• Other income is largely comprised of 1) The effects of unrealised currency translation amounting to Rs16.6 crores for the future tranche liabilities for Henderson and Platform 4 Group in Singapore and New Zealand respectively which was offset by a negative unrealised currency translation amounting to Rs0.9 Crore in respect of the RDBs issued by the parent to its Australian subsidiary; 2) A gain of Rs42.4 Crore as a result of a write down of the liability created for the acquisition of the balance 49% shares of Southern Cross Protection Pty Ltd as the final price paid for those shares was less than the estimated liability created for those shares in 2017; 3) Interest income from bank deposits;
• The Group's consolidated Depreciation & Amortization amounted to Rs28.3 Crore for Q2 FY21 (which was lower than the Rs32.6 Crore for the same quarter last year) driven by 1) Winding down of amortisation of the intangibles in connection with acquisitions over a period of time b. Freeze on discretionary capital expenditure during FY2.
• Lower finance/interest cost (down 12% to Rs 33.28Crore) for the quarter is mainly due to the following a. Reduction in the true up of finance costs relating to future pay-out of the acquired entities consequent to the completed settlements for DTSS and SLV; b. Lower average utilisation of working capital debt facility aided by strong debtors management; and offset by c. Increase due to borrowings to facilitate subsequent tranche pay-outs to the entities acquired during FY20, for DTSS and to fund acquisitions in New Zealand – these events took place in Q2FY20.
• The Group's share of the profit profit/(loss) in its associates amounting to Rs (0.3) Crore (compared to Rs (2.3) Crore in the same quarter last year) driven by a significant improvement in the results of its joint venture for the Cash Logistics business.

Half yearly performance

Revenue for the period was up by 6% to Rs 4324.59 crore driven largely by sharp growth in revenue of INTSS business. While INTSS business revenue was higher by 15% to Rs 2087.64 crore, that of INDSS was up by marginal 1% to Rs 1697.23 crore and that of FMS was down by 9% to Rs 548.43 crore.

The EBIT was up by 1% to Rs 250.55 crore driven largely by INTSS business. While segment profit of INDSS was down by 11% to Rs 94.96 crore despite margin growth in sales was largely due to 70 bps contraction in margin to 5.6%. However gained by higher sales and higher margin (up 80 bps to 6.5%) the segment profit of INTSS was up by 31% to Rs 134.69 crore. Hit by lower sales as well as lower margin the segment profit of FMS was down by 46% to Rs 21.20 crore.

OPM contracted by 30 bps to 5.8%, and thus the growth at OP was restricted by 1% to Rs 250.55 crore. With OI stand higher at Rs 89.55 crore compared to negative Rs 1.96 crore in the corresponding previous period, the PBIDT was up by 38% to Rs 340.10 crore. The PBT was up by 94% to Rs 212.70 crore gained by lower interest and depreciation cost. Eventually the PAT Was up by 10% to Rs 165.96 crore hurt largely by higher taxation (up at RS 46.79 crore against a write back of Rs 43.74 crore in corresponding previous period).

Other developments

During the quarter, the Group's subsidiary in Australia completed the acquisition of the balance 49% shares in Southern Cross Protection Pty Ltd (SXP) pursuant to share purchase and option agreements entered into in 2017 when it increased its shareholding in SXP to 51%. At that time, in 2017, under the relevant accounting policies and standards, the Group also estimated and accounted for a liability to reflect the price which it expected to pay for the remaining 49% shares held by the erstwhile shareholders. Under the terms of these agreements, and based on the formula contained therein, a purchase price for these 49% shares was computed and final agreements were signed with the shareholders on September 30, 2020. As a result of this computation, which has been confirmed and agreed by the shareholders, the final price payable for those shares is less than the estimated liability created for those shares in 2017. Therefore, a gain of Rs42.4 Crs has been recorded and accounted under "Other gains/losses" as a result of a write down of the liability created for the acquisition of the balance 49% shares of SXP.

Management comment

Commenting on the performance, Mr. Rituraj Kishore Sinha, Group Managing Director said, "Our H1 results are a testimony that Essential services like ours have been least impacted during the Covid crisis and are amongst the first to recover. Our H1 revenues of Rs,4,325cr is a 5.6% increase YoY. With September revenues at Rs739 cr compared to March 2020 revenues of Rs720 cr, we are already well into recovery phase. Historically high Operating Cash Flows have led to a Net debt reduction of over Rs210 cr and Net Debt/ EBITDA declined to less than 1, which has been re-affirmed by our credit rating upgrade from A+ to AA-. Basis macro-economic factors proving favourable, we continue our cautiously optimistic outlook for the rest of the year"