Security and Intelligence Services - Q1 FY22 Result Report - YES Securities

(Rating: BUY, TP: Rs580, Upside: 20.5%)

- Reported revenue of Rs 23,793 mn (slightly below estimate, down 2.7% QoQ) mainly due to impact of 2nd covid wave on India security business. Overall, On YoY basis, revenue was up 9.8%. India Security business- down 2.3% QoQ (up 2.6% YoY). It has seen good uptick in June with opening of economy. International business which benefited from certain temporary covid contracts in previous quarters saw degrowth of 4.2%WoQ (up 17.7% YoY)

- Facilities management which was the most impacted in FY21 continued sequential recovery showing 3.1% QoQ growth (up 4.2% YoY). Cash logistics which is a JV business showed 15.6% QoQ decline due to covid impact on retail segment and portfolio rationalisation (but up 17.4% YoY.)

- EBITDA margin was stable at 5.1% led by cost optimisation despite one off cost involved in vaccination of employees

- At CMP of Rs 481, it trades at EV/EBITDA OF 9.5x which is attractive considering strong growth outlook. We maintain BUY rating on the stock with DCF based target price of Rs 580

Shares of SIS LIMITED was last trading in BSE at Rs. 493.25 as compared to the previous close of Rs. 481. The total number of shares traded during the day was 237274 in over 1815 trades.

The stock hit an intraday high of Rs. 501.6 and intraday low of 485. The net turnover during the day was Rs. 117738231.

Source : Equity Bulls

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