Bluspring Enterprises Limited — Q2 FY26 earnings call

Call held 7 Nov 2025

Management summary

Bluspring reported a strong Q2 FY26 with robust revenue growth across core businesses, driven by new client additions and operational efficiencies. While EBITDA saw sequential improvement, year-on-year growth was flat due to strategic investments. The company is actively managing increased DSO and remains focused on cost optimization and sales acceleration, particularly for its foundit platform.

Highlights

  • Q2 Revenue (ex-foundit) of ₹837 crores, up 14% YoY, driven by new sales in facility management, security, and industrial verticals.

  • Q2 EBITDA of ₹29 crores, increased 22% QoQ, with EBITDA margin improving 41 basis points to 3.5%.

  • Security business delivered strong Q2 revenue growth of 19% YoY and 13% QoQ, with the highest ever quarterly headcount addition of 1,300.

  • foundit achieved a 25% reduction in overall site latency and reduced its quarterly cost base from ₹43.5 crores to ₹33 crores.

  • Secured 36 new contracts worth ₹110 crores in H1 FY26 across facilities, maintenance, food, and industrial verticals.

Concerns

  • Flat EBITDA on a year-on-year basis due to investments in leadership and sales team enhancement.

  • DSO increased to 105 days from usual 90 days, largely attributable to delays from novation of contracts post-demerger.

  • EBITDA for the Facility and Food Services segment was down 20% year-on-year.

Key financials

3 periods

Headline

  • DSO
    105 days
  • Net Debt (ex-foundit)
    ₹136 Cr

Q2

  • Revenue (ex-foundit)
    ₹837 Cr
    YoY +14% QoQ +8%
  • EBITDA
    ₹29 Cr
    YoY +1% QoQ +22%
  • PAT
    ₹16 Cr
    YoY +19% QoQ +38%
  • EBITDA Margin
    3.5%

H1

  • Revenue
    ₹1,614 Cr
    YoY +14%
  • EBITDA
    ₹53 Cr
    YoY -5%

What they filed

Q1 FY27: revenue up 19.1%, net profit up 77.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue770 791 802 797 857 +11%863 +9%865 +8%949 +19%
EBITDA23 21 5 12 17 −23%24 +16%25 +429%21 +76%
Net profit2 -158 -23 -7 4 +98%-23 +85%4 +116%-2 +78%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Q2 Revenue
₹858 Cr Total
  • Facility and Food Services ₹514 Cr 59.9%
  • Security ₹168 Cr 19.6%
  • Telecom and Industrials ₹155 Cr 18.1%
  • foundit (Investments) ₹21 Cr 2.4%

Capital allocation

high confidence
  • Debt Net ₹136 Cr Cost 7.3%
    As we speak, at our organizational level, our net debt position is 174 crores. Without foundit, it is at ₹136 crores. We are confident to bring this ₹136 crores to sub 100 levels by the year end. Yes, so thanks for that. So, we started off with almost 8%, but we had our basis points coming down. As we speak, our blended cost is around 7.35%.

Guidance & targets

Revenue

  • Full Year Revenue Growth Revenue · FY26 · High confidence 14%
    Q2 has seen a 14% year-on-year growth, and we believe that we will be able to maintain this number on a full year basis, at least for this year.

    — Kamal Pal Hoda

Working Capital

  • DSO Working Capital · by year-end · High confidence sub-100 days

    From 105 days today

    However, with novation's behind us, we are confident of reducing the DSO days and bringing the net debt to sub-100 levels by the year-end.

    — Prapul Sridhar

Debt

  • Net Debt (ex-foundit) Debt · by year-end · High confidence sub-100 crores

    From ₹136 crores today

    We are confident to bring this ₹136 crores to sub 100 levels by the year end.

    — Prapul Sridhar

Profitability

  • foundit Break-even Profitability · this year · Medium confidence very near
    We believe the exit should be very near to the break-even numbers, Varun, but we will have to obviously go through next two quarters to continue to support that team and take all the right steps. We believe we should be very near to that number.

    — Kamal Pal Hoda

  • EBITDA Margin Profitability · by year-end · High confidence 4%

    From 3.5% today

    Looking ahead, our focus for the second half of the year will be on sustaining healthy double-digit revenue growth, while expanding EBITDA margins further to 4% by the end of this year.

    — Kamal Pal Hoda

  • ROE Profitability · by 2030 · High confidence 20%
    Our mid-level, we have always guided that by 2030, we have to be a 20% ROE company.

    — Prapul Sridhar

Growth

  • Overall Growth Rate Growth · next 3-4 years · High confidence 3x GDP growth rate
    So, our overall guidance still remains the same that we want to grow 3x of the GDP growth over the course of next three to four years.

    — Kamal Pal Hoda

Operating Cash Flow

  • OCF Conversion Operating Cash Flow · full year · Medium confidence 20-30%
    And hence, our estimate is close to around 20% to 30% OCF is what we guided earlier to the market. But at a long-term, we have guided around 50% of our operating EBITDA will be converted into cash. So, we are confident of at least meeting 20% to 30% of operating cash this year, given that our growth also has to be funded.

    — Prapul Sridhar

  • OCF Breakeven Operating Cash Flow · next half · High confidence breakeven

    From negative ₹97 crores (H1) today

    So, I was just building up to that. So, as I said, whatever this ₹100 crores odd that we have not yet collected, that is where the focus area is. And we are confident that our OCF position will at least breakeven by the next half, at a full year basis because of faster collections, including growth.

    — Prapul Sridhar

Market context

  • ROE Profitability · next couple of years · Medium confidence double-digit

    From sub 10% today

    So in terms of ROE, definitely, we should be targeting in the next couple of years, a double-digit margin.

    — Prapul Sridhar

What to watch in Q3 FY26

DSO Reduction

by year-end
Current 105 days
Target sub-100 days

Why it matters

Improvement in DSO is crucial for working capital management and cash flow generation.

However, with novation's behind us, we are confident of reducing the DSO days and bringing the net debt to sub-100 levels by the year-end.

Risks & concerns

  • Increased Days Sales Outstanding (DSO)

    medium

    DSO increased to 105 days from a normal 85-90 days due to delays in contract novation post-demerger, impacting collections.

    Management acknowledged

  • Cyclicality of Telecom business

    medium

    The telecom industry has cycles, with growth potentially slowing after major rollouts like 5G, necessitating diversification into areas like solar EPC and satellite communications.

    Management acknowledged

  • Flat EBITDA growth year-on-year

    low

    EBITDA growth was flat YoY due to strategic investments in leadership and sales team enhancement, which are expected to normalize as the business scales.

    Management acknowledged

Q&A highlights

6 direct
Increase in Days Sales Outstanding (DSO) Direct
So, as of now, our DSO levels as reiterated is around 105 days and normally this business will be operating at a sub 85 to 90 days rate. Now, we have an increase in the number of days of DSOs because of our innovations of contract that got delayed because of the demerger in the last six months.

Analyst questioned the significant increase in DSO, which impacts working capital and cash flow. Management attributed it to contract novation post-demerger and expressed confidence in reducing it.

Asked by Zaki Nasser

foundit path to profitability/loss reduction Direct
The second one was obviously on the cost optimization. If you recollect, we were hovering around 45 crores a quarter on a cost base till Q4 of last financial year. Again, you know, there's something as management, we've been able to right size the cost for the present scale of operations and bring it down to almost 30 to 33 crores.

Analyst inquired about the progress on reducing losses for foundit. Management highlighted significant cost optimization and product improvements, expecting better performance in Q3/Q4.

Asked by Zaki Nasser

Sustainability of margin guidance given telecom slowdown Partial
So, see, the overall long-term margin guidance that we had given during our listing was that over the course of next four years, by 2030, we want to reach to 6%. I'm very happy that we've started well in that trajectory. We started our first quarter with 3.1% and now we are at 3.5% EBITDA margin.

Analyst challenged the margin improvement guidance, citing the lower-margin core businesses and potential telecom slowdown. Management reiterated long-term targets and diversification efforts.

Asked by Kaustav Bubna

Requirements for new foundit CEO Direct
The requirement was clear. We're looking for somebody who is handled tech, somebody who comes with a very seasoned experience on the tech side, as well as on the sales efficiency and somebody who is worked on turnaround.

Analyst asked about the profile of the newly hired foundit CEO, indicating the strategic importance of this leadership change for the platform's turnaround.

Asked by Kaustav Bubna

Reasons for margin fall and food business performance Direct
As I mentioned in my speech, there are two reasons why this has happened. One is we have done investment in our leadership and sales team in all our verticals because FM and food being almost two-thirds of our revenue business, the investments there have been a little higher, one. Second, in the same quarter of last year, we had a benefit coming from an estimated credit loss reversal due to a good collection quarter.

Analyst sought clarification on the reasons for margin decline and specific issues in the food business. Management explained it was due to strategic investments and a one-time credit loss reversal benefit in the prior year.

Asked by Varun Pinto

Funding growth and operating cash flow Direct
You are absolutely right. If you see the cash flow or cash generated from operations is negative ₹97 crores. Prapul did mention in his speech that the first half of the year, the performance on the cash flow has not been as per the plan. As part of the de-merger, we had to go through all our thousand plus clients had to be novated to Bluspring from Quest.

Analyst questioned the negative operating cash flow in H1 and how future growth would be funded. Management attributed it to novation delays impacting collections and expressed confidence in OCF breakeven by H2.

Asked by Gaurav Gupta

Return on Equity (ROE) targets Direct
So in terms of ROE, definitely, we should be targeting in the next couple of years, a double-digit margin. Our mid-level, we have always guided that by 2030, we have to be a 20% ROE company.

Analyst asked for specific ROE targets, which is a key metric for shareholder value creation. Management provided both near-term and long-term targets.

Asked by Gaurav Gupta

EBITDA margins from sports events Partial
So, Gaurav, obviously, due to competitive nature of this industry, I may not want to diverge the exact EBITDA margins from these particular events. And these are not one-off events. As part of our next vectors of growth, we had chosen sports and leisure as one of the areas where we want to expand.

Analyst inquired about the profitability of new ventures like sports event hospitality. Management confirmed higher margins than regular business but declined to give exact figures due to competitive reasons.

Asked by Gaurav Gupta

3 min read 6 chapters

Detailed narrative

Overall Performance and Business Environment

Bluspring reported a Q2 FY26 revenue of ₹837 crores (excluding investments), marking a 14% year-on-year and 8% quarter-on-quarter increase. H1 FY26 revenue stood at ₹1,614 crores, up 14% YoY. The overall business environment remained positive, supported by strong economic activity, including 35% YoY growth in Indian office real estate net absorption and a 31% YoY increase in government capex to ₹5.8 lakh crore in H1 FY26. Q2 EBITDA was ₹29 crores, up 1% YoY and 22% QoQ, with H1 EBITDA at ₹53 crores, down 5% YoY due to strategic investments in leadership and sales.

Segmental Performance Highlights

The Facility and Food Services segment, contributing 60% of revenue, grew 14% YoY and 8% QoQ to ₹514 crores in Q2, driven by new sales and education institutions reopening. The Telecom and Industrials segment grew 11% YoY to ₹155 crores in Q2, with industrial sub-vertical showing strong growth and adding 6 major contracts worth ₹40 crores ACV. The Security business delivered an excellent quarter with Q2 revenue of ₹168 crores, up 19% YoY and 13% QoQ, achieving the highest ever quarterly headcount addition of 1,300 and 17 new logos.

foundit Progress and Cost Optimization

The AI-powered job search platform, foundit, recorded Q2 revenue of ₹21 crores, up 5% QoQ. The company focused on cost optimization, reducing its quarterly cost base from ₹43.5 crores in Q4 FY25 to a sustainable ₹33 crores in Q2 FY26. Product enhancements included improvements to the search engine, a revamped recruiter interface, and a 25% reduction in overall site latency, which have been well-received by customers. Management expects foundit to be very near break-even in the coming quarters.

Working Capital Management and Debt

The company's Days Sales Outstanding (DSO) increased to 105 days, up from typical levels of 85-90 days. This increase is primarily attributed to delays arising from the novation of contracts during the de-merger process, which temporarily impacted billing and collection cycles. Net debt (excluding foundit) stood at ₹136 crores. Management is confident in reducing DSO to sub-100 days and net debt to sub-100 crores by the year-end, with banking limits already in place to support growth. The blended cost of debt has reduced from 8% to 7.35%.

Strategic Initiatives and Growth Drivers

Bluspring is making inroads into new segments like sports & leisure, serving as the exclusive hospitality partner for the World Para Athletics Championship. Within education, the company entered off-campus student living space. A new central kitchen in Bengaluru is expected to start operations this quarter, expanding footprint in corporate offices and GCCs. The industrial sub-vertical is transitioning from a manpower provider to a strategic operations partner, securing contracts for end-to-end O&M services. The telecom business is diversifying into solar EPC and satellite communications.

Margin Trajectory and Future Outlook

Q2 EBITDA margin improved by 41 basis points to 3.5%, up from 3.1% in Q1. Management aims to expand EBITDA margins further to 4% by the end of FY26. The long-term ROE target is double-digit in the next couple of years, reaching 20% by 2030. The company's overall growth guidance remains 3x GDP growth rate over the next 3-4 years, achieved through a combination of organic growth and strategic value-based acquisitions, prioritizing the food and industrial maintenance businesses for M&A.

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