Updater Services Ltd (NSE: UDS) Q1 2026 Earnings Call dated Aug. 06, 2025
Corporate Participants:
Unidentified Speaker
Raghunandana Tangirala — Promoter, Chairman and Managing Director
Snehashish Bhattacharjee — Global Chief Executive Officer, Denave India Private Limited
Radha Ramanujan — Chief Financial Officer
Amitabh Jaipuria — Non-Executive Director
Analysts:
Unidentified Participant
Deep Shah — Analyst
Nitin Padmanabhan — Analyst
Rahul Kumar — Analyst
Pritesh Chheda — Analyst
Prince Choudhary — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q1FY26 earnings conference call for Updateo Services Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. This conference call may contain forward looking statements about the company which are based on the beliefs, opinion and expectation of the company as on date of this call. These statements are not the guarantee of future performance and involve risk and uncertainty that are difficult to predict.
I now hand the conference over to Mr. Raghunandana Sangirala, respected MD. Thank you. And over to you sir. Hello sir. Over to you.
Raghunandana Tangirala — Promoter, Chairman and Managing Director
Yeah, thank you. Am I audible?
operator
Yes sir, you’re audible.
Raghunandana Tangirala — Promoter, Chairman and Managing Director
Okay, thank you. Good morning everyone and a warm welcome. Joining me today on this call is Radha Raman, JAMA CFO Amitabh Jaipuri, our non executive Director and CEO of BSS and also we have our investor relations team on this call. I trust you all received the investor deck and it’s also available on our website if you don’t have it and on the stock exchange portal. Let me begin with the Q1 high level numbers. During Q1 26, revenue stood at 7053 million and we witnessed a growth of about 7% year on year. EBITDA stood at 444 million with EBITDA margins of 6.3%. PAT stood at 290 million and witnessed a growth of 13% year on year.
So let me share first the industry update generally. Then I will come to IFM segment and the BSA segment. Global uncertainties, including rising tariffs, geopolitical instability and macroeconomic volatility has impacted our business marginally in some and slightly a little more in some. Where technically their businesses are dependent on where there is a kind of dependence on foreign trade and especially in it. This has resulted a slowdown in the discretionary budget across the sector. As a result, we are discussing some impact on overall business momentum especially in segment directly linked to global client engagement or global client spending.
These global uncertainties have also weighed heavily on IT sector leading to budget rationalization and reduced headcount addition.
operator
Yes sir. Please continue.
Raghunandana Tangirala — Promoter, Chairman and Managing Director
Yeah. Leading to reduced headcount Additional further dampening IT hiring activity and impacting demand for associated services like employee background verification. Despite these headwinds, UDS remains focused on driving operational efficiency, deepening client engagement and expanding its value added services. Our diversified business model across IFM staff across ifam staffing background verification sales enablement provides resilience against sector specific slowdown. In addition, our continued investment in the digital platform and automation is helping us unlock productivity gains, enhance service delivery and position ourselves as a strategic partner to our clients. We believe these trends will enable us to weather short term challenges and sustain long term growth.
Now I come to the ISN segment. During this quarter we added five logos which are large and marquee. Our headcount stood at 73,000 employees which we grew by about 9% year on year. Our people are the heart of our operations and we continue to invest in training safety upskilling. We also have strengthened employee engagement programs and are focused on creating a supportive work. In Q1 FY26 our IFM business recorded a 10% year on year revenue growth to 4679 million. While overall growth was as per our business plan in the item segment it’s slightly lower compared to last quarter due to seasonality.
In our catering business which is primarily services, schools and education institutions which have been shut down due to the invocation period and year end incentive claims on customers which will come back next year and the last quarter we also witnessed a modest slowdown in spending by some non industrial clients. Despite these challenges we maintained our growth momentum underscoring the strength and resilience of our core operations. On the margin front we reported a largely flat performance this quarter primarily due to one off provisions made for aged receivables due to delay in payments. Excluding this one off, our IFM margins would have been higher than the same period last year.
We took some expense on account of mergers of certain entities within the ubs. While it has gained benefited us from the tax angle, EBITDA stood at 258 million reflecting a year on year growth of 8%. Our strategy in this segment remains focused on scaling profitability with an increased emphasis on high value, technically intensive and system critical contracts. Our leadership in the industrial assets space is driven by our proven ability to execute complex complex mandates while consistently meeting clients expectations. Looking ahead, we are targeting between 13 to 15% revenue growth in the IFM segment with profitability expected to grow at a faster pace supported by improvements in operating margins.
This is further supported by several industrial agents including increased GCC investment and the demand for Global Standard ISM Manufacturing growth under make in India Surge in E Com Logistics and Warehouse leads According to motor intelligence, India’s outsourced ASM market is set to grow at about 11% CAGR from 41,470 crore for 41,470 crores to 67,000 crores by 2029. Our focus will remain on ROC at midterm contracts that enhance margins and value creation. I would now like to share an update on Global Awon and our other BSS subsidiary. Global continues to maintain its double digit growth while staying ebitda positive.
In FY26 we expected much better turnaround in EBITDA and PAC while in FY25 itself they had broken even. This is driven by gradual increase in travel volumes across domestic markets. Our Global School of Aviation has also witnessed a stable increase in demand and is expected to continue meaningfully in the upcoming quarters. Rise in demand and Outsourced Aviation Training we see high growth opportunity ahead and we are well positioned to lead in this space. We opened our second aviation school in Pune during this quarter and this is seeing good traction. I’m also thrilled that Ivon, our logistics solutions business has made strong strides in expanding into transport, distribution, logistics and integrated service solutions.
These additions enhance our value proposition and deepen client engagement. Avon continues to witness the margin improvement driven by better sales mix higher margin contracts. The company has commenced Patrac load logistics operations which should further support margin expansion. Everyone is also actively exploring opportunities in corporate relocation space which could become meaningful growth revenue going forward.
Now I’d like to hand over this call to Nyashik Pataka. We asked you of BSS to speak on the BSS segment of Evon, Dene, Matrix and Etana. Over to you nirp.
Snehashish Bhattacharjee — Global Chief Executive Officer, Denave India Private Limited
Thank you Raghu. Good morning everyone. Our DXS segment revenues to that 2,374 million. I would like to give you an update on each DXS segment separately to give a better understanding of what drove Q1FY26 performance. Let me start with an update on our sales enablement business starting with BNEV. While Q1FY26 presented its share of challenges, we continue to see meaningful opportunities emerge amidst this evolving environment. Global uncertainties have led to more cautious corporate spending, particularly demand creation services. With large global companies scaling back their marketing investments, we’ve seen a moderation in international delivery driven by automation, led efficiency models and heightened ROI expectations from clients.
However, it’s important to note that strategic high ROI investments continue indicating a shift towards selective spending rather than across the board cuts. I’m also happy to share that we are currently in the ramp up phase of intelliband for a large tech MNC customer and successful execution here will serve as a strong proof of value. Opening doors to similar opportunities with other large corporates. We are quite confident of a successful execution on this front. We have also started pitching intelligence with several other marquee clients in the technology space, some of the world’s largest software and hardware companies, as well as a few new age AI platform companies.
We are also leveraging the sales intelligence methodology used by intellibank to pilot the use of Agentic AI, an advanced outreach platform such as Clay and smarteens aimed at building a new automated campaign methodology for demonstration. By combining sales intelligence and AI enabled digital outreach automation, the initiative is designed to enhance targeting, boost productivity and improve conversion accuracy. Early experiments with select clients are underway and we expect this to have a meaningful impact on revenue generation over the coming quarters. A few clients we onboarded during the quarter include SME for digital and demand generation, Palo Alto and Amazon E Comm, which are large potential clients.
We also reviewed key clients such as Shell and tatacom which further strengthened that base. Lastly, I’d like to highlight that despite the ongoing challenges in the business environment we have delayed remain focused on what’s within our control. We are continuously investing in technology, seeing strong traction from our core offerings for key customers and staying ahead of the curve by driving innovation and execution excellence. Now I’ll move on to Athena. As indicated earlier, CFR Key Customers insourced a portion of its activities which impacted both revenue and margins for the quarter. Given that Athena contributes a significant share of our profits due to its high margin nature, this impacted overall BX’s profitability.
On a positive note, we continued to build momentum with new client additions during the quarter, including marquee names such as Lodha and Bajans Electricals. We’re also experimenting implementation of AI powered chatbots for a key customer, which is expected to enhance overall efficiency and support our ability to maintain competitive pricing. The proof of concept rollout is planned for the upcoming months and a successful implementation could pave the way for broader client adoption going forward. Lastly, we are confident that Athena’s revenue run rate will normalize over the coming quarters driven by increased contribution from both new and existing clients.
Now moving on to the EBGC and Audits insurance business of Matrix. First, I would like to give an update on our past growing audits and insurance business. The growth prospects of this business continue to remain very exciting despite the pricing Environment being competitive, we are witnessing strong interest from multiple large companies. We are currently above the curve as customers are now focusing on high technology enabled partners where we are at the forefront. We are confident about the long term potential of this business especially as we shift from execution based contracts to value led engagements that help customers optimize invention and improve roi.
Our focus going forward will be twofold. First, to build deep domain expertise across sectors like apparel, retail and FMCG where inventory complexity is high and optimization is critical. And second, to improve margins in this business, a goal we are firmly on track to achieve. IT Moving to the EBDC business, the environment remains challenging due to significant spending cuts by IT companies amid an uncertain demand outlook. Large scale layoffs across major Indian and global IT firms have further impacted hiring activity. Additionally, a few large MNC customers have temporarily frozen hiring due to internal IT infrastructure constraints.
We’re also seeing a broader slowdown in recruitment across other formal sectors. While the external environment remains beyond our control, we are focused on strengthening our technology platforms to enhance data security and deliver faster, more reliable employee background checks. We continue to lead the EBDC industry in turnaround times, reinforcing our position as a trusted partner for our clients. During Q1FY26, the BSS segment contributed 34% to revenues. EBITDA stood at 186 million and EBITDA margins in the BSS segment stood at 7.8% on the way forward. For the BSS segment, the overall business support services is aimed to grow at 15% CHR and India stands to gate especially from the current economic scenario with impacts from GCC schemes, ALI schemes and employment generation incentives for companies. Key drivers of this growth will be sales enablement, ana, EBDC and mailboom management.
Now I would like to hand the call back to Raghu to summarize the Q1 performance and expectation going forward. Thank you. Raghu, over to you.
Raghunandana Tangirala — Promoter, Chairman and Managing Director
Yeah, thank you. Okay, to summarize, UDL has entered FY26 with a strong momentum and a focused strategic direction. And in the IFM segment we have completed and completed the rationalization of our contract and now are concentrating on streamlining operations, improving margins and capitalizing on the growing demand for technically intensive outsourced facilities management services. In the business segment, we are seeing the benefits of cycle leadership alignment, a shift towards high margin technology offering and improve cross selling opportunities across our platform. Our strategy going forward is anchored on profitability, growth, capital efficiency and a disciplined focus on the return on capital employed. We remain confident in our ability to deliver sustained value to all our stakeholders in the years to come.
Now I want to hand it over to Radha Ramanujam, RCFO to give a brief on the financial numbers. Over to you Radha.
Radha Ramanujan — Chief Financial Officer
Good morning everyone with the updates from Raghu and I would now like to touch upon the Financial highlights for Q1FY26. Total revenue from operations grew by 7% year on year to 7,053 million. The segment revenues grew by 10% year on year to 4,679 million while BSA segment revenues remain broadly stable at 2,374 million. In Q1FY26, revenue split between IFM and BSO segments stood at 66% and 34%. Ebitda for Q1FY26, that’s 444 million. Ebitda margin at 6.2%. IFM Ebitda margin was 5.5% while BSR segment Ebitda margin was 7.8% and Ebitda excluding finance income stood at 404 million while iPhone segment excluding finance income was 5.2%.
BSA segment excluding finance income was 7%. Or consolidate, the EBITDA margin excluding finance income stood at 5.8%. Profit after tax witnessed a growth of 13% and it stood at 290 million. Earnings per share grew by 13% year on year to 4.4%. And then ROC stood at 17.9% quarter on quarter. We are cash positive on New Year’s. Net debt to equity stood at negative 0.2x as on 30 June 2025, our headcount in IFM stood at 56,900 employees and headcount at BSO segment stood at 16,200 employees. Overall 9% growth. And during Q1FY26 we added 5 new logos in IFM segment and 9 new logos in DSS segment.
With this, I open the floor for question and answer session. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Deep Shah from B and K securities. Please go ahead.
Deep Shah
Yeah. Hi, good morning. Thanks for the opportunity. So the first question would be on. On DSS specifically Athena. So in 4Q, if I remember directly, we had said that had chosen to move few processes in house amongst other things for the week. Numbers. And this quarter again we’ve said that certain clients transitioned previously outsourced operations in house. Do you, do you referring, are you. Referring to different clients here? Is it the same client? And so what is happening here? Some color would be very useful.
Radha Ramanujan
Can I take the question?
Raghunandana Tangirala
Yeah, you can.
Snehashish Bhattacharjee
Yes, please go ahead.
Radha Ramanujan
Okay. Compared to last quarter, the same client moved their Bangalore business in house. Of course they are retaining their Mumbai business with this. They have been seven cost actualization and that has moved out from it. So.
Deep Shah
Right. So then, then, then would it be fair to say that sequentially things have not become worse? Right. Sequentially numbers also. Also if you can actually share segmental numbers. Because I think BSS is a set of companies which have very different views reviewers. It’s very difficult to understand how his business is doing with a single number. So would it be possible to share company wise numbers? Because that will make analysis much better.
Radha Ramanujan
Yes, we will, we will share the individual company wise analysis number has not dropped much. Yeah, yeah, yeah.
Raghunandana Tangirala
No, I was only adding to that. Rather to say that, you know, there are three big, large, three large companies within bss. We’ll share those numbers with you, which is really Denev, Matrix and Athena. And to what was said on Athena, the good aspects about Athena are also that there are two, three customers who have grown substantially with us. So one in the financial services space, one in the non financial services space. So there are also customers who are growing up quite a lot. In fact, very strong double digit growth with certain customers, in fact certain large customers.
So therefore it’s a slightly uneven picture as far as risk mitigation is concerned. We are aggressively looking at diversifying, which is what I had specifically mentioned in the last call, also that we are diversifying away from our heavy concentration on BFSI customers into non BFSI customers and that we are seeing quite good momentum on that, including good wins. So therefore we do expect that with our own adoption of more and more technology and with diversification of the customer base, we should be seeing Athena revenues not only stabilize but to start growing.
Deep Shah
Right. This is, this is super useful also. So would it then be fair to say that the reduction in operating profitability that we are seeing on the BSS side from 23 crores to 16 and a half crores is to do with Athena, largely to Athena. Would that be a fair conclusion?
Raghunandana Tangirala
No. So what has happened this year is that there are, you know, each of the three companies has faced a different set of challenges And Snehashish, my colleague, he already gave some commentary around that. I’ll just add a little and then Sneha, please jump in and, you know, add more as you as you see fit. So the. Each. So Athena, we have already talked about it, right? So there is. There was a shift within some of our larger BFSI customers into moving things in house and of course in two of them, as we had guided last year as last call, as well, in terms of the business having dropped substantially, in fact become close to zero because of corporate action on their own side.
So therefore, that is as far as Athena’s contribution next to the negative margin, to the negative growth is concerned. The other part of the business, in terms of Matrix, as you all know, Matrix has two basic parts to it. One is the employee background verification, and second is the audit and assurance business. The good part is that audit and assurance is growing very strongly. So, and that is something which we had been working on for quite a few quarters, past quarters, and that is beginning to show very good results. The unfortunate part in the Matrix business, which all of you also know, is the continued pain in the IT industry in this country.
So which we are clearly seeing. In fact, you know, if somebody like TCS can lay off, you know, can lay off people, then, you know, that’s really the bellwether, right? And therefore that gives an indication of the pain that is happening in the IT industry and that is impacting us very badly. So the EBGC business is, you know, is continuing to face headwinds. In the last call, we had guided or we had mentioned that we believe that we have seen or we are close to seeing the end of that pain. But as is apparent now that all was that, that we are not seeing the end of that pain.
So that is as far as EVGC and Matrix is concerned, the name has a very different kind of challenge. There are some parts of the business that are growing very strongly and the other parts of the business are basically facing headwinds, as mentioned, because of geopolitical reasons and extreme caution. In some businesses, we are seeing that spends are coming down. So. And there is this entire challenge around AI and uncertainty around technology and therefore also caution. Right? So though in each of the three businesses, the challenges are different, unfortunately all three have come at the same time, and that is why you are seeing this slight downturn.
But at the same time, what I want to emphasize for everybody on the call is that UDS’s business model actually has stood the test of time. You can clearly see the Fact that because of the mix of businesses that we have within IFM and within BSS and between IFM and BSS put together, we are still able to report good revenue growth in spite of these headwinds in some of our businesses. And we believe that as far as the year itself is concerned, even though the first quarter has been slightly, you know on the pat side we have still grown. I mean we are at 29 crores versus almost 24, 24 and a half crores similar quarter last year. So while we have grown on the path, we believe that the overall year still looks quite strong.
Deep Shah
Okay fine. This is useful. Second on the IFM front. So I, I remember last quarter we had indicated that we had signed couple of market giants including Amazon. So the revenues I guess would have to would have started to flow. We’ve seen 9% top line growth this year. What should be the steady state revenue growth that one should expect here? That is one and subpart two. Because of this deal I think last quarter cash flows were poor. Has those cash flows come in? What would be a cash balance? Say on of. Thank you.
Raghunandana Tangirala
Raza, can you talk on the cash please?
Radha Ramanujan
The cash remains slightly less compared to loss quarter. That is also reflected in our EBITDA as we said some long delay collection in couple of clients we had provided little more in the CNN with a concept that we will not reverse it. We may not reverse it. Other the cash is similar to as of 31st March with the multiple. Where are 250 crores now? Kash.
Raghunandana Tangirala
Okay, I’ll just add to that. You think it’s 250 crores of cash similar to what we had the last quarter. So on the IFM growth because you asked us such a big question, we are confident we’ll maintain whatever we guided. We confident or we are definitely hopeful of doing a 13 to 15% growth on the IFM. Again to add to that what Amitabh said. Since we have a mix of different businesses, even though certain businesses are facing a little bit of challenges, I don’t. I’m quite hopeful that we will deliver on an overall combined consultation consolidated basis whatever numbers we guided. So that. That is the confidence because of the business mix.
Deep Shah
Right? Radha Ma’, am, if I could just follow up. So what would be that provision amount if it would help us understand that Because I think last year we saw like an 8788 crore change in working capital which impeded our CFO. And now that the cash balance is same, could you help us with the. Provision Amount.
Radha Ramanujan
Additional provision which we have created during the quarter combined all the entities around 6 crores. And again last year the working last quarter when we said the working capital changes into a crore we could also appreciate we have grown the business by 300 crores not entire 88 crore is on account of delayed payment compared to FY24 FY25 IGN for 300 crore improvement in top line. Even assuming a two month see the normal credit period is 60 days for. Us. 50 crore rupees will have to be part for the working capital. So what we missed out is 28 crore 30 crore on account of collection. So it’s not like 88 crore has been missed out.
Deep Shah
No, no, absolutely. This is super useful. Thank you.
Radha Ramanujan
Situation remind the same the collection couldn’t come in the way we planned. Of course we are hoping it coming now but it will take the account before June so that has resulted in little additional provision due to the EPM calculations.
Deep Shah
Perfect. No, this is useful. Thank you so much and all the best.
operator
Thank you. Our next question is from the line of Nitin Padmanabhan from Investech. Please go ahead.
Nitin Padmanabhan
Yeah, hi, good morning. First thank you for the incremental disclosures excluding other income and all of that. That’s pretty helpful. So from A, I just wanted your thoughts on a couple of things. So one is on Athena. If you could just give us the. You know, revenue and margin year on. Year Q on Q. Maybe I’ll take that offline as well. That’s not a problem. But to understand between have we seen a drop in margins year on year for both Denev and Athena or is it just Athena and what would. How sharp would that have been?
Radha Ramanujan
Okay Athena, the margin as a percentage is slightly dropped compared to last year when we did 23%. We are at 21% now. But again you should appreciate the top line help. It frantically come down to 37 crore of top line and then it comes down to 28 crore. There are other fixed costs which need to get absorbed with the drop in top line. That is the reason slight drop 50% drop in EBITDA as a percentage while they still maintain upwards of 20% in terms of EBITDA for this quarter then there is a marginal drop in the margin percentage.
Last year we had 5.7% and this. Year we had 5.2%. And again due to the mix of business and timing related to incentive collection finances. So the cost of worry for us is the highest margin EGGC business has not picked up in Q1 that has created Little bit of a shortfall in margin as a percentage for Matrix and primarily the Athena dropping top line has resulted in some over absorption of fixed cost with a lesser turnover.
Nitin Padmanabhan
Got it, got it. Now on the Athena side, has the revenue, is the revenue headwind over with from the transition for those for the large client or should we expect continued weakness for another quarter? So that’s the first one. And is this loss of margin that. We have seen. How should we think about it? Is it a permanent loss or do you think this sort of gradually comes back or it can be a quick comeback, how should we think about.
Snehashish Bhattacharjee
So I think, let me just nuance that commentary a little bit. So margins as Radha mentioned in Athena, are now at around 20% or thereabouts. I think from what we are seeing and from the growth of business in the non BFSI sector also, I think these margins now largely should remain stable. So there might be a percentage of point or point here or there, but otherwise, you know, we don’t see a drastic drop. Will it come back to the 25, 26, 27% that we had earlier? The answer is probably a cautious no. So I don’t think we are seeing margins come back to that level anytime soon.
So the way in which margins will come back is with our own adaptation of AI and technology platforms that can slash costs dramatically. We are experimenting with those, but at this point in time it’s too early to say whether they will contribute to the fact that the margins come back to what they were. So I think we should expect that this is probably the new normal as far as Athena margins are concerned. Revenue should come back, revenue should grow is our belief.
Nitin Padmanabhan
Okay, but you don’t expect, it’s fair to assume no incremental revenue headwind in the following quarters. It’s largely done in terms of whatever. Had to shift out. That is what we believe. But Ms. Neha, would you like to add any further on that?
Raghunandana Tangirala
Yeah, so just to add to that. Thanks Amitar. See, at this point of time it looks like we’ve reached the bottom on that. However, like we said, it’s a dynamic situation and we can’t hold on to that. But our present internal view is we don’t see that headwind in the next two quarters at least. Unless there is some drastic change that happens in the PFSI segment at this point of time, we don’t expect that to happen.
Nitin Padmanabhan
Yeah, got it, got it. And the other thing was, from a. Denev perspective. How much of the deceleration that we are seeing is because of the macro and how much of it do you believe is because people are maybe, you know, adopting AI insourcing or whatever, which is a bigger headwind to. You at the moment? I understand it obviously will be macro, but how big is the headwind and do you think that growth overall should. We should assume at a lower clip going forward for this, for the sales enabled business overall?
Raghunandana Tangirala
I’ll take that.
Snehashish Bhattacharjee
Yeah. Yes, please. Thank you.
Raghunandana Tangirala
Yeah. So the evidence that we talked about and that is essentially both geopolitical and AI disruption, I consider both of them to be macro. Because actually if you look around, I think if you look at your probably other organizations that you interact with, this is a reality that is yet to be understood by everyone. Every company is trying to figure out how this will help them optimize or improve their productivity. So I expect that situation to continue at least for another one one and a half years. Last year was more of experimentation. This year most companies are looking at implementation to see whether the experiment works.
And if that works year after, probably it will sell. However, with the AI technology also getting advanced on almost a quarterly basis now, there will be changes that will keep on continuously coming up. However, at binge, we also look at this as an opportunity. We are in the business of enabling sales and the AI disruption that is happening is also enhancing the ability to both target as well as improve conversion. So why we do see the next two quarters playing out in a similar manner because customers have to see use case working for them to implement.
But we at the same time also see some early signals of customers realigning with us on some of the new methodologies. And we’ve talked about them in the speech already. A couple of these customers who have renewed their contracts from quarterly contract to contract are people who are seeing that benefit. However, there is much more play that is to come in that space. Right now we are probably seeing early conversion benefits, early productivity benefits that needs to move up to a much more exponential level with the changes that are happening. So I am still being cautious. The margin is still going to be squeezed because the investments are going to be continuous at this point of time. We do see good stuff turning around in the next three to four quarters as per.
Nitin Padmanabhan
Okay, so I think your top customer is the most tech savvy customer that you have. Is that a bigger headwind for you at the moment and you’re looking to. Sort of diversify from there? Is that what it is?
Snehashish Bhattacharjee
Okay, you are referring to our top customers, Microsoft in this case. I’m exceeding right,
Nitin Padmanabhan
Correct. correct, correct.
Snehashish Bhattacharjee
Yes. So the top customer, if you see almost one, about 60% of our revenues are coming in from the tech space and each one of them have their own offering. From an AI platform or AI tool perspective, where we are coming in is leveraging of the same technology that they sell to his help improve productivity and output. At this point of time, every one of them is continuing to invest in us. What has changed in some of these cases is their own definition of the outcome that they expect. Such as. Which is where we are readjusting ourselves.
Otherwise at this point of time, the outlook doesn’t look like them becoming a headwind for us. Neither Microsoft nor any of the other guys. In fact, in Tele bank we are working with one of the same largest software organizations where they have their own offerings but we’re still working with them and helping them improve their own sales reach, outreach as well as conversion. So I don’t see that as a headwind yet.
Nitin Padmanabhan
Got it. So in summary, I think from what you’re saying for yeah, I’m done. Just for. Yeah, I’m done for. In summary, the next we should assume flattish revenues for the next two quarters on a sequential basis. That that’s a fair assumption to make. Is understand. Not overall. Not overall. Just seeing what you call sales enablement.
Snehashish Bhattacharjee
Yes. So. But. But with a. But with upward bias I would think. Yeah,
Raghunandana Tangirala
got it, got it, got it. Thank you. Thank you and all the best.
operator
Thank you. A request to all participants. Please restrict your questions to two. Two questions for participants. Our next question is from the line of Rahul Kumar from Wakaria. Please go ahead.
Rahul Kumar
Yeah, hi, just one question on this logistic business. Am I right that this business has declined sharply this quarter?
Radha Ramanujan
No, I would say the business has not declined sharply this quarter compared to the last quarter where we did 24 crores. This quarter they have done 26 crores. So I just increased. .
Snehashish Bhattacharjee
Okay Because I’m getting numbers wrong from the presentation.
Radha Ramanujan
Where is that you’re getting it? Compared to Q4 there is a marginal decline. Q4 we did 28 crore which has come to 26 crore. But again last year, Q1 the business has grown.
Rahul Kumar
No, I mean this quarter you have shown that the logistic is 4% of. The BSS business which makes it, you know, 10 crores. Which is why I was asking.
Radha Ramanujan
Where have we. That’s what even I’m wondering where is we generally don’t quantify. Where have you changed it?
Rahul Kumar
Sorry, this is in the segment wise. Highlight of BSS where it is written. 4.2% is the warehouse management and niche logistics solutions.
Snehashish Bhattacharjee
You’re talking about the pie chart.
Radha Ramanujan
Okay, okay, okay. 4% of BSS.
Rahul Kumar
It’s okay. I’ll, I’ll take this outline. The second question which I have was. If you just summarize, if you take this Q1 EBITDA as a base, what more headwinds I like to be absorbed in the next two quarters either in. The BSS or ifm. And are there any growth avenues which can, you know, offset these headwinds?
Amitabh Jaipuria
I think you know the previous, the answer to the previous two or three questions. I’ve actually dwelt a little bit on this already. So I’ll just very quickly summarize. The headwinds that we are clearly seeing are because of the geopolitical issues. We are seeing caution as far as customer spending is concerned. That’s the reality. India specific IT headwinds continue. I think all of you are very well aware of those headwinds and therefore the EBGC business and to an extent some of the others will continue to be impacted, which is also a headwind that we have talked about.
There are business, business specific headwinds such as in Athena that we have talked about because of our customers undergoing a little bit of change in their own strategy. The mitigants of how are we going to take care of these is also to some extent indicated in our own results. So aggressively looking for new customers and new avenues of growth in Athena we mentioned about the fact that we are diversifying away from BFSI into non BFSI customers and we also mentioned about the fact that two or three customers, large customers, are actually growing very strong double digit. Right?
So growing existing customers selectively and looking at the non declining parts of the economy or of the industry segments where we can grow, that is really one big part of what we are trying to do in terms of mitigating it. And even though that might sound very non glamorous, but the fact of the matter is that those are the strategies that work the best. So aggressively looking for new customers, aggressively growing existing customers selectively wherever possible. The third area which we are working on very strongly for revenue for the overall profitability growth is on the cost side and we are already seeing actions around that across BSS and across ifm.
And that will at the end of the day also contribute to our profitability. So overall profitability this year will be strong. There’ll be a strong growth over last year. And if you compare business to business, because last year we ended at 119crores and out of that we had already talked about the fact that 10 crores was in a way non business. So the business delivered 109 crores crores of pat this year. We are already looking not very strong growth on that number. So that continues because of these three aspects that we talked about.
Raghunandana Tangirala
Yeah. Okay. I’m just adding to what you said Amita. I think question was how does it look for the next 2 3/4 of this year? Like what we guided we said we’ll grow it around 15% both technically in the EBITDA that level. We strongly believe we will do that. We were talking in the last call what will be end year. We said the growth would be early regions above 15% that we still remain because of the business mix.
Rahul Kumar
Okay. Okay. Thank you.
operator
Thank you. Our next question is on the line of pritesh from Lucky. Please go ahead.
Pritesh Chheda
So you know just listening from your comments so you know when you are. Calling out this geopolitical. And let’s say BSS as our impacted area of business. So now I’m just trying to Wonder that’s like 30 of our total revenue is BSS and we within that 30%. Contribution comes from it IPS. So we are like trying to do. A conversation on 10% of the total revenue. On the impact side there’s another 90% of the piece in which IFM is like 75% of your revenue or 65% of your revenue where you’re hinting initially. We’Re talking about growing faster than the. Industry growth, at least to the industry growth. Can you share some comments on the. 90% of the piece of the business. In terms of the trajectory of growth. And why is it that. We’Ve been listening to you for the past four quarters you have a stated growth of 2x in IFM but what we see. Is half that number. So we’re seeing 10% growth. So maybe you want to get give some thoughts there and guidance properly.
Raghunandana Tangirala
So this 2x of industry is not so I think there is some miscommunication. I don’t think we’ve ever said 2x of industry.
Pritesh Chheda
So there was another number of GDP. So that’s why.
Amitabh Jaipuria
And yes that is absolutely correct. We had talked about 3x of GDP and over the last two copies, if you remember because of the headwinds that we were seeing, we had talked about the fact that we probably end up between two to three times of GDP and if you look at a GDP number today most people are talking about 6.2% or thereabouts. And if you look at two and a half times that, that is 15%. And Raghu just mentioned as you will recall that we will probably end up growing somewhere in that region in terms of both revenue and even more strongly in terms of Pat.
Raghunandana Tangirala
I don’t think we’ve gone very wrongly there. I was maintaining always a 15% growth which is what I said just now. Because in spite of all these macro and the headwinds and all that because of the business mix of having IFM and basic, we still maintain that. I don’t think we’ve gone very much away there.
Amitabh Jaipuria
Yeah.
Pritesh Chheda
So if we split the two pieces.
Raghunandana Tangirala
You are calling out, that ism will. Grow at whatever your stated objective is. And within bss, what portion of the BSS business is impacted? If you could just quantify that.
Raghunandana Tangirala
Rather you want to take that. What portion of the BSS impacted is. If you can combine all the BSS numbers last quarter of last year to this year and fourth quarter to this first quarter also.
Radha Ramanujan
Yeah. When we take out the little manpower oriented business of Benin and Global and Avon out of the BSL which is getting impacted close to 45% of the BSL top line. When we have 240 groups of DSS top line, 40% of the test impacted. Due to this global changes.
Pritesh Chheda
Madam, you are not clearly audible. Hello.
Radha Ramanujan
Hello. Am I audible?
Pritesh Chheda
Yeah. You may want to.
Radha Ramanujan
Okay. Out of my BSS business of 238 crore. If we remove Avon and Global to be having a different challenges, the rest of the business. If I still remove the manpower oriented business of Delhi, close to 100 crore of a business is impacted by the global change in headers.
Pritesh Chheda
So Basically I calculated 10%. We concluded 100 divided by 700. That’s 16% of the business is expected. And 85% of the business is still. You guys believe that you will grow, right? That’s how we should interpret.
Raghunandana Tangirala
Yep.
Radha Ramanujan
Yes.
Pritesh Chheda
Okay. Now in this 15% of the business. Do you see a downside? Do you see the business shaving off by some percentage or you see the business continuing the way it is?
Raghunandana Tangirala
We have already answered that question. When we looked at that overall Athena business. My colleague talked about the fact that we believe that we are now at a stage where further downsides will be limited.
Pritesh Chheda
Okay. Okay. Thank you.
operator
Thank you. Our next question is from the line of Prince Chaudhary from Pink Wealth.
Prince Choudhary
Hello. Hello. Yes.
operator
Yes, sir.
Prince Choudhary
Yes. Yeah. So my question is that you know in the IFM segment basically we have seen that you know the whatever the new contracts have been signed in the recent like last six months or one year, we have been seeing a good uptick in pricing and those contracts are basically, you know, for two to three years. So my question is that in the long run, if we see after three years, if I have to see that industry, outsource, industry just. Do you see any structural changes that you know that the shift from unorganized to organized will happen and still the pricing, which benefits have got this three year contracts, whatever we have signed recently, it will be continued there will be more cyclic. There will be cyclicality due to intense competition.
Amitabh Jaipuria
If you really look at the overall secular movement of formalization should continue, outsourcing should continue and overall more and more compliance should continue. However, what we saw over the last three four quarters on a business like Athena, in some cases customers have reversed the outsourcing trend and taking, have and have taken out operations back in house. Now they may have done that for different reasons, but we, but we did see that. So therefore, while earlier, a year and a half, two years ago, there was absolutely no stopping the, the movement towards outsourcing, now it is a slightly more nuanced picture in certain industry segments, especially bfsi. So that is the, that is the only caution that we would like to talk about in the, in our commentary. To answer your question.
Raghunandana Tangirala
I think he was asking on the ISM segment.
Prince Choudhary
Yeah, yeah, yeah, yeah.
Amitabh Jaipuria
To answer that, I don’t see the, there is any insourcing happening here. And what you asked was three years contract. Yes. We signed between two years, three years, five years, depending on the type of contract. So I don’t see any changes there or any kind of something which is negative for us.
Prince Choudhary
So my question was that, you know that during the COVID phase we faced an immense competition. That is why, you know, the contracts were being signed at a lower prices. Then after that, you know, the pricing environment improved and competition intensity came down. So but if we, let’s say today, three years, we are secured. But you know, I just wanted to understand that. Is there any cyclicality in terms of, of pricing when we renewed the contract?
Raghunandana Tangirala
No, we don’t have it.
Prince Choudhary
Okay. And there is no cyclicality in terms of price. Okay. And do we see any structural changes, you know, where we can say this IFM business will continue to grow at a, you know, reasonable pricing contract because from shift from unorganized to organized and lot of outsourced.
Amitabh Jaipuria
No. We have always talked about the fact that, that pricing power in this business is limited and that it’s a game for big boys in terms of economies of scale. And that is where our advantages lie as uds because we are amongst the largest players out there. So therefore we have never said that we will pull price in IFM because it’s a competitive industry and every day with every contract we have to win our right to succeed, which we do.
And that is why we have been around for 35 years plus. Right. And that is why we continue to win new customers and continue to get our contracts renewed. So we will continue to do that. But will price change upwards in a way in any significant manner over the next year or two? We don’t see that. And so downward like do we see again like if we see any shift competition industry from unorganized. You know, basically this IFM as a business is itself difficult to scale. So just wanted to have your thoughts regarding that. Even if we don’t improve the pricing, but those pricing contracts will be stable or like then we’re going to see a cyclicality like what happened in last three to four years past. So the IFM margins industry wide are around, you know, depending on which company you’re looking at is between four and a half to six percent. That Right. It’s not more than that. So therefore, you know, our current view is that it’ll remain in this range.
Prince Choudhary
Okay, thank you sir.
operator
Thank you. Our next follow up question is from the line of Nitin P. Padmanaban from investech. Please go ahead.
Nitin Padmanabhan
Yeah, hi. Thank you for the opportunity. Yeah, yeah. Sir, you were suggesting 15% growth, was that on an overall basis or you were referring to IFM specifically? Just a clarification.
Raghunandana Tangirala
No, no, it’s an overall basis. Yeah.
Nitin Padmanabhan
So see here’s if you could just help me with this math. So when I look at when we got into for this year, when I just analyzed the first quarter revenue, I get an implied 2% growth over last year’s revenue. Right. Last year when we entered we had a, when we analyzed the first quarter we had a 7% growth for the full year. Right. Now considering that last year growth was around 12 and a half percent overall, how can this year be better? If our first quarter annualized itself is so meaningfully lower, Are we expecting a full pickup in ifm? Because at least looks like BSS is going to be sort of flattish over the next two quarters, more or less. Then how will that 15% growth be achieved? Shouldn’t it be lower growth than last year on an overall basis? Is at least what the math is suggesting. So, just wanted your thoughts on what we are missing.
Raghunandana Tangirala
Okay. I Mean I didn’t look at that math. We had looked at what are we projected the next three quarters or for the full year. So you’re right, IFM growth will be much more significant than the DFS growth because BASS growth will. But it will grow like what we had actually planned. I think overall we’ll still make up at the bottom line at 15% growth. At the PAC level, EBITDA level, even at the revenue level I think we may not do 15, we will do 13%. But as Amitabh was saying, this is all especially in ifm.
It’s how I manage efficiency. So overall we are confident that is what we will do. I’m not very clear on that 2% growth last quarter to this quarter to understand why that could be some aberration here there. But I’m clear on the plan. What we have got the business pipeline and what contracts we have signed for the next quarter because we don’t have visibility for four quarters. We have at least one quarter visibility. So we know what will be the second quarter or at least almost the third quarter. So that we are quite confident. In terms of the percentage growth, what you said we guided around 15%. There’s not much difference there. Even what was the top line growth was we had actually guided. But we may not be committed to that number. I remember it was 3200 crores.
Amitabh Jaipuria
Yeah. So Raghu, if I can just add without you know sort of really getting into the weeds. So this. So you know your, your math that you have done in terms of you’re basically asking what is the asking rate for the next three quarters in terms of where you. Where you’re going to land up. Right. And I think that’s a valid question. We have done a lot of our own projections in terms of where what we need to do in terms of quarter two, three and four to. To be close to what we are talking about on the earnings side. We are absolutely confident that the number that we have talked about will happen. Right.
As far as revenue is concerned, IFM revenue growth, we know where we are going and it will be double digit. We are quite confident. Bss. Yes, you are right. It is slightly flattish. There is a certain view that some of these businesses especially in part of the Nev’s business, the ANA business of Matrix and some parts of Avon’s business and some part of Global’s business. Right. That these and. And with the bottom having been reached as far as Athena is concerned with these factors, the Q2, Q3 and Q4 numbers should be looking better. So is the current mat.
So whether it will be 15, whether it will be 14, whether it will be 13 and a half, whether it be 15 and a half, slightly difficult to say at this stage. The on the revenue side, on the net income side, which is on the pad side, we are absolutely confident that the number that we have guided, very brief with broad numbers. This is not guidance, as informal guidance in terms of, you know, how companies issue. We don’t issue that. But whatever we have spoken about in terms of 15% plus growth, as far as bottom line is concerned, we are confident.
Nitin Padmanabhan
Thank you so much. All the very best.
operator
Thank you. Ladies and gentlemen. This was the last question for today. I now hand the conference over to the management for closing comments. Thank you. And over to you, sir.
Raghunandana Tangirala
Yeah, thank you. Thank you everyone for joining on this call.
Snehashish Bhattacharjee
Thank you very much. Yeah, go ahead, Raghu. Sorry.
Raghunandana Tangirala
Yeah, thank you. I have been able to answer all the questions. We look forward to your such interactions in the future. In case you require any further details, you can contact Devon from SBA for our industry relations. Yeah.
Amitabh Jaipuria
And just before we log off, just before we log off, Raghu, I do want to tell everybody very strongly that the company’s fundamentals remain absolutely rock solid. There’s that management team that knows what it’s doing, strong emphasis on governance and compliance and very strong financial position of the company. So therefore the platform remains intact. The issue of some macros impacting short term quarterly numbers might be there and is there, but the long term process of the company remain absolutely solid. So that’s. I just wanted to end by saying that.
Raghunandana Tangirala
Okay. Yes. So thank you, all of you.
Snehashish Bhattacharjee
Thank you.
operator
You on behalf of Updater Services Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.
Raghunandana Tangirala
Thank you. Thank you.