Updater Services Ltd (NSE: UDS) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
Raghunandana Tangirala — Promoter, Chairman and Managing Director
Radha Ramanujan — Chief Financial Officer
Amitabh Jaipuria — Non Executive Director
Analysts:
Nitin Padmanabhan — Analyst
Deep Shah — Analyst
Pritesh Chheda — Analyst
Nihal Shah — Analyst
Unidentified Participant
Rahil Shah — Analyst
Sunil Kothari — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Updator Services Limited Q3 and Nine Months FY ’25 Earnings Conference Call. 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 the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Raghunandan, Promoter and Managing Director. Thank you, and over to you, sir.
Raghunandana Tangirala — Promoter, Chairman and Managing Director
Thank you. Good morning, all of you and a warm welcome to everyone presented on this call. I have with me Mr Amitab Jaypuria, Non-Executive Director; Rajar, Chief Executive Officer; and SGA Partners, our Investor Relations Advisors. I hope all of you received the investment deck by now but if not you can still view them on the stock exchange and the company website.
I’m pleased to share that we continue to maintain our growth trajectory, which is which is accompanied by strong margin improvement on a consol basis. We continue to outperform our guidance in terms of margin improvement. Our range of capabilities coupled with the ability to consistently meet high expectations of our clients and our two quarters and earlier in the quarter, that’s what we about INR45.54 crores. The a wide range of solutions such as services like housekeeping, gaming services, control and support services while the hard service is comprised of production support, engineering and services including management.
Our strategy evolving around driving operational efficiency, while actively optimizing our low-margin contracts have started to pay positive results, evident that improvement is having witnessed the segment EBITDA margins. During our active contract rationalization, our revenue growth has been lower than what we had expected initially but potentially, but the profitability metrics are improving and that was the whole idea of, you know getting out-of-the lower-margin business and and focusing more on the high-value, high-margin business. The revenue growth has been slightly slower against our internal products. We are outperforming compared to the industry, not just in growth, but also in terms of profitability.
Moving on to other within item segment, we have received an offer to merge two of our within Technologies and ITS during Q3, the decision was made to further simplify and streamline our company’s operations. We have also made a strategic decision to merge Private Limited and Private Limited into the. This process is currently under consideration with the NCLT rather we’ll provide you detailed explanation on the rational and the benefit lines in our industrial catering vertical outperformed our internal targets and have also improved their margin substantially.
During nine months FY ’25, the iPhone revenue grew by 8% and is a birth of INR132 crores, while EBITDA witnessed a growth of 46% on a year-on-year basis, we have we have lifting our operational margins gradually through a mix of high-quality products coupled with operational efficiencies the industry in the industry terms as per Intelligence, we also market of 10% and 6700 crores by 2029 and current size of INR3,770 crores. So we look to little capitalize on the growth opportunities and outsize the industry level through our commercial excellence and aspire to grow IFM segment revenue at least of nominal growth.
A few factors contributing to this growth would be the rapid expansion of India, sector the rise of co-working places. These are increasing investment in India and require advanced facilities management to meet global standard. Initiatives like and India sign-up as well for us in the industrial segment. Moving e-com and logistics sector is also driving growth in warehouse requirement. And lastly, shift to our outlook IFM, which helps companies and asset owners to focus on their core business.
Now moving to BSL, our business segment saw revenue growth of about 19% in the nine months FY ’25. I’d like to talk about segment of basis separately. Our largest vertical in the space enablement sector, France, which is the name of two headwinds in terms of master to the mix of business and the investment we are making in technology. We are constantly working on the implementation of AI derivative technologies in, which would help us improve our efficiency, improve our margins and also improve our productivity. This is what would happen going-forward from now. We have been investing a little bit ahead of it we successfully have begun utilizing the sales intelligence which is our proprietary technology for this would also start paying us back probably in the next few quarters coming. This technology will help us become more efficient in terms of helping our customers deals faster and further improve our consumption rate.
We are also expanding our sales team, increasing leadership across all fronts, development and deployment of new proprietary technology, development technologies through platform integration, while also focusing on regional expansion of newer customers and in newer countries we have commenced business in South Korea through our office setup in August 24. We’ve consistently posted an entrepreneur employee friendly culture. In this spread I’m proud to share that we have been honored the Leader in Business Award at.
Our investor people policies have also earned a great certification for the time coming to Acena, Athena witnessed a loss of a key client during the nine months FY ’25 as the client itself is reducing operations in India. This led to a flattish revenue for Athena during this last nine months FY ’25. We have been working continuously on reducing our customer concentration in Athena and diversifying into other sectors like retail, education, etc. The lead-time for converting business is about two to 3/4.
On the positive side, EBITDA margins have remained the same. We are confident that we will get newer business lines from a diverse range of segments going-forward. Secondly, in Athena, with the IT and sector gaining momentum with the government’s large focus on development of tech paths and coupled with the focus on increasing penetration and the last mile delivery of BFSI services in India. We remain confident Athena will bounce-back in the next few quarters. Matrix revenues have also grown about 17% year-on-year and is on pace to grow at about 20% plus over the next course of FY ’25. This growth stems from higher demand from employee background verification services across sectors in the country. Stringent regulations and high security concerns of employers would give us more kind of opening for the employee background verification.
We have implemented technology, which is we Call-IT as, which is a digital platform for tracking and verification, which is also into full-time, I mean, which is into fully operational from this quarter. This would help us in terms of improving productivity and efficiency profitability. The A&A segment, which is the audit and assurance segment within Matrix is also seeing a good growth in the country. As a direct result of more stringent regulation, the audit concerns of companies and the general rising and focus of corporate governments for these companies would give us much more opportunity to grow in this segment. So the market is aiming to grow at about 5%, 6% CAGR and we are expecting nearly about 20-odd percent growth in this segment., which is our supply-chain and logistics company, which is set to achieve about INR100 crores of revenue this year and it was a run-rate revenue this year. Is extremely unique and a one-of-a-time company in India due to unique mailroom management software being proprietary in nature.
With improved efficiency from warehouse management, transportation and logistics business, the company has managed to grow revenue by about 56% year-on-year and while also improving its operating margins. Our strategy around A1 will be centered around being a holistic supply-chain management and warehousing player in India going-forward. And coming to Global, which is our ground and business has broken even this year. If you look at the last couple of years, they have been not been making profits, but this year they broken even and we expect them to be very kind of profitable going-forward from the next quarter. We have now started operational all the 22 airports which are global have the concession it has taken it about a year of us, year, year and a half for us to get all these airports actually start firing.
They airport become popular and visibly visibility increases, they will — and visibility increases, they will become more profitable. We’ve also got additional inflows of flight from Air India Express and on back of increased traveling during this festival holiday season, we see that. So we see that the business adding good profits to the group. During nine months FY ’25, the BSS segment contributed 35% to revenues and 46% to the total EBITDA. EBITDA for the BSS segment grew by 22% year-on-year basis. EBITDA margin for BSS segment stood at 9.5% as of nine months FY ’25, which was 9.3% during the same-period nine months FY ’24.
Way forward, the overall business support sources aim to grow at about 9.5% CAGR. India stands to gain, especially from the current economic scenario with impact from GCC schemes, PLI schemes and employment generation incentives for companies. Our BSS subsidiaries stand to gain from the organic economic growth. The key drivers for this growth would be sales enablement, audit and assurance, employee background verification and mailroom management. Male room management along with niche logistics and warehouse management. We expect to achieve a 3x GDP growth even in BSS segment, which will further improve the company margins.
To finally summarize, is well-positioned to grow, thanks to the strong industry dynamics and our own proven track-record in managing large contracts. We continue to scout for strategic acquisition that will enhance UDA’s overall capabilities and contribute positively to our margin. We are focusing on increasing cross-sales between our IFM and basis companies, which will create significant growth opportunity, unlock additional synergies. We have made Mr, our BSS Group CEO and seeing synergies across Matrix and SNR. We have given additional responsibilities as the BSS Group CEO for across the group for the synergies within the BSS segment. We have recently onboarded Smithy, our Group CHRO. And with her strategic guidance, we will further optimize people synergies across the Group.
With this, I will hand over this to for giving the financials and numbers on the Q3 nine months ended FY ’25. Over to you, rather.
Radha Ramanujan — Chief Financial Officer
Thanks, and good morning, everyone. First, I will start with the Q3 FY ’25 highlights and then take you through the nine months ended December ’24. Of Q3 FY ’25, the revenue from operations grew by 9% on a year-on-year basis to INR7,6 million. IFM segment revenues grew by 9% to INR4,554 million and VSO segment revenues grew by 7% to INR2,451 million in Q3. Our revenue split between IFM and BSS segment stood at 65% and 35%. EBITDA for Q3 FY ’25 grew by 18% to million. EBITDA margin stood at 9.4% versus 6.8% in Q3 FY ’24, an improvement of 60 basis-points over last year same-period. Excluding our finance income, which most of you were asking me to populate, our EBITDA grew by 24% year-on-year to INR486 million and EBITDA margin excluding other income stood at 7%, which was 6.1% same time last year.
And IFR segment EBITDA stood at 6.7%, while BSO segment EBITDA stood at 8.7%. And PAT witnessed a growth of 52% and it is at INR312 million. Our earnings per share grew by 48% year-on-year to INR465. And coming to the nine months FY ’25 highlights, the total revenue from operations grew by 12% year-on-year and we are now at INR2,46 crores company. The IFM segment revenue grew 8% year-on-year compared to INR1,328 crores and BSS segment revenue grew by 19% year-on-year to INR717 crores in the nine-month period ending FY ’25. Our revenue split between IFM and BSLs continued at 65 to 35 ratio. EBITDA for nine months FY ’25 grew by 34% to INR1499 million and the EBITDA margin for the whole year Nine-Month period is 7.3% versus 6.1% in the Nine-Month period ending FY ’24, a significant improvement of 120 basis-points.
Excluding finance income, our EBITDA grew by 30% year-on-year to INR1,0 million. The EBITDA margin excluding other income stood at 6.7%, which was 5.7% same last year, 100 bps improvement over last year. IFM segment EBITDA margin stood at 6.1%, while BSS segment stood at 9.5% and both IFO as well as DSS margins improved consistently compared to the same time last year. Our PAT witnessed a substantial growth of 101% and stood at INR848 million. Our earnings per share grew by 74.1% to INR1260. ROCE is at 22.3% and return-on-equity is at 14.6%. PDF is a net cash company on-net debt-to-equity is negative 2 times as on 31st December, 2024. We have overall 69,000 people and IFM stood at 54,053 employees and BSU segment stood at 14,76 to employees.
During the nine months FY ’25, we added 60 logos in IFM segment and 35 new logos in BSS segment. And we Call-IT out only the substantial and continuing logos which are more than INR5 lakhs. We keep adding a lot of clients, but what we call-out is the substantial ones.
Auditors, I will open the floor for question-and-answer. 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 your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets 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 Nitan from Investec. Please go-ahead.
Nitin Padmanabhan
Congrats on a good quarter. My first question is for, which is about Denev and Ethana. So ethanol will take some time to recover. So one on ethanol, if you could give us some sense on what’s happening there, the headwind from the RBI mandate, has that come off? And should we start — when should we really start assuming growth? I think on Ethana, in the first-half, it declined 6% versus the first-half in the first-half. So does it — so has it grown in — I think from what you’re saying, it looks like it’s grown in the 3rd-quarter. So just wanted to reconfirm that. So — and apart from that, I have a few questions on the name also, so I’ll follow-up post this.
Radha Ramanujan
Okay. I can answer the growth of Acena while I request Ragu to give a high-level view on the verticals. Acena revenue has not grown in the 3rd-quarter compared to the previous quarter, but has maintained the profitability. They have to take certain action with respect to giving off the seeds and other things, which took little bit of a time. So in Q3, they have taken all that measures and the profitability improved in Q2. Yeah, over to you.
Raghunandana Tangirala
Yeah. Yeah. Yeah, hi. Is not on this call, so I will just give you for — I mean what your question, I’ll answer that one. Lost a large account on the — at beginning of this year. That’s why you will find the growth being muted. This — when they lost this account, not because of anything else, this bank BFSI had a closed business in India. And in the first or between first and second-quarter, they’ve also lost another big account, which the company had got sold to, they got sold to another entity, so the business got restructured. However, we had anticipated this. We are working towards adding different other accounts and probably not in the BFI segment also. And that will start giving us results from the first-quarter next year. So that is how if you look at headwinds when you said this is how it happened. We did anticipate, but we didn’t anticipate this happening so fast. So that is the reason the revenue was better. However, profitability will still maintain because SNA is a high-profit business and we’ll continue to do, that answer? Or is there anything specific you want?
Nitin Padmanabhan
Yeah. That’s helpful. What would be the — so obviously, Q4 also there will be a revenue headwind here. So what kind of — so what is the current revenue for the nine months for ethana and how is it for the year, you expect it to be flat or there will be a decline?
Raghunandana Tangirala
I expect it to be flat, but rather, can you give me numbers for nine months and what is the full-year numbers? We have it we have the full visibility.
Radha Ramanujan
Yeah, the current revenue for the Nine-Month period is INR107 crores and they’ll be closing the full-year period with about INR135 crores, which will be at par with last — last year what they did. They may not show any growth in terms of top-line. Similarly, the profitability also will be similar to what they had reported last year.
Amitabh Jaipuria
So if I may just add, given the fact that we have lost my two large customers for — for reasons of the — which are very specific to the customers. In the management’s view, the fact that we will still be able to hold our numbers from last year in terms of both revenue and profitability is actually because of the actions that the local management, the Athena team took to contain costs as well as to maximize revenue from other clients. So it’s — from that perspective, we see it as a positive because as the new logos kick-in, the Athena growth platform remains intact. I just thought I will add that.
Raghunandana Tangirala
Yeah. We are actually confident on that. I would actually say we have the Athena team had really worked very hard and then maintained without any negative — any dip either in revenues or in profit in-spite of all this.
Amitabh Jaipuria
Yeah.
Nitin Padmanabhan
Got it. The — on the Denev side, the question was considering a this shift to an AI-based agent selling. Now how should we think about growth? Because on one-hand, you know, as outsiders, they can be a compression on existing customers or do you see that not happening, whereas it just accelerates the new customer additions. So how is adoption with existing customers? And if adoption rate is faster, does that mean that growth will be softer for a year or so and then sort of pick-up post that? How should we think about this dynamic?
Raghunandana Tangirala
Yeah. Would I take it, then I’ll add later.
Amitabh Jaipuria
Yeah. So basically, see, that’s a valid question that you have because my is the one company that in some sense is at the forefront of the technology piece for the Group. And at the same time, the area of sales enablement is itself going through a little bit of churn of because of new technologies. So we are adapting to that. The customers are also adapting to that. The business models are changing to an extent. And therefore, what is happening is that this space will remain slightly soft. So in the coming year, we expect new logos to kick-in and we also expect our own efforts in AI and other remote agents, et-cetera. Our own efforts there will start paying-off.
Yeah. So — but this year is right now looking like the next few months, maybe two quarters are looking like quarters of transition. So that’s — that would be our commentary on. Will margins soften further from here? The answer is a no. But we don’t believe margins will soften further. But will growth continue? Our answer is yes. We believe growth will continue. Ragu, do you want to add anything?
Raghunandana Tangirala
I’d add to what Amithab said, we had already invested into the new technologies or agents or AI, whatever we call that over the last one, 1.5 years, this will start paying customer adaptability is very good. I expect a little bit — I’m a little more bullish on that. We would actually show a better growth next year. And of course, better the margins. There is no doubt will go or down. This year, the margins are slightly muted or down compared to the last year or the previous year because of business mix. It’s not because of technology disruption. Because technology disruption, we have already started working on that.
As Amishab said, we are on the forefront of it. We see customers adapting to it. We’ve invested heavily on technology. We are using all the agents what you said, and it would be a tech-driven business going-forward. Even earlier, it was largely tech-driven, though we were never calling it agents or AI, all that. So that I’m very confident on in terms of. I would don’t want to give you call-out numbers, but I’m definitely will do much better the next year or even from the next quarter. This will start to as well.
Nitin Padmanabhan
Sure. Thank you so much. I’ll fall-back in the queue. Thank you so much and all the best.
Raghunandana Tangirala
Thank you.
Operator
Thank you. The next question is from the line of Deep Shah from B&K Securities. Please go-ahead.
Deep Shah
Yeah, hi, good morning. Thanks for the opportunity. So the first question is basis your commentary. If I understood it correctly, the WFM business, you’ve done slightly lower than your expectation in terms of growth, but it’s still better than the market. So any particular reason why the market is slowing down and given that you’ve been doing this for some time, how do you see it working out? Because typically, why would a market which has such a structural tailwind slow-down? So your comments on that would be useful.
Second, on the global front, so I understand that you’ve broken even. And you also mentioned that seven airports you are doing here India Express. So how should we think about this? Is this — I mean, would Air India eventually would we be doing for them or Air India Express would be separate and then if it’s separate, will we be doing all 22 airports, how should we think about this?
Raghunandana Tangirala
Yeah, did I answer? Yes. See, I’ll answer your last question on global, yes, it took us time to actually start operational all 22 airports. Even now, when I say we have started operating 22 of us, still six or seven airports are being 100% operational. In terms of to getting all the clearances and starting off in terms of equipment and all that. However, all these will be operational, definitely 100% operational by first-quarter of next year. We see global to grow at — in terms of optically on numbers, it looks like 100% to 100% growth because the last year or these last few quarters, we were not operating all the airports. So that would give very good numbers. From a minus INR8 crore or INR9 crores last year, this would this year itself, we will show profit because this quarter, nine months itself we have broken even. So that would grow as per what we planned or even slightly do better than what we planned.
Coming to Air India Express, we have a contract with them. I mean it is a contract for all our efforts, wherever they fly. Now I said airport because these are the seven airports where they are flying in now. So we have a contract with Express for all — any airport, all these 22 airports. It’s only the seven which are operational now this quarter and the next quarter, but it could increase. So that is left with them, but that was how — that’s how you got that seven airport was Air India as well. So that is on the global. And IFM, yes, whatever we called out, we will grow on that. The margins improvement is because of a small mix within the IFM business. Like for example, our industrial business could be warehouse production support, some engineering services mix, we have increased. So if you look at even the growth was only 8%, 9% but our margins improved because of our efficiencies and the business mix. This is a combination of both.
Deep Shah
Yeah, right, sir. But if you could like give us some color on why the industry as a whole is slowing down because that is what I understood from my opening remarks or is that not the right conclusion?
Amitabh Jaipuria
I don’t think — sorry, sir, go-ahead.
Raghunandana Tangirala
Please.
Amitabh Jaipuria
Okay. So I — we’re not saying that the industry is really slowing down because new construction keeps happening. So but the — there are — customers are trying to figure out what kind of model serve them the best-in terms of service providers. And the vendor consolidation anyway continues to play in favor of companies like us, which is UDS and the larger companies. So it’s not really a slowing down and 8%, 9%, 10% industry growth because the industry report earlier, of course, did paint a slightly more bullish picture, but they had included other segments which we are not operating in. So if — and if industry grows at 10%, has already talked about the fact that we will grow ahead of industry, that’s our objective.
And that will be our attempt because we will continue to win new logos and like we have already won 95 new logos this in the Nine-Month period, you already see that in our results and these will start paying-off as well. So our commentary is not that the industry is slowing down significantly. Minor blips here or there keep happening because of various source — various different kinds of things, but not all of which we understand, not all of which we control. But overall, if you look at a three to five-year horizon and even a longer-term horizon, this industry is set to grow low-double-digit and we will grow ahead of that.
Radha Ramanujan
And if I may add one comment, growth, what is compared is also the similar in a peer thing in the last two quarters, what they have reported is a growth and our growth was much better. It’s more on that comparison as well.
Deep Shah
Understood. This is useful. A couple of boot keeping questions if I could. One, could you provide margins without other income? Second, what would be your cash balance?
Radha Ramanujan
See, I had clarified our margin with income and this interest income both has been given to you. And our cash position at this point of time is INR176 crores.
Raghunandana Tangirala
No, just let me just give that once more rather with other income and without income?
Radha Ramanujan
Yeah. The EBITDA margin for the Q3 is 7.4% versus 6.8% last year and EBITDA margin excluding other income is 7%, which was 6.1% last year. So the other income is 0.4% this period and the other income is 0.7% last year, because last year we had the full cash line with us in the Q3. And on a Nine-Month period, our EBITDA margin is 6.7% this year and 5.7% last year. And if I exclude the other income, it is 6.1% this year. 7.3% YCD nine months this year versus 6.1% last year. We just want to see this improvement. And excluding the finance income, it is 6.7%, which was 5.7% same time last year. Excluding finance income also, we have grown 1% compared to last year.
Amitabh Jaipuria
Yeah. So provided the nine months, 1% improvement without finance income is the number.
Deep Shah
Okay, okay, understood, sure. And sir, one request. We have multiple businesses with different viewers. So if you could provide this on a consistent basis, it would be useful because today Athena, Denev, Matrix, we are all following different numbers and different guidances. So if it would make this as a part of the PPD, revenues, margins that would be very useful.
Amitabh Jaipuria
Okay. Yeah. So we’ve got that feedback from some other people as well. And next cycle onwards, we will do that.
Deep Shah
Thank you, sir. That would be really useful. Thank you so much. All the best.
Amitabh Jaipuria
Yeah. Yeah.
Raghunandana Tangirala
Next quarter we’ll definitely do that. We’ll do that, but at least 80%, 85% of the businesses within this segments.
Amitabh Jaipuria
Major companies here, major company which will.
Raghunandana Tangirala
It will cover 80% to 90% of our both revenue and PAT. Next quarter onwards, we will call-out these names. It’s only three companies basis and three in IFR, I take 90% of the revenue.
Deep Shah
Perfect, sir. Perfect, perfect. That would be useful. Thank you so much. All the best.
Amitabh Jaipuria
Thank you.
Operator
Thank you. Ladies and gentlemen, to ask a question, please press star and one. The next question is from the line of Pritesh from Lucky Securities. Please go-ahead.
Pritesh Chheda
Sir, on the revenue growth side, how should we incrementally look for next year in terms of your revenue growth, especially when I’m seeing that since last 3/4, we’ve been slowing down so — and on the other hand, we have this larger revenue growth guidance given. So how should we look at the revenue growth next year?
Amitabh Jaipuria
See, we have always guided that we will grow a bit at about 2.5 to 3 times of the economy. But we are dependent on other economic agents. So as the economy — if the overall economy slows down, like this year, for example, but from the earlier projections, the economic growth rates are now being projected that we will be down by about 1%, right, compared to the projections earlier. So if the overall economy slows, we will slow as well. Our growth rate will slow. We will continue to grow strongly, but our growth rate will slow. And we continue to maintain that we should be growing between 2.5 to 3x of the of the overall economy.
Pritesh Chheda
So see by whatever means that means between 15% and 20%, whatever be the number is it 15, 16, 17, 18, 19, 20%, right?
Amitabh Jaipuria
That’s right. 20% should be other growth rate.
Pritesh Chheda
So right. So when I look at the absolute number in that. But when I look at the last four quarters, your growth has never been above 13%.
Amitabh Jaipuria
Yeah. So we have been growing at about 2 times. You’re absolutely right. And what we are seeing in the future is an acceleration of that growth to some extent because we do believe the economy will look up, number-one. Number two, global, as Ragu pointed out, that is poised for a bit of a breakout because the other — all the other airports will come online. We expect the A&A business and the employee background verification business to continue to grow. But WSE will continue to contribute to margins. IFM has continued to show growth, if you will, and we are expecting the decline in the margins of the name and the softness there to stabilize and improve as we have already said in our earlier commentary.
So if you look at most of our business components, that is what is looking good. Over the past three to four quarters, if you look at it, we have always given the commentary about some business or the other being slowing — slowing down. This quarter, for example, had an issue, right, with two large customers dropping out because of reasons which are internal to them and are not on. So — and we have not lost that by the way. So we are not losing the competition. At the end, these businesses do depend and they do depend on the panel. So going-forward, we are expect that.
Operator
I’m sorry to interrupt sir. We are unable to hear you.
Amitabh Jaipuria
Am I audible? I’m sorry, the connection was slightly bad. Am I audible now?
Operator
Yes, please go-ahead.
Amitabh Jaipuria
Yeah. So therefore, what we believe is that between 15% to 20% and as you pointed out, 14%, that’s pretty close to the range that we have talked about. Between 15% to 20 is what we should be doing, but really obviously. So can we give very, very answer is a no.
Deep Shah
Sir, can you give a some idea on some idea on what kind of deals are you discussing? See, because for next year, if you have this aspiration, you should have some ongoing discussion or transaction or an order book to support it. So if you can tell any of those points?
Amitabh Jaipuria
Yes. So we have three active conversations that are going on right now and of varying — one is a fairly large transaction. The other two are slightly smaller. And it — it sort of it will be — it will add significantly to our — to our bottom-line and more importantly to our capabilities and to our top-line also to an extent if the deals actually happened. So there are three active conversations. That’s what we can tell you. But further detail, obviously, we cannot because right now the conversation is on. When we say no guarantee that a transaction is so we want you to remember that and note that because we don’t want to miss a present. So there is no guarantee that the transaction will materialize, but there are three very active and promising conversations that are on.
Pritesh Chheda
Okay.
Raghunandana Tangirala
Yeah. And just to clarify, see, we are confident of doing that 15% to 20% growth without compromising on margins as it bought us today will only want to improve it. This is what we are talking organic. We’re not talking of any inorganic addition. So that will happen definitely, as Amitab said, we are active advanced stages in some one or two smaller ones. But we cannot kind of tell you with the complete certainty this is going to happen in the next 1/4 or two quarters, but that is the whole idea that we would want to do it. But this growth what we spoke is all organic.
Pritesh Chheda
Okay. Okay. Got it sir.
Operator
Thank you. The next question is from the line of Nihal Shah from Prudent Corporate Advisory. Please go-ahead.
Nihal Shah
Yeah. Thank you for the opportunity and congratulations on a great set of numbers. So when we talk about BSF, so there how much of it is because of the two client reduction and how much do we see the economic activities as well softening because as you said that the RBI itself has reduced the growth guidance for Indian economy. So how much of that could be attributed to the slowdown in economy as well.
Raghunandana Tangirala
So, if you can just give the numbers of the Q3 slow — the Q3 reduction in revenue in Athena, that is really because of loss of customers, right? That’s the number. So yeah.
Radha Ramanujan
So exactly the reduction what has reported or in Q3, their top-line went down by 12.1 to INR33 crores and is primarily on account of missing the two large clients who were with them. As one date, there is nothing that has hurt them in the existing business with the RBI regulation, but the new inflows are stagnated. People are continuing with the current business. What may happen with the regulations, so they are not able to compensate the loss business with new business because there is — everybody is holding on to the current way of operating. They’re not able to get new clients in the BFSA segment. While saying so, they are now aggressively looking into non-BFSA segment and it may take — now they have — they are doing the POC, they are now getting into the client relationship. This quarter and next quarter could be challenging, but the new avenues, non-BFSI, then help sells them to scale-up in the subsequent quarter.
Nihal Shah
Okay.
Radha Ramanujan
So what is — maybe focus on the non-BFS side? Because BFSI was a profitable client for them.
Nihal Shah
Okay. Okay. So when we talk about the other for — so their airport handling services, which we were expecting it to breakeven or give some amount of profit in this year. So how has that profitability phased-out in the next — in the nine months.
Amitabh Jaipuria
So we have delivered on that. And we had said that we will breakeven and we have done that already. So this year global will be a positive contributor. Last year it was a INR9 crore loss because of global, because we were investing ahead of the business as we were required to do. And now that has come through and we have already broken even and global will be a positive contributor this year.
Raghunandana Tangirala
So it would be roughly about INR1 crores this year.
Amitabh Jaipuria
Yeah. So it will be a INR10 crores swing from last year. Last year was minus INR9. This year it will be a positive one or two.
Nihal Shah
Okay. So in the next year in FY ’26, so as you were saying that the operations are ramping-up currently and will ramp-up in the coming couple of quarters or so. So can we expect that to go up to a higher single-digit kind of a margin in the FY ’26?
Amitabh Jaipuria
Yes.
Nihal Shah
Okay, okay. Thank you. Thank you.
Radha Ramanujan
It could be a little more than a single-digit because you know that we’ve already made the investment, but it would definitely be a much bigger number going-forward next year FY ’26.
Nihal Shah
Okay. Thank you. Thank you very much.
Raghunandana Tangirala
Thank you.
Operator
Thank you. The next question is from the line of Sakshi from Securities. Please go-ahead.
Unidentified Participant
Hello. Hi, thanks for the opportunity. What benefit are we expecting from the upcoming budget for employment and how do we see this benefiting our IFM segment?
Amitabh Jaipuria
So we don’t — since we have a varied set of businesses, we don’t see the budget as an event that can be a very negative or very, very largely positive. The — what we do see is that if there is a action on the corporate tax front, obviously, that will be a positive, but we don’t anticipate that. We do anticipate that there will be encouragement for job creation and that there will be encouragement for relocating or setting up my infrastructure here on both the services side by way of GCCs as well as on the industrial side by way of further PLI schemes and encouragement to large-scale electronics outlets and those kinds of things, electronics packages and those kinds of things. So both of which are positives capital…
Operator
Sorry to interrupt you, sir, we are losing you. We cannot hear you that clearly. Your voice is breaking.
Amitabh Jaipuria
I’m sorry I’m actually in one place, but the network maybe I can take that.
Raghunandana Tangirala
I can just I mean tell what Amitab said. Yes, there is no direct benefit or the advantages we’re looking at the budget. But indirect, yes, like what Amitab said, the more on the manufacturing gets more, yes, they get benefited. That’s what is indirect. Because directly, we don’t see budget impacting us either negative too much or positive. It could be only positive, sorry. So that is what I’m thinking, but we have now not seen the budget directly impacting us negative at least so that if that answers the question, fine, otherwise I can elaborate.
Unidentified Participant
Understood. Thank you so much and congrats on the good set of numbers.
Raghunandana Tangirala
Thank you.
Operator
Thank you. The next question is from the line of Harsh Sharma from HS Securities. Please go-ahead. Harsharma, please go-ahead with your question. Your line is unmuted. May we request you to kindly proceed with the question. MR. Harsharma, your line has been unmuted. As there is no response, we’ll move to the next question, which is from the line of Nitan from Investec. Please go-ahead.
Nitin Padmanabhan
Yeah, hi. Thanks for the follow-up. What is the borrowing number for the quarter?
Radha Ramanujan
This quarter, we have closed all the borrowings. Initially we had deposited the IPO process in fixed deposits and we continued the borrowing. And in October since all the fixed deposit costs matured, our — we are net cash companies, there is no borrowing. There could be minor on a day-to-day fluctuation, INR1 crore, INR2 crore cash credit see utilize, but otherwise there is no borrowing.
Nitin Padmanabhan
Right. So the finance cost will be that we see now is or at least the next quarter will be more or less just the lease cost. There won’t be any financial…
Radha Ramanujan
Lease costs and maybe the timing different collection is a statement that couple of days tax credits and other things. Predominantly it will be the least announced.
Nitin Padmanabhan
Fairly fair enough.
Radha Ramanujan
We go for an acquisition and get into borrowing?
Nitin Padmanabhan
Sure, absolutely. Thanks.
Operator
Thank you. The next question is from the line of Rahil Shah from Crown Capital. Please go-ahead.
Rahil Shah
Can you hear me?
Operator
We cannot hear you clearly.
Rahil Shah
Hello. Am I audible?
Operator
Yes, now you are. Please go-ahead.
Rahil Shah
Yeah. So just one question on the margins, if you can guide something overall for the company, what do you expect to-end this year with and the next year FY ’26 EBITDA margin.
Amitabh Jaipuria
If I may so am.. I audible? Can I — yeah.
Operator
Yes, yes.
Amitabh Jaipuria
Yeah. So on the margin, see, we don’t give formal guidance and we will stay with that. We are not giving formal management guidance. What we have said is that because of operational leverage, we will grow margins of 20 to 25 basis-points year-on-year and we expect that to continue. We expect a little bit of contribution also because of the fact that our higher price well. Well. So that is what we can tell you on margin improvement for next year. Does that answer your question? Hello?
Rahil Shah
Yeah.
Amitabh Jaipuria
Okay, sir.
Rahil Shah
Yeah, got it. Got it. Thank you.
Amitabh Jaipuria
Thank you. Yeah.
Operator
Thank you. The next question is from the line of Sunil Kothari from Unique. Please go-ahead.
Sunil Kothari
Yes. Thanks for opportunity, sir. Congratulations. Sir, what is the scope of removing some less profitable business or reducing costs like in IFM, we have substantially improved our profitability. So as a whole organization, where do you see the scope of reducing costs or maybe removing at least profitable businesses, a little more from a year or two point-of-view, not a quarterly point-of-view.
Amitabh Jaipuria
See, we continuously review our portfolio of businesses understand where we can optimize either on the growth side or on the profitability side and cost is a major contributor on the profitability side. So that’s a continuous process. At this particular point in time, we don’t see us — we don’t see us divesting any business at least in the next two to three years, that’s not on the horizon. And the cost will — we are very conscious of our cost base and you will see and we are working on cost side action in this year’s planning cycle now. So you — so that’s an idea is clearly to improve our cost position, but there is no divestment of any existing business being planned.
Sunil Kothari
So if I understood right sir, this IFM, we restructured some businesses. We have allowed to go away some less profitable businesses. Now any scope there or that process has been done?
Amitabh Jaipuria
There is some scope of — but by and large, a lot of the low-margin businesses we have got rid of already as we have been saying over the past two quarters. There is still some scope you know because you see it’s like this, right, if you remove the bottom 10%, then the next 10% becomes to the bottom 10%, right? So there is a continuous culling of less profitable contracts or contracts where we find that our cost doesn’t allow us to make a decent return.
Sunil Kothari
Right. Sir, next question is to Mr Rabu. Sir, basically we are acquiring so many different companies, different business segment, business mindset and culturally different organization. How difficult or is he this style rather than, say, growing organically?
Raghunandana Tangirala
Yeah, that’s a bit missage. However, we’ve not done many, it may look like we have done many, it’s only largely three companies. It is — it is — I mean, we need to put in focus and work on it to get it kind of integrate with the overall philosophy or the business how we do with the parent company. So that’s happened very successfully so-far. So going-forward, yes, what you’re saying is right. It’s not a easy thing. We will have to do it. However, we’ll do that, like I think Amitab mentioned this earlier, only if it is going to add value to our existing business or if we can add value to a business which we’re going to acquire. So that would be the basic underlying kind of philosophy or policy for our acquisition strategy.
So that would make our business actually better because it will add kind of synergies, add capabilities, add value or we could do that with the acquired business. So that is the whole idea. That’s what has happened so-far. If you look at all our acquisitions have been very successful, let me say all it’s basically three or four, the other things happened much earlier. So today, I would even say if you — if after acquisition and the businesses kind of integrated, more than two years, I wouldn’t even call them as inorganic. It’s part of the overall thing. I think two years is a pretty decent time. By that time, it’s — I wouldn’t even call them as a kind of a acquired business or a business which is new to us. So all our business are now more than three, four, five, six years after our acquisition. So our last acquisition was, which is now two years into it. Next year, I think we will be 100% owning less or 90% something. We have some structure with the promoter.
Sunil Kothari
Great, sir. Thanks a lot and wish you good luck.
Raghunandana Tangirala
Thank you.
Amitabh Jaipuria
Thank you.
Operator
Thank you. Ladies and gentlemen, this was the last question for today. I would now like to hand the conference over to the management for closing comments.
Raghunandana Tangirala
Okay, great. Thank you all of you. Thank you for joining us. I hope we have been able to answer all your queries. Look-forward to such interaction in the future. In case you have any further details or queries or any further clarification you require, you can contact the company, you can contact Devan of SGA, our Investor Relations Advisor. So feel free. You can mail to us and write to us so thank you again for joining.
Amitabh Jaipuria
Thank you.
Radha Ramanujan
Thanks everyone. Good day. Bye.
Amitabh Jaipuria
Bye. Bye.
Raghunandana Tangirala
Bye.
Operator
On behalf of Updater Services Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.