Rituraj Sinha is used to dealing with challenges. In about 17 years, he has transformed Security & Intelligence Services India Ltd (SIS) - the security company that had revenues of Rs 25 crore in 2002 - into a billion dollar enterprise, which is now the largest in its segment. On the way, he also acquired an Australian company that was seven times bigger than SIS.
The second-generation entrepreneur is now rolling up his sleeves to achieve something equally remarkable. By 2025, Sinha wants SIS to also become the industry leader in facilities management and cash management.
"And in each of the three segments - security solutions, facilities management and cash management - we want to have a market share of up to 15 percent," says Sinha of his next Five-Year Plan for SIS.
That will be unique for any global security firm. In none of the big markets across the world, including US, UK and Australia, does the market leader in security business also enjoy leadership in segments of facilities management and cash management.
For instance, if Allied Universal is the largest provider of security solutions in the US, the market leaders in facilities management and cash management are separate companies. Similar is the situation in the UK.
SIS, which had revenue of Rs 7,093 crore in the 2019 financial year, generates more than half of its consolidated topline from the security solutions business. Facilities management and cash management segments make up for the rest. The company had revenues of over Rs 4,000 crore in the first six months of the present financial year, showing a growth of 24 percent, from a year earlier.
The new target may be unique but Sinha believes it is achievable. "It is not like a telecom company is diversifying into real estate sector. All SIS units are service-oriented companies, and sometimes share the same location. For instance, a hotel or a bank will use all our services," says Sinha.
The challenge
In security solutions business, which make up most for SIS's 2.25 lakh employees spread over 312 branches, the company has been comfortably sitting on the pole position.
But it will be in the facilities management and cash business that the challenge lies. That is especially because, Sinha was hoping to become the largest player in these segments by 2019. Now the target has been pushed a little further.
In facilities management segment, in which SIS acquired the then fourth largest Dusters in 2017, Sinha is gunning for the top market share in the next financial year. "We have a monthly revenue of Rs 110 crore. We are number two in the industry right now," he says.
An addition of Rs 15 crore in the monthly run rate will take the company into the pole position.
It is the cash management vertical that could be the toughest. Even though SIS is the second largest player in the segment, it still has some catching up to do with leader CMS. The path has been tough, especially after demonetisation, and the resultant focus on digitisation, dented the cash management business.
Sinha will have to bank on inorganic growth to pull it off. Industry sources pointed out that at least three companies in the top 10 are on the block, and whoever takes the lead in acquiring these would cement the top ranking in the industry.
CMS is owned by private equity major Baring PE Asia.
The three-point strategy
With his eyes on the 2025-vision, Sinha is using three tools to ensure that SIS is ready to handle the scale.
"SIS has taken a micro market approach. We have gone hyper local," he says of the company that now has presence in 640 districts in India. No one city contributes to more than 5 percent of its topline.
"Mumbai is a big market. But there is opportunity in a Solapur, Silvassa or Aurangabad. Our growth is not dependent on the metros or tier-1 cities," says Sinha.
Second, he is investing in technology, both to build systems and processes in SIS, and for client servicing. For instance, a pilot project for Indian Railways uses sensors to inform when a toilet in a station has reached a certain limit in footfalls, and needs to be cleaned.
Similarly, SIS now spends on an average less than 30 minutes in each hire. "We have made our business processes repeatable and scalable. It's the philosophy that is followed by a quick service restaurant chain, like the McDonald's," says Sinha.
It's important for a company that hires more than 30,000 people in its workforce in a year. That is same or higher than a top deck IT company.
Sinha's third tool is people. "As a market leader, we have unfortunately also become a favourite poaching ground," he explains. To prevent that, SIS now gives ESOPs to employees every four to five years, puts them up for higher education and has extensive training programmes.
"If you take the top 500 key people of SIS, their average years of service is 11 years. But their average age is only 39 years. So for 60 percent of them, SIS is their first job. My challenge is to ensure these people stay committed to SIS in the next 10 years," says Sinha.
The tools will probably be the deal-breaker for SIS.
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