SIS India expects higher revenues from strong global operations

Abhishek Law Kolkata | Updated on November 21, 2020 Published on August 05, 2020

Security services firm bags 1,600 new contracts in June quarter

SIS India, the country’s largest security services and facility management provider, is expecting improved revenues this year on the back of strong international operations — 1,600-odd new contracts secured in India between April and June — and an upward revision in prices.

International operations (security services in Australia, Singapore and New Zealand) accounted for over 47 per cent of SIS India’s revenues for Q1FY21 (April to June), while the remaining 53 per cent is from domestic operations. Within India operations, 40 per cent revenues came from security services, while the remaining 13 per cent was from facility management services.

Revenues from international operations for the April-June quarter witnessed an over 11 per cent growth, while the security service business in India saw growth of over 6 per cent, and facility management services business grew by 1 per cent.

Counter-balance to volatility in India

According to Rituraj Kishore Sinha, Group Managing Director, SIS India, international operations have been a perfect “counter-balance” to volatility in Indian markets caused by the pandemic and the subsequent lockdown.

Australia, New Zealand and Singapore have seen amongst the lowest Covid-19 cases and have been among the fastest to recover too. The international business is expected to continue contributing around 40 per cent towards revenues.

Moreover, provision of special ad-hoc security and strategic medical and emergency response services in these countries helped SIS offset the revenue reduction from affected segments.

“In terms of operating metrics, our operating cash flow to EBITDA has been at an all-time high of 81 per cent. Normally, it is around 60-65 per cent,” he told BusinessLine.

The company, listed on the bourses, reported an 8 per cent increase in consolidated revenues, year-on-year (y-o-y), to ₹2,167 crore for the quarter ending June 30. Revenues in the year-ago period stood at ₹2,008 crore.

Consolidated profit slipped 23 per cent y-o-y to ₹58 crore, against ₹75 crore in the year-ago period.

SIS India made a one-time provisioning of ₹54 crore in June, presuming possible re-imposition of lockdown leading to a hit in revenues.

India operations

Calling 2020 an “unpredictable year”, Sinha said the company has secured 1,600 new contracts between April and June this fiscal. However,the first two months saw a complete lockdown.

Facility management was hit, while service volumes in the security business remained low. Revenue contributions of new contracts are visible post June 8.

“We have 1,600 new orders during Q1, but there have been service volume variations across categories. As volumes pick up and places like educational institutions open, there will be greater contribution of revenues from these new contracts in the coming quarters. Service volume variations are temporary in nature,” he pointed out.

According to Sinha, there has also been an upward revision in contract prices, while in existing contracts the scope has been enhanced with the addition of new services like sanitisation, fever screening, hygiene and disinfection focus.

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Published on August 05, 2020
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