Despite the slowdown, facility management and security services provider, SIS India has seen an increase in demand. This has led to the company witnessing a near 35 per cent growth in its security business; and another 40 per cent jump in the facility management vertical’s turnover for the first nine months of this fiscal.

Accordingly, EBITDA margins have improved by over 100 basis points to 6.1 per cent for April-December period, as against the 4.9 per cent in the same period last fiscal. Profit after tax has seen a near 60 per cent year-on-year jump, to ₹230 crore for this period.

The company’s growth is driven by its increased focus on India operations and offering of end-to-end solutions across core verticals of security and facility management.

According to Rituraj Kishore Sinha, Group Managing Director, SIS India, improvements in EBITDA (earnings before interest, depreciation, interest, taxation and amortisation) margins indicate that this “was more than a revenue change”.

Increase in margins have come on the back of operating leverages — like previous years’ branch infrastructure and technology investment kicking in now, with higher revenues.

Second, the solutions basket of the company is also undergoing a change. The demand for security services and facility management has not declined despite slowing economic activity. In fact, contrary to the popular opinion, there is an increase.

Sinha explains that while automobile companies were battered in terms of car sales, there was an increase in demand for security solutions, such as more cameras and personnel for manning additional stock. Similarly, maintainance hygiene services across campuses continue.

“Some of our businesses are more resilient to slowdown. Furthermore, there is an increase in share of our India businesses which is helping improve both top line and bottom line,” he told BusinessLine .

Improving India business

Incidentally, nearly 65 per cent of SIS India’s revenue this fiscal has come in from operations in the country, as against previous years, when the majority of its turnover came from overseas operations.

For instance, three years ago, at the time of listing on bourses (NSE and BSE), the turnover break-up of international to national revenues stood at 55:45. Over the years, a conscious decision was taken to shore up revenues from Indian operations.

In FY19, the company reported approximately ₹7,100 crore in revenue, of which ₹3,000 crore was from operations in Australia, New Zealand and Singapore. The remaining came from India operations and included ₹3,000 crore from the security services vertical; and another ₹1,100 came from facility management services.

SIS India also has a cash logistics vertical, where it operates as a minority shareholder to Prosegur of Spain, the second-largest cash management company in the world.

“We are forecasting that the share of India revenues should be up to 75 per cent of our turnover in the next two years or so. This will happen since Indian businesses are growing by 8-9 per cent quarter-on-quarter; as compared to overseas market which are growing at 8 per cent per annum,” Sinha added.

Plans are afoot to explore acquisitions in India as a part of its growth strategy.

The company plans to close FY20 with around ₹8,500-9,000 crore in revenue.

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