SIS Limited (SIS.BO) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to SIS Limited Q3 FY '26 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Vineet Toshniwal. Thank you, and over to you.

Okay. Thank you very much. Welcome, everyone. Good afternoon to our quarter 3 FY '26 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 FY '26, as you know, has been this is a 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, and we are seeing sustained momentum in growth and profitability both. For the first time, we've crossed INR 4,000 crores in quarterly revenues, right? We have reported consolidated revenue of INR 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'm 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 model. Now there has been much discussions 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 a provision in our results. So coming to that, it's actually in line with ICAI guidance where we had engaged our actuary and they have done a reassessment based on the new definition of wage, the leave and gratuity obligations, right? So the company has recognized a onetime exceptional charge of INR 290 crores, which is associated with past period gratuity and leave liabilities, okay? 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 heard 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 be -- we will start the process of educating our clients 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 recoveries materialize, 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 gratuity 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 INR 1,400 crores in excess of that with all 3 segments firing. So on a consolidated basis, we have the highest ever quarterly revenue of INR 4,185 crores, which is, as I said, 24.5% year-on-year. India security reported its highest ever revenue of INR 1,898 crores, almost like INR 1,900 crores, which is a 33.7% year-on-year growth. FM also recorded its highest ever quarterly revenue at INR 636 crores, which is a 10.3% year-on-year. International security recorded a very robust growth, highest ever quarterly revenue, INR 1,670 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 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 SG&A. So on a consolidated basis, our EBITDA grew from INR 168 crores by [ 20.7% ], right, from -- on a year-on-year basis. So now we are at an EBITDA margin of 4.5%. This, again, I'm talking of operating EBITDA, not the reported EBITDA. India Security operating EBITDA margin is 5.2% after adjusting for the acquisition-related costs, which are a onetime 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 INR 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. EBITDA margin is -- was up by 19.2% on a year-on-year basis. Now coming to the PAT. We have reported an operating PAT of INR 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%. Our efforts to clean up the balance sheet, which we had taken a charge last year to clean up the goodwill, et cetera, 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 2 days. So now -- sorry, the DSOs were 69. Now they are down to 67, which is an improvement of 2 days from the previous quarter. So that's all about the financial performance and the -- and okay, last but not the least, we are at an EPS of INR 7.2 for this quarter. That almost gives us a run rate of close to INR 30 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 and 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 is the CEO SIS International. Turning over the call for Q&A now.

[Operator Instructions] The first question is from the line of [ Amit from OneCapital ].

Am I audible?

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

I hope this is better now.

Yes, it is. Please proceed with the question.

So on the onetime charge that you have taken of INR 290 crores, 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 [indiscernible] 90-plus percent we can easily recover or maybe 50%? What's your view on that?

This is Rituraj. I'm 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 INR 290 crores is a one-off exceptional item from prior periods. Number two, how is gratuity liability computed? Why has this INR 290 crores come? It has predominantly come because the definition of wage has been changed in the new Labor Codes. Number three, like Vineet explained, we had 2 choices. We could have either raised invoices to our customers for prior period gratuity and claimed arrears or 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 1 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 charged 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 INR 290 crores. Now what we intend to do, and I'm coming to your question, 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 bonus. We believe that most of our customers should come through and comply with their obligation to pay up for gratuity and leave prior period cost. It is impossible for me to, however, predict whether 100% of our claim will be collectible, only 50% or only 30%. 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. 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 gratuity and leave. Further from here, we will only negate this INR 290 crore charge as and when we make the collection from clients. I hope that explains.

And I appreciate you have taken the charge on the first hand which is not the practice being followed by others [indiscernible]. So I appreciate the prudent accounting norms and thanks for that. Another question was on the dividend payout. So in the past, the company has rewarded the shareholders majorly through buyback. But this time, there has been a dividend of INR 7 per share, which is on the higher side from the general norm -- the general dividend that the company gives. So will this -- the reward for the shareholders in the form of dividend will continue going forward or is it -- I mean what should we track for going forward, like, whether it'd be buybacks or the dividends that have come now and will continue? Any views or clear guidelines [indiscernible]?

Thank you for that question. SIS is a cash-positive company, and we generate 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. And over the last few years since COVID, if my memory serves me right, we have returned INR 500 crores, 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 each year. And we have taken the first step this year by announcing a INR 7 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, which 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 trying to do this basis feedback that we get from you guys. I hope you're not upset about it, though?

No, it's -- I mean I would say that of course from the company side it's the same approach. I mean the same amount of quantum that flows out to the shareholders. However, from the shareholders' point of view, the buybacks do create more value because we can at least be offset by the capital loss, which are being bought back by the company, which is not the case with dividend. But, yes, for the shareholders who are in low-tax bracket, probably dividend [ felt ] better. So, yes, both the approaches [ serve the ] shareholder depending on which [ bracket ] they come into.

The next question comes from the line of [ Umang Shah from Banyantree Advisors PMS ].

Am I audible?

Yes, sir. You are audible.

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%; Q-o-Q basis, 2.3%. FM -- obviously, FM and security, you can see it from the earnings note.

Yes, yes, absolutely.

On a consecutive basis, 15% excluding acquisitions.

Okay. 15% ex acquisition. Sir, second question was our security services India margins came in at 4.8%. You mentioned there were these onetime acquisition costs. If my memory serves me right, AP Securitas acquisition, the margins are 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 FY '26 or FY '27?

So let me revisit the numbers. India security margins, if you will see our earnings note, you 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 it, 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-cut road map to integrating APS into the SIS Group, 100% and working through all the efficiencies that can come through SG&A rationalization, sales -- kind of sales rationalization and everything, and over a period of time, take -- uplift their margin from current 4% to [indiscernible] as good as what SIS margins are.

The next question comes from the line of [ Sucrit D Patil from Eyesight Fintrade Private Limited ].

My name is [ Sucrit Patil ]. My first question, 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 in between expanding your coverage, meeting client SLAs and protecting margins? And if something shifts like, for example, wage inflation, regulatory changes or client churn, what internal signals would tell you that it's time to change the plan of action? That's my first question. I'll ask my second question after.

Sucrit, 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 elaborate a little bit more on your question.

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 swing? For example, if there's some change in the manpower deployment or billing cycle or client payment behavior, what is the plan of action on this? I just want to understand how do you manage the risk? I just want [indiscernible] view on that.

Brajesh ji, I think it's your question.

It's Brajesh here. 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 slide, which covers each aspect of business, how the business is doing on margin, how much is doing on sales, how the business is doing on collections and DSO. This has been reviewed at corporate level also and there is a system of having a DRM, [indiscernible] review meeting in which every regional head and zonal head review this performance of the previous month on the basis of the 7 items. And on the basis of that tracking whatever corrective action is required, we plan that thing and we [ adequate ] to those plans. At the time of next month 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 if anything else you are looking for.

The next question comes from the line of [ Rama Krishna from Zen Wealth Management Services Limited ].

This question not particularly related to the quarter performance or something like that. So at a general level, just wanted to understand your thoughts. So you have indicated that higher compliance thresholds due to implementation of labor reforms is an opportunity for players like you with respect to the addressable market opportunity. So just I wanted to understand 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 these segments, what is the kind of addressable opportunity furthermore that you will have in terms of ensuring sustainable growth and competitive scenario, pricing metrics and all those things? I think that will be a bit helpful.

So that's a little broad-based question, but let me try and address that for you. See, talking about security per se, if you go by the [ GSTIN ] code on which security services GST is paid and you back calculate the annualized size of market, security services alone constitute more than INR 1 lakh crores 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, INR 500 crores in annualized revenue will not even add up to 1/4 of the market size. What I'm 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, which result in 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 guards, let's say, is 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 and various different challans that went 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 [ GSTIN ] type IT platform where every single employer in the country, whether it is a multinational corporation or an MSME, a contractor like us or an end customer, all of us would have a single labor license and a single challan or a single statutory deposit for all our employees would need to be uploaded to the portals of the government. What that will do is it will, hopefully, over a period of time when this is fully realized, eliminate a large part of compliance arbitrage that is used against us as a result of which the addressable market for companies like us is limited. What we see these labor reforms as is that when everybody has to comply to the same rule of law, the customer has a choice to pay the same full compliance and maybe 5%, 10% more markup to a national leader or a multinational market leader or pay 5% lesser service charges and go with a local mom-and-pop shop. When the arbitrage reduces, the market naturally shifts to larger organized, more compliant operators. And this is not theory. This is exactly what happens in evolved labor markets like Australia, for example. In Australia, we estimate that 75% to 80% of the industry is organized and compliant. Maybe 20% could be noncompliant in some shape or form. In India, we estimate that the organized compliant market is just about 40%. So we believe that it is labor reforms or labor codes are a trigger for Indian security addressable market or Indian FM addressable market for companies like us to move up from the 40% range to the 60%, 70% range as and when this compliance fully takes shape in the next 3 to 5 years. And that completely changes the landscape, the opportunity size and the advantage that lies with larger compliant players like us. I've given you a very long explanation, but I hope that all on the call would be able to appreciate exactly in a very basic manner what is going to happen to this industry as a result of labor codes.

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

So honestly, this has -- what I explained to you does not in any meaningful way change our thesis on acquisitions. SIS is predominantly an organic growth-driven entity. 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. And as you all know, organic growth is the best for return on equity. So our priority is clearly organic.

Can I ask one more or you want me to join back in the queue?

Join back in the queue, please.

The next question comes from the line of [ Shrinjana Mittal from MS Capital ].

I have a couple of bookkeeping questions. One is on the depreciation side. The depreciation number is higher by INR 8-odd 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?

Brajesh here. So the reason for increase in depreciation is because of 2 reasons. One is, of course, the additional CapEx deployed at the customer side. So every time we try to provide a solution kind of sales to a customer, it also involves some CapEx, which we divide to our customer locations. But in this quarter, there is one more aspect is there that because of this PPA accounting of APS acquisition, we have created some intangible assets, which amortization has taken place. So I think INR 2 crores, INR 3 crores is coming from there. And also since APS has got consolidated for the first time, INR 3 crore depreciation got added because of that. So I hope that is fine for you.

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

There is no one-off. It's a recurring number.

Only 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. No, that covers the second question I had. Just one last question then. The AP Securitas consolidation was done for the full 3 months of this quarter?

Yes. This has been done for the full 3 months. From 1st October onwards, we have done the [ completion ].

The next question comes from the line of [ Vishal Chandramani ], an Individual Investor.

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 in 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 that you can get the acquired margins up as well as the labor market tightness, what is your expectation for your outlook for margins, say, in FY '27 and beyond?

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 5.5% in facility management and close to 4% 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 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 a SAP or Apple 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 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 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 consol 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.

The next question comes from the line of [ Umang Shah from Banyantree Advisors PMS ].

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 a lower margin and inability to pass on minimum wage increases?

This is Murali here. Okay, it's a bit of a yes and 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 that. It is black and white out there in all the geographies that we operate internationally. So the price rise is not an issue, right? So that is contractual obligation. The customers will pay us. However, some of these sites are -- 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 margins. So yes, it does impact our margin. However, it's not due to the price wage increase.

Got it. Got it. Very useful. And with the India-Europe FTA negotiation recently concluded, it also talks about movement of service professionals and have a 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 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 [ or ] put together the 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, sir. And just last one. Thank you for [indiscernible] the book SIS Story was a very good read. The insight that the book gave helped us a lot in understanding the history and where -- how SIS is -- where it is today and how it is so. In that, we read a lot about One SIS and VProtect. This were some of the initiatives that you had spoken about 3, 4 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. But coming to your question, I think when SIS has broken even, it is doing fairly well. It is roughly run rating at INR 10 crores a month. So that's INR 120 crores per annum. So it's not a very big business, but it's broken even, it's taken shape. It's going to plan. And VProtect, the alarm monitoring business, gets divided into 2 parts. One is the B2B side where we are solving problems of banks and retail organizations, et cetera. And the other one is B2C side where we are basically addressing homes and 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, INR 10 crore monthly revenue. And if my memory serves me right, it is adding close to 15% EBITDA margin.

The next question comes from the line of Anant Mundra from Mytemple Capital.

Sir, what has been the contribution of EPS to our operating PAT this quarter?

You have Brajesh this side. So, operating PAT and reported PAT, the difference is on account of tax -- deferred tax, which we have been created on the onetime exceptional item of gratuity and [ leave ] provisions. So that is -- and another thing is that we have accounted for onetime acquisition cost of about INR 7 crores. So mainly these are the 2 components which has resulted in the difference between the operating PAT and reported PAT.

And how much has APS contributed.

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

Yes.

Just give me a sec. We'll tell you the exact number. I think also EBITDA, it is roughly INR 14.

INR 12.5 crores is the EBITDA.

INR 12.5 crores is adding to EBITDA each quarter and PAT number we'll just give you.

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 PAT level from last year, it's about INR 102 crores and this year, it's about INR 100 crores. So the growth in EBITDA is not really translating into a growth in PAT.

No, that's a very good observation. Let me clarify. Last year, same quarter, we had a bump up in the profit after tax owing to 80JJAA and income tax refund interest. So there was an abnormal INR 100-some crores of PAT. And that's why when compared to that Y-o-Y, the number is looking disappointing. But if you compare it to the preceding quarter, which was roughly at INR 90 crores, INR 93 crores, that would probably explain APS add-up better.

All right. Got it. Got it. Maybe I'll connect separately for the operating PAT contribution from EPS.

Anant, I will -- Anant, we can connect offline and get back on this one here.

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

The goodwill charge?

There's goodwill, and I think there's some -- there's something that we're also amortizing, right? I think there's some INR 2 crores, INR 3 crores of contribution that has come.

Intangible assets we have paid on the basis -- as per the PPA accounting. The actual goodwill amount, which have been created is approx INR 130 crores.

Okay. INR 130 crores of goodwill. 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 benefit we can get from this ELI scheme?

I think you will have to wait till next quarter to get an answer to that. But let me add that, that ELI, whatever comes, obviously, given the fact that the 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'm waiting for. But there would be significant flow-through to the PAT line because there are no costs associated here.

The next question comes from the line of [ Rahil from Sapphire Capital. ]

Just one question in regards to each of the businesses and then overall for SIS. Any sort of growth outlook guidance you'd like to give at this point in time for quarter 4 and then for the upcoming year, FY '27?

I think SIS does not really give guidance. But from a very long-term modeling perspective, this question has been asked before. And Vineet 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 look at -- do the crystal ball gazing, I mean, it's like we have consistently said that we will be -- in security, we will be about 1.5x the GDP. So you can model about 11%, 12% type of 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, is 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 consol basis, we should be looking at about 12% type of growth.

Just to supplement what Vineet is saying, if you look up to Page 11 of our earnings note, that's another way to look at it. 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 last 8 years since listing is 13.4%. Now 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%.

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

No, 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 8 years through [ demon ], GST, COVID, labor reforms and all that has happened in between. So that should give you a fair bit of confidence on what we are doing with the business.

Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Rituraj Sinha 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, FY '26 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'd still be close to 15% growth, 15% plus growth. Our profit after tax run rate is near about INR 100 crores now, so on an annualized basis, roughly INR 400 crores. Our EPS basis that is INR 7 for the quarter, but on an annualized basis, our EPS would translate to somewhere close to INR 30, 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 are moving back in the 15%, 16%, 17% zone. Our net-debt-to-EBITDA, even this particular quarter where you see a bump up, if you back out the lease charges, which are INR 140 crores, our net debt continues to remain around 1.1, 1.2, which is well within control. And overall, I think SIS is very well set 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 kilometers per hour or 100 kilometers per hour. That one we will get to know as we progress through the year. But I can say with confidence, basis 9-month results, that FY '26 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.