SIS Limited — Q4 FY26

SIS Limited Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=o6pgOm7JoJk Published: 9 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the SIS Limited Q4 FY26 earnings conference call hosted by SIS 0:08 8 seconds Limited. As a reminder, all participant lines will be in the listenonly mode and there will be an opportunity for you to ask questions after the presentation 0:17 17 seconds concludes. Should you need assistance during this conference, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. 0:28 28 seconds I now hand the conference over to Mr. 0:30 30 seconds Venit Toshnal, president M&A and investor relations from SIS limited. Thank you and over to you sir. 0:40 40 seconds Uh thank you very much. Good afternoon to everyone and I welcome all of you to the Q4 FI26 uh uh earnings call. I hope 0:49 49 seconds you all got a chance to have a look at the results which were as declared u before the long weekend started. 0:56 56 seconds Uh so as you've seen I think by far Q4 and FY26 we're very happy to report that 1:03 1 minute, 3 seconds it's been a milestone quarter and one of the best growth years for SIS in in the possibly the last five six years 1:10 1 minute, 10 seconds postcoid right it's marked by strong execution across all businesses and there is a sustained momentum as you can 1:17 1 minute, 17 seconds see in growth and profitability with the highest ever revenue and highest ever aida margins and as well as pack right 1:25 1 minute, 25 seconds So that's that's uh that shows that we are firing on all all three fronts. Uh we reported a quarterly revenue of 4,489 1:35 1 minute, 35 seconds crores. Uh that's a huge jump of 31% year-on-year growth and a 7.3% 1:42 1 minute, 42 seconds quarteron-quarter growth by far our best quarter. IBIDA for the quarter uh is crossed the psychological 200 cr for the 1:52 1 minute, 52 seconds first time and it's at a record 207 cr which is 25.6% up year-on-year basis. This shows the 2:00 2 minutes strong resilience and scalability of our operating model. 2:05 2 minutes, 5 seconds Now last time last quarter we as you would have seen we reported a one-time exceptional charge of 290 crores uh 2:15 2 minutes, 15 seconds which is basically the charge we had taken uh while implementing the new labor code guidelines on graduating leave liabilities. Uh this quarter we 2:24 2 minutes, 24 seconds did a reassessment of our liability with our auditors and as a result uh after reassessment we uh we reverse 38.8 8 2:33 2 minutes, 33 seconds crore of this liability during Q4 which is uh flowing through other comprehensive income as you can see. So it's a reassessment of the liability 2:41 2 minutes, 41 seconds nothing materially has changed otherwise. So the liability stands reduced by 38.8 crores. Now on a revenue 2:48 2 minutes, 48 seconds basis we are happy to report that on a consolidated basis monthly revenue run rate is now 1,574 2:56 2 minutes, 56 seconds crores which shows uh promising momentum across all categories on a consolidated 3:03 3 minutes, 3 seconds basis as I said 4,489 cr 31% year-on-year jump. India security has 3:10 3 minutes, 10 seconds reported its highest ever revenue of 1,925 crores in this quarter which is a 34.2% 3:18 3 minutes, 18 seconds growth year-on-year basis. Of course, this has uh come with consolidation of our acquisition of APS. Uh for FM, we 3:27 3 minutes, 27 seconds have reported a quarter of 635 crores, which is an 8.1% growth on a year-on-year basis. 3:37 3 minutes, 37 seconds International security uh reported its highest ever quarterly revenue of 1,950 3:43 3 minutes, 43 seconds crores which is a growth of 36.9% on a year-on-year basis. 3:50 3 minutes, 50 seconds Now coming to IIDA uh we have been working as you know for a long time in terms of improving our margin profile 3:57 3 minutes, 57 seconds across all segment and that's a constant endeavor right so on a consolidated level grew by 25.6% 6% yearon year to 4:08 4 minutes, 8 seconds 207 crores with an IIDA margin of 4.6% on a console basis. India security out 4:16 4 minutes, 16 seconds of that has reported an AIDA margin of 5.1% which is 98.4 cr uh almost touching 100 4:24 4 minutes, 24 seconds cr a quarter just for India security alone in terms of IIDA uh facility management reported an AIDA margin of 5.5%. 4:34 4 minutes, 34 seconds And for the international business uh the IBIDA margin for Q4 was stable 3.8%. 4:41 4 minutes, 41 seconds But it was up by 28.7% on a year-on-year basis. 4:47 4 minutes, 47 seconds Coming to PAT, uh the operating PAT was 105.5 crores for the quarter result uh resulting in a margin of 2.4%. 4:59 4 minutes, 59 seconds uh we've been constantly uh on an endeavor to improve our return on capital, return on equity profile. So 5:05 5 minutes, 5 seconds now our ROC stands at 16.5% up from 14.3% a year ago. Uh and we have 5:14 5 minutes, 14 seconds always been guiding that uh we are uh going to operate 15% plus ROC. So I think we've crossed that mark now. uh 5:23 5 minutes, 23 seconds DSO improvement uh operational efficiency uh it has it's a constant uh uh endeavor on our side. So this quarter 5:31 5 minutes, 31 seconds we are reporting one of the best uh BSO days which is 63 days uh down by 4 days 5:38 5 minutes, 38 seconds from the previous quarter and if you look if you were to look at it uh from March uh last few March quarters also 5:47 5 minutes, 47 seconds because typically the March quarter is the best in terms of DSO this is one of the best quarters uh even since 2023 5:53 5 minutes, 53 seconds also. So that's 63 days of DSO. So now with this I close the opening comments. 5:59 5 minutes, 59 seconds Uh on the call we have Rajat China group managing director, Mr. Bajesh Kumar our chief financial officer, Mr. Vikram Kot 6:06 6 minutes, 6 seconds CFO of the international business and I would open the floor for Q&A. Thank you very much. 6:13 6 minutes, 13 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone 6:21 6 minutes, 21 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while 6:29 6 minutes, 29 seconds asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. 6:41 6 minutes, 41 seconds Our first question is from the line of N Modi, an individual investor. Please go ahead. 6:46 6 minutes, 46 seconds Yes sir. Thank you very much [clears throat] for for this excellent result. 6:53 6 minutes, 53 seconds My question is regarding this exceptional item this 290 K which you have provided in December quarter and then some amount you have reversed in 7:01 7 minutes, 1 second the in the current quarter. So sir that amount should not have been let off from here instead of passing it through that comprehensive income something like that. 7:12 7 minutes, 12 seconds Yeah Mr. Modi this is responding to your question. So as for counting norms whenever there is any 7:21 7 minutes, 21 seconds difference in the gravity already reassessed we have to pass it through OCI we cannot simply reduce the gravity 7:28 7 minutes, 28 seconds or we cannot prove it through PL. So as per accounting norms we we are under obligation to pass it through OCI and we 7:35 7 minutes, 35 seconds have just followed what is there as standard. 7:39 7 minutes, 39 seconds Okay. Sir that thing this this amount is just passed through. Now we we are going to get this money from our client 7:48 7 minutes, 48 seconds which we have provided at the moment in L but ultimately we are going to get this money from our clients. 7:55 7 minutes, 55 seconds So there are two aspects one is the liability created for the past period and the the additional amount associated 8:02 8 minutes, 2 seconds with income future. So as far as future additional expenses is concerned this is getting packed in the rate break up of all the existing customer. So it will be 8:11 8 minutes, 11 seconds totally pass through. Regarding the liability of past periods we are under discussion of our customer. Most of them have said that whenever actually this 8:20 8 minutes, 20 seconds amount will be paid to concern employees who will retire at time and that time they will reimburse. So we are not 8:27 8 minutes, 27 seconds creating any acured income against that whenever capital will get realized that will pass to the peers. So that is the status of it. 8:36 8 minutes, 36 seconds So that means we are we are going to get it ultimately this will come to the credit of our PM. 8:43 8 minutes, 43 seconds Yeah. Because that will have cash flow impact. Currently we just done the accounting adjustment. So whenever the cash flow impact will occur at that time it will be found. 8:53 8 minutes, 53 seconds Yeah. Yeah. Right sir. Thank you. 8:57 8 minutes, 57 seconds Thank you. Our next question comes from the line of Abhinav from Acutas Investment. Please go ahead. 9:06 9 minutes, 6 seconds Yeah. Hi, firstly congratulations for brillian reserve this quarter. My first question is regarding our FM business. I 9:13 9 minutes, 13 seconds see there are additional conters which we have won and the monthly run rate has increased to 31 cr which was 21 previous 9:22 9 minutes, 22 seconds year quarter comparison. So is this sustainable and with the current margins which we have? 9:31 9 minutes, 31 seconds Hi this is Ditraj. The FM results are very much sustainable and if you have 9:39 9 minutes, 39 seconds been tracking the FM segment you will see that they have gone from you know uh 4 and a half% or lower 9:47 9 minutes, 47 seconds margin profile to almost 5.5% margin profile. Plus the business has reported reasonable growth. I think it 9:56 9 minutes, 56 seconds would be safe to say that both are sustainable. Okay. 10:02 10 minutes, 2 seconds Uh hi, this is Ria. Uh so in our international business, uh we've seen a lot of orders this quarter also coming 10:10 10 minutes, 10 seconds from government and eop. Uh so what are the likely tenure of these orders and how should we look at it? Because if I 10:18 10 minutes, 18 seconds just look at the employee count, they have not increased as much as the revenue has. So could you help me with that? 10:27 10 minutes, 27 seconds So typically yeah, yeah, thanks. Typical contracts that we 10:34 10 minutes, 34 seconds sign in uh in Australia, New Zealand are in the range of 3 to 5 years. That's the that is your first question. in terms of not not increasing headcount. So 10:42 10 minutes, 42 seconds typically the quarter 4 is where we have uh events business pickup revenue. The Australian Open in Australia and the Grand Prix in Australia both uh bring in 10:51 10 minutes, 51 seconds about in Australian dollar terms about uh $20 million of revenue which adds to the revenue without increasing headcount uh correspondingly. 11:01 11 minutes, 1 second So is it fair to say that this will not come this is just a quarterly phenomena YI basis? Yeah, on a on a year-on-year basis, this is every quarter four, if 11:10 11 minutes, 10 seconds you go back and look, will have this upswing in revenue because these are long-term contracts signed, but is tied to the events happening in the quarter. 11:17 11 minutes, 17 seconds So, it will go back down to normalized levels in Q1, but again pick up in Q4 of 27. So, what will be the quantum of these? 11:25 11 minutes, 25 seconds 20 million uh Australian dollars is roughly about 120 crores 11:31 11 minutes, 31 seconds of 120 crores. Got it. And uh my second question is in terms of India business uh for the newer acquisition which we 11:39 11 minutes, 39 seconds have done for APS. So what is the plan there? How is the what have we thought about it? What kind of company do we 11:46 11 minutes, 46 seconds want to make it and when will the margin converge to our India business uh of 11:54 11 minutes, 54 seconds so AP security is a strategic transaction. It is basically the number one security company in India which is 12:01 12 minutes, 1 second SIS acquiring number six or number seven company. 12:07 12 minutes, 7 seconds So it's a classic strategic acquisition. Uh we've got it at a reasonable valuation. 12:17 12 minutes, 17 seconds As far as the margins are concerned in Q4, if you see 12:26 12 minutes, 26 seconds SIS security has excluding APS delivered 5.5% margin. 12:34 12 minutes, 34 seconds APS has delivered 5% margin. On a blended basis, these two businesses have 12:41 12 minutes, 41 seconds delivered roughly 5.2 odd% margin. I think it is going to be uh I mean it'd 12:51 12 minutes, 51 seconds be fair to say that the 50 pips margin gap is the synergy opportunity. 12:58 12 minutes, 58 seconds Our plan is that over the next 18 months odd as we consolidate branches, 13:07 13 minutes, 7 seconds share back office services, integrate procurement and cross-ell on technology and other things. 13:17 13 minutes, 17 seconds I think this should be uh close to converging. 13:25 13 minutes, 25 seconds One correction just one correction previous the APS Q4 I percentage is 4.2%. 13:34 13 minutes, 34 seconds Sorry 4.2 right? Yeah 4.2 so we have a room to go from 4.2 to 5.5 13:42 13 minutes, 42 seconds is it right say that yes got it and how much time or duration do you think this gap will be bridged? 13:52 13 minutes, 52 seconds I think budget uh you know at least a year a year and a half. 14:00 14 minutes Got it. Thanks. Thanks. Thank you. 14:08 14 minutes, 8 seconds Our next question comes from the line of Umang Sha from Banyan Tree Advisor PMS. Please go ahead. 14:14 14 minutes, 14 seconds Um hi sir, good afternoon. Thank you for the opportunity. Uh good set of numbers. 14:19 14 minutes, 19 seconds uh also wanted to congratulate on capital allocation with both buyback uh and a dividend this year with taking the 14:26 14 minutes, 26 seconds total payout to 70%. Um I had three queries. Uh one was what was the reason for declining employees in the facility 14:35 14 minutes, 35 seconds management segment. Uh employees have come down from 85,000 to 82,000 8,000 employees now. Um second was uh any uh 14:45 14 minutes, 45 seconds any foray planned in any other international markets in FI27. 14:50 14 minutes, 50 seconds Uh that was the second question. Um and third question was you had called out that there were multiple one times in 14:58 14 minutes, 58 seconds international business this year. Uh then next year onwards it will normalize to 7%. Uh if that is the uh context then 15:06 15 minutes, 6 seconds how do we plan to have uh doubledigit revenue growth going forward? These are the three questions. 15:15 15 minutes, 15 seconds Okay. So let me try and uh address one by one. So the first thing I think uh let's you didn't ask this question but 15:24 15 minutes, 24 seconds you know just so that I can underline this information. 15:29 15 minutes, 29 seconds SIS has uh returned a total of 250 15:36 15 minutes, 36 seconds crores to shareholders this uh this financial year 15:43 15 minutes, 43 seconds and uh I think since IPO over 8 years if my memory serves me right we would have 15:49 15 minutes, 49 seconds returned uh close to Sha can you help me with the number including this 250 crores how much have we returned in 15:57 15 minutes, 57 seconds total Okay, let's feta gather that number. 16:09 16 minutes, 9 seconds Till then I'll answer your questions. 16:11 16 minutes, 11 seconds Employee headcount uh in FM is not really reduced. They close certain contracts uh surge work towards the end 16:18 16 minutes, 18 seconds of Q4. So I don't think you should read too much on uh FM revenue is not 16:25 16 minutes, 25 seconds contracting. We haven't lost anything significant. There isn't some bad news that is uh not reported. So FM is steady 16:34 16 minutes, 34 seconds state. It's growing. Margins are improving. Business is on track. As far as new markets is concerned, I think uh 16:42 16 minutes, 42 seconds SIS is very focused on India at the moment. Our priority is consolidating 16:50 16 minutes, 50 seconds market share and accelerating the solutioning aspect. 16:58 16 minutes, 58 seconds So currently there is no new international market that we are looking at 17:06 17 minutes, 6 seconds as regards to one time uh you know on the international side. I don't think these are one time just as uh Vikram 17:14 17 minutes, 14 seconds explained it. We have signed a 10-year contract with Australian Grrey, you know, a multiple year contract with 17:21 17 minutes, 21 seconds Australian Open. Whenever these events will happen, we will step in to do the security duties. It so happens that both 17:31 17 minutes, 31 seconds these events take place in Jan to March period. So each year during Jan to March, you will 17:38 17 minutes, 38 seconds see a bump up. So these are multi-year contracts. If you compare last year's Q4 also, you will see the same pattern and 17:46 17 minutes, 46 seconds the year before. So again on international there is no one-time 17:52 17 minutes, 52 seconds contract, no one-time revenue, nothing unsustainable. It is steady state numbers. 18:01 18 minutes, 1 second Sha do you have? 18:03 18 minutes, 3 seconds Yeah. Yeah. 600 crores uh since the IPO, 81 crores through dividends, um 270 18:10 18 minutes, 10 seconds crores through buyback from FI22 to FI24 and then 250 this year. So about 600 crores total. 18:18 18 minutes, 18 seconds Thank you. Great. Great sir. Thank you so much. 18:21 18 minutes, 21 seconds This answers all my questions. All the best. 18:26 18 minutes, 26 seconds Thank you. Our next question comes from the line of Karan from Guardian Capital Partners. Please go ahead. 18:33 18 minutes, 33 seconds Yeah. Hi, thanks for the opportunity. I just wanted to ask what kind of opportunities are you seeing with the implementation of the new labor codes 18:41 18 minutes, 41 seconds and are you seeing any signs of improvement in your business dynamics already with the conversations that you have with your clients? 18:54 18 minutes, 54 seconds Well, labor codes, as I have cited several occasions before, is a reset for India. 19:03 19 minutes, 3 seconds Not just for this industry per se or for SIS. 19:09 19 minutes, 9 seconds Let me walk you through it. There are roughly 55 to 60 K working population in India. 19:20 19 minutes, 20 seconds What you call the labor force of the country. 19:24 19 minutes, 24 seconds Out of this roughly 25 cr are working in farms. 19:32 19 minutes, 32 seconds where labor codes don't apply. 19:37 19 minutes, 37 seconds Remaining 30 K plus people are directly impacted by labor codes which includes 19:44 19 minutes, 44 seconds you and it includes me because this is no longer about blue collar or gray collar. This is basically every kind of 19:53 19 minutes, 53 seconds worker from pune to CEO, a contracted worker or a direct employee, a mining 20:01 20 minutes, 1 second worker or a semiconductor factory worker. So this is a very big change 20:10 20 minutes, 10 seconds coming to our industry. Our industry obviously is manpower intensive. 20:18 20 minutes, 18 seconds It is highly regulated. So these labor codes have a significant impact. 20:24 20 minutes, 24 seconds However, the one clear downside or the not downside or the the retrospective impact 20:33 20 minutes, 33 seconds that we had to take which I was clearly calling out as a minus was the graduity impact and that also 20:43 20 minutes, 43 seconds was basis the fact that the government has now changed the definition of wage. 20:50 20 minutes, 50 seconds So there was no non-compliance. It is just that clarification was issued and we did compliance and we took a 290 cr charge. 21:00 21 minutes As far as I am able to see that is the only significant 21:08 21 minutes, 8 seconds downside of labor codes that I could envisage which is now fully absorbed as 21:16 21 minutes, 16 seconds an exceptional item. Going forward, we have several 21:25 21 minutes, 25 seconds opportunities at hand and I will sign them for you. 21:32 21 minutes, 32 seconds Number one, with regard to existing contracts, 21:38 21 minutes, 38 seconds we believe that our invoicing, compliance, 21:46 21 minutes, 46 seconds collections, and payment cycle would see 21:53 21 minutes, 53 seconds substantial readjustments if the customers fully cooperate. But 22:01 22 minutes, 1 second this has to be seen. This should result [clears throat] in interesting benefits on the working capital side. 22:10 22 minutes, 10 seconds Number two, with regard to competition, I think with a single 22:19 22 minutes, 19 seconds LIN number, a single license, single labor license and a single LIN number like you have a GSC number for a 22:26 22 minutes, 26 seconds business and a single chalan online filing system like you have for GSC. 22:34 22 minutes, 34 seconds The non-compliance trend in this sector which has kept this industry rather 22:42 22 minutes, 42 seconds fragmented which has allowed competitors to take advantage of the compliance arbitrage. 22:51 22 minutes, 51 seconds I think that is also likely to be neutralized as this law gets enforced. 23:02 23 minutes, 2 seconds occurred. I think as the cost of labor goes up in general, 23:14 23 minutes, 14 seconds I see quite evidently that people are more open to considering solutions, 23:22 23 minutes, 22 seconds adding more technology and helping with better outcomes with lesser manpower. 23:33 23 minutes, 33 seconds So when it comes to our existing customers, when it comes to our competitors and when it comes to 23:41 23 minutes, 41 seconds solutioning, there could be material benefits. 23:46 23 minutes, 46 seconds But then again, let me call out that labor code implementation is not flip of a switch. 23:59 23 minutes, 59 seconds It will take time to percolate down to the last contract. 24:06 24 minutes, 6 seconds This is not a change that has happened but it is definitely beginning of fundamental 24:13 24 minutes, 13 seconds shift in the industry. If things go well, this should very well be inflection point for businesses like ours. 24:26 24 minutes, 26 seconds I hope that helps. Yes, thank you so much for that answer. That was it from my side. 24:35 24 minutes, 35 seconds Thank you. Our next question comes from the line of Hashid Katka from Robo Capital. Please go ahead. 24:43 24 minutes, 43 seconds Hello sir, thank you for the opportunity. Am I audible? You are audible sir. You may proceed. 24:50 24 minutes, 50 seconds Yes. So I just wanted to understand what is your roe aspiration for the next 2 three years. 24:59 24 minutes, 59 seconds I don't think uh I mean we have an early aspiration as 25:06 25 minutes, 6 seconds such. I'll tell you SIS must be seen as a compounding story. 25:14 25 minutes, 14 seconds At least that's the way I see it. 25:18 25 minutes, 18 seconds And for us, the two metrics that are super important are to be able to get growth above 15%. 25:30 25 minutes, 30 seconds And maintain returns over 15%. 25:36 25 minutes, 36 seconds on a multipleear basis as long as we can compound on that 15 is 25:43 25 minutes, 43 seconds to 15 formula I think uh we are very happy and uh if you look 25:52 25 minutes, 52 seconds backwards also since listing since FI18 SIS has maintained a 15% 25:59 25 minutes, 59 seconds growth ker that chart is available in our uh 26:06 26 minutes, 6 seconds uh earnings note we put it out each time. So we pretty much want to continue doing what we are doing with a 15% 26:16 26 minutes, 16 seconds return profile and uh with scale that keeps us significant. I think that's 26:23 26 minutes, 23 seconds very important to call out. You know this obviously this sector is seeing multiple companies being listed. I'm 26:31 26 minutes, 31 seconds sure in the coming years there will be many many more. However, in our space we want to be the clear 26:40 26 minutes, 40 seconds platform that distinguishes itself today with 16,000 Kes of revenues. 26:48 26 minutes, 48 seconds We are double the size of all security facility management and cash companies put together. 26:58 26 minutes, 58 seconds So amongst all listed companies, SIS is clear twice their size. But I think it's more important that we are also 27:05 27 minutes, 5 seconds comparable to others in the market and that's why our aspiration is to be 27:12 27 minutes, 12 seconds amongst the top 100 listed companies in terms of profit after tax. We are certain that in 27:21 27 minutes, 21 seconds today's market environment as far as we see the numbers if we get to a 500 cr pat mark that 27:30 27 minutes, 30 seconds would clearly put us at top 100 listed companies excluding the BFSI majors. 27:38 27 minutes, 38 seconds We want to be a significant company. We want to grow at 15%. We want to maintain 15% roe. That's what we really want to pursue. 27:48 27 minutes, 48 seconds Okay, I understand. And um is the plan for IPO of the cash business on track? Like what is the update over there? 28:02 28 minutes, 2 seconds So let me walk you through the whole situation. 28:11 28 minutes, 11 seconds Firstly, the cash IPO is not delayed by us. 28:17 28 minutes, 17 seconds It is deferred owing to circumstances largely the geopolitical situation and 28:24 28 minutes, 24 seconds the IPO markets over the last few months. 28:30 28 minutes, 30 seconds We believe that the [clears throat] cash IPO is designed to unlock value for shareholders. 28:37 28 minutes, 37 seconds We will act with the objective of delivering best value from that unlocking. 28:47 28 minutes, 47 seconds We are not pushed for time. 28:53 28 minutes, 53 seconds When conditions align, we will move hopefully within FI27. 29:04 29 minutes, 4 seconds And I think SEBI has facilitated that by extending the DRHP validity to September 30th. 29:14 29 minutes, 14 seconds I cannot share too much detail but the business has delivered very solid numbers. 29:21 29 minutes, 21 seconds The cash business has delivered very solid numbers for FI26 and a good outlook for FI27. 29:28 29 minutes, 28 seconds So net summary we are well set when the geopolitical environment is more 29:35 29 minutes, 35 seconds predictable and the stock market is more welcoming uh for uh new IPOs particularly in our 29:43 29 minutes, 43 seconds space we will press the button but for now we wait and understand that was very helpful. Thank you. 29:56 29 minutes, 56 seconds Thank you. The next question is from the line of Nishita from Crown Capital. Please go ahead. 30:03 30 minutes, 3 seconds Yes. Hello. Yeah. Congratulations on a good set of numbers. Sir, so I just wanted to understand uh so you mentioned 30:11 30 minutes, 11 seconds that we aspire to grow at around 15% on a multi-year basis and we've had a very good growth in all three different 30:19 30 minutes, 19 seconds segments. So I just wanted to understand what is the growth trajectory uh we see segmental wise. for each segment if you 30:27 30 minutes, 27 seconds could give that growth like for FI27 and going forward. 30:34 30 minutes, 34 seconds We don't do guidance by segment even on a console basis. I have basically articulated what SIS has been doing in 30:42 30 minutes, 42 seconds the past. If you take SIS numbers since listing, we listed as a 6,000 K company 30:49 30 minutes, 49 seconds 8 years back with 100 K of profit after tax ballpark. 30:55 30 minutes, 55 seconds Today we are a 16,000 K company with roughly 390 K of profit after tax for 31:03 31 minutes, 3 seconds FI26 on a normalized basis. If you back calculate the numbers even for the 31:10 31 minutes, 10 seconds return profile, you will basically see that we have been hovering around 15% growth and 15% 31:18 31 minutes, 18 seconds return profile. That's what I said that we intend to continue to do that on a multi-year basis. 31:27 31 minutes, 27 seconds Okay. Okay. Understood. And on the margin front, do we expect the current margins in each segment to be continued 31:36 31 minutes, 36 seconds or can we expect some uh like up upswing in the margins as well? 31:45 31 minutes, 45 seconds So uh if you look at the margin profile of the 31:52 31 minutes, 52 seconds business, uh let me let me take you back. 31:59 31 minutes, 59 seconds you know we were uh roughly 4.3% if my memory serves me right in Q1 32:08 32 minutes, 8 seconds of this year we are closing this year at 4.6 4.7%. 32:17 32 minutes, 17 seconds This is with the impact of APS consolidation for the full quarter. 32:25 32 minutes, 25 seconds the standalone segmental numbers without EPS India security is at 5 12% a beta margin 32:34 32 minutes, 34 seconds FM is also at 5 and a half% a beta margin both are in the vicinity of the 32:42 32 minutes, 42 seconds 6% that we used to do precoid I have said on multiple occasions before and I 32:49 32 minutes, 49 seconds repeat that I see no difficulty in us getting to precoid levels and we have 32:58 32 minutes, 58 seconds demonstrated that over the last one or two years if you go back and trace our numbers but that's that's what we should 33:06 33 minutes, 6 seconds you should work with as this industry is not a 10 10% emit margin industry this is a growth and rosy industry please 33:15 33 minutes, 15 seconds understand that clearly your emit margin will hover around five six maybe six and a half% that won't change You look at 33:25 33 minutes, 25 seconds the global peers, they are all in that ballpark. The key thing is on a base of 16,000 crores, can you keep growing 15% 33:33 33 minutes, 33 seconds year on year and can you maintain over 15% return profile? That is what we are uh you know very focused on doing. 33:43 33 minutes, 43 seconds Understood. Understood. So like can you reach the 65 mark in FI28 or is that achievable in FI27? 33:52 33 minutes, 52 seconds I wouldn't be able to comment on that. Okay. Okay. Thank you so much. Thank you. 34:00 34 minutes Ladies and gentlemen, to ask a question, you may press star and one. Our next question is from the line of Sharak Filoki with MS Capital. Please go ahead. 34:12 34 minutes, 12 seconds Hi, thank you for the opportunity. Congratulations on a a strong quarter. 34:17 34 minutes, 17 seconds Uh ju I had a I had three questions. One is just a clarification. Uh I believe on you know some uh on a interview outside 34:27 34 minutes, 27 seconds with press I I'm not sure if this is correct but you guys mentioned that you're targeting around 20,000 crores in 27. Is that just uh uh you know misquing 34:37 34 minutes, 37 seconds you guys or is it something that you internally think is possible uh overall revenue? That's just first as a clarification. 34:48 34 minutes, 48 seconds Well, it is a misquote but it is also possible. 34:59 34 minutes, 59 seconds Understood. Uh understood. Interesting. 35:01 35 minutes, 1 second And uh just to clarify again on the SIS India securities business X of AP security that margin is 5.5. Is that is that right? 35:12 35 minutes, 12 seconds Correct. Understood. I'll maybe connect offline. 35:16 35 minutes, 16 seconds I'm I'm getting a different number but I'll just connect offline and make sure. 35:19 35 minutes, 19 seconds Um two smaller questions. One on the depreciation side. This quarter quarteron quarter our depreciation has increased by around 15 odd growers. Uh 35:28 35 minutes, 28 seconds which I guess the note says is relating to largely a new uh office lease in the international business that analyzes to 35:38 35 minutes, 38 seconds around a 60 crores kind of an office. Is that is that what it is or and how large is that space? 35:44 35 minutes, 44 seconds Let me let me let me walk you through that because I think uh I'll save everybody the trouble. 35:52 35 minutes, 52 seconds So Q3 FI26 our depreciation number was 55 crores. 36:04 36 minutes, 4 seconds Q4 it shows up as 70 crores. So there's a 15 cr change. 36:12 36 minutes, 12 seconds Out of this 15 cr 10 cr is attributable to the MSS 36:19 36 minutes, 19 seconds leaves that we have signed up in Australia. 36:24 36 minutes, 24 seconds So leaves of a new office contributes 10 crores out of the 15 crores 36:32 36 minutes, 32 seconds and the rest four are basically fixed asset addition in India. 36:41 36 minutes, 41 seconds Let me also give you perspective on a fullear basis. 36:46 36 minutes, 46 seconds FY 25 our depreciation was roughly 163 crores. 36:57 36 minutes, 57 seconds This year is 215 crores. FI26 is 215 K. 37:02 37 minutes, 2 seconds So net change is close to let's say 50 odd kores. 37:07 37 minutes, 7 seconds Of this 50 crores, 20 over 20 cr over is simply leases 37:18 37 minutes, 18 seconds and another 10 crores is basically owing to APS consolidation because of PPA accounting and APS group 37:28 37 minutes, 28 seconds whatever. So if you do apples to apples comparison there isn't 37:35 37 minutes, 35 seconds anything material in terms of the depreciation line. Moreover, we have already put out 37:43 37 minutes, 43 seconds and we do put out in an earnings note every single quarter depreciation chart 37:50 37 minutes, 50 seconds which is there on uh I think if I it's I I don't know the page number. It may be on page 7 8 or 37:59 37 minutes, 59 seconds something. Uh sorry one sec. It's page 11. If [clears throat] you look at the earnings note page 11 there's a depreciation chart since FI21 SIS is 38:08 38 minutes, 8 seconds averaging 1.1 well sorry 1.2% average 1.2% average on depreciation. 38:19 38 minutes, 19 seconds So there is there is nothing that you should be awfully worried about. 38:24 38 minutes, 24 seconds Understood. Now very clear just uh so that's very helpful. So just to again double click on one part of it that 10 38:30 38 minutes, 30 seconds cr per quarter is like a 40 cr annual lease for that office. Is that is that the right and that's I'm guessing is close to what the rent of that uh office built space is. Is that right? 38:48 38 minutes, 48 seconds Yeah. Understood. Okay. Uh small last question. the expected credit loss uh that you guys report on the cash flow uh 38:56 38 minutes, 56 seconds which is just an allowance I understand and it's almost meaningless uh from an overall perspective has gone up dramatically though if I look at it from 39:04 39 minutes, 4 seconds a year-on-year basis anything to read in there or is it just uh you know uh too much of a too much of a double click 39:12 39 minutes, 12 seconds there it's gone up from around 20 odd crores to 50 odd crores well it's just uh prudent provisioning 39:22 39 minutes, 22 seconds understood When you run a first you also have to put these things in context to the revenue number right correct 39:29 39 minutes, 29 seconds put it in context to 16,000 crores and then probably you'll get more uh sense on it 39:36 39 minutes, 36 seconds perfect I understand I just wanted to know from last year there is no major change either in policy or some expectation of a larger receivable loss 39:46 39 minutes, 46 seconds that's not the case no it's simply our audit committee pressing more more prudent. 39:55 39 minutes, 55 seconds Perfect. Thank you so much. Uh thank you for the patience. 40:01 40 minutes, 1 second Thank you. Our next question comes from the line of Watsal Sha from Kingston Capital Management LLP. Please go ahead. 40:10 40 minutes, 10 seconds Yeah. Hi from the quarter. Uh I just had one question. Uh what would be our year on year growth for security India if we exclude APS? 40:25 40 minutes, 25 seconds Okay. Uh about 10 points again 11 11%. 40:32 40 minutes, 32 seconds Yeah. 11 11%. Okay. Okay. That's it. Thank you. 40:40 40 minutes, 40 seconds Thank you. 40:42 40 minutes, 42 seconds Participants who wish to ask questions may please press star and one on the touchstone telephones. 41:02 41 minutes, 2 seconds Okay. So there are more questions then we can wind up. 41:05 41 minutes, 5 seconds Uh sir we have one participant who has just entered the queue. 41:10 41 minutes, 10 seconds We have a question from the line of Madur Rati from counter cyclical investments. Please go ahead. 41:17 41 minutes, 17 seconds So Mr. Now I'm trying to understand that uh is there any advantage that we have 41:23 41 minutes, 23 seconds in uh terms of sourcing of uh labor like uh since the I mean we are based out of 41:30 41 minutes, 30 seconds Bihar and Bihar has the lowest cost uh uh labor. So is there any advantage 41:38 41 minutes, 38 seconds wherein we can source uh people from really interiors at low cost and then train them inhouse and then maybe place 41:47 41 minutes, 47 seconds them in tier one, tier 2 cities. Is that the model? No, that's absolutely not the model. 41:55 41 minutes, 55 seconds So in India, what you get paid is dependent on where you work. 42:02 42 minutes, 2 seconds And you know I think it's it's important to understand that carefully more than your skill 42:11 42 minutes, 11 seconds where you work determines how much you get paid. So if somebody hailing from Bihar works in Bihar 42:20 42 minutes, 20 seconds for the job of a security guard let's say he gets 10,000 rupees. That's the prevailing minimum wage. When the same 42:29 42 minutes, 29 seconds individual goes to Mumbai for example for the same security duty because of 42:36 42 minutes, 36 seconds Maharata jurisdiction he might be able to get 20,000 wage for exactly same duty 42:43 42 minutes, 43 seconds same hours same everything so we don't have an arbitrage we can't take people from Bihar and pay them 42:50 42 minutes, 50 seconds 10,000 rupees in Bombay what they get paid is regulated by where they work having said that you are correct to the 43:00 43 minutes extent that in this line of work where you are dealing with 343,000 people on your payroll. 43:14 43 minutes, 14 seconds The supply chain is your biggest differentiator. 43:20 43 minutes, 20 seconds Your sourcing is your biggest differentiator. 43:23 43 minutes, 23 seconds And I think that is what has propelled SIS to current scale. We have 25 43:32 43 minutes, 32 seconds residential training facilities spread across 14 different states in the country. 43:41 43 minutes, 41 seconds Uh some states like Bihar have uh more than one training facility. 43:47 43 minutes, 47 seconds But uh you know several eastern seabboard states, east India states and 43:54 43 minutes, 54 seconds uh you know some uh central India states uh are supply centers for us. That's where the labor mobility happens from. 44:02 44 minutes, 2 seconds We have the ability to recruit, to train, to certify and then mobilize workers 44:12 44 minutes, 12 seconds and that supply chain has uh you know helped us scale the way we have 44:20 44 minutes, 20 seconds over the many decades. I think uh I think one fundamental thing that one needs to understand about this sector is 44:28 44 minutes, 28 seconds that there is no barriers to entry in this sector. There is no moat like barrier to entry. 44:35 44 minutes, 35 seconds Uh you know anybody can set up a security company you know and hundreds of retired policemen and ex- armymen set 44:43 44 minutes, 43 seconds up security companies every month every year. 44:48 44 minutes, 48 seconds The barriers are not to entry the barriers are to scale. 44:53 44 minutes, 53 seconds You know anybody can run a 50 cr security company when but then there are only two security companies in India 45:02 45 minutes, 2 seconds currently which have revenues more than 2,500 kores. One is group four and the 45:10 45 minutes, 10 seconds second is SIS which is now doing roughly 6,000 kores twice the size of group four. So sorry for a longish answer but 45:18 45 minutes, 18 seconds I hope I have explained it to you. 45:23 45 minutes, 23 seconds Yeah sure that was very helpful. So basically what I understood is that uh for the payment that one receives I 45:31 45 minutes, 31 seconds mean for whether it is our security guard or our competition security guard the the payment will be the same. The 45:39 45 minutes, 39 seconds customer will pay the same salary. It is not as though we can command any kind of premium uh versus the competition. 45:46 45 minutes, 46 seconds Everybody is going to get the same salary whichever agency it might be. So then where does our uh advantage come from? 45:58 45 minutes, 58 seconds So you do command pricing power but it's not like a monopoly or a duopoly where you know you are the only 46:06 46 minutes, 6 seconds provider but you do command a pricing power. uh SIS price on average would be 46:13 46 minutes, 13 seconds a few percentages higher than uh you know [clears throat] a another 46:21 46 minutes, 21 seconds competitor a local company in Bombay or uh Gujarat for that matter or any other place in India and that's largely on 46:28 46 minutes, 28 seconds account of the fact that SIS would be charging a higher service fee SIS would be charging for the technology we provide SIS would be charging you know 46:37 46 minutes, 37 seconds uh you know training fee, a kit fee and a lot of other things that generally would not be paid by customers to uh 46:44 46 minutes, 44 seconds another local company. So people do pay a brand premium but honestly speaking it's not a earthshattering brand 46:51 46 minutes, 51 seconds premium. This is not a monopoly. SIS is the largest but even today we have barely 5% market share in security. 47:00 47 minutes This will fundamentally change when labor codes gets fully implemented. You know in the US the largest security company has more than 15% market share. 47:14 47 minutes, 14 seconds In UK the largest security company has more than 15% market share. In any mature market the largest security 47:20 47 minutes, 20 seconds company generally has doubledigit market share. So we believe that you know this is just the 47:28 47 minutes, 28 seconds beginning. We have a long runway and a huge scope as India grows to you know as 47:36 47 minutes, 36 seconds India remains the the fastest growing security market in the world and the third largest security market in the 47:44 47 minutes, 44 seconds world and mind you globally security sector alone is a $300 billion 47:52 47 minutes, 52 seconds industry as per Fedonia report and India is the largest sorry India is the fastest growing and the third largest 47:59 47 minutes, 59 seconds and we are the market lead in that segment and labor codes are happening. 48:05 48 minutes, 5 seconds So it's all up to execution. 48:10 48 minutes, 10 seconds Understood. So I also wanted to understand Mr. S like you were alluding to the fact that we have our in-house 48:17 48 minutes, 17 seconds training uh centers, residential training centers in multiple states. So firstly 48:25 48 minutes, 25 seconds uh is it uh I mean is there any minimum qualification for security guards like do they have to be 10th pass or anything 48:32 48 minutes, 32 seconds like that or they can be like uh even below that education qualification and then secondly how much time do they need 48:41 48 minutes, 41 seconds to spend in our residential training facility? What is the duration and post that once we train them is there any 48:49 48 minutes, 49 seconds bond or anything with the that particular person whom we have trained for months that for the next 5 years or 48:57 48 minutes, 57 seconds at least some time he will have to uh spend on our payroll otherwise we can just train people on our own cost and 49:04 49 minutes, 4 seconds then after one two months they can just uh I mean join some other uh agencies. 49:13 49 minutes, 13 seconds So let me walk you through it. It's a very very good question and I think for anybody who wants to understand the sector I'll put this on record. 49:22 49 minutes, 22 seconds So the recruitment criteria recruitment qualifications are mandated under the 49:29 49 minutes, 29 seconds private security agencies regulation act 2005. 49:34 49 minutes, 34 seconds It specifies who can be a security guard. He must be an Indian national. He must be above certain age. He must have 49:42 49 minutes, 42 seconds uh you know over 10th metriculation certificate. He should have you know 49:49 49 minutes, 49 seconds there's a certain set of minimum basic criteria set by the Pasara Act. So the minimum criteria comes from there. He 49:57 49 minutes, 57 seconds must have a clean police verification and background check etc etc. How much the training is how what is the duration and what is the content of training. 50:07 50 minutes, 7 seconds This again the bare minimum is mandated under the same Pasara Act which prescribes 180 hours of training and 50:16 50 minutes, 16 seconds subsequent certification under the act itself. 50:22 50 minutes, 22 seconds SIS recruits above the bare minimum criteria. 60 odd% of the total number of 50:30 50 minutes, 30 seconds people we recruited last year were graduates. 50:35 50 minutes, 35 seconds So obviously we are recruiting better quality over the bare minimum prescribed by the act. That's that's the first step towards building a better product. 50:46 50 minutes, 46 seconds Second government prescribes the act prescribes 180 hours of duty. 50:54 50 minutes, 54 seconds It does not prescribe whether it should be residential or non-residential. 50:58 50 minutes, 58 seconds SIS conducts across 25 training facilities residential training 51:05 51 minutes, 5 seconds for a period of 28 days. So again, it's the second input that differentiates 51:14 51 minutes, 14 seconds and helps us build better quality of manpower. 51:18 51 minutes, 18 seconds Number three, the ACT prescribed certification. You can certify, train and certify yourself, but SIS goes for 51:26 51 minutes, 26 seconds third party certification. We do tie-ups for others to come and do the testing and calibrate and certify the manpower. 51:34 51 minutes, 34 seconds Number four and most important training in SIS is not free. 51:42 51 minutes, 42 seconds Training in SIS is subsidized. 51:46 51 minutes, 46 seconds For the 28 days training, people pay roughly 7,500 rupees to undergo training. 51:55 51 minutes, 55 seconds It is not free of cost. It's not a cost center. We do not run recruitment and training as a cost center. 52:03 52 minutes, 3 seconds Once they complete training and they are certified, they get a job guarantee in SIS. But there is no bond 52:11 52 minutes, 11 seconds because under the laws of this country, signing up bonds with people for a minimum service is legally not permissible. 52:25 52 minutes, 25 seconds Moreover, there is no reason for us to do that because a we have already charged them for the training 52:33 52 minutes, 33 seconds and b because we believe that you can't force or tie down somebody to do a job. 52:39 52 minutes, 39 seconds You have to create circumstances that people choose you over other employees. So that's our approach to retention. 52:48 52 minutes, 48 seconds Industrywide a survey conducted said that roughly 42% attrition happens 52:56 52 minutes, 56 seconds in this sector. Our attrition is a good 10% lower than that despite the fact that we maintain the largest workforce 53:05 53 minutes, 5 seconds in the country. So that is the long [clears throat] story about recruitment training costs. 53:13 53 minutes, 13 seconds The good news or the last point that I must also register is that now government through its 53:20 53 minutes, 20 seconds employment incentive scheme is committing to pay people a sum of 15,000 rupees. 53:30 53 minutes, 30 seconds Should they do training and then continue to work in the organized labor force for 12 month 53:39 53 minutes, 39 seconds period on continuous basis? government is incentivizing them with a 15,000 rupee 53:47 53 minutes, 47 seconds payment direct to the individual's bank account. It has nothing to do with the company. We believe this will further 53:54 53 minutes, 54 seconds incentivize people to continue and serve at least 12 months. Hope that helps. 54:02 54 minutes, 2 seconds Yes, understood. Thank you very much and best of luck. 54:06 54 minutes, 6 seconds Thank you. Our next question is from the line of Umam Sha from Banyan Tree Advisor PMS. Please go ahead. 54:14 54 minutes, 14 seconds Um, hi sir, thank you for the opportunity again. Uh, we spoke of uh our margins reverting to precoid numbers and also 54:22 54 minutes, 22 seconds spoke of aspirations of growing uh more than 15%. Uh what big change has happened after co is that minimum wages 54:30 54 minutes, 30 seconds in many states have not been revised. Uh so the numbers that you aspire for will the increase in minimum wages be an 54:38 54 minutes, 38 seconds important factor here or irrespective of this increase we will still grow or aspire to grow at these levels. 54:47 54 minutes, 47 seconds Well wage growth is a positive for us. 54:49 54 minutes, 49 seconds It's not a negative. That's the first thing that you need to understand. 54:54 54 minutes, 54 seconds Revenue in our industry is a function of price which is driven by wages multiplied by volume. 55:03 55 minutes, 3 seconds So if the wage goes up, the price per head per month goes up. The price of overall service goes up. 55:13 55 minutes, 13 seconds Even at the same volume, you get higher revenues. Got it sir. 55:21 55 minutes, 21 seconds And it has not been happening right. 55:24 55 minutes, 24 seconds Postco the government artificially compressed the wage increase. 55:34 55 minutes, 34 seconds So on an annualized basis the wage increase in the country for the last 5 years has been 3 to 5% only perm 55:46 55 minutes, 46 seconds but uh obviously that's not going very well with the workers and that's why 55:54 55 minutes, 54 seconds we saw some incidents in Hana and greater Nida etc in the last month which you might have picked up in the news. 56:01 56 minutes, 1 second Yes. And uh subsequently in the last 30 days, Hana has hiked minimum wages by 50%. 56:10 56 minutes, 10 seconds Uttar Pradesh by close to 28%. Punjab and Uttakhand above 15%. 56:20 56 minutes, 20 seconds So that's that's what's happened in the last uh UP again uh by 20 odd%. 56:32 56 minutes, 32 seconds Very interesting sir. Thank you so much. Thank you. 56:41 56 minutes, 41 seconds We have a next question from the line of Madurati from CounterCycle Investments. Please go ahead. 56:47 56 minutes, 47 seconds Thank you for the opportunity once again. 56:49 56 minutes, 49 seconds Does uh this uh flex space operators giving end to end service and to the 56:56 56 minutes, 56 seconds landlords uh as well as the customers affect our facility management division because a lot of these guys are coming 57:03 57 minutes, 3 seconds up with like providing everything from u designs fit out to your facility management and security services as well. 57:13 57 minutes, 13 seconds corporate offices or office spaces put together would not even constitute 10% of our customer base and facility management. That is the beauty about 57:22 57 minutes, 22 seconds this sector. This is completely diversified you know because you are from counter cyclical. 57:31 57 minutes, 31 seconds Let me tell you that if there is one sector which is nonseasonal it is essential services like security and ethics. 57:41 57 minutes, 41 seconds It's definitely not cyclable and it's almost recession resistant. If 57:47 57 minutes, 47 seconds you go back and see the numbers of SIS during COVID in the first year of COVID when the economy shrunk by 7%, SIS grew by 7%. 57:58 57 minutes, 58 seconds That is because even if one sector like you know people used to ask us the question during covid oh my god people have gone to work from home what will 58:05 58 minutes, 5 seconds happen to FM business the fact is that you know people have gone to work from home offices are requiring lesser manpower hospitals are needing more 58:13 58 minutes, 13 seconds manpower manufacturing establishments are needing more facility management staff so this is this service is 58:22 58 minutes, 22 seconds omniresent just count today morning whenever Wherever whichever part of the country 58:28 58 minutes, 28 seconds you woke up in, whichever building, there would be cleaning staff and security staff and CCTV camera in that building. If you went to drop your kids 58:37 58 minutes, 37 seconds to school or the bus that came to pick them up would be driven by facility management staff with a security guard up front. Most likely, if you went to 58:46 58 minutes, 46 seconds drop them to school, there would be guards, cameras, and cleaners in the school. Your office has guards, cameras, and cleaners. You go to friend's office 58:54 58 minutes, 54 seconds or you go to a mall in the evening or you go to the airport, you will see this everywhere irrespective of city, irrespective of state. 59:03 59 minutes, 3 seconds This is why this sector is so resilient and I think nothing can test you more than COVID and you should see the results of S during CO. 59:17 59 minutes, 17 seconds Got it. So just one question said does pay commission have any impact on wages uh for the overall market and that 59:24 59 minutes, 24 seconds should help us or that is not a big u because uh during like previous pay commission between FI26 and FI29 our revenue had grown at a very nice level. 59:36 59 minutes, 36 seconds So is that a possibility or no? 59:40 59 minutes, 40 seconds My dear friend take a mission is for government staff not for private. We are driven by the minimum wage notifications 59:48 59 minutes, 48 seconds which are now under the wage code of the country. 59:52 59 minutes, 52 seconds So as and when minimum wages are increased by the central government or state governments we have a direct benefit and we pass it on to customers. 1:00:04 1 hour, 4 seconds Our contracts are built for automatic pass through. 1:00:13 1 hour, 13 seconds So Mr. SA taking from your earlier uh you mentioned that uh 60% of our uh 1:00:21 1 hour, 21 seconds guards are basically graduates. So but what's the rationale of hiring overqualified people? I mean for a 1:00:28 1 hour, 28 seconds security guard even a 10th pass if if if that's a statutory requirement then what 1:00:35 1 hour, 35 seconds can a 10th pass not do what a graduate can do? After all, a guard is is not 1:00:42 1 hour, 42 seconds expected to do a lot. So then and the graduate will insist on higher wages. So then what's the rationale for recruiting graduates? 1:00:54 1 hour, 54 seconds Guard graduates or post-graduates, they are all going to be paid as per the minimum wage declared for security guards by the state government. It 1:01:02 1 hour, 1 minute, 2 seconds doesn't matter whether he's a graduate or a 10th pass. So we pay the same wages. Number one. Number two, for the 1:01:09 1 hour, 1 minute, 9 seconds same wages, if you get better qualified people, better educated people. Today, a lot of our guards or job posts are doing 1:01:16 1 hour, 1 minute, 16 seconds phone duty. They are running apps. They are doing their attendance on apps. 1:01:21 1 hour, 1 minute, 21 seconds They're maintaining visitor registers on apps. They are uh filing their reports, carat reports, which is you know 1:01:30 1 hour, 1 minute, 30 seconds situation reports all uh using digital platforms. So more educated is better. 1:01:37 1 hour, 1 minute, 37 seconds We have to pay what the government mandates us to pay for the job role. 1:01:43 1 hour, 1 minute, 43 seconds Understood. Now uh also Mrs. H since we have foreign operations so is there a possibility wherein we can send Indian 1:01:52 1 hour, 1 minute, 52 seconds labor on work permit in Australia and so on uh uh so that we can make higher margins. 1:02:03 1 hour, 2 minutes, 3 seconds No sir, there is no provision to take security guards to international markets. 1:02:08 1 hour, 2 minutes, 8 seconds Immigration laws mostly allow for immigration to only highkilled manpower and that too where they are not locally available. 1:02:17 1 hour, 2 minutes, 17 seconds Security guards so far do not fall under that category. Understood. Thank you very much. 1:02:27 1 hour, 2 minutes, 27 seconds Thank you. As there are no further questions from the participants, I now hand the conference over to Mr. Rajha for closing comments. Over to you, sir. 1:02:40 1 hour, 2 minutes, 40 seconds Thank you very much uh to all of you for joining this call and taking so much time and patience to ask your questions. 1:02:50 1 hour, 2 minutes, 50 seconds As I close this call for FI26 and for Q4 of FI26, 1:02:59 1 hour, 2 minutes, 59 seconds I would like to say that there has been a recurring critique of SIS. 1:03:09 1 hour, 3 minutes, 9 seconds People have often said too many segments, too many moving parts, something or the other is always limping. 1:03:22 1 hour, 3 minutes, 22 seconds That's also been true for several quarters in the past. 1:03:28 1 hour, 3 minutes, 28 seconds FI26 presents a counterpoint. 1:03:33 1 hour, 3 minutes, 33 seconds It demonstrates what happens when a multi-engine platform which is a market leader in security, 1:03:42 1 hour, 3 minutes, 42 seconds market leader in FM delivers. So FI26 is a is a is a good 1:03:52 1 hour, 3 minutes, 52 seconds story and like I said FI26 has been a rebound year 1:03:58 1 hour, 3 minutes, 58 seconds and with labor codes I think we have strong tailwinds 1:04:04 1 hour, 4 minutes, 4 seconds for the coming years to very well be the inflection point for SIS and this industry. 1:04:19 1 hour, 4 minutes, 19 seconds I once again wish all of you the very best and thank you for 1:04:26 1 hour, 4 minutes, 26 seconds continuing to take a deep interest in SIS. I hope to see you soon. 1:04:37 1 hour, 4 minutes, 37 seconds Thank you on behalf of SIS Limited. That concludes this conference. Thank you all for joining us. You may now disconnect 1:04:45 1 hour, 4 minutes, 45 seconds your