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Corporate Report

Published on: Nov. 15, 2021, 11:37 a.m.
Egis group’s bigger designs for India
  • Germain with Gulati: planning to ramp up operations

By Ritwik Sinha. Consulting Editor, Business India

Laurent Germain, CEO of French engineering conglomerate Egis Group, hasn’t been a frequent visitor to India in the past. But this time when he visited the national capital and reached out to the media to explain the group’s growth plan for its India subsidiary, he underlined in no uncertain terms that his visits to this country would be more frequent in the future. And there are concrete reasons for this.

 “In terms of employee strength, India is our second biggest market and in revenue, it ranks fourth in our global list. And with the big-ticket infra push from the government here and the planned matching efforts from us, in the next five years we are targeting to double our current size, which we have reached in the last two-and-a-half decades. India is very critical turf for us now,” he emphasised. 

Egis is known for its expertise in churning out solutions for the mobility and environmental sectors. There are a slew of elements which are shaping the French engineering conglomerate’s bigger designs for India. It is ready with a new modest level capex war chest and has just launched a large-scale global designing centre (only the second outside its home turf).

 It is looking to bring in inorganic components to its growth story and is keen to expand in fast-growing verticals like water management and supply where opportunities for the private sector are gradually opening up. “Egis India has been a relatively low-lying firm in the past and has mainly been present in roadways or highways consultancy projects. But about three-four years ago, they changed the management here and since then there has been more action. They have a good market reputation and they seem well placed to enhance their footprint here,” says a top executive of a home-grown infrastructure consultancy and management firm which is much larger in size.            

Going beyond roadways

A company presentation endorses the theory that during the greater part of its journey in India (it entered in 1995) it had been focusing on roadways consultancy. But is now diversifying at a fast pace in new verticals like metro railways, water management and supply and even airports. The massive public infrastructure spending in India has opened new avenues for the private sector even in basic areas like water management and along with a clutch of home-grown firms, global majors with technology empowered specialisation in different verticals have queued up for a piece of the expanding pie.

 “Today, we have a diversified portfolio in India. There are three key verticals of our business which are broadly of the same size. Railways and water contribute nearly one-third each to our business and the remaining comes from roadways, smart city projects, etc,” Germain points out.

The company’s current annual revenue level in India is slightly less than €50 million and in its global revenue list (€1.2 billion as registered last year) India, clubbed with APAC, is ranked fourth. “Our home turf, France, is the biggest market with 38 per cent share, followed by other European countries contributing 20 per cent. The Middle-East is a strong turf and contributes to 13 per cent of our business. The rest mainly comes from APAC and India is part of this cluster,” explains the group CEO. In terms of operational verticals, the group earns 75 per cent from consultancy services while the remaining one-fourth comes from operation and maintenance (O&M) projects. And in India too, a similar operational pattern is emerging.  

As per the local top brass, despite the Covid turbulences, the company has witnessed its busiest spell in India (in terms of new project additions) in the last one year across the spectrum – metro rail projects, water projects, urban projects, smart cities, highways, ports, etc. According to Sandeep Gulati, MD, Egis India (spearheading the show since 2018), some of the key wins include the Surat Metro Project, PMC for various National Highways, Faridabad and Jaipur smart cities, a prestigious green highway project and various rural water supply projects, especially in North East India.

“In the last one year or so, we have won close to 65 projects and that puts our current projects volume (in different stages) in the country in the vicinity of 120. Recently, we won a major water project in Assam. The Prime Minister is going to inaugurate the Purvanchal Expressway on 16 November. We are involved there as project management consultants,” Gulati points out.

The clutch of projects currently underway also includes some defining O&M assignments in highways like Eastern Peripheral (Sonipat to Palwal Circle), Assam (East West corridor of NH31), Jowai up to the Assam border – NH44 (in the state of Meghalaya) and the Lucknow-Barabanki NH28 stretch. 

But amidst all the verticals, the company seems to be keen on expanding its share of water supply and management projects. “Unlike a water specialist like Suez which works as an EPC contractor, we are working as consultants. And we have bagged many large-scale projects in the recent past in Madhya Pradesh, Rajasthan, Maharashtra, Assam, etc. We have quite a prestigious line up with scores of Rural Jal Jeevan Mission projects,” elaborates Manoj Nainani, ED, Business Unit (Infrastructure). 

According to him, of the 65 projects bagged in the last year, about 15 projects are in the water vertical and six are in railways. But they are mostly of modest size, and will drive Egis India operations in the next few years. “If you look at the entire line up of projects in the government-backed water and sanitation space – AMRUT, Rural Jal Mission, Namami Gange, etc ¬– it amounts to Rs7-8 lakh crore of business opportunity, both for investors as well as service providers. It’s an epic scale opportunity and every noted company with specialisation in water supply and management is keen to partner in more projects,” observes Rajnish Chopra, Global Head, VA Tech Wabag, a leading India-based MNC in the water treatment space.     

Happening hub

Considering the projected growth in the infrastructure business globally (in several clusters including India) including basic supply and environment-related components, the Egis Group is planning to double its global revenue base in the next five years. And India is placed in the forefront of the markets which will trigger this growth momentum for the group. “We are looking at doubling our global revenue to €2.5 billion by 2027. We want our Indian units’ contribution to jump up to €75 million in the same period. Globally, we are committed to making fresh investments of around €600 million in ramping up our operations. In India, we will invest €50 million to further scale up,” says Germain.

For the Egis Group, a critical differentiator as far as its presence in India is concerned, is the recent opening of an International Design Centre here, which will mainly work for large global projects. This is Egis’s second such centre outside its home turf in France, the other being in Poland. According to Germain, the centre will primarily provide engineering designing solutions to projects in English speaking markets like Europe. The Gurugram based centre (attached to its Indian headquarters) has just commenced operations on a low- key basis and will be substantially scaled up in the coming years.

“This corroborates the company’s trust in India’s capabilities and technological prowess. We are planning to hire around 500 people for this centre over the next two to three years. The infrastructure industry will be the key employment generator in the coming times and this design centre will provide amazing opportunities to the local talent to pursue their careers in this space while equipping themselves with world-class skills, working on offshore projects from India,” says Gulati.

The Egis group has been on an international shopping spree in the last year, using the inorganic growth option to the hilt and making 16 acquisitions. Some of its noted acquisitions include: project delivery and technical services consultancy firm Indec in Australia, UK-based nuclear science consultancy and research firm Galson Sciences and Projas, a project management company in Kuwait. And the company is now getting ready to make similar moves in the India market. “I think, our first acquisition will be announced in the next six months. The process has been initiated,” says Gulati. To be largely funded from a €50-million corpus created for investments in India in the next five years, the company will have sectoral preferences for these modest scale acquisitions.

“We are basically looking to acquire entities which are in the railways and water management consultancy space. A key criterion for us is: they must be profitable,” underlines Germain while adding in the same breath that if the company comes across an extraordinary opportunity in the country going ahead, the debt free group will not hesitate to make provisions beyond the fixed investment corpus. This may simply be counted as another reiteration of the Egis Group’s commitment to India. 

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