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Sahana Systems
Our verdict on Sahana Systems isn’t the consensus take — see where we landed, and the one risk the bull case glosses over.
See the verdict — free →Does management do what it says?
The company achieved a PAT of INR 27.67 crore in H1 FY26 alone, which already exceeds the FY24 consolidated revenue benchmark of INR 18.21 crore. (1 exceeded across 1 tracked commitment)
“this financial we are targeting that we would be reaching around 210-ish in terms of the revenue.”
While the specific UK technology PAT target wasn't explicitly isolated, the company reported a significant jump in consolidated PAT to 24% (INR 27.36 Cr for H1) and mentioned scaling deep-tech services globally. (1 in progress across 1 tracked commitment)
“you mentioned that we were planning to take our UK technology international and for that, could itself turn into an opportunity size which could take our PAT to the levels of the last year consolidated revenue... Sir, to answer to your first question, obviously, we are planning the horizon of very near future.”
Management confirmed that opportunities in Southeast Asia (specifically Thailand) and other regions are underway but not yet closed, indicating the fintech/deep-tech expansion is still in the pipeline. (1 in progress across 1 tracked commitment)
“And if we click one such opportunity out of one of the neighboring country, which I'm referring to, that will make our overall pact, which is equivalent to our last year's revenue.”
The company plans to implement UPI in a couple of neighboring countries as a major future fintech initiative. — target: Implementation in multiple countries
“There are now the future of the fintech side of it, as I've already spoken at the beginning, we are already having the plan to, implement UPI in a couple of neighboring countries.”
Management plans to increase the frequency of investor interactions and earnings calls. — target: Increased frequency
“We will definitely be taking this suggestion very well and we will increase our frequency for the interaction with the investor for sure.”
See the full cited Management analysis of Sahana Systems
How durable is the business?
The enterprise segment maintains a 40% share, but management highlighted a 24% growth in business from existing US enterprise customers compared to the previous year. (1 expanding across 1 engine)
“40% comes from enterprise, out of that 40%, 30% is overseas, 10% is aided enterprise business, which is also indirectly associated with government.”
The company's technology moat is strengthening through 'Make in India' IP in electronic warfare, specifically custom-made radar and anti-drone systems that are 1/10th the cost of competitors. (3 expanding)
“DEFENCETECH Delivering AI-powered anti-drone systems, radar solutions, and electronic warfare tools for national and defense forces”
The moat is strengthening as the company expands into higher-margin 'DeepTech' offerings, including AI-powered anti-drone systems and electronic warfare tools, and enters the EV infrastructure space. (1 expanding)
“Sahana is expanding higher-margin offerings in defence-tech, fintech platforms, AI-led product engineering and cloud services, while also entering the EV infrastructure space”
The government and defense segment has expanded its share of total revenue to approximately 65%, driven by large-scale defense tech and master system integration projects. (2 expanding across 1 engine)
“our majority of the revenue comes from government and enterprise business. And our, you know, when I'm saying majority -- our 60% of the business comes from government”
Overseas revenue is stable at 30% of total revenue, primarily driven by the US market, with new opportunities being explored in Southeast Asia (Thailand), Africa, and Latin America. (1 stable, 1 expanding)
“out of that 40%, 30% is overseas... Current, if we look at the current order book and current revenue, which we have acquired from exporter is usually coming from US.”
See the full cited Business Model analysis of Sahana Systems
Where does growth come from?
The company is showing a strong upward trajectory in consolidated revenue, with H1 FY25 already reaching nearly 76% of the total FY24 consolidated revenue. (2 accelerating across 2 signals)
“Revenue from operations 114.16 52.64 116.9%”
The company is projecting a steep upward trajectory in consolidated revenue, moving from a current H1 base toward a target of INR 500 crores by FY28, representing a clear acceleration in scale. (2 accelerating, 3 new trend across 5 signals, 2 leading indicators)
“this financial we are targeting that we would be reaching around 210-ish in terms of the revenue... it will cross up to INR500 crores by the upcoming year in terms of the revenue growth, sir.”
Sahana is gaining significant traction in the marine and port sector, securing high-value projects like the digital twin for Tuticorin port and IoT upgrades for Dredging Corporation of India. (1 new trend across 1 signal, 2 leading indicators)
“And we have delivered a product called SAMVAD and it's version 2.0 to Ministry of Information Broadcast, which is a media monitoring tool for all 58 cabinet ministries, including Prime Minister's office.”
Management is pursuing high-value international fintech and defense contracts, noting that a single successful deal in a neighboring country could equal their entire previous year's revenue. (1 new trend across 1 signal, 1 leading indicator)
“we have also created our own CMS, which are deployed across those stations... per charging, whatever revenue comes in, there is a bifurcation of the revenue, which comes to us.”
The company is demonstrating high success in government empanelment, securing 23 out of 24 possible technology categories with the NIC, creating a massive barrier to entry for competitors. (1 steady across 1 signal, 1 leading indicator)
“we have totally applied 12 patents last year out of which 6 has already been under the process of positive note and two has been awarded to us.”
See the full cited Future Growth analysis of Sahana Systems
What could break the thesis?
Negative cash flow from operations worsened significantly from a positive ₹25.36 Cr in FY24 to a negative ₹18.73 Cr in FY25 on a standalone basis. Consolidated operating cash flow is also deeply negative at ₹48.35 Cr. (3 intensifying, 1 emerging, 1 easing, 5 high-severity)
“I was watching your cash flow and it is on negative side. So I am hoping that probably you have high working capital. So you have sufficient working capital for achieving that kind of revenue or you need to raise the funds?”
The risk is easing slightly as the company successfully acquired 24% new customers in the parent entity and 35% in the Softvan subsidiary during H1. (1 easing)
“for Sahana as a standalone, we have achieved 76% of the revenue from our existing customers. We have acquired 24% of new customers.”
The risk is intensifying as government-related revenue (including defense and PSUs) has increased to approximately 65% of total revenue, up from the previously noted 60%. (1 intensifying, 1 stable)
“everyone would like to exhaust their budget at the -- before the end of financial year and they would be in hurry... if the mobilization advance would be higher then the H2 will always be bulky.”
The company relies on maintaining high-level technical certifications to win business; any failure to renew these would hurt its ability to compete for enterprise and government contracts. [REGULATORY]
“SSL is ISO 9001:2015, ISO/IEC 27001:2013 and CMMI Maturity Level– 3 certified company”
Customer concentration remains extremely high. The top ten customers contributed 88% of total revenue in FY25, up from 81% in FY24. (1 intensifying, 1 stable)
“Our top ten customers contributed approximately 88.00%, 81.00%, and 90.30% of our total revenue from operations during Financial Year 2025, Financial Year 2024, and Financial Year 2023, respectively.”
See the full cited Risk analysis of Sahana Systems
Read the full thesis on Sahana Systems
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