CG Vak Software & Exports Ltd (531489)
Latest quarterly results (Q1 FY27)
In its latest reported quarter, Q1 FY27, CG Vak's revenue was ₹18.0 Cr (-2.4% year on year, -5.3% on the previous quarter), and net profit ₹1.9 Cr (-31.1% year on year); the operating margin was 16.2%.
| Q1 FY27 (₹ Cr) | Value | YoY vs Q1 FY26 | QoQ |
|---|---|---|---|
| Revenue | ₹18.0 | -2.4% | -5.3% |
| Operating profit | ₹2.9 | -25.5% | -0.3% |
| Net profit | ₹1.9 | -31.1% | from loss |
| EPS (₹) | 3.84 | -30.9% | from loss |
| Operating margin | 16.2% | — | — |
📢 Recent Corporate Announcements
CG-VAK Software and Exports Limited announced the outcome of its Board Meeting held on October 14, 2026. The board approved the reconstitution of three core committees: Audit Committee, Nomination and Remuneration Committee, and Investors' Grievance Committee, with Mr. S. Muthukumar serving as Chairman across all three. Additionally, Mr. S. Muthukumar was appointed as an Independent Director in its wholly-owned US subsidiary, CG-VAK SOFTWARE USA Inc. The filing represents routine internal corporate governance changes with no immediate financial impact.
- Reconstitution of 3 board committees: Audit, Nomination & Remuneration, and Investors' Grievance
- Mr. S. Muthukumar appointed Chairman of all 3 reconstituted committees
- Appointment of Mr. S. Muthukumar (DIN: 00758407) as Independent Director in wholly-owned subsidiary CG-VAK SOFTWARE USA Inc
- Board meeting conducted on 14-10-2026 between 11:00 AM and 01:00 PM
CG Vak Software & Exports Ltd announced that shareholders at its Annual General Meeting on September 28, 2026, approved the appointment of four Non-Executive Independent Directors. The appointments include the regularization of Mr. Vasudevan Kidambi, Mr. S. Muthukumar, and Mr. Mani Ravindran, along with the appointment of Mr. A. Sankar. All four directors have been appointed for a term of 5 consecutive years, lasting until the conclusion of the 36th AGM. The moves strengthen board governance with expertise across AI strategy, banking, logistics, and retail distribution.
- Shareholder approval granted on 28.09.2026 at the Annual General Meeting
- 4 Non-Executive Independent Directors appointed or regularized
- Each appointed for a tenure of 5 consecutive years until the conclusion of the 36th AGM
- Profiles span AI/ESG strategy, 30+ years warehousing logistics, FMCG distribution, and banking
CG Vak Software & Exports Ltd has released its unaudited consolidated financial results for the quarter ended June 30, 2026. The company highlighted a significant provision of Rs 235.97 Lakhs (Rs 2.36 Cr) made in the previous financial year (FY26) as an exceptional item due to the New Labour Codes. This provision was substantial, representing approximately 24.8% of the company's FY26 PAT of Rs 9.5 Cr. The company continues to operate as a single-segment entity focused on Information Technology Services.
- Board approved the unaudited financial results for the quarter ended June 30, 2026, on August 5, 2026
- A provision of Rs 235.97 Lakhs was recorded as an exceptional item in FY26 related to New Labour Codes
- The company maintains a single operating segment: Information Technology Services
- FY26 annual revenue stood at Rs 74.38 Cr with a net profit of Rs 9.5 Cr
- North American market exposure remains high at 81% of total revenue
CG Vak Software & Exports Ltd has announced a significant board refresh by appointing three Additional Independent Directors effective August 5, 2026, and proposing a fourth for September 28, 2026. The new appointees bring specialized expertise in Generative AI leadership, logistics, retail distribution, and banking, which aligns with the company's focus on high-growth digital segments. These appointments are for a 5-year term, subject to shareholder approval at the upcoming 36th AGM. Given the company's micro-cap size (Rs 86 Cr), this level of board diversification is notable for governance and strategic oversight.
- Appointment of 3 Additional Independent Directors effective August 5, 2026
- Proposed appointment of 1 Independent Director (Mr. A. Sankar) effective September 28, 2026
- New directors bring over 100 years of combined experience in AI, Banking, and Logistics
- All appointments are for a fixed term of 5 consecutive years until the 36th AGM
- Company maintains a lean operation with TTM revenue of Rs 74 Cr and a market cap of Rs 86 Cr
CG Vak Software's board approved the unaudited financial results for the quarter ended June 30, 2026. A key disclosure highlighted a provision of Rs 235.97 Lakhs (Rs 2.36 Cr) made as an exceptional item in FY26 due to the New Labour Codes. This provision is significant, representing approximately 24.8% of the company's FY26 net profit of Rs 9.5 Cr. The company maintains its focus on a single segment, Information Technology Services, with no changes to its operating structure.
- Board approved unaudited financial results for the quarter ended June 30, 2026
- Exceptional item provision of Rs 235.97 Lakhs recorded for New Labour Codes in FY26
- Company continues to operate under a single segment: Information Technology Services
- Board meeting duration was 5 hours and 15 minutes, concluding at 4:15 pm
CG Vak Software & Exports Ltd has scheduled a board meeting on August 5, 2026, to consider and approve the unaudited financial results for the quarter ended June 30, 2026. This follows a challenging March 2026 quarter where the company reported a marginal net loss of ₹0.02 cr despite revenue of ₹19.01 cr. Investors will be monitoring for a recovery in operating margins, which stood at 21% on a TTM basis but faced pressure in the most recent quarter. The trading window for designated persons remains closed until August 7, 2026.
- Board meeting scheduled for August 5, 2026, to approve Q1 FY27 results
- Trading window remains closed from July 1, 2026, to August 7, 2026
- Company reported a net loss of ₹0.02 cr in the preceding quarter (March 2026)
- TTM revenue stands at ₹74 cr with a market capitalization of ₹81 cr
Financial Performance
Revenue Growth by Segment
Total revenue from operations was INR 5,400.73 Lakhs in FY25, a marginal decrease of 0.017% from INR 5,401.68 Lakhs in FY24. The core segment, Offshore Software Services, contributed INR 5,397.59 Lakhs, remaining virtually flat compared to INR 5,397.70 Lakhs in the previous year.
Geographic Revenue Split
The company has a high geographic concentration with North America contributing 81% of total revenue, while the Rest of the World accounts for the remaining 19%.
Profitability Margins
Operating profit margin remained stable at 23% YoY. Net profit margin improved from 16% in FY24 to 17% in FY25, driven by a 0.83% increase in Profit After Tax (INR 891.74 Lakhs vs INR 884.43 Lakhs).
EBITDA Margin
Operating profit before working capital changes stood at INR 1,374.39 Lakhs (25.4% margin), representing a 6.24% increase from INR 1,293.63 Lakhs in FY24.
Capital Expenditure
Capital expenditure on property, plant, and equipment surged by 966% to INR 921.21 Lakhs in FY25, compared to INR 86.37 Lakhs in FY24, indicating significant investment in infrastructure or technology upgrades.
Credit Rating & Borrowing
The company maintains a very low debt profile with a Debt-Equity ratio of 0.01. There are no formal bank borrowings reported in current or non-current liabilities as of March 31, 2025.
Operational Drivers
Raw Materials
As a software services firm, the primary 'raw material' is technical manpower. Employee benefits expense of INR 3,617.54 Lakhs represents 67% of total revenue.
Import Sources
Not applicable for software services; talent is primarily sourced from India for offshore delivery.
Capacity Expansion
Current employee strength is 273 as of March 31, 2025. Planned expansion in headcount or infrastructure is supported by the INR 9.21 Cr capex in FY25.
Raw Material Costs
Employee costs decreased by 1.54% YoY from INR 3,674.13 Lakhs to INR 3,617.54 Lakhs, helping to maintain margins despite flat revenue.
Manufacturing Efficiency
Not applicable; however, Debtors Turnover improved significantly from 59 days to 46 days, indicating better working capital efficiency.
Strategic Growth
Growth Strategy
The company is focusing on high-growth segments like Outsourced Product Development (OPD) and leveraging rapid advances in digital technologies including GenAI, analytics, cyber security, and cloud to win new deals and drive sustainable growth.
Products & Services
Offshore software services, Outsourced Product Development (OPD), Product Engineering, and Innovation services.
Brand Portfolio
CG-VAK
New Products/Services
AI-driven delivery methods and GenAI-integrated software solutions are being developed to enhance the Product Engineering portfolio.
Market Expansion
Strategic focus remains on strengthening the offshore software services market, particularly in the North American region.
External Factors
Industry Trends
The industry is shifting toward AI-driven delivery and digital transformation (Cloud, Cyber Security). CG-VAK is positioning itself to capture this shift through its expertise in Product Engineering.
Competitive Landscape
Competes with global IT service providers and specialized OPD firms.
Competitive Moat
The company's moat is built on longstanding expertise in Outsourced Product Development (OPD), which creates high switching costs for clients integrated into their engineering ecosystem. Sustainability depends on keeping pace with GenAI advancements.
Macro Economic Sensitivity
Highly sensitive to US GDP growth and corporate IT budget allocations due to 81% revenue exposure to North America.
Consumer Behavior
Clients are increasingly demanding integrated AI and analytics within their software products, shifting demand toward high-end engineering services.
Geopolitical Risks
Subject to international ramifications, changes in government regulations, and tax laws in the US and India.
Regulatory & Governance
Industry Regulations
Compliant with the Companies Act 2013, SEBI Listing Obligations, and Indian Accounting Standards (Ind AS).
Environmental Compliance
The company has fully spent the required amount toward Corporate Social Responsibility (CSR) for the year.
Taxation Policy Impact
Effective tax rate for FY25 was approximately 26.6%, with current tax of INR 318.56 Lakhs on a Profit Before Tax of INR 1,197.78 Lakhs.
Legal Contingencies
The company has disclosed pending litigations in Note 23 of its financial statements; however, specific case values were not provided in the document snippets.
Risk Analysis
Key Uncertainties
Rapid advances in GenAI present a risk of technology obsolescence for traditional software services, with a potential impact on margins if delivery efficiency is not improved.
Geographic Concentration Risk
High risk due to 81% revenue concentration in North America.
Technology Obsolescence Risk
High risk from GenAI and rapid digital shifts; the company is mitigating this by building expertise in AI-driven delivery.
Credit & Counterparty Risk
Receivables quality is high, with Debtors Turnover improving to 46 days and trade receivables standing at INR 685.45 Lakhs.
