SIS Limited (NSE: SIS) Q1 2026 Earnings Call dated Jul. 31, 2025
Corporate Participants:
Unidentified Speaker
Vineet Toshniwal — President, M&A and Investor Relations
Rituraj Kishore Sinha — Group Managing Director
Analysts:
Unidentified Participant
Shaurya Punyani — Analyst
Shrinjana Mittal — Analyst
Pradyumna Choudhary — Analyst
Rama Krishna Neti — Analyst
Subir Sen — Analyst
Siddharth Misra — Analyst
Presentation:
Shaurya Punyani — Analyst
Ladies and gentlemen, good day and welcome to SIS Limited Q1FY26 earnings call. As a reminder all participants line will be in listen only mode and there will be an opportunity for you to ask question after the presentation concludes. Should you need assistance during this conference call please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is been recorded. I now hand over the conference to Mr. Vineet Soshniwal, President Massachusetts and Investor Relations from SIS Ltd. Thank you. And over to you sir.
Vineet Toshniwal — President, M&A and Investor Relations
Thank you very much. Hi, this is Vineet. Good afternoon to everyone and welcome to our quarter one FY26 earnings call. I hope you all got a chance to look at the results which were uploaded in the stock exchanges company website last evening. So let me start off with the headline. We’ve had a solid start to financial year 26 and we are for the first time we have crossed 1200 crore monthly revenue run rate. Psychologically very important mark right? Now let’s talk about all the segments which are all showing very promising momentum, all the three segments.
So on a consolidated basis the group has reported highest ever quarterly revenue of 3549 crores which is actually an increase of 13.4% on a year on year basis. India Security has reported its highest ever revenue at 1460 crores which is a 9.2% growth on a year on year basis. FM has also reported its highest ever quarterly revenue of 594 crores which is 12.1% growth on a year on year basis. International, it has also reported its highest ever quarterly revenue of over 1,513 crores. And happy to report that International Standalone is now a billion AUD business on its own which is a growth of 18.5% year on year.
Coming to profitability, we’ve been maintaining in all the calls that we are constantly on a path to improve margin profiles across all segments. Our focus on margin improvements is showing gradual results and in terms of rationalizing SGNA costs in terms of better customer portfolio management. So on a consolidated level, EBITDA has grown by 10.7% on a year on year basis to 152 crores and the margin stands at 4.3%. India Security reported an EBITDA margin of 5.4% which is similar levels as that of Q1FY25. Now Facility Management reported an EBITDA margin of 4.8% which is actually 60 basis points higher year on year basis.
Additionally, the segment reported its highest ever quarterly EBITDA of 28 crores which is a 28% growth on a year on year basis. Coming to international, the EBITDA margin for Q1FY26 was 3% compared to 3.4% in Q1FY25. The impact is because of restructuring costs and absence of some grants in Henderson in Singapore and some high margin events which happen in Australia which are obviously seasonal and they all happen in Q4FY25. While EBITDA was up 10.7% year on year it was impacted by the decline in security services international segment on a QOQ basis. Now talking about PAT, our PAT for this quarter is at 93 crores which is a PAT margin of 2.6 crores and a jump of 44.7% on a year on year basis.
This is driven by slightly higher. Sorry, this is driven by higher ATGJ benefits and some higher other income. Also our ROCE has now improved from 11.8% a year ago to 14.1% operational efficiency. Talking about net debt and DSO, we are happy to report that our net debt is now at 540 crores which is actually down by 483 crores in a similar period last year June 25th which was at 1023 crores. So this brings the net debt to ebitda down to 0.87 which was 1.76 in June 25th. OCF to EBITDA remains strong. It is at 105%.
DSOs have improved by 6 days compared to June 25th. Now we are at 68 days. Update on CAS JV. As you would have read in the news also we have now received approval from both sebi, nse, BSE for our ipo. We have one year window now to basically proceed with the ipo. As you know that we’ve been constantly looking out for investments in adjacent small businesses startups. So this quarter we have invested INR 6 crore rupees in preference shares of a company named Adi Kosh Financial Advisory Private Limited Koch. It’s a fintech platform providing focused on providing joint liability group loans to Blue Corridor workers across tier 2 towns in India.
Tier 4 towns in India. So with this let me end the opening remarks on the call. We have Ritraj Sinha Group Managing Director Mr. Brijesh Kumar. Our Chief Financial Officer Mr. R.S. morli Krishna. He is CEO SIS International. So with this now I turn over the call for Q and A. Thank you.
Questions and Answers:
operator
Thank you very much Vivian. Now begin the question and answer session. Anyone who wishes to ask a question may press 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 handsets 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 Shaurya Punyani from Arjrav Partners. Please go ahead.
Shaurya Punyani
Hi. Am I audible?
Rituraj Kishore Sinha
Yes, please proceed.
Shaurya Punyani
What kind of growth are we expecting this FY? FY26 and if possible FY27. Like can we maintain our growth rate which we achieved in quarter one?
Rituraj Kishore Sinha
Well, I think you know, we do not guide specifically towards what growth or margins we will achieve. That is not what SI generally does. But I think a good way to assess SIS performance is to look at the chart that is provided on page four of our earnings note where we give out a quarter on quarter revenue growth trend and quarter on quarter EBITDA growth trend since listing, which is Q1FY18. So if you see those charts, you will post that. Since listing in FY18 19, SIS has maintained a 14.8% CAGR on revenue and a 13.4% CAGR on EBITDA growth despite CORONA and all other things that have happened in the last seven, eight years.
So I think that would give you some direction.
Shaurya Punyani
So we are expecting improvement in margin since we are looking at. So you said you’re focusing on margins. So should we expect some improvement this year?
Rituraj Kishore Sinha
Yes.
Shaurya Punyani
Okay. Okay, sir, that’s. That’s. That’s all. Thank you.
operator
A reminder to everyone, ladies and gentlemen, please press star and one on your touchstone phone to ask a question. The next question is from the line of Shrijana Mittal from Ms. Capital. Please go ahead.
Shrinjana Mittal
Hi. Thank you for the opportunity. A couple of questions. One is if you can help me with some numbers. You guys used to report the cash logistics business financials as well, you know in the press release. So if you can just help me with few numbers of the cash logistic business for this quarter and last quarter.
Rituraj Kishore Sinha
Well, as you would be aware that you know because of the regulatory restrictions once we have filed for DRHP and listing process, we have restrictions to share information with regard to performance. I can only assure you that we maintain the trajectory and we are in good hands.
Shrinjana Mittal
Okay, Got it. Understood. And just one more question on the international business. In the last four, five quarters there has been a pickup. So has it because of any new business wins? If yes, can you just highlight upon that like. Is it like a recurring business which has come and what, what is the current cadence like looking like and what are we expecting going forward on the international business?
Rituraj Kishore Sinha
So I would like to draw your attention to page 11 of our earnings note. SIS gives out substantial details every quarterly earnings note. You will see that last quarter we reported significant wins in the Sydney trains in defense sector and in Canberra airport. Those contracts have basically come online in the first quarter and that is what is driving the revenue jump. And these trends are not one offs. These are long term contracts.
Shrinjana Mittal
Understood? Okay. Yeah, thank you.
operator
Thank you. The next question is from the line of Pradyumana Chaudhary from JM Financial family office. Please go ahead.
Pradyumna Choudhary
Yeah, hi sir. Sorry, I’m a bit new to the company so my questions are very basic. I just wanted to understand the growth drivers in the business. You spoke about looking at the historical performance to just gain some sense of the kind of growth the company can continue. But what really is helping this growth? What are the major drivers here? And yeah, like that’s the first question.
Rituraj Kishore Sinha
So fundamentally growth in any environment or any business is a function of volume and price. So if you look at our growth broken down, the first factor that drives our growth is the minimum wage escalation. All our contracts are prorated, all our pricing is prorated to minimum wages. So for example, if minimum wages is 100 rupees and it gets revised to 110 rupees for us, we re rate our contracts basis that 10 rupee change. So the first layer of growth is always the minimum wage change. The second layer of growth is basically the economic activity.
When there is any kind of construction, for example, whether it’s a public utility like a metro or a private residential complex, or a manufacturing facility, or an educational or healthcare establishment, it cannot operate from construction stage itself without security, without cameras, without fm. So any kind of economic activity in this country needs private security. We are basically sector agnostic. You know, we are geography agnostic. We are sector agnostic. We are season agnostic. So basically these services are required. And I think a great testimony to that fact is even when India suffered during COVID with lockdowns, etc.
In the first year of COVID FY21 SIS grew 7%. In the second year of COVID we grew 10% organically. And that happened predominantly because the service demand is very inelastic. So as economic activity grows, we grow. Even when economy comes to a standstill, demand for our service still remains resilient. The third layer for growth is obviously the market share that we pick up from our competitors. So that’s layer three. So these are the three factors that you can broadly consider as revenue drivers.
Pradyumna Choudhary
And what will be the reason for market share gains?
Rituraj Kishore Sinha
Well, I mean we acquire market share basis, better services, better compliances. We are the largest in this industry. We still only represent 5% odd of the market share despite being the largest in the country. And we aspire to move to a 10% market share. So in the top 10 cities, you know, we are constantly using metrics to track market share evolution. Use of technology also is a big factor in helping us acquire greater tech.
Pradyumna Choudhary
And sorry, whenever like any company or any entity is going to choose a security service, what are the biggest factors it looks at?
Rituraj Kishore Sinha
Well, I think the distinguishing factors for selection of a service like ours is basically, you know, inherent capability or expertise in the space. People don’t want to entrust security to somebody who’s a new entrant or somebody who’s going to experiment on their site. So I think past experience is extremely important. Credentials are very, very important. The second thing is, you know, supply chain capability. You know, I mean SIS is backed by 20 plus training academies across the country. We have probably the largest training infrastructure in this industry. That becomes a massive distinguishing factor. The third distinguishing factor would be tech adoption.
Whether it’s electronic security hardware or software to organize something as simple as baggage X ray, or something as simple as visitor entry and exit, or something as basic as, you know, parking, vehicular movement, etc. So these are the three, four things that matter a lot. And then for large national customers, the network matters a lot because you know, let’s say a bank is looking for a security vendor. They will have a discussion out of their office in Banda Kurla in Mumbai, but they’re actually looking at somebody who can give them services in Arunachal and Andhra Pradesh from next week onwards.
So without network you cannot do that. So then in large contracts, network is a fourth factor that comes into play.
Pradyumna Choudhary
All right, all right. And another one, how, like how are we really priced compared to our competitors? Is it more or less similar or do we tend to command a premium? How is it really happening?
Rituraj Kishore Sinha
I don’t think I can take questions around pricing strategy of the business on an investor call. So if you want to know, fundamentally I think you should take time out to visit one of our offices and get a first hand feel.
Vineet Toshniwal
Pradimana, what we’ll do is we are available as IR so maybe we can connect more offline because there are a lot of other people in the line also we would like to take other questions, I hope.
Pradyumna Choudhary
All right, thank you. Yes.
Vineet Toshniwal
Okay. Thank you.
operator
Thank you. The next question is from the line of Ramakrishna Neti from Zen Wealth Management Services. Please go ahead.
Rama Krishna Neti
Yeah, hi. Thank you. Just a couple of questions. Can you please share some more details with respect to your SXP restructuring costs and over a period of time in the future, what is it that we can expect from this entire exercise? That is the first question. Second question is, as an entity at SIS entity level, both domestic and international combined, what is your aspirational operating margin range? Like? I have been observing that over the last few years or quarters, we have been narrowly operating in that 4 to 5% kind of a range. So internally, what is your aspiration from an EBITDA margin perspective? And what is it that you have to do if you have to actually aspire for a higher margin range? And finally, as somebody who is actually as an indirect proxy to the economy, if you can share your thoughts like last 1/4 or 2/4, what has been the status with respect to the economic activity in the country that will be helpful from an insight perspective.
Thank you.
Rituraj Kishore Sinha
Thank you, Ramakrishna. So first response is around sxp. SXP is our mobile patrols business in Australia. It is roughly 130, $140 million per annum business. There were certain issues with regard to management and the decisions they took effective may we have let go of the CEO and you know, a few other senior persons concerned. As of right now, we are exiting a significant number of existing contracts which are not so profitable, closing a few offices and at the same time letting go of some key senior management who have not performed in line with expectations. What that does is that you have a lot of one off costs that are coming through.
There are also some contract corrections which are long term cost fixes that are impacting P and L. As of right now, the SXP business actions are just started in Q1. We expect that this will take at least 2/4 to settle down. So you can expect turbulence with SXP numbers right up to Q3. But we are very sure that we have a plan in place and we will prune the business down a little bit, maybe $10 million smaller, but we will have a much more profitable and stable business in another three to six months time. So that’s what’s happening with sxp.
That is what is dragging the international margins down temporarily. The second question is around what is our aspiration on. When you said operating margin, I assume you’re talking about EBITDA margin, EBITDA margin, SIS in the past has demonstrated its capability to deliver stability, 6% EBITDA. We believe that our business model allows us to continue to deliver 6% with some scale benefits, also some cost efficiencies that we are working on. So overall, if you ask me what is your aspiration in terms of EBITDA margin, I would say we want to go back to the 6% EBITDA margin mark, as we have previously demonstrated.
Last question. Around economic activity. I think if I look at my numbers, you know in India across segments we have continued to pick up contracts, you know, types of contracts also included. So I believe that economic activity in India is fairly resilient. I don’t see a downturn or a change. There might be certain pockets that might have witnessed some slowdown. You know, there’s upcoming elections in Bihar. It’s not a very major market for us, but maybe in that part of the country things have slowed down. Government procurement continues to be strong. Major manufacturing, you know, we have picked up contracts last quarter with Tana Steel, with Aditya Birla.
I think core manufacturing looks stable. It looks strong but not growing as much. We don’t see that kind of new demand or booming demand coming from it. Overall I don’t see a big change. Long story short.
Rama Krishna Neti
And can I ask one more question? Is that okay?
Vineet Toshniwal
Yeah, go ahead please.
Rama Krishna Neti
Yeah, so actually I am new in terms of. I’ve started researching on the company since last 2/4 on the Australian operations and the Singapore operations. I understand SIS was having some issues in the past. So as I understand from the annual report and other publicly available sources, just wanted to confirm where are you with respect to those challenges and how those particular segments are positioned now from a futuristic growth perspective.
Rituraj Kishore Sinha
I think fundamentally if you are researching sis, you would have noted we report on page four of our earnings note every quarter the India to international mix. So as of the latest quarter Q1FY26, 70% of our EBITDA comes from Indian operations and roughly 60% of our revenue comes from Indian operations. India is growing fairly well and we believe that, you know, we will be in double digit growth this year. Probably next quarter result will make it more clear whether it is initial double digits or mid double digits or how it’s looking. As far as international is concerned.
We do not have any significant crises, I would say in the international part of the business as well. MSS as you have noted earlier is going very strong. International security reported a 19% year on year growth in first quarter. Right. They have done exceedingly well on growth. There are challenges around SXP and the margins of SXP, but that is 1 out of the 4 SBUs. Our international business is approximately 1 billion Australian dollars annualized. Like I said earlier, SXP is close to 100 something. So let’s put it that the problem lies in 10% of our international business or maybe 3, 4% revenue of our global business.
So I don’t think there is something that you know should rock the entire boat.
Rama Krishna Neti
Sure. Thank you.
operator
Thank you. Before we take the next question, a reminder to participants. If you wish to ask a question, you may press Star and one on your Touchstone phone. The next question is from the line of Subir Sen from Aditya Birla, Sun Life AMC Ltd. Please go ahead.
Subir Sen
Thank you for the opportunity and thank you for the detailed earnings note. A couple of questions. Can you give us some color on the DSO for FM business? And last quarter you had mentioned about the impairment in Henderson slv, Unique and adis. Can you give us some color on the EBITDA and cash flow generation run rate in these businesses now and whether these businesses are performing more or less in line with what management expectation is. The annual report also came out later after the quarter four results. So in the annual report we had mentioned something like more than one year trade receivables almost 10 11% on a consolidated basis 215 crores versus 1996 crore of receivables.
So can you give us some color on this number as of now and whether the this this kind of a number is a steady state number, it will remain at all points in time or is it that management is making more eff to collect the receivables which are more than one year. Thank you.
Rituraj Kishore Sinha
So firstly if you see our 31 March result or even 30 June result, you will see very strong cash generation, more than 100% cash generation in both quarters. So obviously we are collecting strongly. That is how you know our OCF per beta is 100% plus. As regards to DSO, you will see that our DSOs overall for the facility management business I think you’re asking particularly is 94 days right? If you see the trends and trajectory even for the past few quarters it has hovered around 90 day mark. It may have exceeded maybe 34 days and I’m sure that the team will bring it back to the 90 day mark.
But that’s the broad range for FM 90 days. DSO is what you should bear in mind as far as Security in international is concerned. The business has historically maintained close to 50 to 55 days DSO. It is now 49 days so I think that is fairly in control. I don’t see a problem there. And SIS in India has historically maintained 70 to 75 Das DSO. It is now at 76 days. So maybe one or two days over the line which I am sure will come back. So I don’t think there is a big problem on the DSOs as regards to the receivables which are more than one year old.
These are largely receivables from PSUs and government entities. Some of these contracts have expired. They have extended settlement exercises that involve compliance, documentation, reviews, etc. Etc. Of the overall receivables outstanding, we generally maintain 10% plus as provision which is above and beyond the general guidelines. And our historical experience has also been that this provision is significant and adequate given the nature of business that we operate. To conclude, I only say that the outstanding above one year is always top of CFO’s agenda and we are all driving towards lowering that number. But I don’t think that we are either under provided or the number which is outstanding beyond one year is alarming.
Subir Sen
Okay, thank you. And some color on the four units INDUS and slv unique and ADIS as to how they are performing now in terms of cash generation and EBITDA versus what management budget? Sir?
Rituraj Kishore Sinha
So the goodwill impairment was on Henderson predominantly. That was like 90% of the entire impairment that I have explained in the past. It was basically a mismatch between what we paid for the business and what we had initially provisioned pre Covid for the second tranche. As of right now, Henderson is a breakeven business and it continues to maintain a $50 million annualized plus revenue. So I think in the Consol scheme of things it’s not a very large business. But we are very happy that it is growing reasonably over the last year or it has enough cash reserves to support its growth $20 million or thereabouts on its own books.
And it is breakeven already.
Subir Sen
Okay, thank you. And just one last question. In some of the sub segments like electronic surveillance and alva monitoring or even pest control, what has been the experience now and what is the aspiration going forward? Because some of the businesses are big. But is it that there is an aspiration to grow some of these sub segments into much larger segments? Is there an opportunity and how much in what time frame will that happen?
Rituraj Kishore Sinha
So our FM business at this point in time is 50 crore annualized but still within the FM segment compared to other competitors, we would be in the top three top four companies in the country. So pest control is a highly profitable business. Unfortunately it is not a very large business. It is not the largest FM pest control company in the country, you know, is still, you know, maybe 50, 60 million US dollars. So you know, 400 crores or thereabouts. I’d say so. And they are a clear market leader with a lot of acquisitions. We are in the top three, four with barely 50 crores of revenue.
Can this business be grown? Yes. Our five year plan on this business is looking to double the scale of this business. But do we see it becoming a thousand crore business? Not really. We would be happy to operate a pest control business which is in the range of 100 crores. It is more important for us more than the profitability or the size. It is a very complementary service with our facility management services. So wherever we are doing facility management there is a need for pest control as well. And we want to keep it in house.
So that’s the strategic rationale why we continue to operate and we have taken 100% control of the pest control entity.
Subir Sen
Thank you so much sir. Thank you so much.
operator
Thank you. The next question is from the line of Shiv, an individual investor. Please go ahead.
Unidentified Speaker
Good evening. Good evening everyone. This employee cost which I’m seeing right from 2014 to 2017, 25, it is hovering around 81 to 84%. Because as an investor my team thesis of SIS was that we will adopt Mantech. We are a solution based company. We shouldn’t be measured by headcount. So this 81 to 84% employee cost, if it comes below, I don’t know this, this. Am I seeing the metrics in the wrong way? I’m sorry. And how should I interpret that the Mantech or technology has really benefited SIS. These numbers, this 81% or 80%, can it become 70%? How should we see the impact?
Rituraj Kishore Sinha
Well, I think you know, SIS is pushing forth in the last few years towards higher use of technology which is definitely more profitable than a basic guarding service. But the nature of the business is such that there is still a very significant manpower component. Because predominantly the cost of manpower, the monthly wage cost in India is artificially low. It is probably amongst the lowest in the world which is a great thing for some sectors. But in our sector what that does is that customer uptake of technology is restricted because you know, manpower is still very, very cheap.
Like you, we also believe that this has to change. Like it has Changed in other developing markets over the course of the next few years. This has to change. India cannot keep its minimum wage. Several states in the country still maintain 10,12,000 rupees as monthly pay and they call it fair pay. So I think wage rate has a big bearing on tech uptake. I agree with you completely that our technology, our share of revenue that comes from technology services hasn’t gone up as quickly as one would like. But you will appreciate that this is more to do with customer willingness.
I often quote an example banking sector for, you know, I think all of us till about 10 years back were all active ATM users. In 2015, every time you visited an ATM you would have seen a guard standing outside an ATM. Now there are fewer instances of that. That’s because we help the banking space to move away from manpower security into alarm monitoring and response where they have security without a full time guard on site. Now, banking extremely conscious about cost. It has been a sectoral level change. Can I say the same for manufacturing in India? The answer is no.
For health care, for hospitality and so many other sectors, we haven’t seen that pace of change. But sooner than later, we believe as the wage rate goes up, people will be forced to consider more tech and hopefully that should change the mix. But as of now, completely with you that the rate of change is way below one would have liked.
Unidentified Speaker
Thank you. Thank you sir. Thank you very much.
operator
The next question is from the line of Siddharth Mishra from Fidelity International. Please go ahead.
Siddharth Misra
Yeah, hello, can you hear me?
Rituraj Kishore Sinha
Yes.
Siddharth Misra
No, I had a couple of questions. So just on the margin of the. International segment, what’s the reason? Restructuring, which you’re doing, where the margins. You expect in the international segment and. If I compare it with history, it’s. Still much below historical. And how should you think about the. Margins also in the other segments going forward?
operator
Sorry to interrupt. Yeah, Siddharth sir, we are unable to hear you. We. May we request you to please speak louder or come closer to your phone.
Siddharth Misra
Yeah, is it better now?
operator
Yeah, we have a background noise also.
Rituraj Kishore Sinha
One sec. Yeah, go on, Shujar.
Siddharth Misra
Hello. Is it better now?
Rituraj Kishore Sinha
Yeah, yeah, yeah, much better. Yeah, yeah.
Siddharth Misra
No, I was asking on the international business, after the restructuring which you’re doing, where should we see the margins? Because it’s much lower than historical levels right now. And also in the other segments, how should we think about the EBITDA margins going forward? And the second question is around your. How should we think about the effective tax rate for the company in this year and going forward as well, so these are my two questions. Thanks.
Rituraj Kishore Sinha
Okay, so I request Murali Krishna, CEO for the international business to take your question up on the margin for the international business. And Rajesh will the CFO will answer your question around the effective tax rate. Murli.
Unidentified Participant
Yeah, hi. To that on the international business, what you see right now is a temporary blip owing to two factors. One, of course you know, you spoke about the restructuring and the other thing is also that we have onboarded close to about 100 to $115 million worth of new contracts into the business largely being defense and Sydney trains and whatnot. Now that as you when the business comes in there is this initial onboarding cost that happens which technically drags and it takes a couple of quarters for it to kind of turn around. And similarly for the SXP business, which we said that we are going to, we are currently in the process of restructuring.
The whole idea was that if you looked at FXP in the past two to three years they have had some fairly rapid growth from approx. 70 million to 145 million which is fairly very good in an international market. But as you grow came along some of these businesses which are hurting the bottom line and we are essentially restructuring those as well. And as part of the process we are doing some restructuring on the people front as well. So. So on the larger portion of the business we would like to get back to the old EBITDA margins.
And with respect to sxp we would actually come sharper than what we would be what we have reported in the last few quarters.
Siddharth Misra
Okay.
Rituraj Kishore Sinha
So Siddharth, just for your reference, just to reconfirm SIS International on a steady state basis before all the turbulence was reporting 4 to 4.5% EBITDA margin. I think what Moodlee and I both believe is that we will come back to that broad range at the top end of that range hopefully once the restructuring is done. But that is international business is a forerunner for 4 to 4.5% EBITDA margin. Business security in India and FM in India are shooting for 6% EBITDA margin. And I think we are reasonably confident that we are moving in that direction.
You know, in the coming quarters. Now coming to the effective tax rate, Brajesh is here to address your question. Yeah, hello Siddharth. Decide. So as far as effective tax rate for India business is concerned, till now we are close to zero. And we believe that going forward also this will remain, the position will remain the same. Considering the fact that ATAJ is giving this benefit to us and because that our taxable income comes to zero. Regarding this quarter if you can see then current tax we have reported 7.6 crore. That is mainly because of intercomly dividend which has taken place in Q1.
On that we have to pay tax. But as far as other business income is concerned our tax rate is close to zero because of benefit we are getting under ATG and but this trend expected to be remain the same in future. Also this ATG benefit is there for us.
Siddharth Misra
And what about on the console level? Like how should we think about it?
Rituraj Kishore Sinha
I think the console level you should expect five and a half to six percent is what directionally we are moving towards. As of right now we are probably a percent short. I’m talking about EBITDA margin. If you talk about tax like Brajesh said, I think we want to continue. No, he’s talking about international.
Siddharth Misra
I’m talking about the effective tax rate actually. So I got your answer on the India business. But how should we think about international console effective tax rate? Like how should we think about it?
Rituraj Kishore Sinha
So international we are paying 30% tax there there is no such a benefit.
Siddharth Misra
On the console level. Is there a number which you are thinking about?
operator
Thank you. The next question is from the line.
Rituraj Kishore Sinha
I think Siddharth, this is the console level is more like 3% for this quarter.
operator
As there is no response. Thank you. The next question is from the line of Vivek Bhagwani from Guardian Capital Partners. Please go ahead.
Unidentified Speaker
Hi sir. Thank you for the opportunity. Sir, I wanted to know more about the new employment link incentive scheme by Government of India. How it will benefit us.
Rituraj Kishore Sinha
Sorry, could you repeat that sir, recently.
Unidentified Speaker
Recently Government of India has announced employment linked incentive scheme for new employees. What would be the benefit for us Please if you can tell.
Rituraj Kishore Sinha
Well at this point in time I don’t think we are in a position to comment on that. Because we have not received any formal ministerial or departmental notification that specifies exactly how the scheme operates. We have been picking up from media multiple news reports but we haven’t got a government notification as yet. We are aware that the ELI scheme was proposed to be effective 1st of August. What I can tell you today, having yet to see the notification is that if there is any scheme that is intending to reward employers for job creation formalization then SIS as amongst the top largest employees in the country definitely stands to gain.
But exactly the extent of gain and whether these schemes are designed more towards benefiting the employer or they are designed more to benefit the first time employee directly through dbt we Are unclear about this but we welcome the ELI program and we believe that if it works for other employers it should work for us.
Unidentified Speaker
Okay sir, so one more question I had regarding the new investment in Preference shares of 6 crore in ADI Ghosh that you had announced. Please if you can elaborate on that.
Rituraj Kishore Sinha
Well, you know SIS maintains a corporate VC program which is primarily targeted at synergistic adjacencies. What we are looking for is startups which can substantially improve value addition to customers or can improve the experience for our employees. Blue collar employees. These are the two domains where we are tracking startups. Now Adi Kosh runs a fintech platform by the name of Kosh K O S H which is basically a joint liability based on demand loan, early salary access type of business. We believe that this is a substantial benefit to our 300,000, close to 300,000 employees. Enhances the employee experience.
We believe we can. Because they are a subscriber based model we believe that we will be able to add significant value to Koch. However, we have taken a very small investment in Adi Kosh. Our shareholding would not even be 5% of the entire asset. It is to allow them to pilot on SIS employee base and for us to add value to them. But at the same time SIS takes no obligation on its books of any kind with regard to lending operations whether it is to SIS employees or otherwise.
Unidentified Speaker
Okay sir, thank you.
operator
Thank you. Ladies and gentlemen, due to paucity of time that was the last question for today. I now hand over the conference to Mr. Ruthuraj Sinha for closing comments.
Rituraj Kishore Sinha
I think there is Subir who wants to ask a question. Can you please you have a follow.
Subir Sen
On question, is it?
operator
Okay, I will take the next question. The next question is from the line of Subir sense from Aditya Birla, Sun Life AMC Limited. Please go ahead.
Subir Sen
Thank you for the opportunity again. Just wanted to check Rituraj your views on atjj. Basically what happens if government discontinues this? How will it impact us? And what is your guess is is it possible that government can discontinue such a scheme which is basically helping employers like you who are actually giving employment to this category of people.
Rituraj Kishore Sinha
My friend, I’m not in the business of second guessing what the government might do. Especially in a time where, you know, we have people slapping tariffs on tweets and truth, social and international diplomacy is in a very interesting juncture. I honestly would be shocked to see government of India which is trying to address unemployment as its number one challenge, discontinue incentives towards job creation. But can I guarantee that or forecast that? Well, I’m not the right person to make comments on that, but it’d be an exceptional case if government of India takes away incentives around job creation.
Subir Sen
Thank you so much. Thank you.
operator
Thank you. As there are no further questions from the participants, I now hand over the conference to Mr. Ruthuraj Sinha for closing comments.
Rituraj Kishore Sinha
Thank you very much everyone. You know, like Vineet mentioned, I think we made a great start to the financial year FY26. All three engines are firing on growth. International has grown, so has security in India, so has FM in India. Even as I can’t comment on cash, I think they are in good shape as regards to the margins on the Indian side. We clearly see a nose up situation. Margin should move up and we hope that in the next few quarters you will be able to witness that on the international side. Like I said, it is going to be a little bit wobbly when we restructure SXP because of one off cost and that is likely to continue for the next two quarters.
So you might want to to factor that. But Please remember that SIS is predominantly in India business and almost 70% plus, I think by the end of the year more than 75% plus of our EBITDA will come from India and as long as India is in good shape it will carry the, you know, the extended business through. As regards to cash flow, I think we have continued to report strong cash flows last quarter and this quarter our net debt to EBITDA stands at 0.8 and we believe that this is good time to not only step up our organic growth but also initiate our inorganic growth initiatives and hopefully add momentum to FY26 as the first year of our five year vision plan, Vision 2030.
So I think that’s a quick summary on where we stand. I will come back and talk to you more about the cash listing and unlocking of value for our shareholders in the coming quarter. Hopefully by that time we will have greater clarity on the timing and the size etc. Etc. And other details. We believe that the cash IPO will make SIS the first business services entity to have multiple listed platforms under common ownership and these are market leading entities. SIS Prosegur is the second largest cash company in this country so it is a meaningful operation.
As of right now the true value of our shareholding in that business is not reflected in the share price and probably that is a reason for concern for our many, many shareholders, particularly retail shareholders. And we’d be very happy to create and unlock value for them through this IPO. So I think. Lots happening in FY26. Stay tuned. And I look forward to keeping in touch. Thank you very much for your time, attention and patience.
operator
Thank you. On behalf of SIS Ltd. That concludes this conference. Thank you for joining us. And you may disconnect your lines.