BVG India focusing on long-term contracts with better margins: CMD | Company News

BVG India is also into emergency ambulance services, waste management and infrastructure management services. It also operates in environment and sustainability services. 

The company wants cont­­racts that provide good returns on investment and greater visibility on revenue and margins, rather than chase growth through low-margin work.  

The integrated facility management (IFM), which includes housekeeping and building maintenance, contributes around 65 per cent to its revenue. On the other hand, emergency response services accounts for about 15 per cent, and environment and sustainability services, which covers waste management, landscaping and other environmental services, contributes around 20 per cent, the company’s chief executive officer (CEO) Rupal Sinha said. 

In financial year 2026 (FY26), BVG reported revenue from operations of ₹4,128 crore, up 25 per cent from ₹3,302 crore in FY25. Its profit after tax (PAT) from continuing operations rose 28 per cent to ₹284 crore in FY26 from ₹222 crore in the previous year. 

Sinha expects the broad revenue mix to remain similar over the next five to seven years, with IFM contributing 60-65 per cent and the other two divisions making up the balance. The shares may fluctuate from year to year, particularly when the company wins a new emergency response contract, but will broadly remain at the same level, she said. 

BVG India received approval from the Securities and Exchange Board of India (Sebi) for its initial public offering (IPO) in September 2026. The proposed IPO comprises a fresh issue of shares worth ₹300 crore and an offer for sale (OFS) of 2.85 crore shares by existing shareholders. The company plans to use ₹250 crore from the fresh issue to repay borrowings and the remaining ₹50 crore for general corporate purposes. The OFS will allow promoter Gaikwad and two investment vehicles affiliated with private equity (PE) investor 3i Group to sell their shares. 

Chief Financial Officer (CFO) Manoj Jain said 3i, which has been associated with BVG since 2011, wants to exit and that this was the primary reason for the IPO. The fresh funds will also help reduce working capital borrowings and borrowing limits, creating more room to finance future growth, he said. 

Gaikwad said the company now has greater room to choose contracts based on their profitability and how quickly they generate cash. “It should be a long-term contract. It should be a high-margin contract, an Ebitda-accreting contract,” he said. Ebitda — earnings before interest, taxes, depreciation, and amortisation — measures operating profitability before these costs are deducted. 

The company also assesses whether a contract fits its broader purpose of serving people, places or the planet. BVG is avoiding manpower-only staffing contracts because their margins are low, the CMD said. “Just increasing availability and top line doesn’t make any sense,” he added. 

BVG is not “shying” away from government contracts, CFO Jain said, but will pursue those that meet its requirements for margins, cash flow, and duration. Government contracts can offer good margins, but payments often take longer to arrive. 

Government business contributed about 78 per cent to BVG’s total business in FY22, but its share has since fallen to around 40 per cent, Jain said. The company’s average time to collect payments, known as days sales outstanding, has also declined from 180 days to 112 days as of March 2026. 

The shift in business mix and the decision to exit some contracts also affected operating margins over the past few years, Sinha said.  

BVG is also looking to expand overseas, with operations under way in Saudi Arabia. Also, a small part of the company’s operations is starting in Israel this month, Gaikwad said. He expects international business to contribute around 10 per cent to total revenue once it reaches maturity, although he did not specify a firm timeline. 

The company’s overseas operations are still at an early stage, making their current contribution difficult to quantify.

The company is pursuing longer-term infrastructure contracts under which it manages facilities and earns revenue from multiple sources. These include a 15-year contract for the Kilambakkam bus terminus in Chennai, and a 20-year lease-cum-operation and maintenance contract for a bus terminal in Indore. Under such arrangements, BVG manages and maintains the terminals and earns revenue from sources such as parking, rentals, and advertising, Gaikwad said.

He also sees opportunities in government tenders that assess technical quality alongside price. Under the quality-cum-cost-based selection (QCBS) system described by the company, technical factors can account for 70-80 per cent of the evaluation, with price making up the rest.

The CMD cited an education institution contract in which BVG was the fourth-lowest bidder but won because it received the highest technical score. The system can help the company win work on the strength of its experience and service quality, rather than simply offering the lowest price, he said.

BVG has also been expanding its work in electric mobility. The company operates and maintains electric buses for clients, including providing drivers and managing maintenance, depots, and charging infrastructure, according to the management. Gaikwad said it was also moving towards using electric vehicles for some new solid-waste management contracts. He said BVG aims to offer solutions and take responsibility for service delivery rather than function only as a supplier of manpower.