01 — At a Glance
The IT Services Company That Got Punched (But Laughed It Off)
- 52-Week High / Low₹1,120 / ₹522
- Q3 FY26 Revenue₹510.1 Cr
- Q3 EBITDA₹96.2 Cr
- Q3 PAT (Post-Exceptional)₹36.4 Cr
- Q3 EPS₹6.16
- Book Value₹246
- Price to Book2.93x
- Promoter Holding66.3%
- Debt / Equity0.13x
- Net Cash Position₹540 Cr
The Plot Twist: Q3 FY26 delivered +19.9% YoY revenue growth and EBITDA margins at 18.9% (best in ages). Then a ₹40.3 crore labour code liability smacked PAT down 42.5% QoQ. CFO: “Ex-exceptional, we’d have been at 12.7% PAT margin.” Translation: the quarter was gorgeous. The accounting bomb was a surprise gift from retrospective labour law changes. Shoot the messenger, celebrate the quarter.
02 — Introduction
Welcome to the Software Circus: Where Margin Balloons Pop & AI Bets Get Real
Datamatics Global Services is that rare creature—a mid-tier IT services company that’s been quietly building IP products, acquiring competitors, and now placing massive bets on enterprise AI. Founded way back when Bollywood films were still black & white, the company has pivoted about 47 times, survived three recessions, and somehow emerged with a diversified portfolio across Digital Technologies, Digital Operations, and Digital Experiences. Think of it as your weird cousin who started as an accountant, became a taxi driver, and now manages a gym—except he’s actually making money.
Revenue in FY25 was ₹1,723 crore. Revenue in 9M FY26 is ₹1,468 crore (which annualizes to ~₹1,957 crore if trends hold). That’s roughly 13% growth YoY at the 9-month mark. Q3 alone delivered ₹510 crore in revenue—the highest quarterly number we’ve seen in this dataset. But here’s the thing: you need to look past the labour code grenades and understand what management is actually trying to build.
The concall in Feb 2026 revealed something interesting: Datamatics is rolling out Google Gemini Enterprise company-wide, building AI agents for banking and insurance, and already shipping enterprise solutions. This isn’t vaporware. Management disclosed ~200 employees certified on Gemini Enterprise in Phase 1. Customers are moving from testing into production. And while the FY27 guidance is “high single-digit organic growth” (because, apparently, ‘cautious’ is the new ‘confident’), the AI monetization is expected “in the next few quarters.” Let’s parse this—revenue, margins, bets, and all the drama in between.
Concall Flash (Feb 2026): “One of the best quarters from a revenue and EBITDA perspective.” —Management. Then they spent 45 minutes explaining why PAT looked like it got hit by a truck. Welcome to earnings season.
03 — Business Model: WTF Do They Actually Do?
They Automate Your Boring Work. Then They’ll Use AI To Automate Your Job. Then They’ll Automate Themselves Out Of Business. Simple.
Datamatics operates across three main buckets: Digital Technologies (40% of revenue, basically IT solutions), Digital Operations (43%, business process outsourcing—think data entry, document processing, claims handling), and Digital Experiences (17%, design and experience work). They’ve built proprietary platforms like TruBot (RPA), TruCap+ (document processing), and FINATO (CFO back-office automation). They service 300+ clients across banking, insurance, publishing, logistics, and manufacturing. Top 5 clients = 29% of revenue. Top 20 clients = 55% of revenue. Translation: they have a diversified moat-free client base, which is both good (no single point of failure) and risky (pricing power = zero).
Geography matters: US is 52% of revenue, UK/Europe is 22%, India is 17%, and the rest of the world is 9%. In short, 74% of the business depends on Anglo-Saxon economies making good investment decisions in tech—which is roughly as reliable as a monsoon forecast in Delhi.
The IP products are where the future lives. TruBot is RPA (a robot that automates repetitive tasks). TruCap+ is document processing on steroids (AI reads, classifies, extracts from mountains of PDFs). FINATO is entire CFO back-offices in a box. These are margin-accretive, scalable, and sticky. The problem: they’re competing against UiPath, Automation Anywhere, and literally every other RPA vendor trying to sell the same story.
Digital Tech40%Of Revenue
Digital Ops43%Of Revenue
Digital Exp17%Of Revenue
Top 5 Conc.29%Customer Concentration
The Elephant in the Room: Digital Experiences segment is “soft.” Two big customers moved work to their own captive centers. Management says Q4 will remain “soft,” but Q1 FY27 will see “several new logos” with “healthier margins.” This is the kind of softness that feels like a warning bell if you’re not careful. It’s not a demand crisis—it’s a specific customer transition. Still. Watch it closely.
💬 How many companies do you know that went from document processing to shipping their own AI agents? Do you think Datamatics pulls it off, or does it end in a press release graveyard?
04 — Financials Overview
Q3 FY26: The Numbers (Before & After The Labor Law Bomb)
Result type: Quarterly Results | Q3 FY26 EPS (Post-Exceptional): ₹6.16 | Annualised EPS (Q3×4): ₹24.64 | 9M FY26 EPS (Approx): ₹25.89
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Revenue | 510.1 | 425.4 | 489.8 | +19.9% | +4.1% |
| EBITDA | 96.2 | 54.4 | 88.8 | +76.8% | +8.3% |
| EBITDA Margin % | 18.9% | 12.8% | 18.1% | +610 bps | +80 bps |
| PAT (After Exceptional) | 36.4 | 75.0 | 62.8 | -51.5% | -42.0% |
| EPS (₹) | 6.16 | 12.57 | 10.70 | -51.0% | -42.4% |
The Asterisk Moment: PAT fell 51.5% YoY and 42% QoQ, but Q3 EBITDA is literally the best in the dataset (+76.8% YoY). What gives? The ₹40.3 crore exceptional charge for labour code changes. CFO explicitly noted: “Ex-exceptional, PAT margin would have been ~12.7%.” So if you nuke the bomb, Q3 PAT would have been ~₹65 crore (vs ₹36.4 crore reported). Revenue growth is real. EBITDA expansion is real. PAT weakness is a one-time labour law retrospective that management expects only “routine marginal increases” going forward. The quarter was genuinely strong. The accounting just made it look bad.
05 — Valuation: Fair Value Range
What’s This Automation Company Actually Worth?
Method 1: P/E Based
9M FY26 annualized EPS = ~₹25.89 (rough proxy; FY26 full year EPS TBD). Sector median IT P/E = 23x. Datamatics’ justified band for mid-tier services + IP products: 16x–22x. Fair P/E band: 17x–21x.
Range: ₹440 – ₹545
Method 2: EV/EBITDA Based
9M FY26 EBITDA = ₹261 crore. Annualized: ~₹348 crore. Current EV = ₹4,288 Cr → EV/EBITDA = 12.3x. Mid-tier IT services trade 12x–15x. Datamatics with IP products justifies 13x–16x.
EV range (13x–16x): ₹4,524 Cr – ₹5,568 Cr → Per share:
Range: ₹530 – ₹650
Method 3: DCF Based
Base FCF: ~₹224 crore (9M operating CF annualized). Growth: 12–15% for 5 years (assuming AI monetization ramps). Terminal growth: 4%. WACC: 10.5%.
→ PV of 5-year FCFs at 10.5%: ~₹1,850 Cr
→ Terminal Value (4% growth / 6.5% cap rate): ~₹7,200 Cr
→ Total EV: ~₹9,050 Cr (net cash ~₹540 Cr embedded)
Range: ₹615 – ₹745
⚠️ EduInvesting Fair Value Range: ₹490 – ₹680. CMP ₹719 sits at the upper edge of this range. The stock has been volatile (52-week range: ₹522 – ₹1,120), which suggests the market is confused about whether Datamatics is a “boring IT services play” or an “AI transformation story.” This fair value range is for educational purposes only and is not investment advice. Consult a SEBI-registered advisor.
06 — What’s Cooking: M&A, AI Bets & Segment Softness
The Chaos That Looks Like Strategy
