Updater Services Q3 FY26 results: net profit down 78.8% to ₹6.61 crore, revenue up 10.4%

How did Updater Services perform in Q3 FY26?

Updater Services reported consolidated revenue of ₹767.10 crore for Q3 FY26, up 10.4% from ₹694.89 crore in Q3 FY25. Against Q2 FY26, revenue fell 46.3% from ₹1,430 crore, while total income was ₹770.47 crore, down 10.0% year on year and 46.5% sequentially. The results also included standalone revenue of ₹461.05 crore, up 18.8%, and standalone PAT of ₹9.83 crore.

Consolidated EBITDA was ₹20.69 crore in Q3 FY26, down 55.2% from ₹46.22 crore in Q3 FY25 and 70.8% from ₹70.87 crore in Q2 FY26. The EBITDA margin fell to 2.7% from 6.7% a year earlier and 5.0% in the previous quarter. PAT was ₹6.61 crore, down 78.8% from ₹31.15 crore and 86.5% from ₹48.79 crore; basic EPS was ₹1.37, against ₹4.61 and ₹7.29, respectively.

What changed in Updater Services' costs and profit?

Total expenses rose 14.7% to ₹759.87 crore in Q3 FY26 from ₹662.72 crore in Q3 FY25, outpacing the 10.4% increase in revenue. Employee cost was ₹599.18 crore, up ₹80.75 crore or 15.6%, while other expenses were ₹124.11 crore, up ₹20.27 crore or 19.5%. Cost of materials declined ₹5.01 crore or 19.1% to ₹21.27 crore, finance costs fell ₹0.54 crore to ₹1.45 crore, and depreciation was ₹12 crore.

Other income fell ₹2.30 crore or 40.6% to ₹3.37 crore from ₹5.67 crore. A charge of ₹5.36 crore was reported as an exceptional item, against no exceptional item in Q3 FY25 and Q2 FY26. Tax was ₹1.37 crore against ₹6.68 crore a year earlier, while PBT declined ₹32.59 crore or 86.1% to ₹5.25 crore. The investor presentation attributed margin pressure to transitory factors, including upfront costs on new contracts, and said profitability was expected to normalise as contracts mature.

The limited review report stated that an expense for expected credit loss of INR 201 million was recognised in the current quarter because Avon’s outstanding trade receivables were considered doubtful. It noted trade receivables of INR 266 million and trade payables of INR 35 million at 31 December 2025, and said that, pending conclusion of the investigation, it was unable to determine whether other adjustments to the consolidated results were necessary. The matter also qualified the review report for the quarter and six months ended 30 September 2025.

How did the first nine months of FY26 go?

For the first nine months of FY26, consolidated revenue was ₹2,196.69 crore, up 8.4% from ₹2,027.04 crore in 9M FY25. Total income rose 8.0% to ₹2,210.63 crore from ₹2,046.13 crore, while PBT fell 43.4% to ₹59.87 crore from ₹105.76 crore. PAT decreased 34.7% to ₹55.41 crore from ₹84.79 crore.

Basic EPS for 9M FY26 was ₹8.61, down 31.7% from ₹12.60 in 9M FY25. The investor presentation reported adjusted EBITDA of ₹1,277 million and an adjusted EBITDA margin of 5.8% for 9M FY26, including a one-time loss on account of Avon of ₹222 million. It also stated that the adjusted PBT figures included an exceptional item of ₹54 million on account of a labour law change and the Avon loss of ₹222 million.

How has Updater Services done over the last 8 quarters?

Revenue rose in each of the last seven quarters on a year-on-year basis. In the reported quarterly series, revenue peaked at ₹1,429.59 crore in Q2 FY26 and then fell to ₹767.10 crore in Q3 FY26. PAT also peaked at ₹48.79 crore in Q2 FY26 before falling to ₹6.61 crore in the October–December 2025 quarter.

The EBITDA margin reached 6.7% in Q3 FY25, then declined to 5.0% in Q4 FY25 and Q2 FY26 before falling to 2.7% in Q3 FY26. PAT rose from ₹24.16 crore in Q4 FY24 to ₹34.19 crore in Q4 FY25, then moved lower to ₹6.61 crore in Q3 FY26. The investor presentation said IFM revenue reached its highest-ever quarterly run rate, while margins were affected by transitory upfront costs on new contracts.

Which businesses drove the quarter?

Integrated Facility Management Services reported revenue of ₹531.92 crore in Q3 FY26, up 13.9% from ₹466.95 crore in the year-ago quarter. Segment EBIT was ₹16.88 crore against ₹24.81 crore, with the reported EBIT margin at 3.2%. The investor presentation said IFM revenue reached its highest-ever quarterly run rate, with growth driven by new client additions and the ramp-up of strategic contracts.

Business Support Services reported revenue of ₹252.47 crore, up 3.4% from ₹244.08 crore in Q3 FY25. Segment EBIT was a loss of ₹9.93 crore, compared with EBIT of ₹15.14 crore in the year-ago quarter, and the reported EBIT margin was -3.9%. Adjustments and eliminations recorded revenue of -₹13.93 crore and EBIT of -₹1.70 crore, against -₹10.47 crore and -₹2.12 crore respectively.

What else did the company announce?

The board approved the standalone and consolidated unaudited financial results for the quarter and nine months ended 31 December 2025, along with the limited review report. The filing stated that the results would be published in English and Tamil newspapers and made available on the company’s website. No dividend, fund raise or capital-related approval was stated in the same-day filings.

A separate filing stated that Sunil Munshi would become CEO of material subsidiary Denave India Private Limited with effect from the close of business hours on 31 March 2026, following the resignation of Snehashish Bhattacharjee. The company described the appointment as part of Denave’s succession plan. Another filing said an appellate authority had dropped a GST demand of Rs. 4,69,14,392 in full, leaving no liability.

What did Updater Services' management say?

The company’s investor presentation said margins were affected by transitory factors, including upfront costs on new contracts, and that profitability was expected to normalise as contracts mature. Management said the IFM business had growth momentum back on track through new client additions and the ramp-up of strategic contracts. It also said BSS businesses were continuing to invest in technology and AI-led solutions for efficiency, scalability and outcome-based growth.

Management said structural tailwinds from labour code formalisation continued to favour organised and compliant operators, with full wage pass-through embedded in contracts. It reported that Global delivered its highest-ever profitability, supported by high-margin non-scheduled flight operations and strong seasonal traffic. The reviewed call record for 11 February 2026 contained no guidance, management quotes, stated risks or analyst questions.

How did Updater Services shares react?

The results appeared after market hours, and the stock fell 1.8% after five minutes, 1.4% after 15 minutes and 0.9% after 30 minutes from the price when the filing appeared. On the reaction day, it fell 5.8% from its pre-results close, compared with a 0.0% median move for the other Diversified Commercial Services stocks, an excess move of -5.8 percentage points.

By the next day’s close, the stock was down 4.6% from its pre-results close, while the industry median was up 1.5%, producing an excess sector move of -6.1 percentage points. By five sessions later, it was down 6.8%, against a 0.0% industry median move. Earlier reaction-day moves included -11.3% on 5 November 2025, -4.8% on 5 August 2025 and 0.1% on 24 May 2025.

How did other Diversified Commercial Services companies do?

A total of 72 other Diversified Commercial Services companies were compared, with a median revenue growth of 7.0%. Of those companies, 38 grew more slowly than Updater Services and 34 grew faster. Among the 105 companies for which profit was compared, 53 reported higher profit.