Security Equipment and Services Market India

Transcription

1 Security Equipment and Services Market India March 2012

2 Executive Summary Market Segment Driver & Challenges Competition SecurityequipmentsandservicesmarketinIndiawasvaluedataroundINRxxbnin2010andisexpectedtoreach amarketworthinryybnby2015 The market is primarily expected to grow at a CAGR of y% wherein the maximum demands will arise from the corporate and household segments Currently, the market can be broadly segregated in to CCTV & other equipment, electronic access control, IT security and private security service segments Security equipments includes CCTV (79%), Intercom (3%), Intrusion detection (3%) and others (15%) Electronic access control market covers Biometrics is a foolproof system best suited for the private and Government sector organizations Smart Card is used in the financial services, public sector market and transportation market Proximity card is used in identification cards, payment cards and public transit fare cards Magnetic Strip technology provides a medium level of security as it can be duplicated CCTV and other Equipment Driver Government demand Corporate demand Retail and residential sector demand Challenges High duty and taxation structure Competition from unorganized players Domestics Player Electronics Access Control Equipments Driver Increasing security breaches Demand from upcoming government projects and proposals Economic growth and rise in employable population Demand for better security from increasing R&D centers Challenges Lack of awareness towards security and availability of cheaper alternatives Lack of end to end solution providers Foreign Player Private Security Services Driver Insufficient Police Protection Cost of Electronics Challenges Lack of proper training Fire arms not allowed Bartronics India Ltd Bosch Ltd. Honeywell International Inc UTC Fire & Security 2

3 Market Introduction Market Overview Types of Products Market Entry Strategy Vendor Opportunity Driver& Challenges Future Outlook Competition Strategic Recommendations Appendix 3

4 Market Introduction Products and Services Security Equipment and Services CCTV and other Equipment Electronics Access Control Equipments Private Security Services CCTV Biometrics IT Security Manned Security Service Detective Service Intercom Smart Card ATM Security Cash Transportation Intrusion Detection Proximity Card VIP Security Others (X-Ray, Metal Detector) Swipe Card Special Event Security Management (Exhibition, Marriage, Common Wealth Game) 4

5 Security Equipment and Services Market Overview Market Size & Growth Figures INR bn d CCTV & Other Equipment Electronic Access Control IT Security Private Security Service c b xx a e 2013e 2014e 2015e e 20--e CCTV EAC IT Security Private security service Source: Security Today; Business Standard; ET; Business Line 5

6 Demand for CCTV & other equipment is robust and growth is expected to accelerate in the future Overview CCTV & Other Equipment Demand for security equipments, both for residential and commercial purpose, has increased many folds in recent time These equipments include Close Circuit Camera (CCTV), Intrusion Detection, Intercom and others (Metal Detector and X-Ray s) Market Size and Growth CCTV & Other Equipment INR bn d c b a e f g xx h i j Market size of CCTV hovered at INR xx bn in 2011andgrewatyy%CAGR e 2013e 2014e 2015e However, following the terror attacks, security spending is expected to surge by 40-50% India is an import-driven market with ~60% of security and surveillance equipment imported by foreign manufacturers with local presence or domestic importers/distributors Market Segmentation (2009) CCTV Others Intercom Intrusion Detection Note: *Assumptions Consensus on 2007 market size: INR 15.8bn, growth rate: 25%, : Average growth of 45%, Post-2010: Average growth of 25% Source: Security Today; Business Standard; ET; Business Line 6

7 Awareness among corporate about security is creating huge demand for electronic access systems Overview Electronic Access Control (1/2) The early adopters for electronic access control(eac) were IT/ITES(Call centers/bpo) Electronic access control equipments have gradually gained popularity among major corporations With the increase in employees, it has become difficult for corporations to manage security manually and are thus resorting to electronic security systems Various banks, financial services, insurance, service industry, government agencies, public sector undertakings, ministries and manufacturing sector are adopting electronic access control mechanism Some electronic access control systems includes Card Based (Proximity Cards, Smart Cards, Legacy Technology Based Cards), Biometrics Based (Fingerprint, Face Recognition, Voice/Signature Verification, Hand Geometry, & Iris Recognition) Market Size and Growth -EAC INR bn d c b a 0 e 2010 f 2011 g 2012e xx h 2013e Market Segmentation (2009) i 2014e j 2015e Proximity Cards Swipe Cards Smart Cards Biometrics Source: Security Today; Union Budget

8 Evolution of technology has also brought in threats from the cyber space which in turn boosts the market further Overview Electronic Access Control (2/2) Tremendous advancement in the information technology area has also lead to the evolution of state-of-the-art IT security systems Need for the robust and cost-effective security solutions is gaining a steady momentum in India Valued at approximately INR yy bn in , the network security market is growing at a CAGRofzz% Basically the market comprises of segments including UTM (Unified Threat Management), Firewall, IPS, SSN/VPN and content management The primary drivers for this segment happens to be the emergence of Smartphones and cloud computing The market also exhibits a strong competition amongst established and esteemed players Source: Communication Today Market Size and Growth IT Security INR bn e d c b a 0 f 2010 g 2011 h 2012e xx i 2013e j 2014e Market Segmentation Sales (2011) UTM Firewall IPS SSN/VPN k 2015e Content Management 8

9 US, UK, Germany, Japan, and Israel are major exporters to India SAMPLE Accounts for nearly 45% of Indian imports U.K. Germany Emerging threat to Indian manufacturers from cheaper Chinese goods Israel Japan Exporters from Hong Kong, Taiwan, Korea and Singapore compete on price S.E. Asia is major source of smuggled goods for grey market Major exporters Minor exporters Hong Kong, China, Singapore, Taiwan, Korea High dependence on imports since domestic production is low and concentrated in low-end, basic products, primarily because most Indian firms have small-scale operations and limited technological expertise 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 Source: US Commercial Service; Israel Economic Mission in India 9

10 Private security business is experiencing huge demand primarily due to terror threats Overview Private Security Service Private security service primarily include manned guards, detective services, investigation and security consultancies Manned based security service is experiencing high growth rate primarily due to threat form terror groups Demand for security service has surged after terror attack Market Size and Growth Private Security Services INR bn d c b a 0 e f g xx e 2013e 2014e 2015e h i j PrivateSecurityworkforceinIndiais~5.5mn Only20% ofworkforceisconstitutedbywomen Ratio of private security personnel to police in India is 2:1andwillsoonreach3:1 Besides hospitality industry, demand is driven by private firms in manufacturing, retail, real estate, hospital as well as schools and colleges Segmented Market Share (2009) Organized Unorganized Security guards account for majority of the revenue Source: India PE; Financial Express; IBEF; Security Management; India Journal 10

11 Government had passed Private Security Regulation Act and permits CISF deployment SAMPLE for security as well Government of India has passed a Regulation Private Security Agencies (Regulation) Act, 2005 Private security service providers have to obtain a license from the government They have to maintain a register of their employees, issue identity cards and their uniforms and badges Guards should have received minimum 160 days training before being deployed at client s site Some States have their own regulation for the security industry like Mumbai, Maharashtra Security Guard Board (MSGB), which was created in 1981 but they only regulate welfare of the guards rather than ensuring the creation of trained personnel Various state governments have collaborated with Central Association of Private Security Industry to provide training to guards, wherein the government bears the expenditure Government Involvement FDI CISF Foreign security firms have been setting up business in India without any restrictions and Indian partners have been developing their expertise from foreign tie-ups In FY 10, the government is planning to restrict FDI investment by 49% in domestic private security firms In a major initiative, government allowed Central Industrial Security Force (CISF) to be deployed for private security service About 79 companies have approached the government for CISF protection 100 CISF personnel have been deployed at the Infosys campus in Bangalore Wipro, Reliance and Oberoi Hotel are also waiting for the deployment of CISF in their premises Source: CommOnlii; Indian Express 11

12 abc India accounts for the highest proportion of security service installations Geographic distribution xxx xxx yyy www zzz Source: Security Today 12

13 Distribution Model SAMPLE Indian Security Equipment Industry The overall distribution model of security equipment market in India is a multi staged model wherein the product can reach the end users through multiple channels Manufacturer Distributor End User System Integrator Installers OEM Wholly owned subsidiary Source: Security Today; Netscribes Analysis 13

14 Drivers & Challenges CCTV & Other Equipment Challenges Drivers Government demand High duty and taxation structure Competition from unorganized players Corporate demand Retail and residential sector demand 14

15 Future will see reduction of duties and taxes, shift toward IP and video analytics technologies and PE investment Future Outlook Duties and Taxes Products xxx yyy Private Equity zzz 15

16 Major Public Companies - Summary Net Profit/Loss 150,000 Size of the Bubble represents Market Capitalization in INR mn 2,458, , , ,000-11,000, ,000,000 22,000,000 Total income aaa bbb ccc ddd eee Source: Annual Reports, Databases Note: All figures are in INR mn and are based on the latest financials available 16

17 Public: Domestic Company abc SAMPLE Company Information Offices and Centres India Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange Products and Services Hyderabad Head Office Category Products/Services Key People Name Designation Source: Annual Reports; Databases; Company Websites Note: The list of products and services is not exhaustive 17

18 Public: Domestic Company Bartronics India Ltd. (2/3) Financial Snapshot INR mn a b 0 Financial Summary xxx 2008 Total Income 2009 Net Profit/Loss 2010 Key Financial Performance Indicators 2011 Indicators Value (02/03/2012) Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) * PE Ratio (Absolute) * INR mn a b c 0 Key Ratios Particulars y-o-y change ( ) Profitability Ratios Operating Margin % 22.42% 22.73% 23.01% Net Margin % 10.46% 3.47% 17.39% Profit Before Tax Margin % 15.89% 7.02% 21.42% Return on Equity % 16.78% 6.62% 17.29% Return on Capital Employed % 18.86% 18.46% 11.38% Return on Working Capital % 31.45% 8.78% 27.40% Return on Assets % 5.32% 1.92% 7.40% Return on Fixed Assets % 23.65% 14.35% 27.53% Cost Ratios Operating costs (% of Sales) % 65.84% 61.86% 69.21% Administration costs (% of Sales) % 5.32% 9.42% 6.27% Interest costs (% of Sales) % 4.69% 2.59% 1.22% Liquidity Ratios Current Ratio 5.68% Cash Ratio % Leverage Ratios Debt to Equity Ratio % Debt to Capital Ratio % Interest Coverage Ratio % Efficiency Ratios Fixed Asset Turnover 19.38% Asset Turnover 4.69% Current Asset Turnover -4.71% Working Capital Turnover % Capital Employed Turnover -5.83% Source: Annual Reports; Databases; Netscribes Analysis Note: * figures are as of 5th Mar 2012 Improved Decline 18

19 Public: Domestic Company Bartronics India Ltd. (3/3) Key Business Segments xxx Key Geographic Segments aaa bbb 100% 100% 16% 18% 5% 3% 50% 100% xxx 50% 84% 82% 95% 97% 0% % Business Highlights Description Overview Most Recent Auditor News xxx yyy SAMPLE Source: Annual Reports; Databases; Company Websites Note: Business Segments and Geographic Segments are based on total revenues 19

20 Product Portfolio SAMPLE Matrix Other Players (x/x) Domestics Company CCTV & Other Equipment Access Control Private Security Foreign Company CCTV & Other Equipment Access Control Private Security Source: Company Websites; Databases 20

21 Strategic Recommendations (x/x) aaa abc xyz abc xyz Source: Netscribes Analysis 21

22 Market Introduction Market Overview Types of Products Market Entry Strategy Vendor Opportunity Driver& Challenges Future Outlook Competition Strategic Recommendations Appendix 22

23 Appendix SAMPLE Ratio Operating Margin Calculations (Operating Income/Revenues)*100 Net Margin (Net Profit / Revenues) *100 Profit Before Tax Margin Return on Equity (ROE) Return on Capital (ROCE) Return on Working Capital Return on Assets (Income Before Tax / Revenues *100 (Net Income / Shareholders Equity)*100 EBIT / (Total Assets Current Liabilities)*100 (Net Income / Working Capital) *100 (Net Income / Total Assets)*100 Return on Fixed Assets (Net Income / Fixed Assets) *100 Operating Costs (% of Sales) Administration Costs (% of Sales) (Operating Expenses / Sales) *100 (Administrative Expenses / Sales) *100 Interest Costs (% of Sales) (Interest Expenses / Sales) *100 Ratio Current Ratio Cash Ratio Debt to Equity Debt to Capital Ratio Interest Coverage Ratio Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover Calculations Current Assets / Current Liabilities {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)} Total Liabilities / Shareholders Equity {Total Debt /(Shareholders Equity + Total Debt)} EBIT / Interest Expense Sales / Fixed Assets Sales / Total Assets Sales / Current Assets Sales / Working Capital Sales / Shareholders Equity 23