Updater Services Q1 Results Review - Focusing On High-Margin Business Support Services Business: Motilal Oswal

Motilal Oswal Report

We see Updater Services Ltd. benefitting from the long-term trend of outsourcing noncore business operations for greater efficiency and service quality. With continued momentum in the integrated facilities management space and an inorganic growth engine in the high-margin business support services vertical, we expect the company to deliver sustainable and profitable growth.

We expect a compound annual growth rate of 17%/32% in revenue/Ebitda over FY24-26E.

With visibility of healthy earnings growth over the medium term and strong value from BSS business, we reiterate a Buy rating and a target price of Rs 400 (premised on 18 times FY26E price/earnings on adjusted earnings per share). Our target price implies a 25% upside potential.

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