Synopsis:
Subex shares hit the upper circuit after a Q1FY26 profit turnaround driven by non-core gains, operational efficiency, and new Tier-1 deals. Revenue declined both sequentially and annually, but improved margins and AI-led offerings supported investor optimism.
A telecom-focused technology stock surged to its upper price band after reporting a turnaround in profitability for the June quarter, aided by operational discipline, cost efficiency, and non-core gains. While revenue declined sequentially, the shift from losses to profit lifted investor sentiment.
Subex Ltd with a market capitalization of Rs. 714.87 crore, opened at Rs. 12.72, hitting the upper circuit of 4.95 percent against the previous close of Rs. 12.12.
What’s the News?
Quarter-on-Quarter, sales fell from Rs. 71 crore to Rs. 66 crore, a decline of 7.04 percent. Operating profit improved from a loss of Rs. 13 crore to a profit of Rs. 4 crore. Profit before tax turned positive, moving from a loss of Rs. 14 crore to a profit of Rs. 15 crore.
Net profit swung from a loss of Rs. 18 crore to a profit of Rs. 13 crore. The operating profit margin improved from negative 18 percent to positive 6 percent. Other income increased from 3 crores to 16 crores, contributing significantly to the net profit.
Year-on-year, sales saw a moderate decline of 2.94 percent from Rs. 68 crore to Rs. 66 crore. Operating profit moved from a loss of Rs. 6 crore to a profit of Rs. 4 crore. Profit before tax improved from a loss of Rs. 8 crore to a profit of Rs. 15 crore, while net profit shifted from a loss of Rs. 11 crore to a profit of Rs. 13 crore. Other Income increased from 2 crore to 16 crore.
The company reported that Q1 revenue declined by 6 percent to Rs. 66 crore compared to Rs. 71 crore in Q4FY25, primarily due to deal spillovers and the elimination of non-telco revenues. On a year-on-year basis, telco revenue remained almost flat.
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Operational Highlights
Revenue contribution by region stood at 14 percent from the Americas, 60 percent from EMEA, 1 percent from India, and 25 percent from APAC and the rest of the world. By service type, managed services accounted for 30 percent of revenue, license implementation and customization for 29 percent, and support and other services for 41 percent.
During the quarter, Subex won a Tier-1 opportunity in the Middle East and renewed a Tier-1 managed services contract in Africa. The company launched FraudZap, a light-weight fraud detection platform, and embedded GenAI into its HS platform.
Profit after tax turned positive, supported by non-core gains from IT refunds, operational discipline, and effective cost management. The cash position significantly improved on the back of enhanced working capital efficiency and one-time income gains. EBITDA has been positive in six of the last seven quarters.
The company has been operationalizing AI across engineering teams through initiatives like the Code Shield workshop and the use of GitHub Copilot to improve test coverage, reduce defects, and accelerate releases.
Subex also won a new deal from a Tier-1 operator in the Middle East for HyperSense Fraud Management. The board approved a proposal by Subex Assurance LLP, its wholly owned subsidiary, to make further investment in Subex Middle East, a step-down wholly owned subsidiary.
About the Company
Subex is a telecom AI company enabling connected experiences for over 75 percent of the world’s top 50 telecom operators. Founded in 1992, the company provides consulting services to global carriers for operational excellence and business transformation, helping drive new revenue models, enhance customer experience, and optimise enterprise operations.
Written By Manan Gangwar
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