Skip to content

    SIS

    SIS
    Consumer Services·4 May 2026
    Management Summary

    SIS delivered a milestone Q4 FY26, achieving record revenue, EBITDA, and operating PAT, driven by strong execution across all business segments. The company reported significant year-on-year growth in revenue and profitability, alongside improvements in operational efficiency metrics like DSO and ROCE. Management highlighted the sustainability of growth and margins, while addressing the impact of new Labour Codes and the deferred Cash IPO.

    Highlights

    5

    • Consolidated Revenue of ₹4,489 crores, up 31% YoY and 7.3% QoQ, marking the best quarter.

    • EBITDA reached a record ₹207 crores, up 25.6% YoY, demonstrating strong resilience and scalability.

    • Operating PAT was ₹105.5 crores, contributing to an improved ROCE of 16.5% (up from 14.3% YoY).

    • DSO improved to 63 days, the best in years, indicating enhanced operational efficiency.

    • India Security revenue grew 34.2% YoY to ₹1,925 crores, and International Security grew 36.9% YoY to ₹1,950 crores.

    Concerns

    2

    • Exceptional charge of ₹290 crores in Q3 FY26 related to Labour Code guidelines, though ₹38.8 crores was reversed in Q4.

    • Cash IPO is deferred due to geopolitical situation and IPO market conditions, though targeted for FY27.

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue₹4,489 Cr+31%YoY
    2. 02EBITDA₹207 Cr+25.6%YoY
    3. 03EBITDA Margin4.6%
    4. 04Operating PAT₹105.5 Cr
    5. 05ROCE16.5%

    Segment breakdown

    • India Security₹1,925 Cr42.7%
    • Facility Management₹635 Cr14.1%
    • International Security₹1,950 Cr43.2%
    Donut· Share of Revenue

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Returns FYTD

    ₹250 crores

    M&A

    APS

    acquisition · integrated

    Guidance & targets

    6
    CategoryTargetPriority
    Profitability
    ROE
    15%+
    		High
    Profitability
    PAT
    INR500 crores
    		Medium
    Profitability
    EBITDA Margin
    5-6%, maybe 6.5%
    		Medium
    Revenue
    Growth
    Above 15%
    		High
    Revenue
    Total Revenue
    INR20,000 crores
    		Low
    Other
    Cash Business IPO
    Launch
    		Medium

    APS India Security Margin Convergence

    Within 1-1.5 years
    CurrentAPS Q4 EBITDA margin 4.2%, SIS (ex-APS) 5.5%
    TargetConvergence to 5.5%

    Why it matters

    Crucial for overall India Security profitability and successful integration of the acquisition.

    I think it is going to be -- I mean, it would be fair to say that the 50 bps margin gap is the synergy opportunity. Our plan is that over the next 18 months odd, as we consolidate branches, share back-office services, integrate procurement and cross-sell on technology and other things, I think this should be close to converging.

    How to verify

    key_financials.segment_breakdown[name='India Security'].metrics[label='EBITDA Margin']

    Risks & concerns

    2
    RiskSeverity

    Geopolitical situation and IPO market conditions delaying Cash IPO

    Cash IPO deferred due to external factors, though targeted for FY27. — Management acknowledged

    medium

    Artificial compression of wage increases post-COVID leading to worker dissatisfaction

    Wage increases were 3-5% p.a. post-COVID, but recent significant hikes (e.g., Haryana 50%) are now occurring. — Management acknowledged

    medium

    Q&A highlights

    8

    “So as by accounting norms, whenever there is any difference in the liability already reassessed. We have to pass it through OCI. We cannot simply reduce the liability or we cannot put it through PL. So as per accounting norms, we have an obligation to pass it through the OCI, and we have just followed the accounting standard.”

    Clarifies the accounting treatment for the reversal of the Labour Code-related liability, explaining why it went to Other Comprehensive Income (OCI) instead of the P&L.

    asked by N Modi

    2 min read6 chapters

    Detailed Narrative

    01

    Record Q4 FY26 Performance Across All Segments

    SIS reported its best quarter ever in Q4 FY26, with consolidated revenue reaching ₹4,489 crores, a significant 31% year-on-year and 7.3% quarter-on-quarter growth. EBITDA crossed the ₹200 crores mark for the first time, hitting ₹207 crores, up 25.6% YoY. Operating PAT stood at ₹105.5 crores, and the company's ROCE improved to 16.5% from 14.3% a year ago, demonstrating strong execution and operational scalability.

    02

    Segmental Growth and Margin Profile

    All three core segments contributed to the strong performance. India Security reported its highest-ever revenue of ₹1,925 crores, growing 34.2% YoY, with an EBITDA margin of 5.1%. Facility Management revenue was ₹635 crores, up 8.1% YoY, achieving an EBITDA margin of 5.5%. International Security also recorded its highest quarterly revenue of ₹1,950 crores, a 36.9% YoY increase, maintaining a stable EBITDA margin of 3.8%.

    03

    Impact of New Labour Codes and Exceptional Items

    The company addressed the one-time📎 exceptional charge📎 of ₹290 crores in Q3 FY26 related to Labour Code guidelines for gratuity and leave liabilities. In Q4, a reassessment led to a reversal of ₹38.8 crores, which was routed through Other Comprehensive Income as per accounting norms. Management views the Labour Codes as a significant 'reset' for the industry, expecting them to neutralize compliance arbitrage and drive technology adoption, ultimately benefiting organized players like SIS.

    04

    Operational Efficiency and Capital Allocation

    SIS achieved its best DSO (Days Sales Outstanding) in years, reducing it by 4 days to 63 days, reflecting improved operational efficiency. In terms of capital allocation, the company returned a total of ₹250 crores to shareholders in FY26, contributing to a cumulative ₹600 crores returned since its IPO. The integration of the APS acquisition is progressing, with a target to bridge the 50 bps margin gap within 1-1.5 years through synergies.

    05

    International Business Dynamics and Depreciation

    The International Security segment's strong Q4 performance included approximately AUD20 million (₹120 crores) from event-driven business (e.g., Australian Open, Grand Prix), which is seasonal for Q4 and does not require proportional headcount increases. The increase in Q4 depreciation by ₹15 crores QoQ was primarily due to a new MSS lease in Australia (₹10 crores) and fixed asset additions in India (₹4 crores), with full-year FY26 depreciation at ₹215 crores.

    06

    Strategic Vision and Market Leadership

    SIS reiterated its aspiration to maintain a '15 is to 15 formula' – achieving above 15% growth and maintaining over 15% ROE on a multi-year basis. The company aims to reach ₹500 crores in PAT, positioning itself among the top 100 listed companies (excluding BFSI majors). Management emphasized SIS's market leadership, being double the size of all other listed security, facility management, and cash companies combined.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.