Detailed Narrative
Strong Revenue Growth Across Segments
SIS reported an all-time high consolidated revenue of ₹3,759 crore for Q2 FY26, marking a 15% year-on-year increase. This growth was broad-based, with India Security revenue at ₹1,544 crore (up 11.5% YoY), Facility Management (FM) at ₹629 crore (up 13.7% YoY), and International Security achieving ₹1,607 crore (up 19.3% YoY). The company's consolidated monthly revenue run rate also reached a record ₹1,300 crore, indicating robust demand and execution.
Margin Expansion and Profitability Improvement
Consolidated EBITDA grew by 16.2% year-on-year to ₹168 crore, with the EBITDA margin improving to 4.5%. Facility Management demonstrated significant margin improvement, with EBITDA reaching 5.2% (up 90 basis points YoY) and achieving its highest-ever quarterly EBITDA of ₹33 crore, a 36% YoY growth. India Security maintained a 5.3% EBITDA margin, while International Business saw a 20.4% YoY EBITDA growth despite flattish margins. The operating PAT stood at ₹93 crore, with a 2.5% margin.
Strategic Acquisition of AP Securitas
SIS successfully closed the acquisition of AP Securitas, a transaction valued at ₹71.2 crore for a 51% stake, based on an 8.3x FY24 EBITDA multiple. This acquisition is projected to add approximately 17% to India Security's monthly run rate from Q3 FY26 onwards. Management emphasized that this strategic move aims to consolidate market share and enhance SIS's position in key high-growth segments such as banking, logistics, and warehousing, with full consolidation expected from Q3 FY26.
Operational Efficiency and Balance Sheet Strength
The company showcased improved operational efficiency, significantly reducing its net debt by 23% to ₹663 crore from ₹857 crore in September 2025. Return on Capital Employed (ROCE) also saw a notable improvement, rising to 14.3% from 11.7% a year ago, attributed to balance sheet cleanup initiatives. Days Sales Outstanding (DSO) experienced a marginal 1-day increase to 69 days, which management attributed to a one-time📎 situation in SIS International, expected to be corrected in the next quarter.
Outlook and Margin Targets
Management expressed strong confidence in FY26 being a 'rebound year,' projecting a consolidated PAT of approximately ₹400 crore. They reiterated the objective to achieve a 6% EBITDA margin for both India Security and Facility Management businesses, aiming for this target within the next few quarters. For the International business, the goal is to return to a 4-4.5% EBITDA margin, with organic growth expected to normalize to 7-8% annually after a 'one-off📎' mid-teens growth in FY26.
Robust Recruitment and Wage Inflation Management
SIS highlighted its strong supply-side infrastructure, including 21 residential training academies and Automated Recruitment Kiosks (ARK) across 300 branches, enabling it to recruit 3,000 people annually and avoid staffing-related contract losses. While wage inflation averaged 11% over the last decade, it has moderated to ~5% in the past five years. Management noted that wage inflation is a pass-through in contracts and expressed hope for increased government focus on blue-collar worker wages to boost the industry.
Cash Logistics IPO on Track
Management confirmed that the Initial Public Offering (IPO) for its cash logistics business is progressing as planned. This secondary-linked transaction is anticipated to unlock significant value for shareholders and the parent company. The proceeds from the IPO are expected to help SIS reduce its debt and lower interest costs, which will positively impact the company's profit after tax line and Earnings Per Share (EPS).