- SRIT Is Effectively a Government Digital Infrastructure Business
- Profitability Has Improved, but Cash Flow Tells a More Complicated Story
- The IPO's Use of Proceeds Reveals Where the Business Needs Capital Most
- The Next Phase Depends on Revenue Quality, Not Just Revenue Growth
- Authors Take
SRIT India sits in an attractive part of India's technology market. It builds and manages digital systems for government agencies, telecom networks and healthcare organisations, ranging from custom software and system integration to ongoing technical support.
Its financial record also looks encouraging at first glance. Revenue from operations increased from ₹271.09 crore in FY24 to ₹450 crore in FY26 while profit after tax rose from ₹29.08 crore to ₹43.29 crore. As of June 30, 2026, the company had an unexecuted order book of ₹1,204.72 crore, nearly 2.7 times its FY26 revenue.
But the more interesting question around SRIT is not simply how large its order book is but how efficiently those orders eventually become cash.
That distinction matters because SRIT operates predominantly in government-led technology projects where winning a contract, executing it, recognising revenue and actually collecting the money can happen at very different points in time. Its proposed IPO itself offers an important clue: ₹124 crore of the proceeds has been earmarked for additional working capital requirements.
That makes working-capital efficiency one of the most useful lenses through which to evaluate SRIT's next phase.
SRIT Is Effectively a Government Digital Infrastructure Business
SRIT describes itself through three operating areas: electronic governance, telecommunications and broadband and healthcare. But economically, one characteristic dominates the business: its exposure to government spending.
Electronic governance contributed ₹307.76 crore or 68.39% of FY26 operating revenue. Telecommunications and broadband added ₹109.19 crore or 24.27% while healthcare contributed ₹33.05 crore or 7.34%.More importantly, government customers generated ₹402.34 crore or 89.41% of total operating revenue in FY26. The top 10 customers alone accounted for 89.36% that concentration cuts both ways.
Large public-sector technology projects can be difficult to qualify for and execute. SRIT's 26-year operating history, CMMI Level 5 appraisal and experience across software development, system integration, cloud deployment and managed services can therefore create meaningful barriers for less established competitors.
The company has completed more than 103 projects worth an aggregate ₹1,234.72 crore over the past decade and had 102 ongoing orders as of June 30, 2026. Its ₹1,204.72 crore unexecuted order book was spread primarily across electronic governance at 58.40% and telecom and broadband at 38.01%, with healthcare contributing the remaining 3.59%.That pipeline provides revenue visibility, but an order book should not be treated as equivalent to future profit or cash. Projects still have to be executed on schedule, margins can vary between contracts and payments may arrive substantially later than revenue is recognised.
There is also tender risk. SRIT's bid-to-win ratio stood at only 13.95% in FY26. In other words, continued expansion requires the company to keep bidding for significantly more projects than it eventually wins.
For readers evaluating SRIT, therefore, the important number is not simply the size of the current order book. Future order inflows, execution speed and the economics of those new contracts matter just as much.
Profitability Has Improved, but Cash Flow Tells a More Complicated Story
On the income statement, SRIT's trajectory has been fairly strong.
Revenue from operations rose 43.62% in FY25 to ₹389.35 crore and another 15.58% in FY26 to ₹450 crore. Over FY24-FY26, revenue recorded a compound annual growth rate of 28.84%.Operating EBITDA, or earnings before interest, tax, depreciation and amortisation, increased from ₹40.99 crore in FY24 to ₹64.77 crore in FY26. Profit after tax increased from ₹29.08 crore to ₹43.29 crore over the same period.
Margins, however, have shown that the mix of projects matters. PAT margin fell from 10.73% in FY24 to 8.63% in FY25, partly because a turnkey project involved higher third-party subcontracting costs. It subsequently recovered to 9.62% in FY26 as higher-margin software products contributed more.That is worth watching because SRIT is not a pure software company where revenue largely comes from its own intellectual property and employee costs.
Subcontracting and technical fees reached ₹321.67 crore in FY26 and represented 78.92% of total expenses. This means a considerable part of project delivery depends on outside partners.Yet SRIT's reported return ratios are unusually strong. FY26 return on equity stood at 30.23% while return on capital employed was 28.79%. Debt-to-equity was also relatively modest at 0.23 times. The supplied peer comparison shows these return ratios above those reported for Mastek, RailTel, Protean eGov, Aurionpro and Allied Digital Services.
The complication appears when profits are compared with cash flow.
Operating cash flow was ₹34.16 crore in FY24 and ₹17.97 crore in FY25 but turned negative by ₹12.10 crore in FY26.Why?
A growing amount of money remained tied up before collection.FY26 government trade receivables stood at ₹234.75 crore while unbilled contract assets were another ₹153.80 crore. Working-capital requirements consequently expanded from just ₹32.93 crore in FY24 to ₹150.27 crore in FY26.
A contract asset essentially represents work for which revenue may have been recognised but billing or collection has not yet been completed. For a business handling milestone-based government contracts, this can occur because approvals, certification and billing take time.SRIT has made some progress: trade receivable days declined from 233 days in FY24 to 176 days in FY26. But 176 days still means capital can remain locked up for almost six months on average.Even more importantly, trade receivables and contract assets together amounted to ₹385.55 crore in FY26, representing 63.27% of total assets. The filing also notes ₹13.60 crore of receivables overdue for more than three years.
This is why SRIT's earnings growth should ideally be evaluated alongside operating cash flow rather than in isolation.
The IPO's Use of Proceeds Reveals Where the Business Needs Capital Most
SRIT's IPO is entirely a fresh issue of up to 1.68 crore shares. There is no offer for sale, meaning the proceeds are intended to go into the company rather than to existing shareholders.The allocation of those funds is revealing.
Only ₹12.86 crore is proposed for capital expenditure related to upgrading software products, rebuilding technology platforms, hardware and hiring specialised technical employees.
In comparison, ₹124 crore has been earmarked for additional working capital requirements, including ₹80.60 crore for FY27 and ₹43.40 crore for FY28.Working capital is essentially the money required to keep projects running while a company waits to receive payment from customers.
This means the IPO is not simply financing an aggressive expansion in physical infrastructure. A substantial portion is intended to provide the balance-sheet capacity necessary to execute a growing project pipeline.That could be important for SRIT.
If additional capital allows the company to undertake larger contracts without relying as heavily on borrowings or consortium partners, revenue capacity could increase. At the same time, simply injecting more working capital does not by itself solve the underlying collection cycle.
The more meaningful long-term improvement would therefore be a combination of higher revenue and faster conversion of that revenue into cash.
The remaining IPO proceeds are proposed for acquisitions, strategic initiatives and general corporate purposes, subject to regulatory limits. Potential acquisitions could add new customers, software capabilities or delivery capacity, but their financial impact cannot be meaningfully evaluated until specific transactions are identified.
The Next Phase Depends on Revenue Quality, Not Just Revenue Growth
SRIT's numbers present an interesting combination.
It has grown revenue rapidly, maintains relatively low leverage, reports strong capital-return ratios and has an order book substantially larger than annual revenue. At the same time, the company remains heavily dependent on government customers, a small group of large clients and a working-capital-heavy project model.
Its scale also remains considerably smaller than several listed peers. FY26 operating revenue of ₹450 crore compares with ₹4,277.48 crore for RailTel and ₹3,698.75 crore for Mastek in the supplied peer comparison. Its 14.39% EBITDA margin, meanwhile, was broadly comparable with RailTel's 14.31% and Mastek's 15.02%, though below Aurionpro's 19.58%.That suggests SRIT's future evolution may depend less on simply doing more projects and more on what kind of projects it wins.
A higher contribution from proprietary software and reusable technology platforms could potentially improve margins and reduce the amount of external execution required. Greater private-sector or overseas business could reduce dependence on government spending. Faster collections could allow growth to consume less capital.
There are several measurable indicators readers can watch for evidence of that transition.
- The first is operating cash flow versus PAT. If profits continue growing while operating cash flow repeatedly trails them, working-capital intensity remains an important constraint.
- The second is receivable days and contract assets. Continued improvement from the current 176-day collection cycle would make revenue growth financially stronger.
- The third is customer concentration. With almost 90% of revenue currently coming from the top 10 customers, diversification would reduce the impact of any single contract or agency slowing spending.
- The fourth is the revenue mix. Higher contributions from proprietary software, managed services or healthcare technology could change the margin profile compared with projects involving substantial equipment and subcontracting.
Authors Take
Finally, investors will need the IPO price band before making a complete valuation comparison. The peer analysis places listed comparable-company P/E multiples between 12.59 times and 24.03 times and states that SRIT's final IPO valuation should be assessed once the price band is determined.
For SRIT, therefore, the most useful question is not simply whether India's government digitisation opportunity remains large. The more important question is whether the company can use that opportunity to build a business where a larger order book produces not only higher reported earnings but also progressively stronger cash generation.
If that happens, the quality of SRIT's growth could improve alongside its scale. If working-capital requirements continue rising almost as quickly as the project pipeline, cash conversion will remain one of the most important numbers behind the headline growth story.
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