Bluspring Enterprises Limited (BLUSPRING) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the BlueSpring Enterprises 4Q Fy26 Earnings Call hosted by IFL Capital Services Limited. As a reminder, all participant lines will be in the lesson 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 touchtone phone. Please note that this conference was being recorded. I now hand the conference to Utamita Siddharth Zabak from IFL Capital. Thank you and what you, sir.

Thank you. Ladies and gentlemen, good morning, and thank you for joining us.

I'm sorry to interrupt, sir. Your voice is muffled. Can you please use your handset mode?

Thank you, ladies and gentlemen. Good morning, and thank you for joining us on the post-Q4F526 results conference call for BlueSpring Enterprises Limited. It is my pleasure to introduce the senior management team of BlueSpring who are here with us today to discuss the results. We have Ms. Drugda, Executive Director and CEO, Mr. Prapul Sridhar, CFO, and Mr. Niboshethi, Head Investor Relations. We will begin the call with opening remarks by the management team, and thereafter we will open the call for a Q&A session. I would like to now hand over the call to Mr. Nibod Sherky to take the proceedings forward. Thank you, and over to you, Nibod.

Good morning, everyone. Thank you for joining Q4 F526 Blue Spring Enterprise Limited earnings call. At this point, we would like to highlight that today's discussion may include power-looking statements, which are based on current expectations and are subject to business risks, regulatory changes, macroeconomic environment, and geopolitical conditions. We do not guarantee these statements or results and are not applied to update them at any point of time. These statements should be read in conjunction with the safe hour clause provided on slide number 2 of our investor presentation. With that, I hand the call over to our CEO, Mr. Kamal Palwutta, for his opening remarks. Over to you, Kamal.

Thanks, Nibot. Good morning, everyone, and thank you for joining the call today. The completion of our first financial year as an independent listed company represents a significant milestone for our organization. During our inaugural analyst call in Q1, we reaffirmed a renewed sense of purpose, a sharper vision, and a strong commitment to create long-term value. Since then, our performance has strengthened with each successive quarter, navigating the changing regulatory and external environments towards delivering a robust financial performance. The stability and strength of our core business have provided the confidence to pursue business expansion through disciplined, inorganic growth. We recently announced the signing of Definitive Agreement for acquisition of STIAG Energy Services India Private Limited, a leading energy services company, and LSG Sky Chefs India Private Limited, an in-flight catering and allied aviation services company. I will discuss both these acquisitions in detail after discussing the full year FI26 and Q4 highlights, excluding the investments vertical. We delivered a strong financial year with broad-based growth across key matrices. Revenue for FI26 grew 11% year-on-year to 3,304 crores, while Q4 revenue increased 8% year-on-year to 846 crores. Our sales engine continues to perform strongly. In FI26, we have secured new 164 contracts with a total annual contract value of 459 crores. EBITDA for FY26 increased by 10% year-on-year to 121 crores. EBITDA for quarter 4 FI26 stood at 35 crores, growing 44% year on year and 9% quarter on quarter. Q4 EBITDA margin crossed 4% benchmark, reaching 4.2%, a 35 basis points quarter on quarter increase. The margin expansion was driven by seasonal improvement in our food and telecom businesses, improved contract mix and collection efficiencies. Profit after tax adjusted for the one-time impact of new labor code-related changes gave you 26% year-on-year to 67 crores. Q4 PAT stood at 20 crores, up 73% year-on-year. Adjusted EPS for FY26 stood at Rs. 4.5 per share. Now coming to segment-wise updates, starting with facility and food services. This segment continues to be the largest driver for our business, contributing to over 60% of our revenues. FI 26 revenue stood at 2,031 crores, up 12% year-on-year, while Q4 revenue grew 10% year-on-year to 519 crores. The business added 24 new contracts with 124 crores ACV, giving excellent head start to New Year's growth. The business continued focus on quality deals and investment in leadership, branding, and sales has started to bond through and have laid strong foundation for sustained and profitable growth in the years ahead. Staying on the theme of quality growth, we signed definitive agreement of acquisition of LSG Sky Chefs Bangalore operations in April 2026. The acquisition marks a key milestone in our growth push in high margin segments. Talking a bit more details about LSE, founded in 2001, LSE SkyShare's India Private Committee or LSE India, as we call it, is a leading provider of in-flight catering and allied aviation services for domestic and international airlines, including Indigo, Lufthansa, Etihad and Qatar Airways. Supported by a workforce of over 400 employees, LSE India's Bangalore operations generate revenue of over 110 crores and mid to high teens EBITDA margins. The acquisition gives BlueSpring access to in-flight catering facilities operating at Bangalore Airport under a long-term concession agreement until 2039. According to Bangalore International Airport, BAYAL, estimates air passenger traffic at Bangalore Airport is poised to rise from present 45 million now towards 70 million by 2030, enabling BlueSpring to capture the high-growth aviation catering segment. Moving to telecom and industrials vertical. For us, employee well-being and safety remains paramount. We continue to report on-job fatalities, zero on-job fatalities in quarter four. This was achieved on back of strong emphasis and investment in training, health, and safety. The industrial vertical logged over 25,000 health and safety training hours in FI26. FI26 revenue for telecom and industrial grew 70% year-on-year to 615 crores. The overall segment growth was muted due to delay in planned capital expenditure from leading telecom operators. However, the industrial sub-vertical grew by 7% quarter-on-quarter on back of new contract mobilizations. The focus in this segment continues to be on transitioning from manpower provider to strategic operations partner. The segment continues its margin uptick and delivers double-digit EBITDA margins. This was supported by higher-margin industrial contracts and discipline cost optimization across operations. In industrial vertical, we recently announced signing of definitive agreements for acquisition of STIAG Energy Services India Private Limited in March 2026. Founded in 2001, STIAG India operates on an asset-light business model aligned with our core business approach. It manages both captive and non-captive power plants. The company provides end-to-end plant management solutions, including plant operations and maintenance, O&M, control room operations, and overhauling services. These services contribute 90% of STIAG India's revenue base and are typically secured through long-term contracts ranging from 3 to 5 years, providing strong visibility into stable and recurring cash flows. The balance of companies' revenues is generated through high-margin advisory and technology-driven services, including digital performance monitoring, predictive analytics, diagnostics, training simulators, flexibilization solutions, and simulation studies. SEAG currently employs over 2,000 professionals and manages approximately 7 gigawatts of power assets along with 2,200 tons per hour of process team supply capacity. Its portfolio includes supercritical power plants and refinery utilities demonstrating Proven capabilities across the broader electricity value chain. The company clogged annual revenues of 700 crores with EBITDA margins in high single digits. Moving to our security services business, the security vertical records recorded its highest ever headcount, which crossed 24,000 for the first time. The business clogged FI26 revenues of 659 crores, an increase of 14% year-on-year. This growth was powered by headcount additions of around 2,900 additional security guards during the financial year. The business continues its upward trajectory in Q4 with revenue of 169 growths, a 15% year-on-year increase. Waterfall FI26 witnessed a headcount addition of 850 guards. The focus of this business continues to be adding new logos, increasing business from existing clients, and further strengthening sourcing channels to enable faster mobilizations. Moving on to our investments in Foundit. This has been a turnaround quarter for Foundit. As we had highlighted in earlier quarters, we have invested significant time and resources into revamping the product and focusing on getting unit economics right and moving towards breakeven. The revamped product has been received well by the clients and we registered a strong sales of 26 crores during Q4 FY26. The sales velocity has jumped by 50% from an average sale of 17 crores during the first three quarters of FI26 to 26 crores in Q4 and FI26. This strong growth in sales would convert into revenues in the upcoming quarters. For Q4, Foundry delivered a revenue of 19 crores. All the key product matrices such as total applications, recruiter search, total traffic, and six months active User base have shown growth during the year. In line with our recent guidance, we have lowered our EBITDA losses from 12 crores in Q3 to 9 crores in Q4 FY26. In Foundit, we are further accelerating our AI adoption, which will help in keeping cost and control and increasing productivity. This is in line with our commitment to be EBITDA profitable by end of this financial year. The focus for Q1 for Foundry is on strategic sales, marketing spends to accelerate seeker growth, automation of platform, maintaining revenue trajectory, and continue to improve on our EBITDA. Before I hand over the call to Praful, I would like to emphasize, in our first year post-deemerge, we have undertaken focused initiatives to accelerate sales, adopt a more technology-led operating model, and identify new avenues of growth across our businesses. We have also made target investments in As the year has progressed, the benefits of these investments have begun to materialize, reflecting in an 11% year-on-year revenue growth in FI26 and a 113 basis points expansion in EBITDA margins from 3.1% we reported in Q1 of FI26 to 4.2% in Q4 of FI26. The recently announced acquisitions will further support margin acceleration. The coming financial year will continue to build on the momentum of our first year with a clear focus of driving growth, enhancing margins, and improving return on equity to higher levels. With that backdrop, I will now hand it over to our CFO, Praful Shida, for a financial deep dive. Over to you, Praful.

Thank you, Kamal, and a very good morning to all of you present in the call. Let me take you through our financial performance, excluding founded for the year and quarter ending March 31, 2026. During the quarter, we reported revenues of 846 crores, a growth of 8% year-on-year and flat sequentially. On a full-year basis, our revenue stands at 3,304 crores, a growth of 11% year-on-year. This growth was broad-based across all segments with telecom being an exception. The temporary slowdown in telecom industry is intertwined with the pause in the CapEx rollout of telecom players. During the quarter, we have mobilized close to around 42 new contracts, contributing to an annual contract value of 181 crores. We continue to have a well-diversified client base and sector presence, with top 30 clients contributing to less than 50% of our revenues. Our overall headcount grew by 6,600 during the year. We now stand a strong 93,000-plus workforce working for us. The EBITDA for the quarter stood at 35 crores, a growth of 44% year-on-year and 9% sequentially. Full-year EBITDA now stands at 121 crores, a growth of 20% year-on-year. Our EBITDA margin saw a consistent quarterly increase with Q1 being 3.1% and an exit of Q4 at 4.2%. A 112 basis points jumped during the year. This was aided largely by volume growth, with new contracts being mobilized at better margins, improvement in age collections, and rationalization of low-margin clients during the year. Our interest cost reduced sequentially by 41% to a steady state of around 5 crores per quarter. We got Blue Spring rated recently by a Fitch Group company, and we saw downward revisions in our borrowing rates. Our adjusted PAD for the quarter stood at 20 crores, a growth of 73% year-on-year and 6% sequentially. For full year FI26, our adjusted PAD stood at 67 crores, a growth of 27% year-on-year. Thereby, our EPS stood at 4.5 rupees per share. Exceptional item during the quarter was 6.8 crores. This was on account of certain costs relating to professional fees which we incurred for the acquisitions announced recently. We continued on our previously stated trajectory on reducing debt. We are happy to report that we stand at a net cash position of 15 crores as of March 2026. Our working capital days for the year stood at 37 days as compared to 46 days a year back. Moving now towards segmental performance. Our facilities and food services business continue to be our largest segment. The revenue for Q4, FI26 was up 10% year-on-year and flat sequentially. The revenue growth was driven by 24 new client additions during the quarter, an annual contract value addition of 124 crores. We have continued to add clients across education, commercial and healthcare businesses in this vertical with the total revenues for the year closing at 2031 crores with 12% year-on-year growth. EBITDA for the quarter stout. The telecom and industrial segment recorded revenues of 157 crores for the quarter. Full-year revenues now stands at 615 crores, a growth of 7% year-on-year. As mentioned earlier, the growth in this segment was muted for telecom vertical. However, we registered a strong growth in industrial segment in the metal space with new contracts coming at better margins. EBITDA for the quarter in telecom and industrials was 18 crores, recording a growth of 13% year-on-year and 19% sequentially. A full-year EBITDA in this segment stands at 57 crores, which has a growth of 11% year-on-year. Moving on to security services segment, which saw a recorded revenues of 169 crores for the quarter. which is a growth of 15% year-on-year and flat sequentially. A full-year revenue is closed at 659 crores, registering a growth of 14% year-on-year. We closed the year with over a record headcount increase of 2,900 cars, taking the overall headcount to 24,000 plus workforce. The security business recorded EBITDA of 6 crores for the quarter and 19 crores for full-year, a growth of 23% year-on-year. EBITDA growth was aided by robust additions of headcount and collection efficiencies. Coming to the acquisitions that we announced recently. The acquisitions of STIAC India is expected to add nearly 20% to our top line and improve our pro forma EBITDA margins for the year by approximately 90 to 100 basis points. The business model is annuity based running across multiple years. The transaction is ROE and PAT accredited. We plan to fund this acquisition primarily through debt and internal accruals. Our priority for the financial year is to repay the acquisition debt aggressively following the integration. The acquisition comes at an important juncture of our journey and will elevate us into a higher margin trajectory company. Post-acquisition, the share of our high margin telecom and industrial verticals would grow from 19% to 33% of revenues. We will focus all our efforts in current year on integrating the acquired businesses and unlocking synergies. Closing the deal, the closure of the deal announcement is expected to happen this month. Coming to our second acquisition of LSD Sky Chefs. This is an annuity-based aviation catering business with multi-year contracts with leading airline companies. The business clocks revenues of around 110 crores annually. EBITDA margins of this business are in mid to high teens, which would augment our margins further. The transaction would also be part and ROE accretive and would largely be funded from debt and internal withdrawals. We remain on track to close the acquisition in the next 30 to 60 days. Coming to Foundit. As mentioned earlier, this has been a turnaround quarter for this business as we witnessed a significant uptick in sales of 26 crores for the quarter, which would translate into revenues in the quarters ahead. This has been highest ever sales clogged in the last six quarters. The business recorded revenues of around 19 crores for the quarter. Our losses in the business has come down from 12 crores in Q3 to 9 crores in Q4. We continue our efforts to contain costs and increasing efficiencies in sales. We intend to increase our surgical marketing spend to grow revenues further from the current levels. I would like to conclude by reiterating that this has been the first full year of independent operations. It has been a year of reset and restart for us. Where we realigned our business models, focused on profitable growth, improved internal processes, implemented systems and technologies to improve efficiencies and collections, migrated to SAP, implemented sales force across the verticals, brought down our debt levels, and lowered our cost to serve. I am sure that these measures will lead us to a sustained growth trajectory in the times coming. With that, I conclude my opening remarks and open the call for questions and answers.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star N2. 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 Girish, an individual investor. Please go ahead.

Hello, am I audible?

Yes, you are.

All right. So, I would like to start with congratulating the team on completing the first year and on a fantastic set of results. As you guys have mentioned, I can also see that EBITDA margin has gone up steadily by over 100 BPS in the last four quarters. And both my questions are related to this particular trend. So, first of all, is it fair to assume that post-TIAG consolidation, which is a 700-crore company with high single-digit margin, can we expect that Bluestring will be able to achieve 5% EBITDA margin on a sustained basis in the near future? And my second question is if you can provide some update on the timelines on the closure of both these transactions, TIAG and LSG. Thank you.

Thank you for that question. So you are right, you know, as mentioned in our speech and also reflected from our numbers, we've moved from 3%, which was our starting margins in Q1 of FI26 to 4%, 4.2% now in FI26 Q4. And with this acquisition, our internal estimate is that we should definitely be in the touching distance of 5% margins. In terms of timelines, since these are two separate acquisitions, STIAG acquisitions, we are expected to close within this week. So, starting Q1, we will start consolidating STIAG with BlueSpring. And as far as LSD acquisitions, we are looking at timelines of another 30 to 45 days within which we assume the acquisitions to get completed.

So, then it will accelerate our growth rate as well, if I'm understanding this correctly.

Yeah, so there is an organic growth, as we've demonstrated last year, you know, we've done a double-digit growth. So, from our organic businesses, we expect... 14 to 15% growth, and with these inorganic acquisitions, you know, with 700 crores of annualized revenue from STIAG and, you know, 110 crores of annualized revenues from LSE, that will add on to the existing organic growth.

We will take our next question from the line of Yes Sharma from 361 Capital. Please go ahead.

Hello. Hi, sir. Thank you for this opportunity, and congratulations to the University of Texas. So, one of the questions that I have is in relation to the STIAG India position. So, I'll go with the first question. Sir, how does the STIAG India position fit into a Blue Spring Road strategy?

Yash, is your question that how does STIAG India integrate with BlueSpring?

Yes, so, yes, broadly that, as in, how would the acquisition fit into the overall strategy for BlueSpring?

Yeah. So, Yash, you know, as you can see, we position ourselves as an integrated infrastructure services company, and STIAG offers end-to-end Our services spanning across feasibility, commissioning, O&M, and, you know, they also were a subsidiary of a 90-year-old German company. So, the technical capabilities that they have towards solutions in the power industry are a great addition to the blue screen capabilities. Also, STIAC has, in addition to domestic presence, as well as access to 7 gigawatts of Power plant operations and maintenance within India. They also have overseas presence. So they have a large contract, close to around 600 megawatts in one African country. They also have operations in Middle East and in Vietnam. And the majority of their contracts are SLA-based contracts and not manpower-based contracts. So they definitely become a great addition to the Blue Spring services.

Got it, sir. It was clear. So, the second question I have is that how much the EBITDA from both of the acquisitions will increase going forward, and can you give some light on the profit of the tax margin for the acquisition also?

Yeah. So, Yash, as we have mentioned during our previous calls as well as in this IR presentation, STIAG operates at high single-digit EBITDA margins. So, at 700 crores of revenue, you know, let's say around 60 to 65 crores of annualized EBITDA should come from STIAG. LSG operates close to around 17 to 18 percent presently operating margins. And with 110 crores of revenue, they should probably add another 20 crores of EBITDA from LSG operations. So, both put together, we expect another 80 crores of EBITDA to be added on a combined basis. On a profit after tax, we believe with both these operations integrated well, both financially as well as culturally, we should cross on a... Annualized base is a 100 crore spat company with both these acquisitions integrated well.

So, that we have said that culturally, also it will help. So, that brings on my next question, that how do we see these synergies and cross opportunities playing out?

Yeah, so there are ample opportunities. As you know, one of our service lines into engineering asset management under the brand Hopincon's, we have a very large presence in the industrial asset management space, specifically in the metals, both ferrous and non-ferrous metal industries, and we work with some of the very large manufacturing plants in that space, providing end-to-end operation and maintenance solutions. And, similarly, STIAG is working, you know, with some of these clients also on an end-to-end power plant operations for captive power plants for such metals. So, there is a lot of cross-sell opportunity, both for HopinCon as well as STIAG. And, like I said, yes, you know, we want to showcase ourselves as India's largest. We are an integrated infrastructure services company. So, you know, if you take, let's say, a very large manufacturing setup in any industry, we can become a one-stop solution now with, you know, industrial services, housekeeping services, security services, food services, and now also power plant operation services. So, we can be a one-stop solution for any large, you know, industrial manufacturing setup.

Got it. So, just last question from my side. So, what date are we thinking from with the perspective of consolidations for both the acquisitions?

Yeah, I did answer yes in my previous question, but I'll repeat. So, STI acquisition we are hopeful to complete within this week. So, starting end of this month, we will start consolidating STI. And LSG should take another 30 to 45 days.

Got it. Thank you. Thank you so much for this, sir, and all the best.

Thank you. Next question is from the line of Sarvesh Gupta from Maximal Capital PMS. Please go ahead.

Hi, sir, and congratulations on a good set of numbers. But firstly, on the organic growth piece, so, you know...

I'm sorry to interrupt, Savish. Can you speak a little louder, please?

Yeah, yeah. So, on the organic growth piece, we have given an ACV of around 450-odd crores, right, for FY26, which translates to 12-13%. And then there can be some accounts which can be lost also every year, right? So, if I do that match, it's coming to more like 10% sort of a growth on an organic basis. So, how do we look at the organic growth? Because you mentioned, I think, 15% earlier.

Yeah. Thanks for that question, Sarvesh. You are right. And, in fact, if you look at our current year results, we've grown 11%. So, exactly, you know, we've probably organically grown close to around 15-16%. And we've lost certain contracts. Some we have lost to competition, some we have also lost because we wanted to intentionally come out of some really low margin contracts, and that has also reflected in our margin trajectory moving upwards from 3% to 4%. So, internally, we have weeded out all those contracts, so we do not believe that the reduction should be of the magnitude that we saw in the year one. Also, you know, being year one, we were, you know, we started the year with a negligible investment in our sales leadership, which we have strengthened over the years. As we start this year, we have a full-fledged sales team, which is also well integrated into the culture of the company. So, you know, if I reflect back from year one with, let's say, 50% of my sales team capability and also, you know, me trying to weed out some loss-making contracts. I start this year with a position of strength where I don't have any more contracts that I want to intentionally lose because of poor margins, and I also have a full-fledged sales team, so that gives me confidence to commit 15-16% organic growth.

And I am assuming that on top of that, we will still be on the hunt for inorganic opportunities because the space where you are operating, there can be a lot of inorganic opportunities from time to time.

So, Sarvesh, our first and foremost priority is to integrate these two acquisitions. As demonstrated through these acquisitions, we have a lot of deal discipline. You know, if you look at the prices at which we have got these assets, we've disclosed that, you know, STIAG acquisition, we're going to pay enterprise value of 180 crores. We got almost 140 crores of cash in the business. So, we'll obviously be very selective with our acquisitions. We'll follow the same deal discipline that we have followed with these two acquisitions. But our topmost priority right now is to integrate these two acquisitions within BlueSpring.

You know, the other question is on Founded. So here we have been losing money. Of course, you know, this quarter has been good, but it doesn't fit with the other businesses that we have. And given all kind of AI risk, etc., you know, there can always be a cloud over the long-term outlook for this business. So, what is the management's, you know, near term, let's say, FI27 plan as well as in the medium term, what do you want to do with this, and how do you want to deal with Foundit?

Thanks, Sarvesh, for that question. So, you are absolutely right. And that's why, if you see, in all our presentations, we show our operating assets separately and found it. We show it as an investment because we know that, you know, this is a very different asset than our organic businesses that we are growing. So, in terms of, since your questions are on near term and medium term, in near term, we definitely want to, you know, increase our revenue share. And bring down the losses for that business. Quarter 4 has been a demonstration of that. And, you know, we are midway almost in quarter 1. And we believe we'll be able to repeat our performance over the next 2-3 quarters. So, in the near term, we have given a guidance that by end of this year, quarter four, we want to be a EBITDA break-even. And as you can see, you know, we have jumped from 17 crores of revenue to almost 26 crores of revenue. And if we can continue this trajectory upwards, we are very confident that by exit of this financial year, we should exit with a break-even. And then that brings us to the medium term. We categorically call this out as an investment. We believe that there is a lot of value of this asset, both for us and eventually, if we find a right investor who can scale this asset, you know, it's a space which has got only one last player in the market. And hence, you know, for such a large market like our country, there is definitely an opportunity for a number two player to scale up. So in the medium term, we will not shy away in, you know, coming down and becoming, let's say, a minority investor in founded. But till that time, we want to scale up this asset and find out a right, you know, investor for founded.

Yeah, so that is understood. But, you know, right now, the company is bleeding money. So, till what point of time will the parent support? Have we decided any guardrails that this is a maximum that we want to invest further, let's say, FY27 onwards? Because the funding requirement of this business can be there for a long time if it doesn't reaches the breakeven, and that can always be under question mark.

Yeah, so Tarvish, we have deliberated this internally with our board, and we are keen to see the turnaround for FY27. So as of now, we have visibility of Funding limits were founded for the current year and its growth and whatever is the shortfall the parent supports. We also in past have raised capital for founded from external investors. And if there would be a need, we believe that there will be people willing to invest in this business model. Like I said, this is a year where we want to fully solve founded. And the first and the foremost step in that solution is to move more near towards a breakeven. With that objective being achieved in quarter four, we will definitely be taking some steps to monetize our investments in Foundit.

You know, given the kind of valuation at which we have got 180 crore equity value with 140 crore cash in the company for 65 crore EBITDA. So, I mean, are the revenues going to come in the coming years or is this just a one-time sort of a revenue EBITDA performance and hence it has been sold at this sort of a valuation? I mean, basically, is it sustainable and how do you look into it, you know, in the coming years?

So, STIAC is, first of all, a company which has been in India for the last almost 25 years. This company was founded by STIAC Powered GMBS, which is a 90-year-old German energy player. And STIAC themselves, if you look at our presentation in the last three years, in FI24, they were at 330 crores. FR25, they were at 600 crores, and FR26 last year, they have closed at 700 crores. So, they've been growing, and, you know, it's not that it's a one-time revenue. They have access to long-term contracts. Generally, Pavapan contracts range from 3 to 5 years. And as of now, the visibility of their revenue is definitely there for next three years. And typically, all these contracts, you know, when they come up for renewal, we also get, as in STIEG, also get the chance to participate during renewals. The reason and one of the foremost reasons for, let's say, the Germans to let go of these Indian assets is because strategically they want to now focus more on the Europe market and the energy crisis in Germany. So that's why they had an intent to focus only on the Europe market and they were letting go the Indian assets and to a certain extent we kind of got lucky to get this asset.

On the pre-NDAS basis, you know, what are the major, I mean, first of all, a feedback if you can incorporate that into one of the slides from next quarter, and secondly, what will be the adjustment at low EBITDA level and at the PBT PAT level?

Yeah, I'll let Propul answer that, but we do not have sizable NDAS adjustments in BlueSpring, yeah.

So, around 121 crores of EBITDA that is reported, you will notice close to around 10 crores is coming from only India. The remaining is all operating EBITDA. Number one. And even in terms of our PAT that we have reported, there are only two adjustments to the PAT from an exceptional item perspective. One is the labor code that we had reported in Q3, close to around 29 crores of one-time hit that we had taken because of the labor code changes. One. In Q4, we have taken 6.8 crores of exceptional item towards professional charges for the acquisitions that we have announced. Those are the only two call-outs in PAT as well.

Okay, that's all from my side. Thank you.

Thank you. Before we take the next question, a reminder to all the participants, if you wish to ask a question, please press star and one. We will take our next question from the line of Zakir Nasser, an individual investor. Please go ahead.

Yes, sir, can you hear me?

Yes, sir, audible.

Yeah, congratulations on turnaround quarter, Kamal ji and team. Sir, as it is clearly intended that Founded is an investment for Blue Spring. But on a console level, it keeps burning cash. So would you be reasonably confident that this year, Q4, you will make it EBITDA neutral at least? And as you mentioned, market the size of India cannot have only one player in this segment. So, what would your intent be, sir? Would you want to turn it around or would you want to sell it out? I mean, from the management perspective. Thank you, sir. And this 100 crore, what you mentioned would be X of founded, right?

Yes, thanks for your questions. I think there are three questions. Let me start in the reverse order. Yes, you are right. We'll cross 100 crores bet. Exo found it. I think on our intent. And our confidence level of EBITDA neutral, I think I did answer when similar question came from Sarvesh. But, you know, just to again reassure, if you look at the performance, you know, we've done sizable investments in the product and the sales capabilities and leadership of Founded. We have seen on-ground results in Q4, where the revenue has increased. The sales number has increased from 17 crores that we were hovering around from the previous three or four quarters to 26 crores. Historically, we have seen quarter ones are generally soft quarters for talent platforms, but we are very confident that we will be able to repeat our performance of Q4 and Q1 as well. So, we are on that trajectory of an internally aligned of taking the company to an EBITDA break-even company by the end of this financial year. On our medium-term intent, I have also clarified in the previous call that we see this as an investment, and, you know, we will not shy away at the right time to monetize a sizable part of our investment, but we would also want to find a suitable home for founded. As I explained, there is a phenomenal opportunity in the market while there is a bit of a cloud as soon as, you know, in the previous questions surveys I mentioned about AI risk and IT companies. But if you see our wallet share, that way is pretty, pretty small. So, from an overall market sizing perspective, and, you know, only second player in the market, the opportunity size for us is still phenomenal. And that's what, you know, in the near term, we are trying to capture by enhancing our sales. And, yeah, I think the third question, which was on Pat, I answered that the 100 crores number that we are targeting to cross this year is without funding.

So, sir, would it be safe to assume that Founded, if it touches 35 crore run rate, we will be packed positive on it, sir?

Yeah, that's the range. So, that's the cost base of Founded right now, and we do not need to invest anything further in terms of people, products. So, you are right, 34, 35 crore is the range.

Thank you, sir. Best wishes for the year.

Thank you.

Thank you. We will take our next question from the line of Ashish Parikh, an individual investor. Please go ahead.

Hello. Can I order you? Thank you for the opportunity, sir, and congratulations on good set of numbers. I have two questions. One is regarding the consolidated top line that we predict after these two acquisitions. And that is the first one, sir. And second one is regarding those one-offs and exceptional items that we have been showing on our balance sheet. So, from now on. Do we assume that these one-offs and external items are behind us and will be bad positive? There will be no losses reported? These are my two questions.

Yeah, Ashish, thanks for your questions. On consolidated top line, I think again I answered it in the previous question. So organically, see we closed the year at 3,300 crores. Organically, we are targeting 15 to 16% growth in FY27. And to top it up, another 800 crores comes from the inorganic route. But the 800 crores is an annualized number. It also comes in proportionately from the day we consolidate. So, for example, SIAG, we will obviously get full 10 months. LSE could be, you know, 8 to 9 months depending upon when we do the transaction. As far as one-off and exceptions, I think Prabhupul did explain, even in the current tier, the entire corporate India took a one-off for labor code charges. So that's the only one-off that we have and nothing else. So that way we are also not... You know, having anything one-off except the labor code impact, which like I said, every listed company in their country too. And the second exception was only the acquisition cost for these two acquisitions, which includes diligence done by, you know, big four companies and consult fees, legal and banker charges for the transaction, which is again a customary thing to do in accounting to show the effect of such cost separately from the operating cost. So, even in the current year, we have not done any exceptional reporting other than the two which were obviously, you know, situational driven. And for future standpoint also, we want to continue to report all operating expenses and operating profits. As far as cash position, we are already a cash positive company. If you see our cash flows, you know, excluding Foundit, we've done. Close to around 70% operating cash flows to EBITDA ratio. So we've generated cash during the first year itself and we'll continue to guide the market to be a 55-60% operating cash flow company with the operating EBITDA.

Thank you, sir. Just one follow-up. From these acquisitions, do we have any amortization or depreciation expenses or not?

No, it is again a CapEx-like. Both the companies are very CapEx-like companies, and we don't foresee any large items that is impacting the depreciation at an overall level. We don't foresee that. Both are acquisitions.

Thank you so much, sir. Thank you, sir.

Thank you, Ashish.

Thank you. A reminder to all the participants, anyone who wishes to ask a question, may press star N1. We will take our next question from the line of Costa from BMSPL Capital. Please go ahead.

Yeah, hi. Good morning. This is Shreya on behalf of Kofa. I get a sense that FY27 will be a period of consolidation of the two acquisitions, but I want to understand what will the growth be in terms of revenue and EBITDA margins in the business that stands today if we do not include these two acquisitions. So, basically, how will the business X of these two acquisitions look like in FY27 versus FY26?

Sure. Thanks, Shreya, for that question. So, organic growth in terms of revenue, our guidance is 15 to 16%. Organically, we have touched 4% EBITDA. So, that's the range of EBITDA that we want to be from an organic businesses. Quarter ones would be an exception because two of our high-margin businesses, which is food and telecom, have a seasonality effect in quarter ones. Food, because we work with a lot of large education institutions, and due to summer holidays, quarter ones are generally soft quarters, so we may drop from 4%. In quarter months, but then we come back strongly from quarter two onwards. That has been the historical trend as well. So, you know, the organic revenue growth 15-16%, organic EBITDA range 4%. With these two acquisitions, the EBITDA margins jump from 4% to 5%. And the revenue growth, like I said, you know, organic plus close to around 700 odd crores from these two acquisitions should add. I hope that answers your question, Shai.

Yes, thank you so much and all the best.

Thank you.

Thank you. Participants, you may press start and want to ask a question. As there are no further questions from the participants, I would now like to hand the conference back to the management for closing comments.

Thank you and thank you for all the investors for attending today's call and asking all valid questions. This has been a great first financial year for us as a listed company and we've tried to tick all the boxes of the commitments that we gave during our first inaugural analyst call in Q1, whether it was the margins that we wanted to target or the discipline that we wanted to do with our acquisitions. Our digital investments that we did throughout the year, and our leadership investments that we have more or less now done. A527, as we look forward, we look forward with a lot of optimism, both from our organic businesses as well as integration of these two acquisitions. Thank you once again, and look forward to interacting with you in the coming quarters.

Thank you very much. On behalf of IISL Capital Services Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.

Thank you.