Summary
Bluspring Enterprises Limited - Q3 FY26 Earnings Call Summary Wednesday, February 04, 2026, 11:00 AM IST
Event Participants
Executives 3 Kamal Pal Hoda (CEO), Nibodh Shetty (Head of IR), Prapul Sridhar (CFO)
Analysts 5 Aadarsh Pincha, Anant Mundra, Aryaman Shukla, Kaustav Bubna, Khushi Jain
Financials & KPIs (Excluding Investments/Foundit)
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹844 crores | +10% YoY, +1% QoQ; YoY growth driven by Facility Management and Security; QoQ flat due to telecom rollout delays. |
| EBITDA | ₹32 crores | +12% YoY, +12% QoQ; Margin improved +37 bps QoQ to 3.8% due to volume growth and shared services efficiencies. |
| Adjusted PAT | ₹19 crores | +54% YoY, +14% QoQ; Strong growth despite one-time statutory provisions. |
| Net Debt | ₹107 crores | -₹29 crores QoQ; Reduction following completion of contract novation activities. |
| DSO | 98 days | -7 days QoQ from 105 days; Management aiming for further reduction in Q4. |
| New Sales (ACV) | ₹89 crores | Securements for Q3; Total 9M FY26 new contracts stand at ₹278 crores. |
| Exceptional Item | ₹29.8 crores | One-time charge for gratuity/leave liability under new Labour Codes; ₹20.8 crores relates to associates. |
Geographic & Segment Commentary
- Facility and Food Services: Revenue of ₹521 crores (+11% YoY), contributing 60% of total revenue. Growth was driven by 20 new contract mobilizations (₹79 crore ACV) with a specific focus on high-margin deals in Healthcare and Education.
- Telecom and Industrials: Revenue of ₹151 crores (flat YoY, -3% QoQ) due to delayed network rollouts by major operators. The segment achieved a high 9.9% EBITDA margin through cost optimization and one-time shutdown activities; international expansion has commenced with 50 resources deployed overseas.
- Security Services: Revenue of ₹173 crores (+15% YoY) supported by a headcount addition of 2,500 over the last 12 months. EBITDA was briefly muted due to one-off bonus billings and receivable provisioning (₹0.75-0.80 crores).
- Foundit (Investments): Revenue of ₹18 crores (down YoY); management completed a product UI/UX revamp and reduced the quarterly spend base from ₹45 crores to ₹30 crores.
Company-Specific & Strategic Commentary
- Labour Code Implementation: Management recognized a ₹29.8 crore exceptional liability due to the consolidation of 29 laws into 4 codes. While ₹9 crores is internal cost, the remainder is deemed recoverable from clients via contract clauses over the next 6 months.
- Operational Efficiency: EBITDA growth (+12% QoQ) outpaced revenue growth as previous investments in leadership and sales teams began yielding results. Shared services consolidation contributed to the 3.8% margin achievement.
- Strategic Repositioning: The Industrial vertical is transitioning from traditional manpower supply to high-value SLA-based Operations & Maintenance (O&M) partnerships, evidenced by a new ₹20 crore ACV contract.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| EBITDA Margin | 4.0% by Q4 FY26 | Driven by absorption of fixed costs and higher-margin new contract mobilizations. |
| Net Debt | Sub-₹100 crores (Mar-26) | Expected through robust Q4 cash generation and OCF/EBITDA ratio of ~50%. |
| Foundit Break-even | Within 3 quarters (Q2 FY27) | Dependent on revenue recovery to ₹25+ crore/quarter levels following product revamp. |
| Revenue Growth | 3x of GDP (Long-term) | To be achieved through a mix of organic growth and strategic inorganic adjacencies. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory/Labour Costs | New Labour Codes increased short-term liabilities by ₹29.8 crores. While mostly pass-through, the timing of recovery from 1,000+ clients poses a short-term cash flow risk. |
| Telecom Sector Volatility | Revenue in Telecom de-grew 3% QoQ due to operator rollout delays. Prolonged weakness in 5G/network expansion could impact high-margin revenue streams. |
| Foundit Turnaround | The vertical remains loss-making with a projected additional ₹30-35 crore burn. Failure to hit the ₹25 crore/quarter revenue target would delay the consolidated margin expansion. |
Q&A Highlights
Labour Code & Margins
- Question: Will the new codes hurt margins or aid competition? (Kaustav Bubna)
- Answer: No margin downside as contracts allow pass-through. It is a tailwind as non-compliant, unorganized vendors will struggle with stringent new transparency requirements (Kamal Pal Hoda).
Foundit Recovery
- Question: Is break-even coming from cost-cutting or growth? (Aadarsh Pincha)
- Answer: Primarily growth. UI/UX revamp is done, and sales productivity is up 45%. Spend base was right-sized from ₹45cr to ₹30cr per quarter to lower the break-even threshold (Kamal Pal Hoda).
Debt & Cash Flows
- Question: Why did debt spike earlier in the year? (Kaustav Bubna)
- Answer: High DSOs were temporary during the novation of 1,000+ contracts from Quess to Bluspring. Debt already dropped by ₹29 crores in Q3 as collections normalized (Prapul Sridhar).
Employment Linked Incentive (ELI)
- Question: What is the financial benefit of the ELI scheme? (Anant Mundra)
- Answer: Benefits became effective August 1st. Management will recognize incentives only on a “receipt basis” starting Q4 FY26 or Q1 FY27 after the first 6-month cycle is completed (Prapul Sridhar).
Key Takeaway
Bluspring Enterprises delivered a steady Q3 FY26 with 10% YoY revenue growth and a notable margin expansion to 3.8%. The quarter was defined by the proactive recognition of a ₹29.8 crore exceptional charge related to India’s new Labour Codes, which management views as a long-term catalyst for formalization and market share gains. While the Telecom vertical faced temporary headwinds from rollout delays, the Facility Management and Security segments maintained double-digit momentum. Strategic focus remains on the “Foundit” turnaround, where a right-sized cost base and revamped product are expected to lead to break-even by Q2 FY27. With net debt declining to ₹107 crores and DSO improving to 98 days, the company is well-positioned to meet its 4% EBITDA margin target in Q4 FY26 while pursuing an aggressive 3x GDP growth strategy through organic and inorganic routes.
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