SIS Limited (SIS) Q4 FY23 Earnings Concall Transcript

SIS Limited (NSE:SIS) Q4 FY23 Earnings Concall dated May. 04, 2023.

Corporate Participants:

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Devesh Desai — Group Chief Financial Officer

Rituraj Sinha — Group Managing Director

Analysts:

Koushik Mohan — Ashika Institutional Equity — Analyst

Athreya Ramkumar — ithoughtPMS — Analyst

Amit Chandra — HDFC Securities — Analyst

Amit — N/A — Analyst

Dharma Venkat — N/A — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the SIS Limited Q4 and FY ’23 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]. Please note that this conference is being recorded.

I now hand the conference over to Mr. Bharat Bakshi, President MMA, Investor Relations and Ventures from SIS Limited. Thank you and over to you Mr. Bakshi.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Good afternoon, everyone, and welcome to our Q4 and FY ’23 earnings call. Along with me, I have our Group Managing Director Rituraj Sinha, and our Group CFO, Devesh Desai. I hope everyone has had a chance to look at our results and the earnings note, which has been uploaded on the stock exchanges and our company’s website.

We are very happy to report that the business continued to show strong revenue growth with the growth rate now heading back towards peak levels. On a consolidated basis as you’ve probably seen, we grew revenues by almost 13% in FY ’23. India Security grew almost 20%, Facility Management grew by 36% and our Cash Logistic JV, which we do not consolidate grew by 38% over last year. So very strong growth across all segments in India. The international business was pretty much flat over last year, but this was in spite of a lot of the one-time COVID-related contracts falling off. So basically international was able to pick up on the business to compensate for the one-time contracts falling off. And even with these international numbers included, as I mentioned, on a consolidated basis, overall revenues still grew almost 13% over last year which we feel is a very good outcome showing very strong business growth across all segments.

While the margin front also as guided by an earlier margins are now steadily increasing. Over the course of the last two quarters, our EBITDA margins have increased by 50 basis points. Earnings per share for FY ’23 are 7.1% higher than in FY ’22. The other good news is that this quarter also saw also strong cash generation with consolidated OCF to EBITDA for the quarter at 144% allowing us to repay approximately INR83 crores of debt subsequent to the quarter end. Our net debt to EBITDA from 2.06 times in the previous quarter is now down to 1.75. which is again a good outcome given interest rates have been going up. So overall, we are very happy with the business momentum. We will now turn it over for Q&A.

Questions and Answers:

Operator

Thank you. Ladies and gentlemen we will now begin the question-and-answer session. [Operator Instructions]. Our first question comes from the line of Koushik Mohan from Ashika Stock Broking. Please go ahead.

Koushik Mohan — Ashika Institutional Equity — Analyst

Hi, sir, congratulations for the great set of numbers. So, sir, I just want some clarity on your operating margins and what you are guiding for the future operating margin as well as how is your growth in the other part of the business, which is not related to employees on the automation part of it.

Devesh Desai — Group Chief Financial Officer

This is Devesh here. So as you can see from the — on the results we published we had good growth in all segments, both in revenue and on the operating margin. So as we had guided earlier, we will be — we are slowly certainly going impact to the pre-COVID levels of margin, and this is another quarter of EBITDA growth, which we have delivered.

On the second question was on the guidance. At this point, we’re not giving any guidance, so that I’ll leave it at that but I would only like to say that we will continue working on improving the margins and revenue growth. Hopefully, we’ll be at similar levels this year but at this point, we’re not giving any guidance.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

If I may just add one sentence to that is that as we said, the focus continues to be on increasing the margins, and as we mentioned on our call a couple of quarters ago that we thought we had to do it and things would keep moving up. And as I mentioned in the initial commentary that our margins have moved up last two quarters. I think at a high level, we can see, we expect the trend broadly to continue because we are focusing quite a bit on the margin front but as Devesh said, we don’t have any guidance that we normally give out, but yes, we do see the improvement of this continuing. So. I hope that answered your question.

Koushik Mohan — Ashika Institutional Equity — Analyst

Sure. Yes. I had another question. Sir, how about your sales, how are you looking at your sales, is there any promise of orders that you have it in your hand currently because once one — any one bank gets tie-up with you, they actually stay for a very-very long-lead time, so I just wanted to understand what is the average duration that the client is staying with you as well as what are the expectations that with this existing clients, what do you expect for them in the coming future?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

So actually all clients. Yes, we are seeing very good client additions both new clients as well as existing clients are increasing their business with us across all segments. Again, whether it’s security, whether facilities or cash. We don’t have much like concentration as you’re probably aware, we have many thousands almost 10,000 clients in the security side itself. So there is very low client concentration. In terms of contract, again, it varies a lot. Some of these get all the yield [Technical Issues] some of these get automatically updated, some come up for renewal on a basis, but on average, you can say typically about three or four so is. It is, again, on average, how long we have these contracts. But as I’ve said I think the bottom line is that we have very strong client concentration — very less client concentration and we are seeing good traction across all segments of our — of the sectors we cover.

Devesh Desai — Group Chief Financial Officer

So, I’ll just add to towards other sectors. While typical contracts lead to an average contract length will be three years, we’ve had a number of clients who’ve been with us for a number of years with federal extensions, some clients have been there for 15 years or 20 years, 10 years. So there is a large spread of clients who’ve been sticky with and they give a strong base for our business on a year-to-year basis.

Koushik Mohan — Ashika Institutional Equity — Analyst

Sir, in the history, you have guided that you wanted to become a 10% market share in this business. And according to my understanding, the entire system is growing at 25% CAGR. So in that case if you wanted to be the 10% of the market and if the market is growing at only at 25 percentage levels. So what is your actual point that you’re putting forward that you’ll be achieving them? What are your growth drivers that you were expecting this will be achieved for you?

Rituraj Sinha — Group Managing Director

Hello. This is Rituraj here. Hi. If I can correct you, I don’t think the security market has grown by 25%, I didn’t — I don’t follow where you got that data point from. Okay, the security industry growth ballpark during the last two years after COVID was subdued. It has grown definitely close to 12%, 14% this year. And against that SIS grew 20% this year which basically means that you picked up market share in the process. We believe that with this exercise is repeated over cycle next few years. Our market share, which is currently sub 5% can move up and then with a few strategic acquisitions our ambition. Is too low to a 10% market share in the other, and that is a function of both organic development over few years not wanting to what several as well as some strategic M&A.

Koushik Mohan — Ashika Institutional Equity — Analyst

Got it, sir. Got it. I have a last and final question, sir, it’s on the taxes. You have a lot of benefits on the taxes side, sir, if you can put two-three benefits that majorly contributes your tax benefits.

Rituraj Sinha — Group Managing Director

So if you look at the earnings note, we have given a note on the major tax credit, which is on the contingent of the in fairly well all explained it with a couple of detail. So, I would request you to kindly go through that. And if you have any questions after that we will be happy to answer.

Koushik Mohan — Ashika Institutional Equity — Analyst

Sure sir, thanks for this. I’ll come back in the queue if I have questions.

Operator

Thank you. Our next question is from the line of Athreya Ramkumar from ithoughtPMS. Please go ahead.

Athreya Ramkumar — ithoughtPMS — Analyst

Yeah, hi. Thank you for the opportunity. So I just wanted to ask you about the cash management business, which is now close to 17% of our EBITDA. So and in the press release, it’s said driven by doorstep banking and cash-in-transit. So I just wanted to know what are the things which are driving this growth and going forward in the future are we targeting, will the growth come from the same areas or are we targeting other segments of cash management?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

See, let me first correct you our cash business is not that typical cash company and I say that because less than 20% of our revenue comes from EPS, 80% of our revenue is non-EPS. So first thing you need to understand is that piece of business that is more back outsourcing, typical cash management, I mean if you juxtapose that with the other listed company in this space, you will see 80% of our revenue is ATM linked, that is not yet 20% of revenue. So that is the level of contract. So that also sort of give you a broad sense that because we’re doing outsourcing services there are so many things like new accounting, currency management. operations, invoice collection work for electricity companies. There are so many, so many service lines that we have which are attractive for us, value cargo, cash deposits. So all of this is what is driving the growth on the ATM side.

Athreya Ramkumar — ithoughtPMS — Analyst

Sure, thank you so much. And could you just throw some more color on the doorstep by banking part of it and what’s driving the growth there?

Rituraj Sinha — Group Managing Director

Well, I think more and more people are hoping for agencies like us to collect money at the doorstep and deliver cash at the doorstep. This is also a function of organized retail. As the penetration of online retail in India goes up there are more changes, whether they are far short-changed or short-changed or change [Phonetic] whatever to generally outsource their cash pickup and delivery operations. So people like us actually go and collect money at six times and deliver it to make instruments for cash, but also other instruments at doorstep. So as all this must be seen as also something that’s very true linked to organized retail. This will boost banking will continue to grow.

Athreya Ramkumar — ithoughtPMS — Analyst

Sure, thank you so much. I just had one last question on the margins on the cash flows and so I think year-on-year just trying for Q4, it has declined. So just wanted to understand what the reason is and for full-year, it has actually improved by more than 100 basis points. So is this sustainable margin rate or I just want to understand income above that?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

So margins were, if I understand clearly your local margin forecast logistics side.

Athreya Ramkumar — ithoughtPMS — Analyst

Yes, cashier, yeah.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

So this business already is delivering 14%, 15% EBITDA margin. I believe that as the business gains further market share, the big thing, the decisions that they took around four-five years back was to stay away from the European side of the business and that’s helped us significantly. The other point we took is not so big a cash company that is a market leader across India. We took it from North and East India and we go through like extreme territories like the Northeast parts and Himachal Pradesh such pockets or even Bihar, for that matter, Odisha. So we go to territories where the competition is low. Our market share, therefore is higher, higher market share means greater or cash group means, higher density means cash plan moves more margins, per day and we’ve implemented a tremendous amount of technology today. We are the only business in India, which is able to give you profitability for stock. So my cash spend is also 30 minutes to quickly collect that money, I can actually conclude the cost of that stock and doesn’t I link margin on that. So that’s a function of all the technology we implemented in the last four-five years.

Athreya Ramkumar — ithoughtPMS — Analyst

Sure sir, thank you. That was very helpful. I just had one last question. I just wanted to know do we compete in this doorstep banking with certain payment banks because we are seeing that they are also active in this case.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Sorry, I didn’t follow that. Can you repeat that?

Athreya Ramkumar — ithoughtPMS — Analyst

Are payments banks also providing the service of doorstep banking like cash management?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

As far as I know, the top-end banks in India do not operate because of total and actually, India to operator single catchment a far as I know or I didn’t mean. You can talk to sell, but my understanding of this industry is. that post-demonetization whoever was running cash those would — those that back you on their own, they have a mandate to do so.

Athreya Ramkumar — ithoughtPMS — Analyst

Sure, thank you so much. That was really helpful.

Operator

Thank you. [Operator Instructions] Our next question comes from the line of Amit Chandra from HDFC Securities. Please go ahead.

Amit Chandra — HDFC Securities — Analyst

Yeah. Sir, thanks for the opportunity. Sir, my first question is on the international security services business, so we have been seeing that the margins for this business has been coming off. So can you please explain the reason behind it and where you see is, we’re actually you see to stabilize. And also another aspect to it is that these salary per employee, what I see here is. I know is it’s almost like double the minimum wages that is there in Australia. So what is driving these higher relations in the international business?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

So I’m very happy that you are taking a deep interest in this — in the international business, and I welcome you to visit our Australian operations, directly. I understand that that’s already been set up for you. I in fact encouraged more and more analysts or investors, whoever wants to visit any of these countries, who have visited already to stop over at our office and meet our management will be very happy to facilitate that. But coming back to the question our international business margins are now. That’s a statement of fact but I repeatedly said please compare international margins to pre-COVID, even prior to COVID, the international business was hovering around 4%, 4.5% EBITDA margin. Even now it is settled back at 4%, 4.5% in EBITDA margin. What we show in FY ’21 and FY ’22 with the international businesses reporting fiberoptics even 6.5% margin in some quarters was completely exceptional and that was out of over $100 million of temporary COVID work that came back to more. All of that revenue had exited the system not just in the last financial year FY ’23, $84 million worth of COVID-related contracts came to a stop, and obviously those contracts were more profitable than our standard routine contracts that we got to replace them.

So that, that you will have to understand that the international business is a 4%, 4.5% business and we are working to replicate at 4.5%, but that’s a pre-COVID normal for many, many years, prior to COVID and that will continue to be volatile. It is not really going to become a 6% margin business. What will happen is that the share of international business in our overall revenues and EBITDA is now sub-25% more 40% than 35%, but it is going and the share of international business license from the 30%, 40% share of EBITDA and the revenue to a lower number, the blended margin of SSI will hopefully go up and I have maintained that the India Security business, India facility management business are both capable of delivering 6% plus EBITDA margins. They were delivering 6% plus EBITDA margin prior to COVID and I don’t see any reason why these businesses should not go back at 6%.

Amit Chandra — HDFC Securities — Analyst

Okay. Sir, I know you’ve mentioned that the margins are back to pre-COVID levels, but if I see the relations of the international business, it’s still around 50% higher than what we used to do pre-COVID, so are you saying that the relations also going to normalize over the next two years for the international business.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

What do you mean by the realization, I didn’t get you?

Amit Chandra — HDFC Securities — Analyst

Salary per employee. So if I just calculated the revenue by the total international employees, so, yeah.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

No, so the margin the gross margin remains the same, the EBITDA margin remains the same, so the salary whatever percentage we were really offered employee monthly salary we remain to realize that model that doesn’t change.

Amit Chandra — HDFC Securities — Analyst

Okay, okay.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Let me be more explicit digital question, it is gross margin in Australia is going down. The answer is no.

Amit Chandra — HDFC Securities — Analyst

Okay. Okay. So now like more from a broader perspective. So any overall both as Security Services India, Australia, and the facility management, if you can broadly explain what part of our revenues is right now not basic services, which is the Services segment and solutions, right? So if I understand that Services is typically the and all the current cost-plus services fee model plus the is basic services plus. I know some amount of tech in it, right? So what part of the revenues is from services and solutions and if you can if you can break it up like we didn’t segment it will be helpful. And from — and also in terms of your current contracts, what part of the contracts we have as fixed now fixed service fee model and what is on like variable service fee model.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

So it’s a good question you asked, Amit. There are four layers in the outsourced services market, right and I have said this multiple times. Let me repeat it. What you call the offering, which was on fixed fee per head per month.

Amit Chandra — HDFC Securities — Analyst

Okay.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

In that, we don’t operate. We are always coming up with. Then this led to services sector where we are responsible for outcome, not for the. In such contracts, where we are responsible for security for building or maintaining registers or upkeep cleaning of equipment or HVAD services or whatever, what. These are service-level agreement SLA-based contracts, where we are responsible for outcomes and that led to is basically your 5% to 7% EBITDA margin basis and that is 5% to 7% EBITDA margin business because we charge percentage-based service fee not fixed service INNR based service fee.

Amit Chandra — HDFC Securities — Analyst

Okay.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

85% is maybe even higher in this box. There is a third box. Box number three or less what where we do everything that is involved in the service but on that we had a lot of technology. It could be mechanized cleaning, it could be CCTV cameras services, it could be basically things like reach rotate in response. No, these businesses have a EBITDA margin range of even 15%. And our product business, starting to which is barely, it’s a very small business, it’s still INR5 crores, INR7 crores invoice value more is still delivery close to 15% plus EBITDA margins. So our proof of concept is just that allow businesses more right now. Over the next few years we hope to build that out, we have 15,000 connections right now. We’ve also built-up to 50,000 connections in near-term and should that happen obviously, you will see that more evidently the fact. We also the business also does about bad debt like we just picked up a large contract from Vidanta which is not just manpower and mobile app, CCTV-based video surveillance, EIB-based video analytics, and that together contract will deliver an EBITDA margin of 2 to 10%.

The last and the accumulated roof-based solutions.. This is a cash industry or the pest control industry. Now what happens here is the gross margin is high, the gross margin could 35%, 40%, 45%. In fact role and in cash logistics business because it’s a route way, you also get the benefits of route-based efficiencies and it’s not only these businesses that delivered 20% plus EBITDA margin. Our cash businesses in that pocket which is now roughly 17% if you look at bridge cash, almost 7% to 8% of our revenues are there, we expect to do another 1% to 2%. So you can say. So next time when you see our earnings report, I will ask my team to put out what share of our revenues is in what bracket, maybe segment-wise or they will see what we can do, but we’ll try to give you a more clearer picture because I think for the longest time. Last five years, at least since we got listed, we have been constantly compared to the wrong peer set. We are not a [Indecipherable] company, we are not a 2%, 3% EBITDA margin business. Structurally we are down to 4.5% because of COVID. We have in the past demonstrated ability to deliver 6% plus and we have every intent to go back to 6% plus.

Amit Chandra — HDFC Securities — Analyst

Sir, you mentioned this is obviously is 85% of the overall revenue. So in that services model, what part of the contracts would be on a fixed service fee model, and variable service model, if you can give some number around that? Hello?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Like I said, fixed-based, I mean there could be 5%, 7%, but I don’t think it’s going to be more than that. I mean that would also be in case of like some large bank which has RSV of 100, like hundreds of manpower or maybe INR5 crores of revenue and they have put RFP like that, but generally, by and large, it’s not the case.

Amit Chandra — HDFC Securities — Analyst

Okay. And sir my last question is on the ATJ benefits that we’re taking to what we, on the ATJJ benefit till how long kind of continue and also in terms of the income tax refunds that we have to get from the income tax department because still we are paying taxes, which we have to take the refund back from the department. So, till which financial year we have got the refunds?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Okay. First on ATJJ, as long as this continues, we will take the benefit, there is no notification or information from the government THAT it is going to stop. So as long as constraints. If you look at the Q4 cash flow statement, you see that taxes number is a positive and not negative and that shows that we are getting refunds from the income tax department. Your last question is till which year we have got it, I’m sorry, that is not something I can disclose.

Amit Chandra — HDFC Securities — Analyst

Okay. Okay, sir. Thank you and all the best for the future.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Thank you.

Operator

Thank you. Our next question comes from the line of Amit, an Individual Investor. Please go ahead.

Amit — N/A — Analyst

Hello. Am I audible?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Yes, go ahead, please.

Amit — N/A — Analyst

Sir, my first question is regarding that our receivable part, our revenues have grown by 13%, but our receivables have grown by 20%. What’s the reason for that? Hello?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Yeah, so the two things when we compare the revenue and the receivables moves the receivables also include the GST component. So that goes up by around 18% or 10% depending on the geography which we are covered. And we also reported in our earnings call, if you look at the six-month earnings call, we also report how the DSO is going up and down. So unfortunately this year because we have clients who normally pay at the year-end they did not pay up at the other. So, the 3rd. In April, so RTX not gone up in March, which has come back down in April and that is why we see that there is a difference between the two numbers.

Amit — N/A — Analyst

My second question is regarding this cross-selling opportunity between our security and FM business. I guess, currently only 6% of clients are using both the services. So as these verticals, certain verticals in the security verticals these are managed separately. So how do we approach these cross-selling opportunities internally and what is our strategy to capture this cross-selling opportunity because I think we have a significant headroom to grow this 6% into something like 2025 something? And do we have any internal targets for cross-selling within the organization?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

I think cross-selling is something that we do, all in a way that we don’t end up contributing to the customer, whether we are a security company, FL company, assessment, or electronics security company. So, what we call it is cross-referencing. What it means is that the guy who storage security to let’s say you’re bidding is not going to suddenly go there and start talking about [Indecipherable]. In some cases, what happens is that customers get confused whether you are talking to a security company or what type of service company [Indecipherable]. So what we do is we do more cross-referencing in top 14 cities in the country, which constitute roughly 65% of revenues we have created what we call a city coordinator group, which has representatives of all group companies operating in that city or state if you will see members of that council, they meet once every month to exchange references and pass to each other any updates.

And then let’s say, for example, our [Technical Issues] with regards to in the city of Chennai, for example, and across the strengthening, city quotation says that, okay, I have got 10 contracts. Other people in the FL business, or in expense control or electronic security these are, as we look like. I also want to get a little bit afterward if you have a reference you simply pass along the reference and writes to the customer an email saying it all. Here’s my colleague, he wants to share about whatever service maybe and please give an appointment. That’s it. That’s where the referencing stops. That’s the model we have opted. We do not push gross sales target for our team. We believe each of our businesses is capable of delivering its own growth. And so far that’s also been demonstrated. The 20% growth in security is not hinged upon how much cross-selling up.

Amit — N/A — Analyst

So sir, is there any target something like where you feel this can grow to?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Can you repeat the question, please?

Amit — N/A — Analyst

Are there any internal targets like any ballpark figure key this six percentage growth like most of our clients are using both the facility from some other project provider? So isn’t it like.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

This is a function is the macro side, if you have for companies internal target. Cross-selling is not our biggest growth engine. We don’t have any internal target. I’m sorry to disappoint you, but that’s the way we operate.

Amit — N/A — Analyst

Thank you for replying.

Operator

Thank you. Our next question comes from the line of Dharma Venkat, sir, an Individual Investor. Please go ahead.

Dharma Venkat — N/A — Analyst

Thank you for the opportunity. Good afternoon, sir. I hope you are doing well and fine.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Sorry, can you repeat that?

Dharma Venkat — N/A — Analyst

What I was saying is thank you for the opportunity. Hope you’re doing well and fine. Yes. Yes. All, well. Can you [Indecipherable]. Sir, my first question is regarding our international business. So in our previous calls you had mentioned that you see the COVID contract for us is to make sure that we don’t have a detour from one and see above all come from the call it revenue. We will mention the growth covers that. So I just wanted to know how much because how much government last year due to COVID? We could get a sense of how much growth you have on the international business this year, sir.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

So as you have observed, three minutes fact is stood more than $80 million of contracts of COVID which were not there this year compared to the previous year. So, I hope that gives you the answer.

Dharma Venkat — N/A — Analyst

Yes, sir. And secondly regarding our subsidiary in Singapore Henderson. So how are things looking that the last few quarters, we had some issues there like in terms of revenues and EBITDA. So now what is the big in that and what’s the outlook for next year?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

So, as we have mentioned in the last few quarters. The turnaround strategy has been put in place. Actions are there, actions have been started, it’s getting showing some improvement but it could take a few more quarters to come back to profitable stage but actions are there, the improvements are there on a quarter-to-quarter basis there is improvement in the bottom line.

Dharma Venkat — N/A — Analyst

Can we expect it to be EBITDA breakeven by the end of next year like some sort of EBITDA level breakeven because currently, we’re losing money there, sir?

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Yes, that’s. So yes, the target is to actually get to the present time. Okay, sir. In the previous calls, you mentioned that with 1.6% of our customers who use security services, facility management business is also to have we are working towards a higher numbers. Is there any change in the number, I know it’s just one quarter, but I just wanted to get an update on this.

Dharma Venkat — N/A — Analyst

Can you repeat that, I didn’t understand the last part.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Sir, our — in the previous calls you had mentioned that 1.6% of the customers who use securities services also use facility management services from us and you have mentioned that we are working towards getting us to a higher number. I know it’s just a one quarter, like one quarter before you said this, so I just wanted to know is there any change, I mean, what you are seeing in terms of. Hello, sorry. I think we just kind of a five or six-minute conversation and we stopped selling property management, etc. I think you would have your answers from there.

Dharma Venkat — N/A — Analyst

If anything beyond that, I will try to [Indecipherable].

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Yeah.

Dharma Venkat — N/A — Analyst

Regarding the fixed to inflationary pressures, which we had in our overseas compresses all our contracts renewed on the new wage or industry [Indecipherable].

Bharat Bakhshi — President M&A, Investor Relations and Ventures

So all of these increases have been passed on in Q3. So the full impact has come in Q4 as we had reported earlier. Okay, and just one small request, sir, in the press as possible the presentation was pretty clear and it has all the details, which anyone who wanted to know about this company just one thing, sir, look in that portion it estimated comparison most made between quarter-on-quarter. So if there was a comparison between year-on-year older net debt and the gross debt has moved, it will be even more clear for us. So just a small request. We will talk and we will see how it fits into the overall structure of the call.

Dharma Venkat — N/A — Analyst

Okay. Finally, regarding our cash business, our execution continues to be top-notch, you’re actually bringing in also than most of your investors, so I just wanted to congratulate you on this. Thanks for that. Thank you.

Bharat Bakhshi — President M&A, Investor Relations and Ventures

Thank you very much. Thank you.

Operator

Thank you. [Operator Instructions]. As there are no further questions from the participants, I now hand the conference over to Mr. Rituraj Sinha for closing remarks.

Rituraj Sinha — Group Managing Director

Thank you, everyone, for joining this call. As I look back and summarize FY ’23. I think it’s been a year of more [Indecipherable] and gains for SIS Then the previous two years, which is FY ’21 and FY ’22. And I say so because as I have always measured on three metrics. 20% year-on-year growth, 20% return on equity, and greater than 50% OCF EBITDA. If I can tell you FY ’23 where after a gap of more than two almost three years growth came back, that’s the biggest takeaway for me for FY ’23, growth has come back and come back. The India Security business grew 20%, the FM business 36% and the cash business, 38% year-on-year, and more importantly International business 0.7%, the reality of the matter is that international business lost $84 billion of COVID work, which is exactly 10% of revenue. So the revenue shrank by 10% and still they grew by 2.7%, which for me is almost a 10% growth, which did not get captured because of the accounting. So I think growth is back, all four June of growth and that’s fantastic news because everything else as a function of rules and market share. So I’m glad that we are back on that.

The second factor. Cash is the ultimate reality of business. I’m glad that we’ve had super year-end cash position. In a year when interest rates are going through the roof in Australia, in Singapore, India. We’ve had record collections. We have brought our DSO down by almost one or two days in several segments and overall we follow-up. Now to add up everything all segments have done a fantastic job on collections. In fact, we have repaid. $15 million of debt in Australia after 31st March, which has not been captured in the earnings for obvious reasons. This happened two days back but we repaid that to bring interest cost within control and that is possible because we have a strong cash position. So I think our cash generation is fantastic. I’m very happy about that second aspect.

Third thing is that our debt position. We’re starting to 2x EBITDA and that is a red flag for me, and I’m happy that what’s happened in the last three months, we are back at 1.7 times net-debt EBITDA, and we will continue to work to keep that in check anywhere at 1.5 below one of this under-utilization of balance sheet more than two is crossing the red first threshold. So I think on all those three, I think FY ’23 has been a great result and the team has done a fab job. For us, margins, I know we are nowhere near 6%. I know it’s for everybody. It’s a concern for us as if this will speak but the reality of things is that for the last three quarters back-to-back our margin is improving. The incremental improvement is not that significant. I understand that but it is steadily moving in the right direction. I’m hoping that if the growth momentum continues at because Q2 our disruption three years like FY ’23, April to April through to March, there was no COVID related or any other kind of disruption in business and the coming 12 months are similar. I’m pretty sure that the growth continues operating leverage will kick in, SG&A has started to stabilize and it will start showing off on the EBITDA margin as well. Thank you very much for your patience. And I hope to see you again sometime soon. Thank you very much.

Operator

[Operator Closing Remarks].