SIS Limited (NSE: SIS) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Vineet Toshniwal — President, M&A and Investor. Relations
Rituraj Kishore Sinha — Group Managing Director
Brajesh Kumar — Chief Financial Officer
R S Murali Krishna — Chief Executive Officer – SIS International
Analysts:
Unidentified Participant
Amit — Analyst
Umang Shah — Analyst
Sucrit Patil — Analyst
Rama Krishna — Analyst
Shrinjana Mittal — Analyst
Anand Mundra — Analyst
Raheel Raza — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to SIS Limited Q3FY26 earnings call. As a reminder, all participants lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vineet Toshneva. Thank you. And over to you.
Vineet Toshniwal — President, M&A and Investor. Relations
Thank you very much. Welcome everyone. Good afternoon to our quarter three FY26 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 FY26 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 4,000 crores in quarterly revenues.
We have reported consolidated revenue of 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.
So what we would like to and you would have seen we have taken up a provision in our results. So coming to that it’s actually in line with ICI 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 one time exceptional charge of INR 290crores which is associated with past period gratuity and leave liabilities. 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 erred 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 start the process of educating our client 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 recovery is materialized, they will now start reflecting positively in our financial results having taken the entire provisions.
Right. So that’s, 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 1,400 crores in excess of that with all three segments firing. So on a consolidated basis we have the highest ever quarterly revenue of 4185 crores which is as I said, 24.5% year on year. India Security reported its highest ever revenue of 1898, almost like 1900 crores which is a 33.7% year on year growth. FM also recorded its highest ever quarterly revenue at 636 crores which is a 10.3% year on year.
International Security recorded a very robust growth highest ever quarterly revenue 1670 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 improved results. We focused on margin both in terms of customer contracts as well as rationalization of SGMA. So on a consolidated basis our EBITDA grew from 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 one time 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 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 expansion went up to 3.8% remaining flat on a year on year basis.
But quarter on quarter basis it saw a jump. EBITDA margin was up by 19.2% on a year on year basis. Now coming to the pat, we have reported an operating PAT of 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, you know, clean up the balance sheet which we had taken a charge last year to clean up the goodwill, etc. 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, 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 epa. And okay, last but not the least, we are at an EPS of 7.2 rupees for this quarter. That almost gives us a run rate of close to 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, on the labor codes and the gratuity part. Now on the call we have Ritraj Group Managing Director, Mr. Brajesh Kumar, he’s the Chief Financial Officer and Mr. Murli Krishna, he’s the CEO SIS International. Turning over the call for Q and A now.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press Star and. Two participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Amit from One Capital. Please go ahead.
Amit
Yeah, thank you for the opportunity.
operator
Yes, you are audible but there is a background noise.
Amit
Okay. I hope it is better now.
operator
Yes, it is. Please proceed with the question.
Amit
Yeah, so on the one time charge that you have taken up to 90 crores, I understand it from 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 90 plus percent we can easily recover or maybe 50%. What’s your view on that?
Rituraj Kishore Sinha
Hi, this is Rituraj. I am 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 290 crores is a one off exceptional item for prior periods. Number two, how is gratuity liability computed? Why has this 290 crore 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 two choices. We could have either raised invoices to our customers for prior period gratuity and claim careers 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 one and we raised invoices for the earlier 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 for 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 290crores. 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%, 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 and L over the course of the year. And if they, 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 290 crore charge as and when we make the collection from clients. I hope that explains.
Amit
Yeah, thank you very much for the detailed explanation and I appreciate you have taken the charge on the first hand which is not the practice being followed by others as I think so appreciate the student accounting norm. 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 7 rupees per share, which is much on the higher side from the general norm, the general dividend that the company paid. So will this, will the reward to the shareholders in the form of dividend will continue going forward? Or is it, I mean what will you track for going forward? Like will it be buybacks or the dividends that have come now and will continue? Any views or clear guidelines or policies in that direction?
Rituraj Kishore Sinha
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 500 crore 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 seven rupee 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, you know, trying to do this basis feedback that we get from you guys. I hope you’re not upset about it though.
Amit
No, it. I will 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. Yeah. However, from the shareholders point of view, the buybacks do create more value because we can at least be offsetted by the capital loss which are being bought back by the company. Which is not the case with these risks. But yeah, for the, for the shareholders who are in low tech bracket probability dividend felt better. So yeah, both the approaches serve shareholder depending on which type bracket they come into.
So yeah. Thanks a lot for your explanation. Much appreciated. Thank you.
operator
Thank you. The next question comes from the line of Umang Shah from Banyan to Advisor pms. Please go ahead.
Umang Shah
Thank you for the opportunity. Am I audible?
operator
Yes sir, you are audible.
Umang Shah
Thank you. The first question was if we were to adjust for AP Sekirita’s acquisition, what would be our revenue growth?
Vineet Toshniwal
So the India security revenue growth excluding APS is on a year, on year basis 11.2 QQ basis, 2.3 FM obviously FM and security. You know you can see it from the earnings note.
Umang Shah
Yeah, yeah, yeah, absolutely.
Vineet Toshniwal
15% X excluding acquisition.
Umang Shah
Okay, 15% X acquisition. Okay, got it. Very useful, sir. Second question was our security services in India margins came in at 4.8%. You mentioned there were these one time acquisition costs. If my memory serves me right, AP Security acquisition, the margins were 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 FY26 or FY27?
Vineet Toshniwal
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 or if I were to say organic sis. Right now obviously APS is also part of it is 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 roadmap to integrating APS into the SIS group. 100% and working through all the efficiencies that can come through SGNA rationalization, sales, you know, kind of sales rationalization and everything. And over a period of time take uplift their margin from current 4% to almost as good as what SIS margins are.
Umang Shah
Thank you so much. I’ll get back in the queue.
operator
Thank you. The next question comes from the line of Sutride Patel from Eyesight Fin Trade Private Limited. Please go ahead.
Sucrit Patil
Good afternoon team. My name is Sukhrut Patil My first question to 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 coverage, meeting client SLAs and protecting margins. And if something shifts, like for example wage inflation, regulatory changes or client churn, what internal signal will tell you that it’s time to change the plan of action? That’s my first question. I’ll ask my second question. Thank you.
R S Murali Krishna
So Krit, I’m not too sure if I understand your question right, but I’ll still go ahead and answer 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, you know, elaborate a little bit more on your question.
Sucrit Patil
Yes. But I’ll ask my Second question to Mr. Kumar. From a financial point of view and before anything shows up on the quarterly numbers, what early signs do you track that help you spot the margin pressures or cash flow swings, for example, you know, if there’s some change in the manpower deployment or billing cycles or client payment behavior. What’s the plan of action on this? I just want to understand how do you manage the risks? I just want to understand your view on that.
Rituraj Kishore Sinha
I think it’s your question.
Brajesh Kumar
Yeah, it’s. Thanks for the question. So the process we follow that there is a system of after monthly closing we publish a seven finger model PPT slides which covers each aspect of business. How the business is doing on margin, how much they are doing on sales, how the business is doing on collections and dso. This has been reviewed at Copper Table also. And there is a system of having a BRM branch review meeting in which every regional head and general heads review this performance of the previous month on the basis of the 7 FM and that on the base of that tracking what is whatever corrective action is required, we plan that thing and we educate educate that 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 anything else you are looking for.
Sucrit Patil
Thank you. And best of Luck for the next quarter.
R S Murali Krishna
Thank you.
operator
Thank you. The next question comes from the line of Ramakrishna from Zen Wealth Management Service Ltd. Please go ahead.
Rama Krishna
Yeah, hi. Thank you. 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 human with respect to the addressable market opportunity. So just I wanted to understand, you know, 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 long, 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. Thank you.
Rituraj Kishore Sinha
So that’s a little broad based question but let me try and address that for you. See let’s talking about security per se. If you go by the GST and code on which security services GST is paid and you back calculate the annualized size of market, security services alone constitute more than 1 lakh crore worth of market opportunity. 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 500 crores in annualized revenue will not even add up to a quarter of the market size. What I’m trying to drive at is that the sector is extremely fragmented because 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 there was no mechanism for the government to cross check compliance across 29 different acts and various different challenges 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 GSTN type IT platform where every single employer in the country, whether it is a multinational corporation or msme, a contractor like us or an end customer, all of us would have a single labor license and a single chalan 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 this 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 lower 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 non compliant 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 three to five 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 you know 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.
Rama Krishna
Yeah, this is Faisal. Thank you. 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 security tasks you’ll be doing, if any such opportunities comes up for your further medium term to near term, you will be now looking at aligning with aps with sis I mean earlier you are mentioning about the buyback and dividend. So I’m just trying to understand you will be putting cash for acquisitions also, you know, along with both of them.
Rituraj Kishore Sinha
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. You know, 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 we all know, organic growth is the best for return on equity.
So our priority is clearly organic.
Rama Krishna
Yeah. Thank you. Can I ask one more or you want me to join back in queue?
Vineet Toshniwal
Join back in the queue please.
Rama Krishna
Sure. Thanks.
operator
Thank you. The next question comes from the line of Sri Jinnamittal from Ms. Capital. Please go ahead.
Shrinjana Mittal
Hi. Thank you for the opportunity. I have a couple of bookkeeping questions. One is on the depreciation side, the depreciation number is higher by 8 crores. In your earnings release it’s mentioned that it’s due to some capex at the customer site. So I just wanted to know what kind of capex is this and would this additional charge be a recurring charge?
Brajesh Kumar
Yeah. So the reason for increase in depletion is because of two reasons. One is of course additional capex deployed at customer side. So every time we try to provide a solution kind of sale to a customer, it also involves some capex which we give 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 2, 3 crore is coming from there. And also since APS has got concentrated for the first time, 3 crore depression got added because of that.
So hope that is fine for you.
Shrinjana Mittal
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.
Rituraj Kishore Sinha
There is no one off. It’s the recurring number.
Vineet Toshniwal
Even in the finance cost also you will see something similar. You would notice there is an increase and it’s. It’s predominantly due to the same accounting principle that we are following in case of the APS acquisition plans too. So that has contributed plus some debt that we have Assumed on account of APS acquisition consolidation. So similar, similar explanation on the feline side also if anyone was about to ask.
Shrinjana Mittal
Understood. No, that covers the second question. I had just one last question then. The AP securities consolidation was done for the full three months of this quarter.
Brajesh Kumar
Yeah, this has been done the full three months. From first October onwards we have done the constellation.
Shrinjana Mittal
Thank you. Thanks for taking my question.
operator
Thank you. The next question comes from the line of Vishal Chandramani, an individual investor. Please go ahead.
Unidentified Participant
Yeah, thanks. 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 and security. And you also in your presentation spoke about some types of 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 FY27 and beyond?
Rituraj Kishore Sinha
So let me jog your memory. I think if you’ve been following SIS a few years back pre Covid we were 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, you know, 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 Oracle 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 console 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.
Unidentified Participant
That’s helpful. Thank you.
operator
Thank you. The next question comes from the line of Umang Shah from Bunyan Tree Advisor, pms. Please go ahead.
Umang Shah
Hi sir, thank you for taking the follow up. 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 lower margin and inability to pass on minimum wage increases?
R S Murali Krishna
Hi Mark, this is Murali here. Okay. It’s a bit of a yes and a no in the sense that we are able to pass on the wage increases to both our government as well as defence clients. There are no issues with respect to them. It is black and white out there in all the geographies that we operate internationally. So the price rise is not an issue. So that is contractual obligation the customer will pay us. However, some of these sites 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 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 margin. So yes, it does impact our margin. However it is, it’s not due to the price wage increase.
Umang Shah
Got it. Very useful. And with the India Europe FTA negotiations 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?
Rituraj Kishore Sinha
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 has just happened. We haven’t yet had an Opportunity to frame our thoughts. I 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.
Umang Shah
Sure sir. Thank you so much. And just last one, thank you for. I mean the book SIS Story was a very good read. The insights that the book gave helped us a lot in understanding the history and where. How sis, where it is today and how it is. So in that we read a lot about one SIS and we protect this were some of the initiatives that you had spoken about 34 years back today. Are we still working on those initiatives or they have been subject to into the overall business?
Rituraj Kishore Sinha
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 10 crores a month. So that’s 120 crores per annum. So it’s not a very big business. But it’s broken even. It’s taken shape. It’s you know going to plan and we protect the alarm monitoring business. Gatt gets divided into two parts. One is the B2B side where we are solving problems of banks and retail organizations etc. And the other one is B2C side where we are basically addressing homes and you know 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 10 crore monthly revenue. And if my memory serves me right it is adding close to 15% EBITDA margin.
Umang Shah
Got it. Got it. Thank you so much.
operator
Thank you. The next question comes from the line of Anand Mundra from my temples capital. Please go ahead.
Anand Mundra
Hello. Thank you for the opportunity. So what has been the contribution of UPS to our operating PAT this quarter?
Brajesh Kumar
We are reporting. Yeah, there is this side. So operating pat and reported pat. The difference is on account of tax, deferred tax which we have been created on the one time exceptional item of graduate and leap provision. So that that is another thing is that we have accounted for one time equation cost of approx. 7 crore. So these are the two components which has resulted in the difference between the operating pat and reported pat.
Anand Mundra
And how much has APS contributed?
Rituraj Kishore Sinha
The question is more about how much pat APS is adding.
Anand Mundra
Yes.
Rituraj Kishore Sinha
Okay, just give me. We’ll tell you the exact number. I think on EBITDA it is roughly 14 12.5,
Brajesh Kumar
12.5 is the EBITDA.
Rituraj Kishore Sinha
12.5 crore is adding to EBITDA each quarter and fat number we’ll just give you.
Anand Mundra
Actually my question was more because I can see, I mean you can see that there’s a jump in ebitda of about 25% but if I check at the operating pack level from last year it’s about 102 crores and this year it’s about 100 crores. So the growth in EBITDA is not really translating into a growth in pac.
Rituraj Kishore Sinha
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 80 JJ and income tax refund interest. So that was an abnormal 100 and some crore rupees of PAT. And that’s why when compared to that yoy, the number is looking disappointing. But. But if you compare it to the preceding quarter which was roughly at 1993 crores, that would probably explain APS add up better.
Anand Mundra
All right, all right, got it, got it. Maybe I’ll connect separately for the operating PACT contribution from eps.
Brajesh Kumar
We can connect offline and you know, get back on this one.
Anand Mundra
Sure. And also just a follow up on this as well. What are we intangibles that have now been created due to the APF acquisitions?
Rituraj Kishore Sinha
The goodwill charge?
Anand Mundra
Well, there’s goodwill and I think there’s some amortized. There’s some something that they’re also amortizing. Right. I think there’s some 2, 3 crore of contribution that’s coming on the basis.
Brajesh Kumar
That’S the PPA accounting. The actual goodwill amount which have been created is approx. 130 crore.
Anand Mundra
Okay, 130 crore of good. All right. All right. And just one more question. So I mean there’s a ELI scheme which is I think which has now been applicable from the 1st of August. So have we kind of worked around what kind of numbers or what kind of, what kind of benefit we can get from this ELI scheme?
Rituraj Kishore Sinha
I think you will have to wait till next quarter to get an answer to that.
Anand Mundra
All right, all right, thank you. That’s it for ma’. Am. Thank you.
Rituraj Kishore Sinha
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 match regarding that will be clear once the first payment is made by the government. That is what I Am waiting for but there would be significant flow through to the PIP line, you know, because there are no cost associated here.
Anand Mundra
Got it. Thank you.
operator
Thank you. The next question comes from the line of Raheel from Sapphire Capital. Please go ahead.
Raheel Raza
Good afternoon. So there’s one question in regards to each of businesses and then overall for sis, any sort of growth outlook guidance you’d like to give at this point in time for quarter four and then the upcoming year FY27?
Rituraj Kishore Sinha
I think SIS does not really give guidance but you know, from a very long term modeling perspective, this question has been asked before and Vineet continues to repeatedly articulate that soil give him the opportunity.
Vineet Toshniwal
So look, I think there is no number guidance but if you want to, you know, get do the crystal ball gazing, I mean it’s like, you know, we are consistently said that we will be in security, we will be about 1.5 times the GDP. So you can model about 11, 12% type of, you know, 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 and a half to 15% type of growth rate. Right. International market roughly about 7 and a half percent 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 consolidations, we should be looking at about 12% type of growth.
Raheel Raza
Okay, got it sir. Thank you.
Rituraj Kishore Sinha
You know, just to supplement what Vineet is saying, you know, if you look up to page 11 of our earnings note, you know, that’s another way to look at it. Our you know, charts are present on slide 11 and page 5. So if you look at the revenue growth trends for the last eight years, it’s roughly 14.8%. Looking backwards, our EBITDA CAGR for last eight 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%.
operator
Sorry to interrupt, sir. Sorry to interrupt. There is a background noise which was coming while you’re speaking now.
Rituraj Kishore Sinha
Lord, 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 eight 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.
operator
Thank you 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.
Rituraj Kishore Sinha
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, FY26 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 five 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 100 crores now. So on an annualized basis, roughly 400 crores. Our EPS basis, that is 7 rupees for the quarter.
But on an annualized basis our EPS would translate to somewhere close to 30 rupees, 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, you know, even this particular quarter where you see a bump up if you back out the lease charges, which are 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 km per hour or 100 km per hour that one will get to know as we progress through the year. But I can say with confidence basis nine month results that FY26 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.
operator
Thank you on behalf of SIS Ltd. That concludes this conference. Thank you for joining us. And now you may disconnect your lines.