This article first appeared on GuruFocus .
Release Date: November 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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SIS Ltd ( BOM:540673 ) reported its highest ever consolidated quarterly revenue of 3,759 crores, marking a 15% year-on-year growth.
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The India Security segment achieved its highest ever revenue of 1,544 crores, reflecting an 11.5% year-on-year growth.
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The company successfully closed a transaction with AP Securitas, expected to add 17% to the India security monthly run rate.
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EBITDA grew by 16.2% year-on-year, with a margin improvement to 4.5% on a consolidated basis.
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Return on capital employed improved to 14.3% from 11.7% a year ago, indicating better operational efficiency.
Negative Points
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India Security's EBITDA margin saw a marginal dip of 20 basis points due to branding costs.
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The international business EBITDA margins remained flat year-on-year, indicating challenges in margin improvement.
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The DSO increased by one day due to a one-time situation in SIS International, affecting cash flow efficiency.
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Attrition rates for permanent employees have increased significantly, posing a challenge for workforce stability.
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The international business is expected to take longer to reach the desired 4-4.5% margin profile, indicating slower margin recovery.
Q & A Highlights
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Warning! GuruFocus has detected 3 Warning Signs with BOM:540673.
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Q: Can you provide more details on the AP Securitas acquisition and its expected impact on revenue? A: The acquisition of AP Securitas is expected to add slightly more than 1,000 crores in annual revenue. Currently, the asset is running at 110 crores on a monthly basis. However, we are not providing specific financials at this moment and will wait for the consolidation to happen this quarter. (Unidentified_3)
Q: What does the term "strong rebound" mean in your financial context for FY26? A: The term "strong rebound" refers to the significant revenue growth we are experiencing, which is the highest year-on-year change in the last five years. We have also reported the highest ever EBITDA at close to 168 crores, and we are moving towards a 400 crores profit after tax, which will be the highest jump in both PAT and EPS. (Unidentified_5)
Q: What is the timeline for achieving a 6% EBITDA margin in the Security Solutions India and Facility Management segments? A: While it's difficult to provide an exact timeline, we are moving in that direction. Our security business is back at 5.5% plus, and our facility management business is at 5.3%. We believe reaching a 6% margin, which was the pre-COVID profile, is quite likely within the next few quarters. (Unidentified_5)
Q: What are the expected margins for the international security business, and how does it compare to the Indian business? A: The international business is expected to report the highest ever organic growth in the last 10 years, with margins currently at 3.5%. Historically, the benchmark for international business is around 4% to 4.5%. We are working towards achieving this in the coming quarters. The share of international business is decreasing in our consolidated numbers, which will positively impact the overall margin profile. (Unidentified_5)
Q: How does SIS plan to manage the high attrition rate in the industry, and what are the recruitment challenges? A: The attrition rate in the industry is approximately 35% to 45%. While there are recruitment challenges, the government's ELI scheme has provided some incentives, helping us increase intake. SIS has a robust recruitment and training infrastructure, including 21 residential training academies and a digital recruitment platform, ensuring we do not lose contracts due to recruitment issues. (Unidentified_6 and Unidentified_5)
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
