Metrics cut 2
- 64/3 strategy timeline extended by 1-2 years (prior: three-year target to grow customers to $4M+ run-rate)
- Borqs breakeven revenue reduced to ~$12M quarterly (~$48M annual) from previously mentioned $60-70M annual
Event Participants
Executives
5 Anup Savla, Hareesh Ramanna, Priyaranjan, Rajiv Mody, Siddharth Rangnekar
Analysts
8 Dev Gulwani, Keshav Sureka, Manik Taneja (Unidentified Participant), Naveen Baid, Nikhil Chowdhary, Priyank Chheda, Samarth Singh, Sanjay Kumar Elangovan
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Revenue | ₹339 crores | Up 24% YoY, +1.6% QoQ; broad-based growth across Software Services and Product Solutions |
| Software Services Revenue | ₹219 crores | Up 24.3% YoY, +4.8% QoQ; key growth driver with continued margin expansion |
| Product Solutions Revenue | ₹120 crores | Up 23.6% YoY, -3.9% QoQ; moderated following strong Q4 due to memory/component pressures |
| Gross Margin | 21.9% (₹74 crores) | Up 48% YoY, -1% QoQ; Software Services margin improved 240 bps to 30.6% |
| Product Solutions Margin | 5.9% | Down 310 bps QoQ; impacted by memory pricing, product mix shift, silicon productization |
| EBIT | ₹31 crores (9.5% margin) | Up 430 bps YoY, down 50 bps QoQ; margin improvement driven by Software Services |
| PAT | ₹23 crores (6.9% margin) | Sequentially moderated due to normalization of one-off Q4 other income and lower FX gains |
| Order Book - TCV | $47 million | Includes $34 million from new deal wins; 5 new logos added in quarter |
| Order Book - ACV | $40 million | Includes $24 million from new wins; reflects orders deliverable over next 12 months |
| Active Customers | 93 | Up from 79 in Q1 FY26; revenue contribution from top 5 customers stable at ~56% |
| Headcount | 2,658 | Global headcount with attrition at 9.8%; utilization improved to 85% |
| Cash & Investments | ₹356 crores | Healthy balance sheet position maintained |
| CSAT Score | 4.5/5 | vs industry benchmark of 3.75; reflects execution quality |
Geographic & Segment Commentary
Software Services: Revenue of ₹219 crores, up 24.3% YoY and 4.8% QoQ; gross margin improved 240 bps to 30.6% on improved utilization, disciplined cost management, and scale benefits. Growth driven by automotive connectivity, semiconductor design, and AI-native engagements including multi-year hyperscaler deals.
Product Solutions: Revenue of ₹120 crores, up 23.6% YoY but down 3.9% QoQ following strong Q4; margins fell 310 bps to 5.9% due to memory availability pressures, component pricing, program mix changes, and silicon business moving toward productization. Management expects margins to stabilize over the year as products ship.
Silicon Business: Early-stage but strategically important; building capabilities in analog, RF, mmWave, and package design. Partnerships with Global Foundries, Intel, and TSMC relationships all in progress with significant advancement; projects spanning connectivity, automotive, and AI-enabled design.
Geographic Mix: Revenue evenly distributed - North America 30%, EMEA 25%, India 26%, APAC 20%; broad-based growth across all geographies.
Company-Specific & Strategic Commentary
Chip-to-Cognition Positioning: Company evolved from communications/device engineering to full-stack chip-to-cognition engineering partner spanning semiconductor design, embedded software, connected devices, and AI-native engineering; resonating with customers including new hyperscaler and AI/automation engagements.
64/3 Strategy: Focus on growing customers to $4+ million run-rate revenue within three years; management acknowledged timeline may extend by 1-2 years but remains committed; adding 5-6 sales personnel during rest of FY27.
Borqs Integration: Acquisition has integrated well; expanded OEM/ODM capabilities, deepened hyperscaler relationships, added product ownership; contributed to headcount base and scaled both services and product solutions.
AI-Led Delivery: All customer work being delivered as AI-led; new wins include agent-to-AI services, LLM validation, and intelligent testing for global technology company; AI embedded in all offerings.
Talent & Capability Expansion: Inaugurated silicon incubation center in Hubli for university collaboration; opened new center of excellence in Hyderabad; headcount grew to 2,658 with disciplined scaling.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | Continued momentum through FY27 | Management highlighted growth as "most important imperative" but declined formal guidance; confident in direction toward 64/3 targets |
| Product Solutions Margin | Expected to stabilize over FY27 | Q1 impacted by memory pricing, product mix, silicon productization; actions taken in Q1 expected to show results through year |
| Sales Headcount | Add 5-6 sales personnel during FY27 | To support account mining and 64/3 strategy execution |
| Cash Flows | Expect continued cash consumption in FY27 | Due to growth-related working capital and investments; management working to reach cash flow positive |
| Margins | No formal guidance | Management committed to maintaining margins while driving growth; continuous efficiency and value pricing focus |
Risks & Constraints
| Risk | Context |
|---|---|
| Memory & Component Pricing | Industry-wide memory availability and component pricing pressures impacting Product Solutions margins; management passing costs but incremental margin not preserved; inventory built in Q1 to manage shortage |
| Foreign Exchange Volatility | Lower FX gains in Q1 vs Q4 contributed to sequential PAT moderation; currency movements remain a swing factor |
| Order Book Conversion | TCV of $47 million represents ~25% of annual revenue; requires continuous new deal wins to maintain growth engine; management relying on backlog of 9-10 months carry |
| 64/3 Timeline Extension | Management acknowledged three-year timeframe for $4M+ customer strategy is "metaphoric" and may extend by 1-2 years; risk of delayed shareholder expectations |
| Talent Scarcity | Analog, RF, and mmWave design skills are niche and scarce; company relying on in-house training and development; competition for specialized talent |
| Silicon Partnership Uncertainty | Global Foundries, Intel, TSMC relationships in progress; non-public nature limits visibility on commercialization timing |
Q&A Highlights
Customer Concentration & 64/3 Strategy
Question: With $4M+ customers at six for four consecutive quarters and top-5 concentration rising from 52% to 56%, what is the pipeline for accounts crossing $4M in FY27? (Keshav Sureka, Niveshaay)
Answer: Strategy remains intact though three-year timeline is "metaphoric" and may extend 1-2 years; adding sales bandwidth; focus on converting remaining active customers to 4+ million; company crossed from ~$50M to $125M in two years demonstrating capability. (Rajiv Mody)
Question: Even with extended timeframe, are we looking at ₹2,500-3,000 crore revenue? What drives that growth? (Naveen Baid, Nuvama AMC)
Answer: All three vectors have huge growth potential - silicon business, devices (Make in India/China+1 shifts), and full-stack software services; growth is the most important imperative but company will maintain margins while driving momentum; may consider inorganic opportunities for gaps. (Rajiv Mody)
Product Solutions Margin Decline
- Question: What caused Product Solutions margin to fall from 12.8% to 5.9%? (Keshav Sureka, Niveshaay)
- Answer: Memory pricing has impact - passing on cost but incremental margin doesn't come through; silicon business moving toward productization affecting mix; products will ship through year; margins expected to stabilize on full-year basis. (Priyaranjan, CFO)
Revenue Disclosures & Order Book
Question: Can you share revenue contribution by vertical (auto, satellites, cellular, smart devices)? (Priyank Chheda, Vallum Capital)
Answer: Company does not disclose by offering/vertical as it may distort picture at current scale; both segments grew over 20% YoY; traction across automotive, communication devices. (Priyaranjan, CFO)
Question: TCV of $47 million seems low vs annual revenue; how do you plan to change deal tenure? (Priyank Chheda, Vallum Capital)
Answer: Order book published is quarterly new orders, not total backlog; ACV of $40 million reflects next 12-month delivery; backlog gives 9-10 months carry typical of IT services; silicon orders are multi-year with off-take dependent. (Priyaranjan, CFO)
Sales Team & Headcount Quality
Question: Sales headcount appears to have declined; how do you think about building sales team for 64/3? (Nikhil Chowdhary, Toro Wealth)
Answer: Continuously adding sales bandwidth with 5-6 more expected during rest of year; leadership also selling through industry connects; many engagements delivery-led; cost increase only 3% despite 9% headcount growth due to Q4 catch-up bonuses not recurring. (Rajiv Mody, Priyaranjan)
Question: How many senior analog/RF design leaders below Mr. Savla can own customers end-to-end? (Nikhil Chowdhary, Toro Wealth)
Answer: Teams trained with full visibility and ownership; execution handled independently by team members with priorities, training, and skill sets multiple levels deep; analog/RF/mmWave skills grown in-house. (Anup Savla)
Borqs Acquisition & Headcount Growth
- Question: How does Borqs fit strategically? Is headcount growth from acquisitions or organic? (Manik Taneja, Bowhead Investments)
- Answer: Borqs integrated extremely well; expanded customer access through Hareesh's industry reach; headcount at end Q1 FY26 was 2,200 including ~300 from inorganic, current 2,658 is all organic; AI part of work means headcount may not be only growth metric going forward. (Rajiv Mody, Priyaranjan)
Cash Flow & Breakeven
Question: Operating cash flows negative for two years; can we expect cash flow positive FY27? (Samarth Singh, TPF Capital)
Answer: Investments in business causing negative cash flows, not collection issues; Q1 impacted by inventory build for memory shortage; expect large cash consumption this year; using internal accruals and external funds. (Priyaranjan, CFO)
Question: Borqs breakeven point? (Samarth Singh, TPF Capital)
Answer: Breakeven at approximately $12 million quarterly revenue (vs $60-70M annual previously mentioned); will add to bottom line as scale happens. (Priyaranjan, CFO)
Silicon Partnerships & Niche Technologies
Question: Status of Global Foundries, Intel, and TSMC relationships? (Samarth Singh, TPF Capital)
Answer: All three in progress with substantial significant progress; resulted in additional design work; cannot make public announcements due to non-public nature. (Anup Savla)
Question: What kind of projects in RF and mmWave? (Sanjay Kumar Elangovan, ithoughtPMS)
Answer: These skills are becoming pervasive across AI, automotive, connectivity; projects across spectrum including chiplets, memory integration, package design; customers need cutting-edge expertise; revenue already reflects implementation in these areas. (Anup Savla)
Automotive Instrument Cluster
- Question: Have we won commercial orders for two-wheeler instrument clusters? (Sanjay Kumar Elangovan, ithoughtPMS)
- Answer: Instrument cluster was reference design for Qualcomm; IP created and Qualcomm gave to module suppliers like Quectel; two-wheeler market buying from China due to cost; China+1 could shift demand but seeing shift in NAD and other modules instead. (Hareesh Ramanna)
IP Licensing vs Engineering Services
- Question: Is there conflict between engineering services and IP licensing? (Nikhil Chowdhary, Toro Wealth)
- Answer: No conflict; customers want partners who build IPs for faster product development; custom silicon trend requires embedded IP integration - complementary approach where Anup's team supports when customers embed IP. (Rajiv Mody, Hareesh Ramanna)
Key Takeaway
Sasken reported a resilient Q1 FY27 with consolidated revenue of ₹339 crores, up 24% YoY and 1.6% QoQ, driven by Software Services growth of 24.3% YoY with margins expanding 240 bps to 30.6%. Product Solutions grew 23.6% YoY but margins compressed to 5.9% due to memory pricing and silicon productization, expected to stabilize through the year. Order booking of $47 million TCV including $34 million from new wins and five new logos signals healthy pipeline, while the company added significant strategic engagements including a multi-year hyperscaler deal and AI/automation work. Management's 64/3 strategy remains intact with timeline potentially extending 1-2 years, supported by plans to add 5-6 sales personnel. The company is investing in future capabilities through the Hubli silicon incubation center and Hyderabad CoE, expanding chip-to-cognition positioning with headcount at 2,658, attrition at 9.8%, and utilization at 85%. Cash flow remains a watch item with continued consumption expected in FY27 from growth investments, though balance sheet stays healthy at ₹356 crores in cash. Forward outlook centers on converting bookings to revenue, stabilizing Product Solutions margins, and maintaining growth momentum while preserving margin discipline.