Bluspring Enterprises Limited — Q3 FY26 earnings call

Call held 4 Feb 2026

Management summary

Bluspring delivered a robust Q3 FY26, with double-digit growth in revenue and EBITDA, and significant PAT expansion. The company demonstrated strong working capital management by reducing net debt and DSO. While facing challenges from new Labour Code provisions and a muted telecom segment, management is confident in passing costs, Foundit's turnaround, and continued margin expansion.

Highlights

  • Q3 Revenue (ex-Investments) of ₹844 crore, up 10% YoY and 1% QoQ, driven by new sales in Facility Management and Security.

  • Q3 EBITDA of ₹32 crore, up 12% YoY and 12% QoQ, with margins improving by 37 bps QoQ to 3.8%, in line with guidance.

  • Adjusted PAT for Q3 stood at ₹19 crore, a significant increase of 54% YoY and 14% QoQ, with EPS at ₹1.2 per share.

  • Net debt reduced by ₹29 crore QoQ to ₹107 crore, and DSO improved to 98 days from 105 days, demonstrating strong working capital management.

  • Housekeeping deals in Facility and Food Services won at 150-200 bps higher margins, indicating focus on quality deals.

Concerns

  • A one-time charge of ₹29.8 crores was provisioned for past service costs (gratuity and leave encashment) due to new Labour Codes.

  • Telecom vertical revenue remained flattish QoQ (₹151 crore) due to delayed network rollouts by telecom majors.

  • Foundit revenue decreased by almost 27% YoY to ₹18 crore, requiring an additional ₹30-35 crore investment and 3-4 more quarters for break-even.

  • Security Services EBITDA was muted by a ₹75-80 lakh one-time provisioning towards receivables, though expected to be recovered.

Key financials

2 periods

Headline

  • Revenue (ex-Investments)
    ₹844 Cr
    YoY +10% QoQ +1%
  • EBITDA
    ₹32 Cr
    YoY +12% QoQ +12%
  • EBITDA Margin
    3.8%
    QoQ +0.37%
  • Adjusted PAT
    ₹19 Cr
    YoY +54% QoQ +14%
  • EPS
    ₹1.2
  • Net Debt
    ₹107 Cr
  • DSO
    98 days

9M

  • Revenue
    ₹2,458 Cr
    YoY +12%

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 Q3 Revenue
₹863 Cr Total
  • Facility and Food Services ₹521 Cr 60.4%
  • Security Services ₹173 Cr 20.0%
  • Telecom and Industrials ₹151 Cr 17.5%
  • Foundit ₹18 Cr 2.1%

Capital allocation

high confidence
  • Debt Net ₹107 Cr
    • Rate reset True-up of fair valuation of put liability of Vedang's remaining 1% equity, contributing to INR 3 crores spike in interest cost. ₹2.2 Cr
    As at 31st December, our net debt level is INR 107 crores a reduction of INR 29 crores quarter-on-quarter while our DSO stands at 98 days as against 105 days reported in the last quarter.
  • M&A Vedang Acquisition · Closed

    Increased stake in Vedang by 2% through true-up of put liability.

    Contributed to a ₹2.2 crore spike in interest cost for the quarter.

    Our interest cost has spiked by INR 3 crores of which INR 2.2 crores was due to true up of fair valuation of put liability of an acquisition of Vedang's remaining 1% equity.

Guidance & targets

Profitability

  • EBITDA Margin Profitability · Q4 FY26 · High confidence 4%

    From 3.8% today

    Looking ahead, our focus for quarter 4 will be on sustaining healthy double-digit revenue growth, while expanding EBITDA margins further to our stated guidance of 4%.

    — Kamal Pal Hoda

Debt

  • Net Debt Debt · March end (FY26) · High confidence sub-100 crores

    From 107 crores today

    So having said that, we should actually see a sub-100 debt levels by March end.

    — Prapul Sridhar

Cash Flow

  • OCF to EBITDA ratio Cash Flow · full-year · Medium confidence ~50%
    Our debt has reduced by INR 29 crores quarter-on-quarter and as I mentioned earlier, that we believe that our cash generation is usually robust in Q4 and we have guided the markets that we will be a OCF to EBITDA ratio of around 50%.

    — Prapul Sridhar

Segment Growth

  • Telecom Vertical YoY Growth Segment Growth · year-on-year · Medium confidence 12-15%
    We believe on a on a sustained basis this business should grow 12% to 15% year-on-year.

    — Kamal Pal Hoda

Foundit Profitability

  • Foundit Break-even Foundit Profitability · in another three quarters (from Q3 FY26) · High confidence break-even
    I'm confident that in another three quarters from now, we're looking at breakeven.

    — Kamal Pal Hoda

Foundit Revenue

  • Foundit Quarterly Revenue Foundit Revenue · starting Q4 FY26 · High confidence INR 25+ crores

    From INR 18 crores today

    We feel that starting Q4 onwards, current quarter onwards, we should be able to see that uptick in the revenue.

    — Kamal Pal Hoda

Foundit Investment

  • Foundit Cumulative Burn Foundit Investment · over next three quarters · High confidence INR 30-35 crores
    In terms of burn over next three quarters on a cumulative basis, I believe somewhere between INR 30 crores to INR 35 crores we may have to invest further in the business post which the P&L will start looking positive.

    — Kamal Pal Hoda

What to watch in Q4 FY26

Foundit Revenue Trajectory

Starting Q4 FY26
Current ₹18 crores in Q3 FY26 (down ~27% YoY)
Target Return to ₹25+ crores/quarter

Why it matters

Crucial for Foundit's turnaround and overall profitability, as it has been a drag on consolidated margins.

We feel that starting Q4 onwards, current quarter onwards, we should be able to see that uptick in the revenue.

Risks & concerns

  • One-time charge due to new Labour Codes

    medium

    A one-time charge of ₹29.8 crores was provisioned for past service costs (gratuity and leave encashment) due to the government's new Labour Codes.

    Management acknowledged

  • Delayed network rollouts in Telecom vertical

    medium

    The Telecom and Industrials segment's Q3 revenue was flattish QoQ due to persistent weakness and delayed network rollouts by telecom majors.

    Management acknowledged

  • Foundit's continued losses and need for further investment

    medium

    Foundit's revenue decreased by ~27% YoY, and it requires an additional ₹30-35 crore investment and 3-4 more quarters to reach break-even.

    Management acknowledged

  • One-time provisioning for receivables in Security Services

    low

    Security Services EBITDA was muted by a ₹75-80 lakh one-time provisioning for receivables, although management expects to recover these from clients.

    Management acknowledged

Q&A highlights

7 direct
Foundit turnaround strategy, revenue decline, and potential divestment Direct
As mentioned in the present earnings call, most of the product-related work and investments is complete. The product revamp is now completed with a better UI/UX for both seeker and recruiter. We are extremely confident that there will be an upward revenue trajectory starting with this current quarter onwards. And in the run up to this, we've also been bringing down our cost base to levels that we have visibility of break-even in next three quarters.

Addresses concerns about Foundit's performance, outlines specific actions taken, and provides a clear timeline for revenue recovery and break-even.

Asked by Khushi Jain

Impact of new Labour Codes on margins and cost recoverability Direct
We have assessed an incremental liability of INR 29.8 crores relating to past service cost in gratuity and leave liabilities. We expect that these costs will largely be passed to the clients over time as we have enough safeguards in our contract terms that allow us to revisit pricing in every event of statutory revisions.

Clarifies the financial impact of regulatory changes and management's strategy to mitigate margin erosion by passing costs to clients.

Asked by Kaustav Bubna

Detailed implementation and impact of new Labour Codes on unorganized competition Direct
Yeah, if I may add, Kaustav, while obviously the downside is not there, but there is a huge potential upside as these codes have obviously stringent compliance requirements and we believe that it's going to become increasingly difficult for people to work with non-compliant vendors. And with our nationally scaled safety-first and high compliant environment in which we operate, we believe that this could be a tailwind opportunity for players, formalized players like Bluspring.

Explains the strategic advantage Bluspring expects to gain from the formalization driven by the new labor laws, positioning it as a tailwind for compliant players.

Asked by Kaustav Bubna

Recoverability of the Labour Code charge (₹29.8 crores) from clients Partial
So, the remaining INR 20-odd crores is what we have taken for associate population who are our revenue generators. For these costs on gratuity and leave encashment, as iterated earlier, we have to go back to the customer. We have a legal framework already agreed with the customer which allows us to go back and recover these costs.

Provides a breakdown of the one-time charge and clarifies that the majority (₹20 crores) is recoverable, mitigating the long-term financial impact.

Asked by Anant Mundra

Muted revenue growth in Q3 and its potential link to Labour Code uncertainty Direct
What we see is starting from September onwards, the new rollouts and the network rollouts that we had received the plans from the telecom operators have not happened. It has slowed down. That is the reason we see that telecom vertical has seen a slight dip in revenue as against what we had planned.

Management attributes the muted growth primarily to telecom sector specific issues and strategic contract exits, rather than broader Labour Code uncertainty, providing clarity on growth drivers.

Asked by Anant Mundra

Muted EBITDA in Security Services and stake increase in Vedang/Terrier Direct
So this INR 75 lakh to 80 lakh of one-time provisioning we have taken on certain receivables which post confirmation from the client we have seen that there are certain leeways and penalties. While we have provided for it, we are also going back to the customer in terms of reconciling these receivables back into our P&L.

Explains the specific reason for muted EBITDA in a key segment and confirms the nature of recent stake adjustments in subsidiaries.

Asked by Anant Mundra

Funding of Foundit's cash burn given negative OCF and total investment to date Direct
So foundit has been funded basis the previous fundraise and the debt levels that have been raised at foundit level. And I think we are very close to seeing a turnaround in this business and would want to continue to push the revenue trajectory in this business which like I said is visible from the Q4 onwards.

Clarifies how Foundit's losses have been funded (previous fundraise, debt at Foundit level) and the total investment, addressing concerns about capital allocation.

Asked by Kaustav Bubna

Consideration of share buyback versus acquisitions for capital allocation Direct
See, buyback is not an option as of now. We are not thinking about any of such corporate restructuring as of now for the very reason that first we want to stabilize the entire operating business of ours, bring it to a stage where we believe the value will be right. And post that and also mind you our cash scenario as of now is around INR 107 crores of debt.

Clearly states the company's capital allocation priorities, focusing on organic and inorganic growth over buybacks, citing the need to stabilize the business and manage existing debt.

Asked by Priyan Shrivastava

2 min read 6 chapters

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%.

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