Dev (DEVIT) Q2 FY27 IT Profit Plunges 96% Despite Strong Revenue Growth
Dev Information Technology's Q2 revenue surged 29% year-on-year, but net profit collapsed 96% due to a high base from an exceptional gain last year.
Dev Information Technology reported a 29% jump in Q2 FY27 revenue, but net profit plunged 96% year-on-year. The stark divergence stems from an exceptional gain that inflated last year's profit to an unsustainable level.
For Dev Information Technology, the September quarter was a story of two starkly different realities. The business delivered robust revenue growth, but the bottom line was erased by a comparison to an unsustainable high from a year ago.
The numbers show the split. Consolidated revenue rose 29% year-on-year to ₹62.63 crore and jumped 42% from the June quarter. Net profit, however, fell 96% to ₹2.74 crore. The operating business improved, with operating profit up 52% year-on-year, according to Univest.
Revenue & profit
Revenue (₹ Cr)
Net Profit (₹ Cr)
| Metric | CurrentQ2 FY27 (Sep 2026) | PreviousQ1 FY27 (Jun 2026) |
|---|---|---|
| Revenue (₹ Cr) | 62.63 | 44.13 |
| Net Profit (₹ Cr) | 2.74 | 2.11 |
| PAT Margin (%) | 4.4 | 4.8 |
The Ghost of an Exceptional Gain
The collapse in profit is almost entirely a base effect. ScanX Trade notes that the Q2 FY26 consolidated profit of ₹71.88 crore included an exceptional gain of ₹9.24 crore. This one-off item created a net profit margin of 148% last year, a level impossible to repeat from regular operations.
Stripping that out, the underlying profit trajectory is one of recovery from a loss. The company posted a ₹7.42 crore loss in Q3 FY26 before returning to modest profits in the last two quarters. Sequentially, profit grew 30% from Q1.
Costs Rise with the Business
Employee benefit expenses surged 57% year-on-year to ₹29.48 crore, ScanX Trade reports, indicating investments in headcount or compensation. This outpaced revenue growth, contributing to a slight 40 basis point sequential dip in net profit margin to 4.4%.
The company continues to win government contracts, a key client segment. According to Alfafinder, orders announced in recent months include a ₹5.15 crore project from NICSI and a ₹5.33 crore order from the Gujarat government.
A Market Waiting for Normalcy
With no specific management guidance cited in filings, the outlook rests on execution. The FlashFinance report notes the company's profit was 98% below its own trend, a statistical artifact of last year's spike. The core operating business, it says, grew faster than reported profit.
The stock has fallen nearly 50% over the past year, reflecting this earnings volatility and a broader sector re-rating. It now trades at a significant discount to the industry average P/E.
Key Points
- Revenue growth of 29% YoY and 42% QoQ reflects strong business execution and order wins.
- The 96% YoY profit plunge is misleading, driven by an exceptional gain of ₹9.24 crore in the year-ago quarter.
- Underlying profitability shows a sequential recovery, with net profit up 30% from Q1 FY27.
- Employee costs rose 57% YoY, indicating investment for growth but pressuring margins in the near term.
Hexa Perspective
This quarter resets Dev IT's financial narrative to its operational reality. The exceptional gain that distorted year-ago comparisons is now in the past, allowing a clearer view of a business growing revenue but grappling with cost inflation.
The path ahead hinges on converting a steady stream of government orders into sustained, higher-margin profitability. Investors are weighing whether the current valuation, at a deep discount to peers, already prices in the company's volatile history or awaits proof of consistent earnings power.
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