SIS eyes 20% revenue growth for FY25

SIS Ltd, the country’s largest security, facility management and cash logistics service provider, is looking at a 20 per cent increase in revenues for FY25, from its India and overseas operations.

Revenue CAGR for the company is around 15 per cent.

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India ops are expected to witness a high double digit rise in revenues while overseas business growth is pegged in single digits.

According to Devesh Desai, CFO, SIS Ltd, the company’s target continues to be 50 per cent cash conversion from EBITDA (earnings before interest, tax, depreciation and amortisation).

The company is already pruning “less profitable contracts” and will focus on growth and improving margins in the coming quarters. The exercise of cutting down on the less profitable contracts has already been completed in the security services vertical, the process is still on for the facility management business, and will be “completed in another quarter or two”.

“This year we witnessed a slower growth as we focussed on pruning the less profitable contracts. The exercise has been done across the security services vertical, and will be completed for the facility management business in the next couple of quarters,” he told businessline.

For FY24, SIS reported revenues of ₹12,261 crore, up 8 per cent y-o-y.

Revenue growth in the India business is close to 12 per cent y-o-y while for the international business vertical it is up 2.4 per cent y-o-y.

During the year, the company adjusted for a one-time impairment loss of over ₹65 crore relating to its Singapore security business, Henderson Security, by writing down the goodwill.

Demerger of Cash Logistics Solutions

According to Desai, a demerger of the cash logistics and management business vertical is being mulled to “unlock value”.

The business is a JV with Prosegur of Spain, in which SIS is a 49 per cent partner.

The vertical reported a revenue of ₹634 crore in FY24 with an EBITDA of ₹107 crore. The PAT is in the 7- 8 per cent range. Being a JV, the profits are mentioned as ‘Other Income’ in the consolidated profit and loss statement of the company.

“We are working on the demerger details. It would allow listing of the entity and also unlock value for shareholders. Moreover, it will enable the JV to raise growth capital from the markets too,” he said.

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