Security Equipment and Services Market – India July 2014
Executive Summary Market Overview
Drivers and Challenges
Security equipment and services market in India was valued at INR xxx bn in 20-- and is expected to attain a CAGR of xx% to reach INR xxx bn by the end of 20- Currently, the market can be broadly segregated into CCTV & other equipment, electronic access control, IT security and private security service segments CCTV and other Equipment
Electronic Access Control
Private Security Services
Drivers Government Demand Corporate Demand Booming Real-estate Sector Challenges High Duty and Taxation Structure Competition from Unorganized Sector
Drivers Increasing Security Breaches Demand for Upcoming Government Projects Economic Growth and Rise in Employable Population Demand for Better Security from R&D Centers Challenges Lack of Awareness Lack of end-to-end solution providers
Drivers Insufficient Police Protection Cost of Electronics Challenges Lack of Proper Training Firearms not Allowed
Major Security Equipment and Services Vendors
Competitive Landscape
Player 1
Player 2
Player 3
Player 4
Player 5
Player 6
Player 7
Player 8
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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•Macro Economic Indicators
•Introduction •Market Overview •Types of Products •Market Entry Strategy •Vendor Opportunity
•Drivers and Challenges •Future Outlook •Competitive Landscape •Strategic Recommendations •Appendix SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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Increasing security awareness among both end users and corporate establishments is largely pushing the market Security Equipment and Services Market Overview – India • Fast spreading awareness about the necessity and usefulness of electronic security equipment, coupled with the increased demand for manpower security, is fueling the growth of the overall market • CCTV and Electronic Access Control will continue to dominate the electronic security equipment segment Growth drivers such as government regulations, growing real estate and the booming corporate sector will primarily boost this segment
• Security services market will also greatly benefit from the on-going and future establishments of large corporations and real estate based developments within the country
Security Equipments and Services Market Size – India Segment 1
Segment 2
INR bn xx%
a
xx%
b c d e
xxx
xxx
xxx
xxx xxx
xxx
xxx
xxx xxx
xxx
xxx
xxx
0 2013
2014e
2015e
2016e
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
2017e
2018e 4
Electronic Security Equipment (x/x) • The overall electronic security equipment segment has shown significant growth in the past couple of years in India so far and the segment is further expected to grow at a CAGR of about xx% during 2013 to 2018, to reach an estimated market size of INR xxx bn • Competition in the market is stiff, wherein majority of the players can be classified under the unorganized sector Although, the unorganized sector has a large presence, nevertheless it caters to a mere xx% - xx% of the total Indian market, whereas on the other hand, players from the organized sector dominate more than xx% of the market The primary reason for this is the emergence of system integrators and value providers, which is mainly controlled by the organized sector
• Some of the major challenges identified include currency fluctuations, high ownership cost and price sensitivity among others
Electronic Security Equipment – Segmentation Segment 1
2013
Segment 2
Segment 3
2015e
2018e xx
xx
xx
xx
xx
xx
xx
xx
xx
Note: xxx SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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SAMPLE
Electronic Security Equipment (x/x) Accounts for nearly xx% of Indian imports
U.K.
Germany
Emerging threat to xxx manufacturers from cheaper xxx goods
Japan Israel
Exporters from xxx, xxx, xxx and xxx compete on price
xxx is major source of smuggled goods for grey market
Major xxx Minor xxx • The US, UK, Germany, Japan and Israel happen to be the major xxx to India • High dependence on xxx since xxx is low and concentrated on xxx, xxx, primarily because most Indian firms have xxx and limited xxx • Due to technological advancement made in foreign countries, it is unviable for new Indian companies to start indigenous development from scratch and invest large amounts of capital required for product development
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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Private Security Services Private Security Services Overview – India • Entry of foreign players and the growing demand for
Market Size & Growth – India INR bn
private security services across corporate houses,
a
retail establishments and residential complexes are
b
the major growth drivers for the segment
c
The current trend of global players buying smaller
d
domestic players in India has greatly increased the liquidity
e
in the market
0
– In 2010, International Service System acquired 49% of SDB Cisco – Recently, the Indian arm of G4S bought Terra Force
• Owing to the volume dependent business model,
xx xx%
xx xx
xx
2013
xx
xx
2014e
2015e
2016e
2017e
2018e
Market Segmentation – India (20--) xx
xx
xx
xx
xx
investments made in the market can yield returns as high as xx%, which in turn has attracted a plethora of
xx
investors
• Currently, the manned security segment accounts for
xx
xx
the majority share in the market followed by the cash logistics segment
xx
Players operating in the cash logistics segment carry up to INR xx bn and up to INR xx bn in their vaults SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
xx 7
Drivers & Challenges – CCTV and Other Equipment
Challenges Drivers
High Duty and Taxation Structure
Government Demand
Competition from Un-organized Players
Corporate Demand Booming Real-estate Sector
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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Increasing security breaches and slow government response will be a major driver for the market Increasing Security breaches
Impact
• Terror attacks and the lurking danger of infiltration across major cities in the nation has had a huge impact on the mindset across all quarters of the society including the government, businesses and citizens
SAMPLE
Apart from threats along its borders, it also faces significant levels of threat from domestic terror outfits in various parts of the country This has led to an overhauling of national and state level security infrastructure, thereby proving to be beneficial for the market segment by a large extent
• Additionally, crimes such as domestic robbery, theft, motor vehicle theft from apartments have become common in most of the parts of the country, thereby raising the demand for electronic access systems significantly
National Crime Statistics – All India Unit Nos xx
a
xx
xx xxx
b
xx xxx
c xxx
xxx
xx
xx
d 0
xxx
xx xxx
Dacoity
xxx
xxx
Preparation and Assembly for Dacoity
xxx
xxx
Robbery
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
Burglary
Auto Theft 9
xx
SAMPLE
Sector
Market Growth
Outlook
Hospital
xx
xx
Education Market
xx
xx
Shopping Mall
xx
xx
Automated Teller Machine
xx
xx
Special Event
xx
xx
Real Estate
xx
xx
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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SAMPLE
Competitive Benchmarking (x/x) Public Trading Comparable (FY 20--)
Player 1
Player 2
Player 3
Player 4
244.130
329,955.3
4,389,119.1
1,162.5
Share Price (INR)
7.30
10,500
5,591.20
66.05
EV/EBITDA (INR )
-15.4
23.4
11.4
5.4
EV/Revenue (INR)
4.6
3.4
1.9
0.7
PE Ratio
N.A.
34.66
18.71
2.83
Market Capitalization (INR mn)
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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SAMPLE
Competitive Benchmarking (x/x)
Key Ratios of Major 4 Companies – Operational Basis (FY 20--) (x/x) Inventory Turnover Ratio
25 20 15
Debtors Turnover Ratio
24.55
8.25
10 5 0
4.15
7.05
5.94
8.53 2.84
0.12 Player 1
Player 2
Player 3
Player 4
• xxx
Note: Assuming all sales are credit sales SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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SAMPLE
Public: Domestic Company – Player 1 (x/x) Company Information
Offices and Centres – India
Corporate Address
Tel No. Fax No. Website Year of Incorporation
Ticker Symbol Stock Exchange
Hyderabad
Products and Services Category
Head Office
Products/Services
Key People Name
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
Designation
13
SAMPLE
Public: Domestic Company – Player 1 (x/x) Financial Snapshot Total Income
INR mn 10000
860.9 5000
8232.3
1,099.9
Key Ratios
Net Profit/Loss
1,500
-475.8
1,000 8931.4
500
7946.7
-321.8 2163.4
0
2010
INR mn
2011
2012
2013
Financial Summary • The company reported total income of INR 2163.4 mn in FY 2013, as compared to INR 7946.7 mn in FY 2012 • The company earned an operating margin of negative 31.85% in FY 2013, a decrease of 33.04 percentage points over FY 2012 • The company reported debt to equity ratio of 0.60 in FY 2013, a decrease of 7.50% over FY 2012
Key Financial Performance Indicators Value (30/04/2014)
Market Capitalization (INR)
244.130
Total Enterprise Value (INR)
7015.649
EPS* (USD) PE Ratio* (USD)
-500
y-o-y change (2013-12)
2013
2012
2011
2010
-33.04
-31.85%
1.19%
17.53%
22.42%
-8.89
-14.87%
-5.99%
12.31%
10.46%
-20.38
-26.02%
-5.64%
11.21%
15.89%
Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets
2.38
-7.87%
-10.25%
18.58%
16.78%
-17.09
-15.33%
1.76%
15.10%
18.86%
204.71
187.69%
-17.03%
50.51%
67.42%
-4.07
-3.55%
0.52%
9.31%
11.40%
-81.18
-73.27%
7.90%
86.56%
50.71%
46.18
144.96%
98.78%
82.37%
77.41%
6.16
25.67%
19.51%
18.52%
5.32%
-26.93
-32.82%
-5.89%
-6.17%
-4.69%
Cost Ratios
• The company incurred a net profit of negative INR 321.8 mn in FY 2013, as compared to net profit of negative INR 475.8 mn in FY 2012
Indicators
0
Particulars
N.A. N.A.
Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)
Liquidity Ratios Current Ratio Cash Ratio
1.97%
0.98
0.96
1.48
1.43
-33.18%
0.02
0.02
0.02
0.02
7.50%
0.60
0.56
0.27
0.30
4.69%
0.38
0.36
0.21
0.23
-760.1%
1.37
-0.21
-2.86
-4.82
-74.85%
1.63
6.48
4.91
2.24
-81.50%
0.08
0.43
0.53
0.50
-83.38%
0.11
0.63
0.93
0.89
-70.09%
-4.17
-13.96
2.87
2.98
-78.15%
0.23
1.07
1.18
1.23
Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio
Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover
Improved
*: Data corresponds to 1st May 2014 SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
Decline
14
SAMPLE
Public: Domestic Company – Player 1 (x/x) Key Business Segments
Key Geographic Segments
Segment 1
Country 1
100% 50%
100%
100%
100%
100%
0%
Country 2
100%
5%
3%
3%
6%
50%
95%
97%
97%
94%
2010
2011
2012
2013
0% 2010
2011
2012
2013
Business Highlights (x/x) Description
News
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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SAMPLE
Public: Domestic Company – Player 1 (x/x) Business Highlights (x/x) Description
News
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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SAMPLE
Public: Domestic Company – Player 1 (x/x)
• xxx
• xxx
S
Weakness
O
T
Opportunity
• xxx
W
Strength
Threat
• xxx
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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SAMPLE
Private: Domestic Company – Player 2 (x/x) Company Information
Offices and Centres – India
Corporate Address
Tel No. Fax No. Website Year of Incorporation Hyderabad
Products and Services Category
Head Office
Products/Services
Key People Name
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
Designation
18
SAMPLE
Private: Domestic Company – Player 2 (x/x) Shareholders of the Company Name
Ownership Structure
No. of Shares held
Directors or Relatives of Directors
100.00%
Total
22,000,000
Note: Shareholding pattern as on AGM dated 29th Sep 2011 SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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SAMPLE
Private: Domestic Company – Player 2 (x/x) Financial Snapshot Total Income
INR mn 800
200
Net Profit/Loss
35.2
600 400
Key Ratios
40 10.8
600.2 316.8
0
30 20 10 0
2010
Particulars
INR mn
2011
Financial Summary
y-o-y change (2011-10)
2011
2010
-3.76
5.06%
8.83%
-2.47
3.40%
5.86%
-3.81
5.07%
8.89%
-12.28
4.08%
16.36%
Profitability Ratios Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets
-20.06
4.57%
24.63%
-604.02
14.22%
618.24%
-19.95
4.53%
24.48%
-642.38
38.69%
681.07%
3.77
94.94%
91.17%
18.51
24.77%
6.26%
N.A.
N.A.
N.A.
Cost Ratios
• The company incurred a net profit of INR 10.8 mn in FY 2011, as compared to net profit of INR 35.2 mn in FY 2010 • The company reported total income of INR 316.8 mn in FY 2011, as compared to INR 600.2 mn in FY 2010 • The company earned an operating margin of 5.06% in FY 2011, a decrease of 3.76 percentage points over FY 2010
Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)
Liquidity Ratios Current Ratio Cash Ratio
28.52%
1.36
1.06
-56.33%
0.64
1.47
N.A.
0.33
N.A.
N.A.
0.25
N.A.
N.A.
N.A.
N.A.
-90.09%
7.64
77.12
-67.74%
0.89
2.77
-80.72%
0.74
3.86
-95.99%
2.81
70.01
-56.94%
1.20
2.79
Leverage Ratios Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio
Efficiency Ratios Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover
Improved
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
Decline
20
SAMPLE
Private: Domestic Company – Player 2 (x/x) Business Highlights Description
News
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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SAMPLE
Private: Domestic Company – Player 2 (x/x)
• xxx
• xxx
S
Weakness
O
T
Opportunity
• xxx
W
Strength
Threat
• xxx
SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT
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