This Security Company is an awesome Security to Own 😉
- Big Fat Target – To be no 1, in all three verticals of Security, Facility Management and Cash Logistics in India by 2022.
- Revenue Contribution Today
- 38% India security service.
- 49% Australia, New Zealand and Singapore security service revenue.
- 13% facility management
- Negligible Cash management logistics.
- No of employees – 2,15,000
- Team Lease – 2,00,000
- Quess – 2,92,872
- TCS – 4,24,285
- Pretty sure it’s easier to have more blue collar employees than white collar employees 😉
- Crossed 1 billion or Rs 7,000 cr sales for the first time in 2019 this year.
- First year of crossing 2,00,000 employees.
- India market share does not exceed 5% of the country. In countries like Australia the large players have 15-20% market share of mature economies. SiS is aiming to be a “BIG FISH IN A BIG POND”. Veteran Investor Bharat Shah will be very happy 🙂
- Cost of funds as on 31st march is 7.5 %. This should reduce further after the Budget.
- Customer credit rating has been re-looked. Q1 had witnessed some major write offs due to bad debts. Why SIS is a like bank in more ways than one https://biginvestorblog.com/2019/05/30/sis-is-this-a-security-services-company-or-a-bank/
- Will largely focus on Tech Solutions this year.
- Going beyond cleaning as a facility management to managing facilities like Oil and Gas companies. Quess has been doing this successfully for a while. https://www.quesscorp.com/businesses/industrials/
- Expect to see some major reforms in the the Labor Policy of India.
- https://www.business-standard.com/article/economy-policy/modi-renews-labour-reforms-push-as-jobs-regain-focus-before-2019-ls-polls-118031400691_1.html
- It will aim to combine 44 central laws into four codes wages, industrial relations, social security and welfare, and the fourth – occupational safety, health and working conditions.
- TAILWINDS for Security
- People are generally more frightened as threat perceptions increase. Security has moved from a LUXURY to a NECESSITY.
- 40 cr people live in cities, and every building be it residential, office space, entertainment space or simply parks have to be guarded. As urbanisation increases, each unit needs to be protected.
- GDP * 2 x. Security services will grow at least 2x the GDP growth in developing economies.
- India has 150 police officers for 1,00,000 citizens with extremely low technological use. Pakistan , Nepal and Bhutan have better police to people ratio. https://en.wikipedia.org/wiki/List_of_countries_and_dependencies_by_number_of_police_officers
- Technology will help make labour more efficient and move up from sub optimal utilisation.
- Private Security Agencies Regulation Act will soon do to security services what RERA did to the construction industry. Consolidation will be a necessity.
- GOVT OUTSOURCING – the Govt is sick of paying pension. They want to get efficient and outsource its maintenance and lots of services.
- Currently a 80,000 cr market, the same could go upwards of 1,50,000 cr by 2025.
- Current marketshare of India – 4%.
- Australia marketshare – 20%
- TAILWINDS for Facility Management
- The Indian Railways has finally begun outsourcing its housekeeping services.
- From singular services, SiS is looking to take over end-to-end facility management. Not too much into the future, you could probably hand over the entire housekeeping department of a hotel to SiS.
- Healthcare attendants are probably going to the fastest growing category, especially after Ayushmann Bharath and increased Health Insurance penetration.
- TAILWINDS for Cash Logistics
- It is rumoured that the 2000 rupee note will be scrapped. More 500 notes simply mean more business and more replenishments.
- Moving from cash-top-up mechanism to a cassette mechanism, for ATM refilling, which means, money will have to be taken back too.
- Minimum net worth of companies to operate in the cash management business to be 100 cr. I wonder who came up with such an profoundly innovative idea 🙂
- Marketshare 14%
- Stickiness – Most tech enabled solutions will be relatively sticky in nature as it quite a painful task in re-deploying everything. Also SiS is the best in the business, and moving from them would only mean going to a smaller player who probably has more bandwith temporarily.
- Acquisition Strategy –
- Good players who are local companies, but can’t scale beyond that location. SLV in Delhi-NCR, Uniq in Bangalore. Henderson Singapore.
- New niche players with specific skill sets. Eg Apollo Sindhoori who is huge in healthcare management. Rare Hospitality Mumbai.
- SiS usually has a staggered buy-out approach, which is based on valuation based on agreed performance.
- Landing on the right side of Technology Disruption –
- Facial Recognition, E-invoices, Automatics Salary and Bonus Payments, Raising complaints before the client complains, and many productivity improvement tools.
- The Security services industry is an 80,000 cr industry growing upwards of 20%, with mandatory rise in wages annually.
- Concentrated Shareholding – 98.95% of the shares are held by 109 shareholders who have each at least invested Rs 45,00,000 at current share price of 915. This is a big-boys club stock.
My previous Post on SiS.
Can u post a blog on Apollo sindoori