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Check Before You Invest : SIS Ltd

BSE: 540673 NSE: SIS ISIN: INE285J01028
  |   Sector:  Miscellaneous   |   Industry:  Professional Services

Snapshot

Q.1 Which industry/sub-sector does SIS Ltd belong to?
SIS Ltd belongs to the Miscellaneous sector, operating specifically within the Professional Services segment.
Q.2 Is SIS Ltd a good quality company?
SIS Ltd is a good quality company, based on a consistently good multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is SIS Ltd undervalued or overvalued?
SIS Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 40.13 20.57
Price to Book 2.17 2.43
Price to Sales 0.35 0.48
EV to EBITDA 7.74 12.24
Q.4 Is SIS Ltd a good buy now?
SIS Ltd is a good buy now, based on strong price trend analysis suggesting prices may rise. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of SIS Ltd?
SIS Ltd revenue growth is 7.6% for FY-2025, which is below its 5-year CAGR of 9.22%, indicating slower growth.

Q.2 Gross Profit margin of SIS Ltd?
SIS Ltd Gross profit margin which is the profit after deduction of direct costs, is 1.6% for FY-2025, which is below its 5-year median of 3.6%, indicating decreasing margins.

Q.3 Operating Profit Margin of SIS Ltd?
SIS Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 2.26% for FY-2025, which is below its 5-year median of 4.33% indicating decreasing margins.

Q.4 Net Profit Margin of SIS Ltd?
SIS Ltd Net Profit Margin is 0.09% for FY-2025, is below its 5-year median of 3.05%, indicating decreasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 1.6 3.6
Operating Profit Margin (%) 2.26 4.33
Net Profit Margin (%) 0.09 3.05

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of SIS Ltd?
SIS Ltd Return on Asset is 0.2%, which is below its 5-year historical median of 6.58%, indicating deteriorated asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of SIS Ltd?
SIS Ltd Return on capital employed is 5.82% for FY-2025, which is below its 5-year historical median of 11.02%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of SIS Ltd?
SIS Ltd Return on equity is 0.5% for FY-2025, which is below its 5-year historical median of 15.94%, indicating the business is making worse use of its shareholders capital.

Q.8 Cash conversion cycle of SIS Ltd?
SIS Ltd Cash conversion cycle is 50 days, in line with its 5-year historical median of 48 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 2.25 2.18
ROE (%) 0.5 15.94
ROCE (%) 5.82 11.02
Cash Conversion Cycle 50 days 48 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of SIS Ltd?
SIS Ltd Debt-to-Equity ratio is 0.63, which is above the industry average of 0.08, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of SIS Ltd?
SIS Ltd Debt to cash flow from operations is 2.02, which is at a moderate level.

Ownership & governance

D: Promoter shareholding and pledge status of SIS Ltd?

Q.1 Promoter shareholding and pledge status of SIS Ltd?
Promoters hold 71.88% of the SIS Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does SIS Ltd performance compare with that of its Peers?

Q.1 Revenue growth of SIS Ltd vs industry peers?
SIS Ltd revenue CAGR is 9.22%, compared to the industry median CAGR of 0.00%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 7.6 0
Gross Profit Growth (%) -50.4 14.9
Operating Profit Growth (%) -42.5 9.1
Net Profit Growth (%) -93.7 15.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 2.25 1.37
ROE (%) 0.5 12.58
ROCE (%) 5.82 12.98
Cash Conversion Cycle (days) 50.23 53

Valuation & price assessment

Q.1 Stock return of SIS Ltd over the last decade?
Over the last 5 year(s), the stock has delivered a CAGR of -1.12% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- -1.1% 0.2% 10.5%
Q.2 Valuation ratios of SIS Ltd vs historical?
The current P/E ratio of 40.13 is higher than its historical median of 20.57, indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 40.13 20.57 26.54
Price to Book 2.17 2.43 2.42
Price to Sales 0.35 0.48 1.70
EV to EBITDA 7.74 12.24 15.30

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