We have a plan to open a design centre in India that would cater to international businesses of Egis. It would be opened in Gurgaon; but as we scale up, we would be looking at other locations as well.
Engineering consultancy services provider Egis Group, majority owned by the French government, has been in India through a subsidiary for nearly 25 years now. Egis India managing director Sandeep Gulati discusses with Surya Sarathi Ray the road crossed and the path ahead. Edited excerpts:
How has the journey been for Egis in India?
We are basically consultant to a client. Since most of the infrastructure projects in India are from the government, we mainly cater to the government both in the pre-bid and the post-bid stages. We started out with roads and highways sector; but now, we are one of the most diversified amongst the consulting companies present in India. Our portfolio comprises rail, water, ports, airports, urban development and smart cities.
Besides, you name a large metro project in India, and we have been associated with it. In terms of size, rail would be the largest vertical followed by urban development and roads and highways.
We have about 3,000 people in India on payroll. Out of this, around 1,000 are from the road operations, which is a separate company of the Egis group in India. This does operation and maintenance (O&M) work in the road sector.
How has been the revenue growth for the company?
Our annual revenue, which is essentially the fees that we charge from our clients, is approximately Rs 300 crore now and we have been growing at a compounded annual growth rate (CAGR) of around 13-15% for the last four-five years. As of now, our order book is around Rs 700 crore. Some part of it would be executed this year, and part in subsequent years. Typically, it takes anything between three and five years to execute an order.
How has been the business in the first six months of the current year?
Typically, the orders we get are not linear in a year. But, because of Covid-19, some of the bids have got delayed. Hence, orders which we were expecting in the second quarter have now moved to the third quarter. So,from our perspective, we are doing reasonably well in the first half, but not to our estimation.
Some of our business has moved from Q2 to Q3, but overall target will remain.
What is the target?
We are aiming to bag orders worth Rs 350 crore. We have already done around Rs 150 crore against the target of Rs 200 crore. But I am confident that we will be able to cover that in the next six months.
The government is laying a lot of emphasis on infrastructure projects. How do you see Egis getting benefited from this?
It’s a huge opportunity for us. Infrastructure is something that no government can ignore. And this is one sector everybody is bullish about and in all the domains we are in. I see Covid-19 as an opportunity as it will help us in getting more opportunities, which were earlier under less focus from the government. For example, I see a lot of opportunities in the healthcare sector. A lot of new hospitals, a lot of new facilities, medical colleges etc would be built. We are also going to participate in these opportunities.
Since there are lots of opportunities in infrastructure, with healthcare also opening up, the government is going to spend more; will you recruit more engineers?
Absolutely. We have taken around 250 people in 2019. Even in 2018 the hiring was quite strong. But 2020 is a different story, as we have not been able to hire as fast as we could have done. So, with new sectors and new opportunities, we will hire more. Positions will also come up in the rural water supply. These roles will not come up in the main metros but will come up in the Tier II cities. So, yes absolutely, to answer your question, we will be looking at hiring more people. This year may be, we will go a little slow. We may hire in a few places, but I don’t think that number will be very significant this year.
I just want to say that we are extremely bullish on India. And the group is very strongly behind us. They see India as a very important country to be in. In terms of number of people, Egis India is the largest outside France. That, in itself, shows the importance attached to India.
Any new vertical that Egis India is planning to enter into?
We have a plan to open a design centre in India that would cater to international businesses of Egis. It would be opened in Gurgaon; but as we scale up, we would be looking at other locations as well. Initially, it will be a 50-seater; but internally, we believe that very easily we can scale up to 200-250 seats in the next two-three years. We would start with rail, we would do rail design and then obviously move into other domains as well. The design centre will be the second outside France. We have a design centre in Poland, but that works on roads and highways.