COVID-19 has resulted in a paradigm shift in the way business will be conducted going forward. We believe there will be incremental focus on improving hygiene and sanitation not only at the work place but also at airports, entertainment zones, restaurants, etc. In addition, businesses will have to create standard operating procedures (SOPs) and necessary infrastructure to build consumer confidence and increase footfalls, once the economy opens up. Facility Management, as a sector, is at the forefront of this and likely to be one of the key beneficiaries.
Having said that, the businesses operating in this sector will have to initiate new measures to adapt to this new ‘normal’. One of the foremost developments will be adoption of technology and reduction of people’s touch. This will not only improve efficiency but also reduce dependence on manual labor. Besides, companies will have to invest in training and skill development to ensure smooth transition and technology adaptation. Although, the Company will have to incur initial capex but the return on investment (RoI) is expected to be incrementally better in the medium to long-run.
We further believe smaller companies with limited capital may not be able to compete with larger players in this new normal, which might result in M&A / consolidation.