HRH Next said AI won't cut jobs. Then it said margins improved from cutting jobs.
The contact center outsourcer contradicted itself on headcount in the same earnings call, then capped margin guidance at 15% after hinting at more.
What's new
- FY26 revenue hit ₹68 crore, up 18% year-on-year; EBITDA grew 38%, outpacing top-line growth.
- AINA AI platform generated ₹7 crore in its first year, or 10% of total revenue.
- A proof-of-concept with one large client could generate ~50% of current annual revenue if converted.
- FY27 revenue target is ₹100 crore, split ₹75-80 crore organic and the rest from acquisitions.
Themes from the call
Demand
The order book is healthy with a large AI audit POC covering 2-3 crore calls monthly, but the ₹50 lakh Heritage Finlease and Chai Sutta wins are early-stage.
Margins
EBITDA grew 38% on 18% revenue growth, with management crediting the 'Operation Green Cover' cost consolidation program.
Capital allocation
FY27 capex is ₹11-12 crore, split between two new centers at ₹3-3.5 crore each and ₹5-6 crore for AINA development.
Guidance watch
- PAT margin guidance is 10-12%, with a hard ceiling of 15%. Management explicitly walked back earlier comments about expanding beyond the 10-12% range.
- AINA is targeting 50% of total revenue within three years, starting from 10% now.
Risk flags
- The same-day contradiction on headcount cuts versus consolidation undermines the reliability of management commentary.
- Working capital pressure persists as large enterprises defer payments during their own fundraising cycles, though no bad debts are reported.
- The massive AI POC is just that — a proof of concept. Conversion to ₹34 crore in annual revenue is not guaranteed.
Key quotes
-
"This does not mean that because we have brought AI into the company, we are in any situation to remove people. No."
— Ankit Shah, Managing Director, prepared remarks -
"There has been some consolidation in overall manpower and infrastructure as well."
— Ankit Shah, Managing Director, Q&A session -
"The potential is mind-boggling."
— Ankit Shah, Managing Director, on the single-client AI POC
The brief
HRH Next delivered solid FY26 numbers: ₹68 crore in revenue, up 18%, and EBITDA growth of 38%. The AINA platform's first-year contribution of ₹7 crore is a credible start. But the conference call's credibility took a hit. In prepared remarks, MD Ankit Shah said AI would not lead to job cuts. Within the same call, he attributed EBITDA improvement directly to manpower consolidation. On PAT margins, management first hinted at expansion beyond the 10-12% range, then capped it at 15% when pressed. The contradictions aren't catastrophic, but they make guidance harder to underwrite. The AI opportunity itself is genuine. A single proof-of-concept involving the auditing of 2-3 crore calls monthly could be worth roughly 50% of current revenue if it converts. That's a big if. The ₹100 crore revenue target for FY27 blends organic growth with acquisitions, and the capex plan of ₹11-12 crore is modest. The core question is whether to trust management's numbers when their words don't align. The P&L looks fine. The narrative needs cleaning up.
The numbers are moving in the right direction. The commentary needs to stop contradicting itself.