₹73.3 crore, building on a 7.1% sequential gain. However, net profit was nearly flat, inching up just 0.3% to ₹8.68 crore. The net profit margin compressed by 290 basis points to 11.8%.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 73.3YoY +25% | 68.45 | 58.78 |
| Profit (₹ Cr) | 8.68YoY +0.3% | 9.48 | 8.65 |
| Net Profit Margin | 11.8%YoY -20% | 13.8% | 14.7% |
The cost surge behind the growth
The revenue jump did not reach the bottom line because operating costs rose sharply. According to a scanx.trade report, employee benefits expense increased by 20% year-on-year, while outsourced service costs rose 21%. This ate into the gains from a much stronger core business: FlashFinance notes the company's operating profit soared 75.1%.
Yet, the headline profit was dragged down by a 40.5% plunge in other income. This line, which includes interest and one-off items, fell to ₹4.7 crore from ₹7.9 crore a year ago. FlashFinance analysis shows that 41% of pre-tax profit still came from other income and one-offs, underscoring a lingering reliance on non-operational earnings.
A mixed signal in a tough market
The company's performance arrives amid a muted sector outlook. Reports from IANS Live and Fortune India indicate the Indian IT sector is facing soft demand, pricing pressure, and delayed client decisions. In this climate, CyberTech's revenue growth stands out, but the margin pressure is a sector-wide theme.
Live Chart
· CYBERTECH
(BSE)
ISIN: INE214A01019
Management did not provide formal guidance for the rest of FY27, according to a Univest analysis. The focus now shifts to whether the strong operating profit growth can be sustained and converted into net earnings, especially if other income remains subdued.
Key Points
- Revenue growth of 24.7% YoY significantly outpaced net profit growth of just 0.3%.
- Net profit margin fell 290 basis points due to rising employee and subcontractor costs, coupled with a 40.5% drop in other income.
- The core operating business was strong, with operating profit up 75.1% year-on-year.
- The company operates in a challenging IT services environment marked by pricing pressure and cautious client spending.
Hexa Perspective
CyberTech's quarter presents a clear divergence: a vigorously growing top line constrained by a profitability squeeze. The 290-basis-point margin contraction is the figure to watch.
The compression has two drivers. The rise in employee and outsourced costs is likely structural, tied to delivering the new business. The sharp decline in other income, however, may be more volatile. If that line does not recover, the company's profit growth will remain entirely dependent on its ability to wring operating leverage from its expanding revenue base—a tougher ask in a competitive pricing environment. The valuation, at a P/E of 10.1 against an industry average of 17.9, already prices in this uncertainty.
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