Internet service provider (ISP) Excitel claims to have turned profitable in the financial year ended March 2026 (FY26).
In a statement, the company said that it minted a profit after tax of ₹40 Cr in the fiscal under review as it recalibrated its geographic reach and go-to-market strategies. In contrast, it reported a net loss of ₹70 Cr in FY25.
The positive bottom line came despite the top line remaining largely flat in the fiscal under review. According to the startup, its operating revenue stood at ₹530 Cr in FY26 compared to ₹516 Cr in the previous fiscal year. However, what helped Excitel was improving margins as the ISP’s EBITDA rose 2.5X YoY to ₹75 Cr in the fiscal under review.
Excitel also said that its total expenses in FY26 stood at ₹460 Cr, with last mile connectivity accounting for the biggest chunk of its costs at ₹200 Cr. Since the startup partners with local cable providers for last-mile connectivity of its fibre network, it shares 38% of its revenue with the partners, leading to higher expenses on this front.
Speaking with Inc42, Excitel CEO Varun Pasricha said that the ISP spent around ₹100 Cr on manpower while around ₹80 Cr was spent on network expansion.
“The profitability came at the cost of not growing because actually we grew in the cities where we are, but we also removed the cities which did not make sense,” Pasricha added.
Rethinking Geographic Expansion
The financial turnaround came on the back of the startup’s reining in its geographic footprint, as it shuttered operations in Mumbai as well as smaller towns and cities in North India. The startup said that it had already begun taking measures on this front around mid-2024, reversing an earlier aggressive expansion spree.
Around the same time, Excitel said that it also began to double down on making existing cities profitable, while also focussing more on eliminating waste, improving efficiencies, increasing automation in areas like customer relation management (CRM) and leveraging technology to increase output.
This also meant that the startup exited cities that were harder to crack rather than continuing to burn money. Mumbai, which the startup had entered in 2022, is dominated by local providers that offer broadband services at half the rates that established players do, making it harder for Excitel to gain a significant share, Pasricha added.
“It becomes a very brutal fight to the bottom if you want to compete at those prices. And we decided that Excitel stands for a certain level of service and quality that we can’t deliver at the price. It is better to call it a lack of product-market-fit than to persist in this battle,” Pasricha said.
Smaller towns, on the other hand, are harder to crack for independent ISPs, without a complimentary telecom business, as mobile network helps in amortising costs incurred from capital expenditure.
“The time it would have taken for these towns in Haryana or UP to become profitable would have been several years. There is so much to do in our big cities that we didn’t really need to stake it out in these small towns,” Pasricha said.
Excitel is also leveraging automation in CRM, customer support, network monitoring, and surveillance to reduce costs, with around 70% of customer tickets now resolved without human intervention. This, as per the company, has led to per employee productivity jumping 15-20% year-on-year.
Enroute To The Next Million Users
Going forward, Excitel is looking to double down in its existing geographies, including Delhi, Bengaluru, Hyderabad, Lucknow, Kanpur, Jaipur and Varanasi. The startup claims that it currently caters to 1 Mn users, and is banking on these cities to source the next million users.
It is also looking to expand to cities like Chennai, Pune and Kolkata starting early-2027. In the current financial year (FY27), Excitel is aiming to grow its customer base by another 20%, with an aim to expand the number to 10 Mn in the next five years.
Additionally, the startup is looking at a revenue growth of 15-16% in FY27, and targeting a profit after tax of ₹50 Cr and an EBITDA of ₹100 Cr.
For its next phase of growth, the startup is also planning to introduce new product offerings, including internet protocol television (IPTV). Under this, it plans to bundle OTT platforms with cable TV on its broadband services. On the back of this, the startup is looking to enter new homes, which is already a huge play for established players in the space like Airtel and Jio.
Meanwhile, Parischa also noted that Excitel’s costs have surged drastically over the past six months. He attributed this to the multifold increase in price of components required for its modems and fibre optic cable, citing supply chain disruptions, geopolitical tensions and Rupee depreciation.
Going forward, the sector may have to increase prices of broadband services to offset these costs, Pasricha added.
Despite this, the startup, which has raised $16.5 Mn to date, is not looking to raise external funding in the near future, with the CEO noting that its current cash flow generation is enough to sustain any capital expenditure.
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