Updater Services

Updater Services reported a challenging FY26, with overall revenue growing 7% year-on-year to INR2,960 crores. The underlying business, however, demonstrated resilience with a 7% revenue growth. For Q4 FY26, total revenue from operations increased 3% year-on-year to INR750 crores, with an EBITDA of INR49 crores, translating to a 6.6% margin. The full year PAT stood at approximately INR83 crores, and adjusted Return on Capital Employed was 14.9%.

FY26 was a year of reset, focusing on deepening client relationships, improving contract-level profitability, and investing in technology-led operations to position UDS as an integrated service partner. The company highlighted significant structural tailwinds in the IFM industry, including new labor codes effective November 2025, growth in Grade A office spaces and industrial real estate, and the shift towards outcome-based contracts. These factors are expected to benefit UDS's compliance-first model and pan-India delivery capabilities.

The IFM division witnessed healthy momentum in Q4 FY26 and grew 10% year-on-year to INR1,995 crores for the full year, contributing 67% to FY26 revenue. The segment added 30 new logos and saw increased wallet share from existing clients. EBITDA margin for IFM stood at 4.4% in Q4 and 4.5% for FY26. Strategic priorities for FY27 include improving client-level profitability, enhancing operational efficiency through technology, and expanding higher-margin specialized services.

The BSS segment's revenue for FY26 was broadly flat at INR965 crores, with an adjusted EBITDA of INR85 crores (9% margin). Denave grew 11% in FY26, adding 49 new logos and achieving 21% Y-o-Y growth from new and existing customers, with an EBITDA of INR26 crores. Athena's revenue declined to INR113 crores in FY26 from INR136 crores in FY25 due to prior customer losses, but added 4 new logos and saw its BFSI concentration reduce from 86% to 81%, with an EBITDA of INR24 crores. Matrix's revenue was INR128.6 crores with an EBITDA of INR15 crores, impacted by softness in IT/ITES hiring and a large customer's spending reduction.

The company maintains a healthy balance sheet with a net cash position, reflected by a negative net debt to equity ratio of 0.24 as of March 31, 2026. Updater Services holds approximately INR450 crores in cash, including mutual funds and fixed deposits. Management indicated that this cash would be utilized for a combination of acquisitions, rewarding shareholders (via buyback or dividend, subject to Board decision), and internal organic growth, particularly in AI and technology.

Management expressed cautious optimism for FY27, expecting to grow ahead of the industry, although formal guidance was deferred until after the Q1 call. Key priorities include strengthening governance, transforming FP&A with advanced analytics, and implementing shared services for cost optimization. The company also continues to invest in AI-led technologies across all entities to drive scalability and efficiency. For FY27, 85-90% of revenue is already visible from existing contracts, providing a strong base.