The way Firepro Systems is going, it will not remain in the small and medium enterprise (SME) segment for much longer. The largest Indian player in the infrastructure protection and safety business has set itself a revenue target of Rs 1,000-1,200 crore for the next financial year (2009-10).
Should it achieve the target, it will have grown its top line ten times in four years. Since 2005-06, when it clocked a turnover of Rs 110 crore, it has been growing its top line by over 50 per cent every year. In keeping with this it is targeting a turnover of Rs 750 crore in the current year. This, if achieved, will mean a year-on -year growth of over 80 per cent on last year’s (2007-08) turnover of just under Rs 400 crore.
Chairman and Managing Director NS Narendra was still in his twenties when he founded Firepro 15 years ago in the fire safety space. It has been a kind of picks and shovels supplier to the IT start-ups that joined the gold rush at around the same time. Globally oriented IT operations in India followed different standards of safety and over the years IT and ITeS have been Firepro’s main engine of growth.
Even before the IT boom could mature, the last few years have seen phenomenal new business coming from sectors like retail (large format malls), manufacturing (auto and pharma plants), infrastructure (power plants, refineries and airports) and most recently SEZs.
Over the years, Firepro’s portfolio of offerings has grown. In today’s jargon, it does not sell just equipment or systems, but solutions. And the spectrum covers fire detection and suppression, security in terms of access at various levels (airport perimeter to apron), video surveillance and most recently storage (data via networks).
What is more, explains Narendar, electronic surveillance has now become “intelligent through data analysis via algorithms that sit on systems”.
For example, if a bag is left unattended beyond a certain period the system will issue an alert. Or in a large jewellery store, only a correctly tagged sales staff can take items out of a particular showcase when attending to customers.
Surveillance takes on a new dimension in the age of intelligent buildings and protection of network infrastructure which uses such latest technology as internet protocol. Since cabling for surveillance has to be built into the design and construction of a structure, safety and security have acquired the same lifecycle as the structure itself.
Given the current high-tech nature of the business, today the largest players in the around Rs 4,000-crore Indian market for protection and safety are MNCs like Tyco, Honeywell and Siemens. Firepro is the first Indian name behind them counting among its customers Microsoft, Intel, TCS, Wipro, Unitech, Brigade, Forum mall and Maruti Suzuki.
After growing rapidly in the Indian market, Firepro has decided to access the global market, currently estimated at $105 billion. This year it plans to generate 15 per cent of its turnover (9 per cent last year) from its global operations which are currently centred in Australia and West Asia.
In West Asia, where it has a local partner, it has won two notable contracts in Abu Dhabi, to provide fire protection systems for the Formula One racetrack and the Ferrari Experience Centre.
But Firepro is looking for more than orders from overseas. Advanced economies are marked by high regulation need for substantial documentation. To operate in those markets is “a learning experience” for Narendra. His Sydney-based operations have made a beginning in securing contracts from Australian government entities and also in the retail space.
Firepro makes a net margin of 10 per cent and still remains unlisted, having secured a marquee investment of $12 million for 15 per cent stake from AIG in 2006. “We have not paid any dividend so far except once when the investment came in and have grown on our internal earnings, the AIG funding only helping us grow faster,” observes Narendar.
As for the future, he sees “A lot of investor interest in Firepro but we can meet the cash needs for the expansion to the 2010 target from internal generation.” So those looking for an IPO from this firm on the fast track will have to wait.
subir.roy@bsmail.in
