Updater Services Limited has released its Business Responsibility and Sustainability Report (BRSR) for FY 2025-26, offering a detailed disclosure of its environmental, social, and governance (ESG) performance on a standalone basis. The report, submitted as Annexure VIII to the company's annual filings, covers the period ending FY 2025-26 and reflects the company's commitment to transparency, accountability, and responsible business conduct in line with the National Guidelines on Responsible Business Conduct (NGRBC).

Company Overview and Operations

Updater Services Limited, incorporated on 13-11-2003 and headquartered at First Floor, No. 42, Gandhi Mandapam Road, Kotturpuram, Chennai - 600 085, is engaged in providing support services, specifically Housekeeping & Maintenance Services, which account for 100% of its turnover under NIC Code 82990. The company's paid-up capital stands at Rs. 66,95,32,410/-. For CSR applicability purposes, the company reported a turnover of Rs. 17,62,40,50,000 and a net worth of Rs. 9,05,97,80,000.

The company maintains 35 offices across India and serves customers in 27 states domestically and across 2 international markets. Exports contribute 0.09% of total turnover. Updater Services serves a diverse customer base spanning over 33 industry segments, including Manufacturing, BFSI, Healthcare, IT/ITES, Retail, Real Estate, Education, Energy, FMCG, and Pharmaceuticals, among others.

Workforce and Employee Well-Being

As of the end of FY 2025-26, the company employed 56,252 permanent employees, comprising 41,252 males (73.33%) and 15,000 females (26.67%). The company has no staff in the 'Workers' category. The following table summarises key workforce metrics:

All 56,252 permanent employees are covered by health insurance and accident insurance. Maternity benefits cover all 15,000 female permanent employees (100%). Well-being expenditure as a percentage of total revenue stood at 0.11% in FY 2025-26, compared to 0.10% in FY 2024-25. Retirement benefits including PF and Gratuity cover 100% of employees, while ESI coverage stood at 71.88% in FY 2025-26 versus 79.63% in FY 2024-25.

The company conducted 15 training programmes for employees other than Board members and KMPs, achieving 90% coverage on health and safety measures and 69% on skill upgradation in FY 2025-26. Performance and career development reviews were conducted for 100% of all permanent employees. The Lost Time Injury Frequency Rate (LTIFR) for employees improved significantly from 5.38 in FY 2024-25 to 1.03 in FY 2025-26, with total recordable work-related injuries declining from 24 to 22.

Governance and Board Composition

The Board of Directors comprises 6 members, of whom 2 are female (33.33%). Among Key Managerial Personnel (KMP), 2 out of 4 are female (50.00%). The company has an ESG Committee constituted on March 28, 2024, chaired by Mr. Raghunandana Tangirala, Chairman & Managing Director (DIN: 00628914), and responsible for overseeing alignment with NGRBC principles.

All nine NGRBC principles are covered by board-approved policies, which have been translated into procedures and extended to value chain partners. Independent assessments have been carried out by external agencies including BSI, Intertek, CERTVALUE, and SIS across multiple principles. The company has set short-term carbon emission reduction targets by 2032 and long-term targets by 2042 under Principle 6.

The following table summarises key remuneration data:

Gross wages paid to females as a percentage of total wages stood at 22.45% in FY 2025-26, up from 21.53% in FY 2024-25.

Environmental Performance

Updater Services has undertaken several sustainability initiatives, most notably the installation of a 90 kW solar power plant at SaiTech Park, Guindy, Chennai, and a 47 kW solar power plant at Kotturpuram, Chennai. The company also installed automatic electric sensors for lighting and automatic water sensors to optimise resource consumption.

The following table presents key energy and emissions data:

Air emissions data for FY 2025-26 recorded NOx at 170 µg/m³ (down from 215 µg/m³), SOx at 13 µg/m³ (down from 18 µg/m³), and Particulate Matter (PM) at 16.70 µg/m³ (down from 19.20 µg/m³), as assessed by Chennai Testing Laboratory Pvt Ltd. The company is compliant with applicable environmental laws and regulations in India and does not operate in any ecologically sensitive areas.

Subsidiaries and CSR Activities

Updater Services holds stakes in nine subsidiaries, including Avon Solutions & Logistics Private Limited (76.00%), Denave India Private Limited (89.57%), Global Flight Handling Services Private Limited (73.93%), and Updater Services (UDS) Foundation (100%), among others. None of the subsidiaries currently participate in the Business Responsibility initiatives of the listed entity.

Under its CSR mandate, the company supported two key projects during the reporting year:

On procurement, 61% of input materials were sourced directly from MSMEs/small producers in FY 2025-26, a significant increase from 31% in FY 2024-25. Domestic sourcing stood at 92% of total inputs. The company's related party transactions as a share of total purchases rose to 25.80% in FY 2025-26 from 4.12% in FY 2024-25, while sales to related parties declined marginally to 0.52% from 0.79%.

Updater Services reported consolidated revenue from operations of ₹29,395 million for the financial year ended March 31, 2026, marking a 7.4% increase compared to ₹27,360 million in FY25. Despite top-line growth driven by its Integrated Facility Management (IFM) and Business Support Services (BSS) segments, consolidated profit after tax (PAT) fell 30% to ₹827.79 million from ₹1,189.77 million in the prior year. The decline in profitability was attributed to cost pressures, strategic growth investments, and a one-time provision of approximately ₹230 million related to logistics receivables at subsidiary Avon Solutions & Logistics Private Limited.

The IFM segment delivered robust performance, with revenues rising 10% to ₹20,480 million, supported by sustained demand across manufacturing, healthcare, and logistics sectors. The BSS segment grew by 2% to ₹9,678 million, bolstered by momentum in sales enablement services. On a standalone basis, revenue increased 10.7% to ₹17,624 million, while standalone PAT dropped to ₹528.59 million from ₹793.31 million.

Financial Performance Overview

The Board of Directors decided not to recommend a dividend for the year, opting to retain profits to support business expansion initiatives. The company remains a net cash entity, with total capital and net debt standing at ₹8,229 million as of March 31, 2026.

Operational Highlights and Risks

Updater Services emphasized its resilience in maintaining EBITDA margins despite the one-time provision for Avon’s logistics receivables. The company highlighted improved working capital efficiency through better receivables management and optimized billing cycles. However, statutory auditors BSR & Co. LLP noted qualifications regarding the maintenance of accounting software audit trails and backup procedures, which management has since addressed with corrective measures.

Significant contingent liabilities include disputed income tax dues of ₹410.72 million and Goods and Services Tax (GST) disputes totaling over ₹193 million. These matters are currently pending before appellate authorities. Additionally, undisputed Labour Welfare Fund dues of ₹87.26 million remain unpaid.

What the Numbers Show

The divergence between strong revenue growth and declining profitability underscores the impact of margin compression in labor-intensive service segments. While the IFM segment expanded rapidly, the overall group profitability was weighed down by specific operational lapses and strategic provisions. The company’s net cash position provides a buffer for future acquisitions, aligning with its strategy to pursue inorganic growth opportunities in high-margin business support services.