Market Research Report : Security Equipment and Services Market in India 2014 - Sample

Security Equipment and Services Market – India

July 2014

2

Executive Summary

Market Overview

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

Drivers and Challenges

Competitive Landscape

Major Security Equipment and Services Vendors

Player 1 Player 2 Player 3 Player 4


CCTV and other Equipment

Drivers

Government Demand

Corporate Demand

Booming Real-estate Sector

Challenges

High Duty and Taxation Structure

Competition from Un-organized Sector

Electronic Access Control

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

Private Security Services

Drivers

Insufficient Police Protection

Cost of Electronics

Challenges

Lack of Proper Training

Firearms not Allowed

SECURITY EQUIPMENT AND SERVICES MARKET IN INDIA 2014.PPT

3

•Macro Economic Indicators

•Introduction

•Market Overview

•Types of Products

•Market Entry Strategy

•Vendor Opportunity

•Drivers and Challenges

•Future Outlook

•Competitive Landscape

•Strategic Recommendations

•Appendix


4

Increasing security awareness among both end users and corporate establishments is largely pushing the market

• 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 Equipment and Services Market Overview – India

a

b

c

d

e

0

INR bn

xx%

xx%

2018e

xxx

xxx

2017e

xxx

xxx

2016e

xxx

xxx

2015e

xxx

xxx

2014e

xxx xxx

2013

xxx xxx

Security Equipments and Services Market Size – India

Segment 2 Segment 1


5

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

xx

xx

xx

2013

xx

xx

xx

2015e

xx

xx

xx

2018e

Segment 3 Segment 2 Segment 1

Note: xxx


6

SAMPLE Electronic Security Equipment (x/x)

Accounts for nearly xx% of

Indian imports

Emerging threat to xxx manufacturers from cheaper xxx goods

• 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

xxx is major source of smuggled goods for grey market

Exporters from xxx, xxx, xxx and xxx compete on price

Israel

Major xxx

Minor xxx

U.K. Germany

Japan


7

• Entry of foreign players and the growing demand for

private security services across corporate houses,

retail establishments and residential complexes are

the major growth drivers for the segment

The current trend of global players buying smaller

domestic players in India has greatly increased the liquidity

in the market

– 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,

investments made in the market can yield returns as

high as xx%, which in turn has attracted a plethora of

investors

• Currently, the manned security segment accounts for

the majority share in the market followed by the cash

logistics segment

Players operating in the cash logistics segment carry up to

INR xx bn and up to INR xx bn in their vaults

a

b

c

d

e

0

INR bn

xx%

2018e

xx

2017e

xx

2016e

xx

2015e

xx

2014e

xx

2013

xx

Market Segmentation – India (20--)

xx

xx

xx

xx

xx

xx xx xx xx xx

Private Security Services

Market Size & Growth – India Private Security Services Overview – India


8

Drivers & Challenges – CCTV and Other Equipment

Drivers

Government Demand

Corporate Demand

Booming Real-estate Sector

Challenges

High Duty and Taxation Structure

Competition from Un-organized Players


9

SAMPLE

Increasing security breaches and slow government response will be a major driver for the market

• 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 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

Increasing Security breaches Impact

a

b

c

d

0

Auto Theft

xxx xxx

Burglary

xxx xxx

Unit Nos

xx

xx

xx xx xx

Robbery

xxx xxx

Preparation and Assembly for Dacoity

xxx xxx

Dacoity

xxx xxx

xx xx

National Crime Statistics – All India


10

SAMPLE xx

Hospital xx xx

Education Market

xx xx

Shopping Mall

xx xx

Automated Teller Machine

xx xx

Special Event xx xx

Real Estate xx xx

Sector Market Growth Outlook


11

SAMPLE Competitive Benchmarking (x/x)

Public Trading Comparable (FY 20--)


Market Capitalization (INR mn) 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


12

SAMPLE Key Ratios of Major 4 Companies – Operational Basis (FY 20--) (x/x)

Competitive Benchmarking (x/x)

• xxx

8.537.054.15

24.55

2.845.94

8.25

0.120

5

10

15

20

25


Inventory Turnover Ratio Debtors Turnover Ratio

Note: Assuming all sales are credit sales


13

SAMPLE

Key People

Products and Services

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Stock Exchange

Name Designation

Head Office

Hyderabad

Category Products/Services

Company Information Offices and Centres – India

Public: Domestic Company – Player 1 (x/x)


14

SAMPLE Financial Snapshot Key Ratios

Financial Summary

• 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

• 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

Indicators Value (30/04/2014) Market Capitalization (INR) 244.130

Total Enterprise Value (INR) 7015.649

EPS* (USD) N.A.

PE Ratio* (USD) N.A.

Particulars y-o-y change

(2013-12) 2013 2012 2011 2010

Profitability Ratios

Operating Margin -33.04 -31.85% 1.19% 17.53% 22.42%

Net Margin -8.89 -14.87% -5.99% 12.31% 10.46%

Profit Before Tax Margin -20.38 -26.02% -5.64% 11.21% 15.89%

Return on Equity 2.38 -7.87% -10.25% 18.58% 16.78%

Return on Capital Employed -17.09 -15.33% 1.76% 15.10% 18.86%

Return on Working Capital 204.71 187.69% -17.03% 50.51% 67.42%

Return on Assets -4.07 -3.55% 0.52% 9.31% 11.40%

Return on Fixed Assets -81.18 -73.27% 7.90% 86.56% 50.71%

Cost Ratios

Operating costs (% of Sales) 46.18 144.96% 98.78% 82.37% 77.41%

Administration costs (% of Sales)

6.16 25.67% 19.51% 18.52% 5.32%

Interest costs (% of Sales) -26.93 -32.82% -5.89% -6.17% -4.69%

Liquidity Ratios

Current Ratio 1.97% 0.98 0.96 1.48 1.43

Cash Ratio -33.18% 0.02 0.02 0.02 0.02

Leverage Ratios

Debt to Equity Ratio 7.50% 0.60 0.56 0.27 0.30

Debt to Capital Ratio 4.69% 0.38 0.36 0.21 0.23

Interest Coverage Ratio -760.1% 1.37 -0.21 -2.86 -4.82

Efficiency Ratios

Fixed Asset Turnover -74.85% 1.63 6.48 4.91 2.24

Asset Turnover -81.50% 0.08 0.43 0.53 0.50

Current Asset Turnover -83.38% 0.11 0.63 0.93 0.89

Working Capital Turnover -70.09% -4.17 -13.96 2.87 2.98

Capital Employed Turnover -78.15% 0.23 1.07 1.18 1.23

Improved Decline

Net Profit/Loss Total Income

7946.78931.48232.3

-475.81,099.9

0

5000

10000

-500

0

500

1,000

1,500

INR mn INR mn

2013

-321.8 2163.4

2012 2011 2010

860.9



*: Data corresponds to 1st May 2014

15

SAMPLE

100%100%100%100%

0%

50%

100%

2013 2012 2011 2010

97% 94%97%95%

0%

50%

100%

2013

6%

2012

3%

2011

3%

2010

5%

Business Highlights (x/x)

Description News

Segment 1

Key Business Segments Key Geographic Segments


Country 1 Country 2


16

SAMPLE Description News

Business Highlights (x/x)



17

SAMPLE

• xxx • xxx

• xxx • xxx

T O

W S Strength Weakness

Opportunity Threat



18

SAMPLE Private: Domestic Company – Player 2 (x/x)

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Company Information Offices and Centres – India

Head Office

Hyderabad

Key People

Products and Services

Name Designation

Category Products/Services


19

SAMPLE Name No. of Shares held

Total 22,000,000

100.00%

Directors or Relatives of Directors

Note: Shareholding pattern as on AGM dated 29th Sep 2011

Private: Domestic Company – Player 2 (x/x)

Shareholders of the Company Ownership Structure


20


Financial Snapshot Key Ratios

Financial Summary

• 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

Particulars y-o-y change

(2011-10) 2011 2010

Profitability Ratios

Operating Margin -3.76 5.06% 8.83%

Net Margin -2.47 3.40% 5.86%

Profit Before Tax Margin -3.81 5.07% 8.89%

Return on Equity -12.28 4.08% 16.36%

Return on Capital Employed -20.06 4.57% 24.63%

Return on Working Capital -604.02 14.22% 618.24%

Return on Assets -19.95 4.53% 24.48%

Return on Fixed Assets -642.38 38.69% 681.07%

Cost Ratios

Operating costs (% of Sales) 3.77 94.94% 91.17%

Administration costs (% of Sales) 18.51 24.77% 6.26%

Interest costs (% of Sales) N.A. N.A. N.A.

Liquidity Ratios

Current Ratio 28.52% 1.36 1.06

Cash Ratio -56.33% 0.64 1.47

Leverage Ratios

Debt to Equity Ratio N.A. 0.33 N.A.

Debt to Capital Ratio N.A. 0.25 N.A.

Interest Coverage Ratio N.A. N.A. N.A.

Efficiency Ratios

Fixed Asset Turnover -90.09% 7.64 77.12

Asset Turnover -67.74% 0.89 2.77

Current Asset Turnover -80.72% 0.74 3.86

Working Capital Turnover -95.99% 2.81 70.01

Capital Employed Turnover -56.94% 1.20 2.79

Improved Decline

Net Profit/Loss Total Income

0

20

40

30

10

800

600

400

200

0

INR mn INR mn

2011

10.8

316.8

2010

35.2

600.2


21


Description News

Business Highlights


22

SAMPLE

• xxx • xxx

• xxx • xxx

T O

W S

Private: Domestic Company – Player 2 (x/x)

Strength Weakness

Opportunity Threat


23

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Market Research Report : Security Equipment and Services Market in India 2014 - Sample

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