Meta Infotech reported an H1FY27 revenue of Rs 895 million, a 57% year-on-year decline as the company consciously discontinued low-margin product sales. Despite the sharp top-line contraction, profitability ratios improved, with gross margins jumping to 32.2%. The firm is shifting toward higher-value cybersecurity services to improve long-term sustainability.
Meta Infotech H1 Profitability Rises Despite 57% Revenue Decline
Revenue: Rs 895 million | PAT: Rs 49 million
Reader Takeaway: Gross margins surged to 32.2% following a strategic shift away from low-margin product sales toward services.
What just happened
Meta Infotech Ltd released its half-year results for the period ending September 30, 2026. The company saw a major decline in top-line figures, with revenue falling 57% year-on-year to Rs 895 million. Profit after tax (PAT) also dropped 53% to Rs 49 million compared to the same period last year.
Why this matters
The steep revenue decline is a result of a deliberate strategic pivot. Management decided to discontinue product sales to a major banking client to stop low-margin business drag. While the top-line has shrunk, the company is betting that this transition will lead to higher-quality, service-led revenue and more sustainable growth in the cybersecurity sector.
Profitability Analysis
The strategy is showing early signs of success in terms of margins. The gross margin improved significantly to 32.2% from 16.8% in the previous year. Similarly, the EBITDA margin moved up to 8.7%, and the PAT margin improved to 5.4%, suggesting that the company is trading volume for better profitability.
Business and Operational Update
As of September 30, 2026, the company holds an order book of Rs 927 million. While the order book appears smaller, management states it is composed of higher-value service contracts. Additionally, the company added 12 new clients during the half-year, expanding its footprint into cities like Chennai, Bengaluru, Hyderabad, and Delhi, alongside international markets.
Risks to watch
The primary risk remains the ability of the company to scale its service business quickly enough to compensate for the lost product revenue. Investors should watch if the company can effectively convert the current order book into consistent quarterly growth without further top-line erosion.
What to track next
The market will look for revenue growth recovery in the upcoming quarters and whether the company can maintain these higher gross margin levels as they continue to acquire new clients.