SIS Q3 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹4,185 Cr
verified against source
Revenue YoY
24.5%
reported change
EBITDA
₹196 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
SIS Limited delivered a landmark Q3 FY26 with consolidated revenue crossing the INR 4,000 crore quarterly milestone for the first time at INR 4,185 crores, representing 24.5% YoY growth. All three segments reported their highest-ever quarterly revenues: India Security (INR 1,898 crores, +33.7% YoY), Facility Management (INR 636 crores, +10.3% YoY), and International Security (INR 1,670 crores, +20.8% YoY). Operating EBITDA reached a record INR 196 crores with 4.5% margin, while Operating PAT stood at INR 100.8 crores. Management took a conservative one-time exceptional charge of INR 290 crores for past period gratuity and leave liabilities under new labor codes, with plans to recover these from clients once rules are notified. Return ratios improved to 15.2% from 12% a year ago, and DSO tightened by 2 days to 67. The company sees labor reforms as a structural tailwind that will consolidate the fragmented security industry from ~40% organized to 60-70% organized over 3-5 years. Risk: The INR 290 crore provision recovery from customers remains uncertain and timeline-dependent on labor code notification.
Colored figures show movement against the previous available record.
Guidance to track
- India Security: ~1.5x GDP (~11-12%); Facility Management: 12.5-15% given larger addressable market; International: ~7.5% sustainable growth rate; Consolidated: ~12%
- Direction is upward with goal to return to pre-COVID levels (Security 6%, FM 6%, International 4.5%). Labor reforms are structural tailwind, not headwind. Blended margin structurally improving as higher-margin India business grows faster than international.
- Clear roadmap to integrate APS margins from current 4% to match SIS India Security margins (~5.2%) through SGNA rationalization, sales optimization, and operational efficiencies.
- Will use both dividend and buyback as return mechanisms going forward, responding to market feedback. May pursue additional buyback in H2 FY26.
Risks flagged
- Management cannot predict recoverability percentage of the INR 290 crore gratuity provision from customers. While they believe most customers will comply (like PF/ESI), actual collection timeline and quantum remains uncertain pending labor code notification.
- AP Security operates at 4% EBITDA margin vs SIS India at 5.2%. Integration execution risk exists as management works to bridge this gap. Also, APS consolidation contributed to higher depreciation (INR 23 crore amortization of intangibles) and finance costs.
- Unemployment tightness in international markets requires overtime to meet clearance requirements for government/defense clients, compressing margins in International Security segment. This was flagged by analyst and acknowledged by management.
- Management deferred quantification of Employment Linked Incentive scheme benefits, stating they need to wait for first government payment. This creates uncertainty around a potentially significant PAT positive that they acknowledge will flow through with no associated cost.
Key quotes
- This is the year of rebound and 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.
- What I would rather say is we have provided for it fully, and whatever we claim if we claim 99% it will come back into our P&L over the course of the year.
- We see labor reforms as a structural tailwind. It is to be seen whether this tailwind is coming at 10 km/h or 100 km/h, but I can say with confidence that FY26 seems to be the year of rebound for SIS.
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