SIS LIMITED (SIS) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to SIS Limited Q3 FY26 Earnings Call. As a reminder, all participants' 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. Vineet Toshneva. Thank you and over to you.

Thank you very much. Welcome, everyone. Good afternoon to our quarter three FY26 earnings call. Yesterday, the results were uploaded. I hope all of you had a chance to look at our results. So, let me start saying that the entire tone for FY26, as you know, has been, this is a year of rebound, and, you know, we are happy to report that this has been a milestone quarter in every sense for SIS, which is marked by very strong execution across all business lines, and we are seeing sustained momentum in growth and profitability both. For the first time, we've crossed 4,000 crores in quarterly revenues. We've reported consolidated revenue of 4,185 crores. This represents a whopping 24.5% year-on-year growth. Of course, there is acquisition consolidation also built in. That's why the quarter-on-quarter growth is 11.4%. The operating EBITDA, as you would have seen in the results, we have carefully reported operating and reported EBITDA. So I am referring to the operating EBITDA part for the quarter stood at a record INR 196 crores, which is actually 25.2% growth year on year. This shows the resilience and scalability of our operating models. Now, there has been much discussion and a lot of noise around the labor codes, and you would be seeing results across the board from various IT companies and other companies, even in the security staffing industry as well, right? So what we would like to, and you would have seen, we have taken up a provision in our results. So coming to that, it's actually in line with ICIA guidance, where we had engaged our actuary, and they have done a reassessment based on the new definition of wage, the leave and gratuity obligation, right? So, the company has recognized a one-time exceptional charge of INR 290 crores, which is associated with past period gratuity and leave liabilities. Now, we must emphasize that this is prior period. There was a choice in front of our management that whether to take a slightly aggressive view or conservative, We have erred on the side of being conservative and we have taken a full provision. Now, as we go forward, because these are pertaining to the past period, we will start the process of educating our client once the model codes are actually notified and we will be trying our best on a best effort basis to recover the incremental employee-related payouts from our customers. Because, as you know, in our model, everything is a pass-through, right? So, as the recovery is materialized, they will now start reflecting positively in our financial results, having taken the entire provisions, right? So that's on the labor code and the gratitude provision part. We'll be happy to answer if there are any other questions after this. Now, coming to the results, you've seen consolidated monthly revenue run rate is now 1,400 crores in excess of that, with all three segments firing. So, on a consolidated basis, we have a highest-ever quarterly revenue of 4185 crores, which is, as I said, 24.5% year-on-year. India Security reported its highest-ever revenue of 1898, almost like 1900 crores, which is a 33.7% year-on-year growth. FM also recorded its highest-ever quarterly revenue at 636 crores, which is a 10.3% year-on-year. International security recorded a very robust growth, highest ever quarterly revenue, 1670 crores, which is a growth of 20.8% year-on-year basis. Now, coming to the earnings part, which is EBITDA, we've been trying to, you know, improve our margin profile, as you know. So, focus on margin improvement initiatives, again, showing results. We focused on margin both in terms of customer contracts as well as rationalization of SGMA. So, on a consolidated basis, our EBITDA grew from 168 crores by 20.7%, right, on a year-on-year basis. So, now we are at an EBITDA margin of 4.5%. This, again, I am talking of... Operating EBITDA, not the reported EBITDA. India's security... India Security operating EBITDA margin is 5.2% after adjusting for the acquisition-related costs, which are a one-time cost, which were all taken in this particular quarter only. Facility management reported an expansion in EBITDA margins by 80 basis points to 5.4%. So additionally, the segment reported its highest ever quarterly EBITDA of 34.3 crores, which is a 29.1% growth on a year-on-year basis. For international security, again, there is margin expansion. The EBITDA margin went up to 3.8%, remaining flat on a year-on-year basis, but quarter-on-quarter basis, it saw a jump. The EBITDA margin was up by 19.2% on a year-on-year basis. Now, coming to the PAT, we have reported an operating PAT of 100.8 crores for the quarter, which is, even though it's flat on a year-on-year basis, but quite a big jump over the last quarter. So, the operating PAT margin is now at 2.4 percent. Our efforts to, you know, clean up the balance sheet, which we have taken a charge last year to clean up the goodwill, etc., is all showing on our increased return on capital profile, which was 12% a year ago. Now it has crossed 15% watermark. Now it's at 15.2%. Again, operational efficiency, the DSO part, we have been keeping a very tight ship. DSOs were 67. Now they are down by two days. So now... Sorry, the DSOs were 69, now they are down to 67, which is an improvement of two days from the previous quarter. So that's all about the financial performance and the EPA. And okay, last but not the least, we are at an EPS of 7.2 rupees for this quarter. That almost gives us a run rate of close to 50 rupees on an annualized basis, which is quite a jump from the last year, right? So that's all about, that's a complete snapshot of our financial results and the commentary on the labor codes in the Gratuity part. Now, on the call, we have Rituraj, Group Managing Director, Mr. Brajesh Kumar, he's the Chief Financial Officer, and Mr. Murali Krishna, he's the CEO at SIS International. Turning over the call for Q&A now.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handset 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 Amit from OneCapital. Please go ahead.

Yeah, thank you for the opportunity. Hello, Addison.

Yes, sir, you are audible, but there is a background noise.

Okay, I hope it is better now.

Yes, it is. Please proceed with the question.

Yes, so on the one-time transplant you have taken, I understand it's on the conservative side, but when it comes to kind of how much we think we can recover out of it, do you think it is? What's your view on that?

Hi, this is Ritu Raj. I am glad you started off with this question. This is the elephant in the room that needs to be addressed. So, the first point I'd like to call out is that gratuity charge that is showing up on our quarterly results of 290 crores is a one-off exceptional item for prior periods. Number two, how is Gratuity Liability computed? Why has this 290 crore come? It has predominantly come because the definition of wage has been changed in the new labor codes. Number three, like Vinit explained, we had two choices. We could have either raised invoices to our customers for prior period gratuity and claimed arrears. We could have done the more conservative or financially prudent approach of taking the charge first and then going back and claiming what our customers ought to pay for prior periods. Now, obviously, if we went for option one and we raised invoices for the arrear claims, the Potential impact reflecting on our PL would have been significantly lower. We have gone for the more conservative approach, as Vineet explained. We have fully... Gratuity payable or gratuity liability for prior periods, assuming that no customer, if no customer pays us for prior period gratuity liability, what is it that we would have to expense from our balance sheet? We have already taken that charge. It is to 90 crores. Now, what we intend to do? What we intend to do now is to go back and raise, as soon as the model rules are out, which is when the act becomes operational, we will go back and raise claim towards gratuity and leave, which is the responsibility of the principal employer, which is our customer in this case. Most of our customers... Just as they comply with minimum wages, they comply with PF, they comply with ESI, they comply with, you know, bonus, we believe that most of our customers should come through and comply with their obligation to pay up for gratuity and leave. It is impossible for me to however predict whether Only 50%, only 30%. What I would rather say is, we have provided for it fully. If we claim 99%, it will come back into our P&L over the course of the year, and if we are able to collect lesser than that, it will also reflect, but it will be a positive reflection. There is no further bad news to be had on account of graduating and leave. Further from here, We will only negate this 290 crore charge as and when we make the collection from clients. I hope that explains.

Yes, thank you very much for the detailed explanation. I appreciate you taking the charge on the first hand, which is not the practice being followed by others, as I see. So, I appreciate the student accounting norms. Thank you for that. Another question was on the dividend sale. So, in the past, the company has rewarded the shareholders majorly through buyback. But this time, there has been a dividend of 7 rupees per share, which is much on the higher side from the general dividend that the company pays. So, will the reward to the shareholders in the form of dividend? Will it continue going forward? Or is it, I mean, what will it be going forward? Like, will it be buybacks or the dividends that have come now and will continue? Any views or clear guidelines of policy in that direction?

Thank you for that question. SIS is a cash... It's significant quantum of free cash each year. As you can see from our past performance, we have a practice of distributing this cash to our shareholders each year. Over the last few years since COVID, if my memory serves me right, we have returned 500 crore approximately to our shareholders, mostly through buybacks. Having said that, there was some feedback from the markets that because SIS is back-to-back only bringing buybacks. We are not seen as a dividend yield company or dividend paying company. Therefore, the board has decided to return money by way of dividend as well as buyback. Eat you up. We have taken the first step this year by announcing a 7 rupee dividend. We believe that as the year comes to a close, Also the benefits that we might accrue from ELI, which is the Employment Linked Incentive and other such sources, we will have more than adequate cash in hand, even after our acquisition funding and internal growth capital requirements, to return another chunk to our shareholders. May come in the form of a buyback, potentially towards the second half of the year. But we have done so, keeping in view the feedback from the market, and we have done so, keeping in mind that dividend or buyback are both taxable now at the hands of the receiver. So the tax implications are neutral. Outgo of cash from the company is the same. So we are just, you know, trying to do this basis feedback that we get from you guys. I hope you're not upset about it though.

The company side is the same approach. I mean, it's the same amount of quantum that goes out to the shareholders. Yeah, however, from the shareholders' point of view, the buybacks...

Thank you. The next question comes from the line of Umang Shah from Banyan to Advisor PMS. Please go ahead.

Thank you for the opportunity. Am I audible?

Yes, sir. You are audible.

Thank you. The first question was, if we were to adjust for AP Securitas acquisition, what would be our revenue growth?

So, the India security revenue growth, excluding APS, is on a year-on-year basis, 11.2, QOQ basis, 2.3. FM, obviously, FMN security, you know, you can see it from the earnings note.

Yeah, yeah, yeah, absolutely.

The concern basis is 15% excluding acquisition.

Okay, 15% ex-acquisition.

Okay, got it. Very useful.

Sir, second question was, our security services India margins came in at 4.8%. You mentioned there were these one-time acquisition costs. If my memory serves me right, AP Securitas acquisitions, the margins were much lower than the security services India entity. In that context, then, what would be the aspiration for the margins for us to grow at, say, in FY26 or FY27?

So, let me revisit the numbers. India security margins, if you will see our earnings note, you will see the portion of the reported EBITDA. Okay, reported EBITDA is intact, 5.5, 5.5, right? So, no change over there, right? So, margins are absolutely stable in India security, if I were to say organic SIS, right? Now, obviously, APS is also part of SIS, right? At the time of acquisition, we had explained, APS asset is a different margin profile, different growth company, right? That's what. So, right now, they are at 4% EBITDA margin, and there is a clear roadmap to integrating APS into the SIS group, 100%, and working through all the efficiencies that can come through SG&A rationalization, sales, you know, kind of sales rationalization and everything. And over a period of time, uplift their margin from current 4% to... As good as what SIS margins are.

Got it. Got it. Thank you so much. I'll get back in the queue.

Thank you. The next question comes from the line of Switchrate Departial from iSight FinTrade Private Limited. Please go ahead.

Good afternoon, everyone. My name is Sukrut Patil. My first question to Mr. Krishna is, as SIS continues to operate across multiple geographies and service lines, what are the main trade-offs you are managing right now, say, between expanding coverage, meeting client SLAs, and protecting margins? And if something shifts, like, for example, wage inflation, regulatory changes, or client churn, what internal signals will tell you that it's time to change the plan of action? That's my first question. I'll ask my second question after. Thank you.

So, I'm not too sure if I understand your question right, but I'll still go ahead and answer as much as I can. You spoke about inflation and the cost increasing and so on. So, as you might know, our business is largely a cost-plus business, and as and when the wage increases happen, with a little bit of a time lag, we do indeed pass it on. As per contractual obligations, we do indeed pass it on to the customers. So, there is not real risk in the business with respect to that. Again, I'm not too sure if I've answered you fully or if you want to kind of, you know, elaborate a little bit more on your question.

Yes, but I'll ask a second question to Mr. Kumar. From a financial point of view, before anything shows up on the quarterly numbers, what early signs do you track that help you spot the margin pressures or cash flow swings? For example, you know, if there's some change in the manpower deployment or billing cycles or client payment behavior, what is the plan of action on this? I just want to understand how do you manage the risks? I just want to address your view on that.

Rajeshji, I think it's your question.

Yeah, it's Rajeshji. Thanks for the question. So, the process we follow that there is a system of after monthly closing, we published a seven-finger model PPT slides, which covers each aspect of business, how the business is doing on margin, how much it is doing on sales, how the business is doing on collections and DSO. This has been reviewed, a copy table also, and there is a system of having a BRM, France review meeting, in which... Every regional head and general head review this performance of the previous month on the basis of the seven items, and on the basis of that tracking, whatever corrective action is required, we plan that thing and we educate those plans. At the time of next month's DRM, we first see that against the plan, what is the actual result, and whatever further corrective action is required, we take the action. I hope that satisfies your query or anything else you are looking for. Thank you, and best of luck for the next quarter.

Thank you.

Thank you. The next question comes from the line of Ramakrishna from ZenWealth Management Service Ltd. Please go ahead.

Yeah, hi. Thank you. This question is not particularly related to the quarter performance or something like that. So, at a general level, I just wanted to understand your thoughts. So, you have indicated that higher compliance thresholds, you know, due to implementation of labor reforms. Even opportunities for players like human with respect to the addressable market opportunity. So, just I wanted to understand, you know, against this background, I mean, if you can spend some time in terms of your thoughts on industry positioning, like SIS being market leader in many of the segments, you know, what is the kind of addressable opportunity furthermore that you will have, you know, in terms of ensuring sustainable growth and competitive scenario, pricing metrics, and all those things. I think that would be a bit helpful. Thank you.

So, that's a little broad-based question, but let me try and address that for you. See, let's, talking about security per se, if you go by the GSTN code on which security services GST is paid, And you back-calculate the... Annualized. Security services alone constitute more than 1 lakh crore worth of market opportunity. So it's a fairly large market. The problem with this market has been that companies like SIS, which are by far the largest in the segment, barely control 5-6% market share. If I add up the top 10, It will not even comprise of 15% market share. Probably, top 50 security companies or security companies with over, let's say, 500 crores in annualized revenue will not even add up to a quarter of the market size. What I am trying to drive at is that... The sector is extremely fragmented because of a fundamental gap, and that gap has been the enforceability of the labor laws. Giving a compliance arbitrage opportunity to smaller companies. I mean, if I put it in very plain language for everybody to understand, when the rule of law with regard to labor acts is not very enforceable or very clear, what happens is That a security company with 1,000 cards, let's say, We are not paying minimum wage to 100 people. But there is no way for government to enforce that. And then the same security company is depositing Provident Fund only for 800 people. And ESI Chalan is only for 600 people. And they are paying bonus for 500 people. Now, there was no mechanism for the government to... Cross-check compliance across 29 different acts. Up to 937 different forms to be filled and deposited. What this labor reform has done for us is that, number one, it has addressed the fundamental ambiguities. For example, interpretation of wage definition. You cannot have different definition of wage for provident fund, bonus, and gratuity. It is the same definition that you must comply and everybody must comply. Similarly, the government has come up with consolidated, at least they are proposing to come up with a GSTN type. Where every single employer in the country, whether it is Labor-Lightened.

Just a follow-up. It will lead to more and more consolidation and from your point of view, like what you did with AP Securitas, you will be doing if any such opportunities comes up for the medium term to near term, you will be now looking at aligning with APS with SIS. Earlier you were mentioning about the buyback and dividend, so I am just trying to understand And you'll be putting cash for acquisitions also, you know, along with both of them.

So, honestly, this has, you know, what I explained to you does not, in any meaningful way, change our thesis on acquisitions. SIS is predominantly an organic growth-driven entity. You know, we don't acquire every year, we don't acquire in every segment, we don't acquire for aggregation, we acquire for strategic reasons, as and when such an opportunity presents itself. So I don't see... This to be directly correlatable with our acquisition philosophy. I think this is a trigger for organic consolidation in the industry by way of creation of a level playing field. Is the best for return on equity. So, our priority is clearly organic.

Yeah, thank you. Can I ask one more or do you want me to join back in queue?

Join back in the queue, please.

Sure. Thanks.

Thank you. The next question comes from the line of Sri Jinnamitha from MS Capital. Please go ahead.

Hi, thank you for the opportunity. I have a couple of bookkeeping questions. One is on the depreciation side. The depreciation number is higher by 8.000 crores. In your earnings release, it's mentioned that it's due to some capex at the customer side. So I just wanted to know what kind of capex is this and would this additional charge be a recurring charge?

Yeah, Reyesha. So, the reason for increased injection is because of two reasons. One is for the additional capex to provide a customer site. So, every time we try to provide a solution kind of sale to a customer, it also involves some capex which we provide to our customer location. But in this quarter, there is one more expectation that because of this TPA counting of APS acquisition, we have created some intangible assets, which amortization has taken place. So, I think 2-3 crore is coming from there, and also since APS has got constituted for the first time, 3 crore depreciation got added because of that. So, hope that is fine for you.

Understood, that's clear. So, this would be a recurring number, right, the depreciation number? There is no one-off in the depreciation number for this quarter.

No, there is no one-off, it's a recurring number.

To add to that, even in the finance cost also, you will see something similar. You will notice there is an increase, and it's predominantly due to the same accounting principle that we are following in case of the APS acquisition tranche 2. So that has contributed, plus some debt that we have assumed on account of APS acquisition consolidation. So similar explanation on the finance side also, if anyone was about to ask.

Understood. That covers the second question I had. Just one last question then. The AP Securitas Consolidation was done for the full three months of this quarter?

Yeah, this has been done for the full three months. From 1st October onwards, we have done the consolation.

Understood. Thank you. Thanks for taking my question.

Thank you. The next question comes from the line of Vishal, Chandramaneev, an individual investor. Please go ahead.

Yeah, thanks. My question was just on the margins, right? So you mentioned that you have a roadmap for integrating the acquisition to align with your steady state margins and security. And you also in your presentation spoke about some tightness in the labor markets for the international segment. So given that there would be a certain time till you can get the acquired margins up as well as the labor market tightness. What is your expectation for your outlook for margin, say, in FY27 in Lyon?

So, let me jog your memory. I think if you've been following SIS, a few years back, pre-COVID, we were a 6% margin business in security, a 6% margin business in facility management. And roughly a 4-4.5% EBITDA margin business in international. We slid all the way back to 4% in security, sub-4% in FM, and 3% in international. As we had committed, it has taken us a bit of time, but we are back at 5.5% in security. Roughly five and a half percent in facility management, and close to four percent in international. Looking ahead, I think our direction is upward, and our goal is to get back to pre-COVID levels. As regards to a timeline, I think, you know, I won't venture a guess, but we are on track. And I don't see labor reforms as something that will throw us off. It is not a headwind. It is a structural tailwind. There will be margin volatility as we renegotiate these contracts. Just to clarify, by renegotiation, I mean the contract is in place, but I need to raise a fresh invoice as per new labor codes. And the customer has to process that in his SAP, Oracle, or whatever else, acknowledge it, and then pay us money. This takes a bit of time. Once this volatility is through, I think we should be, you know, back on our agenda of getting back to pre-COVID levels of margin. But I think what is extremely important to understand is as you look at the margin profile of the business, Please also consider that, you know, on a blended basis, SIS is now a 5%, close to 5% EBITDA margin business. This shift is also happening because the Indian businesses are higher margin compared to international, and the share of international is dropping every year because India is growing faster. So structurally, on a consult basis also, we are moving towards better margins. And then as my friend Vineet pointed out earlier, ultimately margin is a key driver for the principal metric, which is return ratios. I think our return ratios are already at 15% plus, up from 12%. And we think that basis what we are seeing right now in trends, we are going to again see an upward movement. From 15. So, overall, that's the longest answer to your question. That's helpful. Thank you.

Thank you. The next question comes from the line of Umang Shah from Banyan Tree Advisor PMS. Please go ahead.

Hi, sir. Thank you for taking the follow-up. Sir, first question was, in international business, we see based on your finance, based on your disclosures, that almost 36% of the revenue comes from defense and government. Is this one of the reasons why we have lower margin and inability to pass on minimum wage increases?

Hi, this is Murthy. Yeah. Okay, it's a bit of a yes in the no, in the sense that we are able to pass on the wage increases to both our government as well as defense clients. There are no issues with respect to them. It is black and white out there in all the universities that we operate internationally. So the price rise is not an issue, right? So that is contractual obligation. The customer will pay us. However, some of these sites require more clearances when we deploy people on the site, and those clearances do take time. And to identify people with those clearance requirements, getting those clearances does take time. And in effect, what happens is for us to service these sites, we have to incur, let's say, overtime. In those sites, right? And that pulls our margin down. And as and when the unemployment rate eases, we will find more people, and that would obviously push back our margin down. So, yes, it does impact our margin. However, it is, it's not due to the price-based rates.

Got it. Got it. Very useful. And with the India-Europe FTA negotiation recently concluded, it also talks about movement of service professionals and our category of contractual services suppliers. Considering our expertise in security outsourcing and having an international presence, can SIS benefit from this export of manpower to youth Europe?

How do I say, I think, Firstly, my compliments for watching this sector so closely. I'm not sure. Whether others have picked it up or not. I think this is a very interesting development. It's rather premature to comment on it. It has just happened. We haven't yet had an opportunity to frame our thoughts and put together a strategy. But we are watching it. We are watching it very closely. We believe there is certainly opportunity here. And as and when we have something material, we will come back to you.

Sure. Thank you so much. And just last one. Thank you for, I mean, the book SIS Story was a very good read. The insight that the book gave helped us a lot in understanding the history and how SIS is, where it is today and how it is so. So, in that, we read a lot about OneSIS and WeProtect. These were some of the initiatives that you had spoken about three, four years back. Today, are we still working on those initiatives, or they have been subsumed into the overall business?

Well, firstly, thank you for reading SIS story and thank you for marketing the book, even as I'm not going to get any royalty from it. Coming to your question, I think when SIS has broken even, it is doing fairly well. It is roughly run rating at 10 crores a month. So that's 120 crores per annum. So it's not a very big business, but it's broken even, it's taken shape, it's, you know, going to plan. And we protect the alarm monitoring business. GAD gets divided into two parts. One is the B2B side where we are solving problems of banks and retail organizations, etc. And the other one is B2C side where we are basically addressing homes and, you know, shops and restaurants and small businesses like that. We are very happy to share with you that we are almost at 30,000 connections. That brings us to close to… Again, 10 crore monthly revenue, and if my memory serves me right, it is adding close to 15% EBITDA margin.

Got it.

Yeah.

Got it. Thank you so much.

Thank you. The next question comes from the line of Anand Mundra from My Temple's capital. Please go ahead.

Hello. Thank you for the opportunity. Sir, what are the contributions of APS who are operating back this quarter?

The difference between the operating pad and the reported pad, the difference is on account of tax, different tax which we have been created on the one-time exception item of graduate and leave provisions. Another thing is that we have accounted for one-time equation cost of about 7 crores. These are the two components which have resulted in the difference between the operating pad and the reported pad.

And how much has APS contributed?

The question is more about how much PAT APS is adding.

Yes. Actually, my question was more because I can see, I mean, we can see that there's a jump in EBITDA of about 25%. But if I check at the operating pack level from last year, it's about 102 crores and this year it's about 100 crores. So the growth in EBITDA is not really translating into a growth in pack.

Let me clarify. Last year, same quarter, we had a bump up in the profit after tax owing to ATJJ and income tax refund interest. So that was an abnormal hundred and some crore rupees of pet. And that's why when compared to that YOY, the number is looking disappointing. But if you compare it to the preceding quarter, which was roughly at 90-93 crores, that would probably explain APS add-up better.

All right, all right. Got it, got it. Maybe I'll connect separately for the operating part contribution from APS.

Anand, we can connect offline and get back on this one.

Sure, and also just a follow-up on this as well. What are the intangibles that have now been created due to the ATF acquisition?

The goodwill charge?

There's goodwill and I think there's some amortizing, there's some something that they're also amortizing, right? I think there's some 2-3 crore of contribution that's coming.

That's the PPA accounting. The actual goodwill amount which have been created is approximately 130 crore.

Okay, 130 crore of goodwill. All right, all right. All right. And just one more question. So, I mean, there's an ELI scheme, which is, I think, which has now been applicable from 1st August. So, have we kind of worked around what kind of numbers or what kind of benefits we can get from this ELI scheme?

I think you will have to wait till next quarter to get an answer to that.

All right. All right.

Thank you.

That's it for me. Thank you.

That ELI, whatever comes, Employment linked incentive program is created for employers like us who are targeting blue collar, who are large scale, who recruit in thousands every month. So SIS probably would be in the top tier of ELI beneficiaries in the country. The exact math regarding that will be clear once the first payment is made by the government. That is what I am waiting for, but there would be significant flow through to the pad line, you know, because there are no costs associated here.

Thank you. The next question comes from the line of Raheel from Sapphire Capital. Please go ahead.

Hi, sir. Good afternoon. So, just one question in regard to our age of businesses and then overall for SIS. Any sort of growth or guidance you'd like to give at this point in time?

I think SIS does not really give guidance, but from a very long-term modeling perspective, this question has been asked before, and we need continues to repeatedly articulate that, so I'll give him the opportunity.

So, look, I think there is no number guidance, but if you want to, you know, look at, do the crystal ball gazing, I mean, it's like, you know, we are consistently said that we will be in security, we will be about 1.5 times the GDP, so you can model about 11-12% type of, you know, growth in security. FM has a smaller base, bigger target addressable market, much more, much bigger growth profile. So again, you could budget for between 12.5% to 15% type of growth rate. Right? International market, roughly about 7.5% is what you can say. It's a sustainable growth rate. I mean, this year has been exceptional, but not all years are so good like this. So, that's how you can model it, right? Overall, consoled basis, we should be looking at about 12% type of, you know, growth.

Okay. Got it, sir. Thank you.

You know, just to supplement what Vineet is saying, you know, if you... Look up to page 11 of our earnings note. You know, that's another way to look at it. You know, charts are present on slide 11 and page 5. So, if you look at the revenue growth trends for the last 8 years, it's roughly 14.8%. Looking backwards, our EBITDA CAGR for the last 8 years since listing is 13.4%. Thank you. Coming to page 11, if you look at our net debt to EBITDA profile, we have always been around 1.2x on average over the last 5 years. OCF to EBITDA for the last 5 years on average has been 83%. Finance cost has been 1.1%.

Sorry to interrupt. Sir, sorry to interrupt. There is a background noise which was coming while you were speaking.

Now, sorry for that. I think what I'm trying to say is that we put out these revenue charts and all the trend lines in the earnings note every quarter. So if anybody wants future outlook, a good way to see it is to trace back our journey in the last eight years through demon, GST, COVID, labor reforms, and all that has happened in between. That should give you a fair bit of confidence on what we are doing with the business.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Rituratsana for closing remarks.

Thank you very much, all of you, for taking the time to join this call. As I had said in the last investor analyst call, FY26 seems to be a rebound year for SIS Group. We are sitting on one of the highest revenue growth that SIS has seen in the last 5 years, close to 20%. Even if you back out our acquisition, it will still be close to 15% growth, 15% plus growth. Our profit after tax run rate is near about 100 crores now. So on an annualized basis, roughly 400 crores. Our EPS basis, that is 7 rupees for the quarter, but on an annualized basis, our EPS would translate to somewhere close to 30 rupees, which is a big bounce back after the last few years. That has been a little wobbly. Our return ratios, which were 12% ballpark range, I'm moving back in the 15, 16, 17% zone. Our net debt to EBITDA, you know, even this particular quarter where you see a bump up, if you back out the lease charges, which are 140 crores, our net debt continues to remain around 1.1, 1.2, which is well within control.

Good morning.

And, uh... To take on labor reforms, we see labor reforms as a fantastic tailwind. It is to be seen whether this tailwind is coming at 10 km per hour or 100 km per hour. That one will get to know as we progress through the year. But I can say with confidence, basis nine-month results, that FI26 seems to be the year of rebound for SIS. And I would like to thank my investors and the analysts for patiently allowing us the time and opportunity to get this organized and continuing to stay interested. Look forward to seeing you guys soon. Thank you once again for joining. All the best.

Thank you. On behalf of SIS Limited, that concludes this conference. Thank you for joining us and now you may disconnect your lines.