Updater Services Limited

Updater Services reported a strong Q4 FY25, with total revenue from operations growing 14% year-on-year to ₹7,256 million. For the full fiscal year FY25, revenue grew 12% year-on-year to ₹27,717 million. The company achieved its highest PAT margin since listing at 4.7% in Q4 FY25, contributing to an 80% growth in full-year PAT to ₹1,190 million and EPS of ₹19.87. EBITDA for Q4 FY25 was ₹523 million (7.2% margin) and for FY25 was ₹2,022 million (7.3% margin), reflecting a 28% year-on-year growth.

The IFM segment contributed 66% of total revenue and 56% of total EBITDA in FY25. Revenue for the segment grew 10% year-on-year to ₹18,182 million, with EBITDA growing 32% to ₹1,139 million. The EBITDA margin improved by 110 basis points to 6.3% in FY25 from 5.2% last year, driven by contract optimization and better operational efficiency. The company aims to grow IFM revenue at 3x the nominal GDP growth rate, capitalizing on India's IT/ITES expansion, co-working spaces, and 'Make in India' initiatives.

The BSS segment saw strong revenue growth of 17% in FY25, reaching ₹9,536 million, and contributed 34% to revenues and 44% to total EBITDA. EBITDA margins for BSS improved to 9.3% in FY25 from 8.8% in FY24. The company targets over 15% organic growth in the BSS segment for FY26, driven by sales enablement, audit and assurance, employee background verification, and mail room management. The BSS segment's contribution to total business is expected to increase to 35-40% over time^⏳.

Denave faced a challenging FY25 due to global client investment rationalization and AI disruption. To mitigate this, Denave invested in technology and shifted focus to high-value, AI-enabled solutions. In Q4 FY25, Denave signed an agreement for its AI-driven sales intelligence platform, Intellibank, and onboarded marquee clients like Vodafone and Dyson. The vision is to evolve Denave into an AI-enabled technology-driven sales intelligence and enablement partner, leveraging its long-standing client relationships.

Athena experienced changes in client engagements in FY25, with some clients moving processes in-house or scaling down operations. Despite this, costs were managed effectively, maintaining stable margins. Athena is focusing on diversifying its client base, onboarding a large corporate in financial services, and integrating AI tools like chatbots and voice bots to enhance employee productivity and streamline processes. The company aims for Athena to scale meaningfully and become a preferred outsourced sales arm.

Updater Services completed key mergers to streamline operations and simplify its structure. ITSS merged with Wynwy Technologies, and Tangy Supplies & Stanworth Management Services merged into UDS, both effective April 1, 2024. These integrations are expected to yield benefits in cost rationalization and operational efficiency. The company also launched Global School of Aviation for airport staff training, and Avon expanded into transport and distribution logistics, crossing ₹100 crores in revenue with 50% growth.

Updater Services maintains an asset-light business model, reflected in its negative 0.2x net debt to equity ratio as of March 31, 2025. The company confirmed minimal extraordinary capex planned for the current year, with minor increases for airport capacity augmentation and technology investments. Management is actively evaluating two acquisition opportunities, adhering to a disciplined strategy of acquiring margin-accretive, asset-light, and service-oriented businesses with strong management teams.