Updater Services Q3FY26: EBITDA Margin Contracts to 2.66% Amid Profit Decline
Updater Services reported challenging Q3FY26 results with EBITDA falling 56% to ₹204 million and margin compressing to 2.66% from 6.65% year-over-year. While revenue grew 10% to ₹7.67 billion, consolidated net profit declined 70% to ₹92 million, impacted by ₹220.69 million impairment losses and ₹53.57 million exceptional items from new labour codes.
*this image is generated using AI for illustrative purposes only.
Updater Services Limited announced its consolidated financial results for Q3FY26, revealing a challenging quarter marked by significant profit decline and margin compression despite revenue growth. The Chennai-based integrated facility management services provider faced substantial headwinds from impairment losses and regulatory changes.
Financial Performance Overview
The company's Q3FY26 performance presented a mixed picture with strong revenue growth offset by substantial profit erosion and margin compression:
| Metric: | Q3FY26 | Q3FY25 | Change (%) |
|---|---|---|---|
| Revenue from Operations: | ₹7.67 billion | ₹6.95 billion | +10.40% |
| Consolidated Net Profit: | ₹92 million | ₹309 million | -70.23% |
| EBITDA: | ₹204 million | ₹462 million | -55.84% |
| EBITDA Margin: | 2.66% | 6.65% | -399 bps |
| Basic EPS: | ₹1.37 | ₹4.61 | -70.28% |
Nine-Month Performance Analysis
For the nine months ended December 31, 2025, the company demonstrated resilience in revenue generation while facing profitability challenges:
| Parameter: | 9M FY26 | 9M FY25 | Growth (%) |
|---|---|---|---|
| Revenue: | ₹21,966.86 million | ₹20,270.43 million | +8.37% |
| Net Profit: | ₹554.06 million | ₹847.92 million | -34.66% |
| Basic EPS: | ₹8.61 | ₹12.60 | -31.67% |
Segment-wise Performance
The company operates through two primary segments - Integrated Facility Management Services (IFM) and Business Support Services (BSS). For Q3FY26:
Integrated Facility Management Services:
- Revenue: ₹5,319.20 million (Q3FY26) vs ₹4,669.46 million (Q3FY25)
- Segment profit: ₹168.78 million vs ₹248.10 million
Business Support Services:
- Revenue: ₹2,524.75 million vs ₹2,440.77 million
- Segment result: Loss of ₹99.32 million vs profit of ₹151.44 million
Key Challenges and Exceptional Items
The quarter was significantly impacted by two major factors:
Impairment Losses: The company recorded impairment losses of ₹220.69 million in Q3FY26, substantially higher than ₹17.96 million in Q3FY25. This included ₹201 million related to expected credit losses on trade receivables of ₹266 million in subsidiary Avon Solutions & Logistics Private Limited due to alleged irregularities under investigation.
Regulatory Impact: Updater Services recorded exceptional items of ₹53.57 million due to the statutory impact of new labour codes notified by the Government of India on November 21, 2025. These codes consolidated 29 existing labour laws and resulted in incremental employee benefit provisions.
Operational Metrics
Despite challenges, the company maintained operational stability:
| Expense Category: | Q3FY26 | Q3FY25 |
|---|---|---|
| Employee Benefits: | ₹5,991.76 million | ₹5,184.26 million |
| Other Expenses: | ₹1,020.41 million | ₹1,020.45 million |
| Finance Costs: | ₹14.51 million | ₹19.86 million |
The company's paid-up equity share capital remained stable at ₹669.53 million with a face value of ₹10 per share.
Historical Stock Returns for Updater Services
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.06% | +3.12% | -15.06% | -44.47% | -54.61% | -42.78% |
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