SIS Q3 Results Review - Below Expectations; Improving Outlook to Support Growth: Axis Securities

Axis Securities Report

In Q3FY24, SIS Ltd. reported revenue at Rs 3,073 crore, registering a flattish growth of 0% on a QoQ basis but improved by 5.8% on YoY. The company’s consolidated Ebitda for the quarter grew by 4.8% QoQ to Rs 151 crore, owing to the rebound of international business and strong demand for Indian security solutions.

SIS reported a net income of Rs 79 crore, which declined by 6% QoQ but grew by 16.5% YoY. Security services in India exhibited an encouraging growth of 5.9% QoQ, driven by the rising demand for security guards and mandatory checkups.

Outlook

From a long-term perspective, we believe SIS is sorting out client-specific engagement in verticals such as International business. However, rising concerns over the prospects of large economies along with prevailing business and demographic constraints pose uncertainties over the company’s short-term growth rates.

Valuation and recommendation

We recommend a 'Buy' rating on the stock and assign a 16 times price-to-earnings multiple to its FY26E earnings of Rs 34.7/share to arrive at a target price of Rs 540/share, implying an upside of 10% from the current market price.

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.