About the Company:
SIS is the largest private security services provider in India, offering a range of services that includes Security Services, Facility Management Solutions (FMS), and Cash Management Services (CMS). Private security is a non-cyclical business, making it recession-proof. Furthermore, it has a unique advantage of long-term customer retention and stickiness, which provides strong visibility of future cash flows.
As the leader in the private security services industry in India and with a significant presence in international markets like Australia, Singapore, and New Zealand through acquisitions, SIS is well-positioned to capture the demand in the Asia Pacific region. The company can serve clients who prefer a single service provider for operations across multiple locations, thereby enhancing its competitiveness in the market.
SIS has a significant market presence across various geographies. In India alone, it provides services to over 8000 customers across 26,000 locations, while internationally, it caters to approximately 7500 clients.
We have a positive outlook on SIS due to the nature of its business, leadership position, growth prospects, and the robust demand for private security services both in India and globally.
Business of SIS can be analysed into 3 key verticals:
India Security Services Vertical:
According to projections, the security solutions market in India is expected to grow at a CAGR of 14%, and reach a market value of US$ 21 billion by 2024. SIS is placing increased emphasis on technology, which has become a critical component in the ramp-up of security solutions investments by customers.
Despite this growth potential, the Indian security solutions market is still dominated by unorganized players, controlling over 65% of the market. However, the trend is expected to change significantly in the foreseeable future, as brand preference for organized players increases. Although SIS is the largest security solutions provider in India, its current market share is in the single digits, indicating significant headroom for growth.
Segmental Performance:
|
Parameters
|
FY 2022 (Rs. Cr)
|
FY 2021 (Rs. Cr)
|
Y-o-Y % change
|
|
Revenue from Operations
|
3,857
|
3,488
|
10.60%
|
|
EBITDA
|
166
|
190
|
-12.80%
|
|
EBITDA (%)
|
4.3%
|
5.5%
|
|
|
Revenue Share in Overall Business (%)
|
38.3%
|
38.0%
|
|
|
EBITDA Share in Overall Business (%)
|
33.3%
|
36.5%
|
|
Security Services International:
The global security services market was valued at US$ 163 Billion in 2021, and it is expected to reach US$ 295 Billion by 2026(Source: Annual Report). This growth is expected to be driven by various factors, including increased spending on security solutions by public health sectors in multiple countries, a rise in security threats in commercial real estates, and an increase in property crime.
SIS has a significant presence in the global security services market with 8260 employees stationed abroad. It caters to 7472 customers and monitors 8145 sites, with 42% of its customers having been associated with SIS for over five years. The company operates in multiple countries, which it has acquired and operates under different names.
Australia
SIS’ subsidiary MSS Security is the largest security solutions company in Australia, holds an 18% market share in the country. Its operations span across various market segments such as arts, events and recreation, aviation, commercial property, data and communication, education, energy and resources, financial services, government, health, industrial and manufacturing, as well as maritime and logistics.
In addition, SIS has another subsidiary called Southern Cross Protection (SXP), which runs the largest national security patrol network in Australia. SXP's fleet of fully equipped vehicles and highly trained security patrol officers make it an ideal solution for customer sites such as shops, restaurants, and independent residences where deploying full-time security personnel may not be cost-effective.
New Zealand
Platform 4 Group (P4G) is a reputable security service provider based in New Zealand. It offers a comprehensive range of services to its private, commercial, and government clients, which include trained security guards, loss prevention officers, and event security teams. Its clientele spans across various industries, such as health facilities, retail centres, film studios, construction sites, and hospitality venues.
Singapore
Henderson Security Solutions is a prominent security firm in Singapore and is recognized as one of the largest in the country. It is a premium service provider that caters to a wide range of customer segments, including residential condominiums, public transport, and commercial spaces. With over 200 sites in Singapore, Henderson Security Solutions has established itself as a leader in the security industry.
At present all overseas business entities are 100% held by the SIS Group as it completed acquisition of P4G business in New Zealand and Henderson business in Singapore. Company ended the year with a monthly run-rate of 484 Cr in March 22 as against 416 Cr in March 21.
Segmental Performance:
|
Parameters
|
FY 2022 (Rs. Cr)
|
FY 2021 (Rs. Cr)
|
Y-o-Y % change
|
|
Revenue from Operations
|
4,840
|
4,530
|
6.80%
|
|
EBITDA
|
269
|
292
|
-7.70%
|
|
EBITDA (%)
|
5.6%
|
6.4%
|
|
|
Revenue Share in Overall Business (%)
|
48.1%
|
49.6%
|
|
|
EBITDA Share in Overall Business (%)
|
54.1%
|
56.1%
|
|
Facility Management Services:
Segmental Performance:
|
Parameters
|
FY 2022 (Rs. Cr)
|
FY 2021 (Rs. Cr)
|
Y-o-Y % change
|
|
Revenue from Operations
|
1,395
|
1,127
|
23.70%
|
|
EBITDA
|
64
|
39
|
61.40%
|
|
EBITDA (%)
|
4.6%
|
3.5%
|
|
|
Revenue Share in Overall Business (%)
|
13.9%
|
12.4%
|
|
|
EBITDA Share in Overall Business (%)
|
12.8%
|
7.6%
|
|
Cash Management:
SIS’s Cash Logistics business is a Joint Venture with Prosegur, A global leader in cash solutions wherein it has a 49% holding. It is the 2nd largest player in India (CMS being the first) with a diverse clientele and comprehensive solutions.
Financials
Click here to check 10 year financial X-Ray
About the Management:
Ravindra Kishore Sinha: Chairman and Promoter
Rituraj Kishore Sinha: Group Managing Director
Risks:
SIS has a history of big acquisitions, over the past years a lot of business expansion was done by acquisitions of market leaders in the respective geographies/segments. Any huge acquisition wherein the company overpays shall dent future prospects.
Promoters of the company have strong political connections which raises questions regarding potential corporate governance issues.
