Service Care Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian facilities and workforce management industry is undergoing a transformation fueled by rapid urbanization, increased adoption of integrated services, and growing emphasis on hygiene, safety, and operational efficiency across commercial and industrial premises.

The financial year 2024 25 witnessed a notable increase in demand for bundled services combining soft and hard facility management, driven by both cost optimization efforts and the need for streamlined vendor management. The workspace management vertical gained prominence owing to the continued evolution of hybrid work models, workspace reconfiguration needs, and a preference for flexible, scalable office solutions.

Further, government initiatives and the rising importance of Environmental, Social, and Governance (ESG) compliance have positioned integrated service providers like Service Care Limited as key enablers of sustainable urban infrastructure. The industry is also seeing a gradual shift towards technology-enabled service delivery models incorporating IoT, real-time monitoring, and data-driven insights.

OPPORTUNITIES AND THREATS

Opportunities:

Urban Growth and Infrastructure Projects: Increased investments in commercial infrastructure, real estate, and smart buildings open doors for expanded facility services. Outsourcing Trend: Corporates are increasingly outsourcing non-core operations, including housekeeping, security, and maintenance. Workplace Evolution: With the shift towards hybrid working models, demand is increasing for managed workspaces and flexible service models. New Verticals: Sectors such as BFSI, healthcare, warehousing, and logistics are emerging as promising areas for workforce and facility solutions. Digital Solutions: Implementation of automated attendance, IoT-enabled maintenance, and app-based service requests is gaining traction and creates an edge for tech-savvy operators.

Threats:

High Attrition Rates: Labor intensive operations are vulnerable to high attrition and skill gaps, impacting service continuity and quality. Compliance Pressures: Frequent changes in labor and safety regulations increase the administrative burden, especially for multi-location deployments. Cost Pressures and Margin Erosion: Competitive pricing, wage inflation, and delay in receivables may put pressure on profitability. Operational Risks: Inadequate supervision, theft/loss incidents, or service failure at client locations may result in reputational damage.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE

The Company operates across three core verticals, each of which demonstrated strategic progress during the year: a. Facility Management:

This segment contributed the largest share to the Companys revenues. Our service portfolio includes housekeeping, sanitation, security services, pest control etc. We successfully retained several long-term clients and added new contracts in industrial parks, corporate offices, and hospitals. b. Workspace Management:

This vertical showed increased momentum with enhanced demand for managed and semi-managed workspaces. The Company expanded its presence in Tier 1 and Tier 2 cities, offering customized space design and integrated utilities management. c. Workforce Management:

We scaled this vertical by onboarding new clients in BFSI. Our emphasis remained on compliant deployment, timely onboarding, and enhanced background verification.

OUTLOOK

The Company is well-positioned to build on its performance in the coming financial year, driven by its strong client base, sectoral diversification, and expanding geographic footprint. With the growing demand for integrated facilities and manpower services across sectors, Service Care Limited aims to strengthen its value proposition through innovation, quality delivery, and operational excellence. In FY 2025 26, the Company wants to focus on the following strategic initiatives: Deepening Client Engagement: Enhancing service delivery and account management practices to grow wallet share in existing accounts and improve client retention. Geographic Expansion: Scaling operations in emerging regions with high industrial and infrastructure development potential. Technology Ennoblement: Upgrading operational systems for better real time monitoring and workforce tracking across client sites. Sustainability and ESG Integration: Expanding green cleaning solutions, energy-efficient facility operations, and workforce skilling aligned with ESG expectations of clients and stakeholders. Talent Investment: Continuing investments in training, employee welfare, and digital HR tools to build a stable and performance-driven workforce.

The Company remains cautiously optimistic, acknowledging macroeconomic uncertainties, rising cost pressures, and competitive dynamics. However, with prudent governance and a scalable service delivery model, it expects to achieve sustainable growth while maintaining service excellence and client trust.

RISKS AND CONCERNS

Despite growth opportunities, the Company is cognizant of several risk factors:

a. Manpower Dependency: The quality and availability of skilled and semi-skilled workers is crucial. Labor shortages or industrial unrest could impact service delivery.

b. Client Concentration Risk: Dependency on a few major clients can expose the Company to volume and pricing renegotiation.

c. Compliance Risk: Failure to comply with labor laws, safety standards, or ESG norms may result in penalties or loss of business.

d. Cybersecurity and Data Protection: As operations become tech-driven, data privacy and system security are emerging risks.

e. Receivables and Cash Flow: Delayed payments from clients, especially government-linked projects, may impact liquidity.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Service Care Limited has implemented a robust internal control framework that ensures accurate financial reporting, statutory compliance, operational efficiency, and safeguarding of assets. Internal audit is conducted at periodic intervals across functions such as operations, HR compliance, procurement, and billing. The findings are reviewed and necessary corrective measures are implemented in a timely manner.

FINANCIAL PERFORMANCE

A summary of financial indicators is as follows:

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

As a people-driven organization, Service Care Limited places strong emphasis on employee satisfaction, training, and well-being. With a workforce of over 5,900 employees across multiple sites, the Company ensures statutory compliance, regular engagement programs, and structured grievance redressal mechanisms.

In FY 2024 25, the Company initiated a few HR measures such as skill development and safety training across functions, Digital HRMS rollout to streamline onboarding, attendance, and payroll, focused recruitment to address manpower gaps in high-growth areas. improved retention policies through revised benefits and incentives, and strengthened POSH (Prevention of Sexual Harassment) framework at all locations.

The Industrial relations remained cordial throughout the year.

KEY FINANCIAL RATIOS EXPLANATION OF SIGNIFICANT CHANGES

The key financial ratios along with the comparative changes and requisite details forms part of the Board Report forming part of this annual report.

CONCLUSION

The financial year 2024 25 marked a period of steady progress for our company, driven by strategic execution, operational resilience, and a customer-centric approach. The Company continued to strengthen its core service offerings across facility, workspace, and workforce management, while adapting to evolving industry needs and client expectations.

Looking ahead, the Company remains committed to long-term value creation through digital transformation, people empowerment, and sustainable business practices. While external challenges such as inflation, compliance requirements, and competitive intensity persist, Service Care Limited is confident in its ability to navigate uncertainties with agility and deliver consistent performance.

The management expresses sincere gratitude to its employees, clients, vendors, shareholders, and regulatory authorities for their continued support and trust. With a strong foundation, clear priorities, and a forward-looking mindset, the Company is poised for a productive and growth-oriented FY 2025 26.