Omicron has not had much of an impact on revenues in January and they continue to be at December levels. The pipeline for February also looks strong, says Rituraj Sinha, Group Managing Director, SIS India
SIS India is the largest security services and facility management firm and the second largest cash logistics firm after CMS Info Systems.
According to him, revenues have not contracted and the company is “on course towards strong double digit numbers” in FY22. The company was recently awarded a two-year-contract, valued at ₹225 crore, to provide security solutions at 18 sites of Mahanadi Coalfields.
“There has not been much of an impact of Omicron on revenues or the existing contracts. In fact, we have been able to initiate hikes too at the time of renewal which indicate that the economy is doing well,” he told BusinessLine.
The company is run rating at ₹10,000 crore of revenues.
For the quarter ending December 31, 2021, SIS India’s consolidated revenue was up 10.3 per cent year-on-year and 7 per cent over the last quarter. All businesses crossed their pre-COVID level numbers.
“We have acquired companies in the past we continue to look at opportunities but in the last two years we have been preoccupied in settling the transactions that were half closed,” Sinha said.
According to him, SIS will look at inorganic growth through acquistions, predominantly focusing on India. The company would wait for some time before it makes a move.
“Our acquisitions predominantly will be India focused but we will also be looking at transactions which are very value attractive for us and we will have to wait for the expectations to settle down.I am sure there will be a period of time where people who have attempted an IPO and they cannot do so, will definitely be on the block and that is when we hope to make a move,” he explained.
The cash logistics business also has headroom for growth– both organically and inorganically. Although it is one of the smaller verticals, cash logistics saw a 15 per cent revenue growth YoY; while EBITDA margins were at 12.4 per cent.
“The business has potential report margins in the mid-teens,” he said. SIS’s cash logistics business is a JV with Prosegur. The company, Sinha said, is targeting Rs 1,000 crore turnover from the segment, by FY25.
International markets – Australia and New Zealand – are already opening up post Covid. The Covid-related business, though lower than the previous quarters, continued to remain stronger than expected because of the Omicron variant.
The EBITDA margin for the international business was 5.6 per cent in Q3FY22.
“The margin is settling towards our pre-Covid normal levels as temporary Covid contracts with exceptional margins decline; indicating normalcy in these regions,” he said.