Detailed Narrative
Robust Q3 FY26 Performance with Margin Expansion
Bluspring reported a strong Q3 FY26, with revenue (excluding Investments) reaching ₹844 crore, marking a 10% YoY and 1% QoQ increase. This growth was primarily driven by new sales additions in the Facility Management and Security verticals. EBITDA for the quarter stood at ₹32 crore, growing 12% YoY and QoQ, with EBITDA margins improving by 37 basis points QoQ to 3.8%, aligning with management's guidance. Adjusted PAT saw a significant 54% YoY and 14% QoQ jump to ₹19 crore, translating to an EPS of ₹1.2 per share.
Strategic Impact of New Labour Codes
The government's notification of new Labour Codes in November led to a one-time📎 charge of ₹29.8 crore for past service costs (gratuity and leave encashment). Management expects to pass the majority of these costs (₹20 crore for associate population) to clients over time, leveraging existing contract terms. The company views the formalization of employment driven by these codes as a significant tailwind, making it increasingly difficult for non-compliant vendors and favoring organized players like Bluspring.
Segmental Performance and Diversification Efforts
The Facilities and Food Services segment, the largest contributor at 60% of total revenue, grew 11% YoY to ₹521 crore, achieving EBITDA margins of 4.5% (+50 bps QoQ). The Telecom and Industrials segment, despite flattish QoQ revenue of ₹151 crore due to delayed network rollouts, delivered double-digit EBITDA margins of 9.9% (+160 bps QoQ) through cost optimization. The Security Services segment continued its upward trajectory with ₹173 crore revenue (+15% YoY), though EBITDA was muted by a ₹75-80 lakh one-time📎 provisioning for receivables.
Foundit Turnaround and Investment Strategy
The 'Foundit' platform recorded ₹18 crore revenue in Q3, experiencing a ~27% YoY decline. However, management has completed a product revamp (better UI/UX) and reduced the spend base from ₹45 crore/quarter to ₹30 crore/quarter. They are confident of an upward revenue trajectory starting Q4 FY26, aiming to return to ₹25+ crore/quarter. An additional cumulative investment of ₹30-35 crore is anticipated over the next three quarters, with break-even targeted within the same timeframe.
Improved Working Capital and Debt Management
Bluspring demonstrated strong working capital management, reducing its net debt by ₹29 crore QoQ to ₹107 crore as of December 31, 2025. Days Sales Outstanding (DSO) also improved significantly from 105 days to 98 days. The company aims to achieve net debt levels below ₹100 crore by March end and targets a full-year Operating Cash Flow to EBITDA ratio of approximately 50%, reflecting robust cash generation capabilities.
Strategic Growth Initiatives and Outlook
The company secured new contracts worth ₹278 crore in 9M across various verticals and deployed over 2,000 guards in the Security vertical. Bluspring is diversifying its Telecom revenue streams, including its first overseas project with 50 resources. Management expects telecom rollouts to pick up in Q4, driving high single-digit QoQ revenue growth. For Q4 FY26, the focus remains on sustaining healthy double-digit revenue growth and expanding EBITDA margins further to 4%.