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Indian security equipment and services market is primarily boosted by the rapid urbanization and the ongoing globalization wherein need for robust and updated security technologies is gaining momentum with each passing day. Off late criminal activities coupled with the dawn of terrorism has triggered the demand for both security equipments and private security services by leaps and bounds. The industry is expected to attain a CAGR of more than 25% to reach nearly INR 600 bn by 2015.
The market primarily comprises of multiple segments including CCTV & other equipments, electronic access control, IT security and private security services. “Basically the demand for security equipment is seen mostly from the residential and commercial and enterprise segments of the market, wherein frequent criminal activities and the lurking danger of potential terrorist attack is stimulating the market by manifolds,” says Mr. Kalyan Banga, Product Manager at Netscribes. The market gets a further boost from occasional special events such as the recent commonwealth games held in New Delhi. Players operating in the Indian market space hail mostly from the unorganized space, on the contrary, 80% of the revenue generated within the market comes from the organized market, i.e. the players with ISO certification. “Speaking of players, it is observed that vendors in the market prefer to import products primarily from UK, Germany, Japan and Israel,” added Kalyan.
Government of India (GoI) has also taken various initiatives intended for the upliftment of the overall industry, which in turn acts as a boon for the players operating in the market. Allowance of FDI and the permission for CISF deployment as private security forces happen to be some of the major initiatives taken so far. Additionally, GoI has also signed pacts with Israel for the facilitation of better homeland security. State governments have also played their role by entering into collaborations with CAPSI for the setting up of training centres for security guards, so as to provide an enhanced security cover to the nation.
With constant growth in competition, market entry strategy is the key to success for any new vendor looking to venture into the industry. “Analysis shows, import of equipments happens to be the most preferred route for vendors,” noted Kalyan. Additionally, vendors also collaborate with local firms to distribute their products or indulge in self production of equipments.
The report begins with an illustration which briefs about the several segments within the market. The segments have been well highlighted for the better understanding of readers. Market overview section begins with the graphical representation of the overall market size and forecasted growth figures and the break up of these figures for the years 2010, 2012 and 2015. Moving along, the report elaborates on each individual market s
2. Executive Summary
Security equipments and services market in India was valued at around INR xx bn in 2010 and is expected to reach
a market worth INR yy bn by 2015
The market is primarily expected to grow at a CAGR of y% wherein the maximum demands will arise from the
Market 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
Segment – 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 Electronics Access Control Equipments Private Security Services
Driver Driver Driver
– Government demand – Increasing security breaches – Insufficient Police
– Corporate demand – Demand from upcoming government projects and Protection
– Retail and residential sector proposals – Cost of Electronics
Driver & demand – Economic growth and rise in employable population Challenges
Challenges – Demand for better security from increasing R&D
Challenges – High duty and taxation
centers
– Lack of proper training
– Fire arms not allowed
structure Challenges
– Competition from unorganized – Lack of awareness towards security and availability of
players cheaper alternatives
– Lack of end to end solution providers
Domestics Player Foreign Player
Competition
Bartronics India Ltd Bosch Ltd. Honeywell International Inc UTC Fire & Security
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 2
3. •Market Introduction
•Market Overview
•Types of Products
•Market Entry Strategy
•Vendor Opportunity
•Driver & Challenges
•Future Outlook
•Competition
•Strategic Recommendations
•Appendix
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 3
4. Market Introduction – Products and Services
Security Equipment and Services
Electronics Access Control
CCTV and other Equipment Private Security Services
Equipments
CCTV Manned Security Service
Biometrics IT Security
Detective Service
Intercom
ATM Security
Smart Card
Cash Transportation
Intrusion Detection
Proximity Card VIP Security
Special Event Security
Others (X-Ray, Metal Management (Exhibition,
Swipe Card Marriage, Common
Detector)
Wealth Game)
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5. Security Equipment and Services – Market Overview
Market Size & Growth Figures
INR bn CCTV & Other Equipment Electronic Access Control IT Security Private Security Service
d
c
xx
b
a
0
2010 2011 2012e 2013e 2014e 2015e
20-- 20--e 20--e
CCTV EAC IT Security Private security service
Source: Security Today; Business Standard; ET; Business Line
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 5
6. Demand for CCTV & other equipment is robust and growth
is expected to accelerate in the future
Overview – CCTV & Other Equipment Market Size and Growth – CCTV & Other
Equipment
•Demand for security equipments, both for
INR bn
residential and commercial purpose, has
d
increased many folds in recent time j
c xx i
These equipments include Close Circuit Camera
h
(CCTV), Intrusion Detection, Intercom and others b g
f
(Metal Detector and X-Ray’s) a e
•Market size of CCTV hovered at INR xx bn in 0
2010 2011 2012e 2013e 2014e 2015e
2011 and grew at yy% CAGR
However, following the terror attacks, security
Market Segmentation (2009)
spending is expected to surge by 40-50%
CCTV
•India is an import-driven market with ~60% of
Others
security and surveillance equipment imported Intercom
by foreign manufacturers with local presence Intrusion Detection
or domestic importers/distributors
Note: *Assumptions– Consensus on 2007 market size: INR 15.8bn, 2006-2008 growth rate: 25%, 2008-2010: Average growth of 45%, Post-2010: Average growth of 25%
Source: Security Today; Business Standard; ET; Business Line
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 6
7. Awareness among corporate about security is creating huge
demand for electronic access systems
Overview – Electronic Access Control (1/2) Market Size and Growth - EAC
•The early adopters for electronic access INR bn
control (EAC) were IT/ITES (Call centers/BPO ) d j
•Electronic access control equipments have xx i
c
gradually gained popularity among major h
corporations b
f
g
With the increase in employees, it has become e
a
difficult for corporations to manage security
manually and are thus resorting to electronic 0
security systems 2010 2011 2012e 2013e 2014e 2015e
Various banks, financial services, insurance,
service industry, government agencies, public Market Segmentation (2009)
sector undertakings, ministries and manufacturing
sector are adopting electronic access control Proximity Cards
mechanism
Swipe Cards
•Some electronic access control systems Smart Cards
includes Card Based (Proximity Cards, Smart Biometrics
Cards, Legacy Technology Based Cards),
Biometrics Based (Fingerprint, Face
Recognition, Voice/Signature Verification,
Hand Geometry, & Iris Recognition)
Source: Security Today; Union Budget 2009-10
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 7
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) Market Size and Growth – IT Security
•Tremendous advancement in the information INR bn
technology area has also lead to the evolution e
xx k
of state-of-the-art IT security systems d j
i
•Need for the robust and cost-effective security c g
h
f
solutions is gaining a steady momentum in b
India a
•Valued at approximately INR yy bn in 2011-12, 0
the network security market is growing at a 2010 2011 2012e 2013e 2014e 2015e
CAGR of zz%
Market Segmentation – Sales (2011)
•Basically the market comprises of segments
including UTM (Unified Threat Management),
UTM
Firewall, IPS, SSN/VPN and content
Firewall
management
IPS
•The primary drivers for this segment happens SSN/VPN
to be the emergence of Smartphones and Content Management
cloud computing
•The market also exhibits a strong competition
amongst established and esteemed players
Source: Communication Today
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 8
9. US, UK, Germany, Japan, and Israel are major exporters to
India
SAMPLE
Accounts for
nearly 45% of Emerging threat to Indian
Indian imports U.K. Germany manufacturers from
cheaper Chinese goods
Japan
Israel
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
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 9
10. Private security business is experiencing huge demand
primarily due to terror threats
Overview – Private Security Service Market Size and Growth – Private Security
Services
•Private security service primarily include
INR bn
manned guards, detective services,
d j
investigation and security consultancies xx i
c h
•Manned based security service is experiencing g
b f
high growth rate primarily due to threat form e
a
terror groups
0
Demand for security service has surged after
2010 2011 2012e 2013e 2014e 2015e
terror attack
Private Security workforce in India is ~5.5 mn
Segmented Market Share (2009)
– Only 20% of workforce is constituted by women
– Ratio of private security personnel to police in India is
Organized
2:1 and will soon reach 3:1
Unorganized
•Besides hospitality industry, demand is driven
by private firms in manufacturing, retail, real
estate, hospital as well as schools and colleges Security guards
account for majority
of the revenue
Source: India PE; Financial Express; IBEF; Security Management; India Journal
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 10
11. Government had passed Private Security Regulation Act and
permits CISF deployment for security as well
SAMPLE
Government of India has passed a Regulation “Private Security Agencies (Regulation) Act, 2005”
Private security service They have to maintain a register of Guards should have received
providers have to obtain a their employees, issue identity cards minimum 160 days training before
license from the government and their uniforms and badges 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
• 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
FDI
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
CISF 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
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 11
12. abc India accounts for the highest proportion of security
service installations
Geographic distribution
•xxx
xxx
yyy
www
zzz
Source: Security Today
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 12
13. SAMPLE
Distribution Model – 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
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 13
14. Drivers & Challenges – CCTV & Other Equipment
Challenges
High duty and taxation structure
Drivers
Competition from unorganized players
Government demand
Corporate demand
Retail and residential sector demand
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 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
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 15
16. Major Public Companies - Summary
Net Profit/Loss
150,000
Size of the Bubble represents Market Capitalization in INR mn
2,458,395.3
1,355.1
241,801.4 537.8
0
633.1
-150,000
-11,000,000 0 11,000,000 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
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 16
17. Public: Domestic Company – abc
Company Information
Corporate Address
SAMPLE Offices and Centres – India
Tel No.
Fax No.
Website
Year of Incorporation
Ticker Symbol
Stock Exchange
Head Office
Hyderabad
Products and Services
Category Products/Services
Key People
Name Designation
Source: Annual Reports; Databases; Company Websites Note: The list of products and services is not exhaustive
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 17
18. Public: Domestic Company – Bartronics India Ltd. (2/3)
Financial Snapshot Key Ratios
Total Income Net Profit/Loss y-o-y change
Particulars 2011 2010 2009 2008
INR mn INR mn (2011-10)
a a Profitability Ratios
Operating Margin -5.08 17.34% 22.42% 22.73% 23.01%
b Net Margin 0.75 11.21% 10.46% 3.47% 17.39%
b Profit Before Tax Margin -5.78 10.11% 15.89% 7.02% 21.42%
c Return on Equity 0.31 17.09% 16.78% 6.62% 17.29%
Return on Capital Employed -3.04 15.82% 18.86% 18.46% 11.38%
0 0
Return on Working Capital -2.67 28.78% 31.45% 8.78% 27.40%
2008 2009 2010 2011
Return on Assets 0.70 6.02% 5.32% 1.92% 7.40%
Financial Summary Return on Fixed Assets 6.88 30.53% 23.65% 14.35% 27.53%
Cost Ratios
• xxx Operating costs (% of Sales) 4.43 70.27% 65.84% 61.86% 69.21%
Administration costs (% of
0.21 5.53% 5.32% 9.42% 6.27%
Sales)
Interest costs (% of Sales) 1.04 5.73% 4.69% 2.59% 1.22%
Liquidity Ratios
Current Ratio 5.68% 1.51 1.43 1.68 2.93
Cash Ratio -28.99% 0.02 0.02 0.04 0.18
Leverage Ratios
Debt to Equity Ratio -14.70% 1.84 2.16 2.45 1.34
Debt to Capital Ratio
Key Financial Performance Indicators -12.83% 0.46 0.53 0.63 0.53
Interest Coverage Ratio -36.13% 3.08 4.82 8.87 19.02
Indicators Value (02/03/2012) Efficiency Ratios
Market Capitalization (INR mn) Fixed Asset Turnover 19.38% 2.68 2.24 4.09 1.57
Total Enterprise Value (INR mn) Asset Turnover 4.69% 0.53 0.50 0.55 0.42
Current Asset Turnover -4.71% 0.85 0.89 1.02 1.03
EPS (INR) *
Working Capital Turnover -15.37% 2.53 2.98 2.50 1.56
PE Ratio (Absolute) * Capital Employed Turnover -5.83% 1.50 1.59 1.89 0.99
Source: Annual Reports; Databases; Netscribes Analysis Note: * figures are as of 5th Mar 2012 Improved Decline
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 18
19. Public: Domestic Company – Bartronics India Ltd. (3/3)
Key Business Segments Key Geographic Segments
xxx aaa bbb
100% 100% 5% 3%
16% 18%
xxx
50% 100% 50% 95% 97%
84% 82%
0% 0%
2011 2008 2009 2010 2011
Business Highlights
Description News
Overview • xxx
Most Recent Auditor • yyy
SAMPLE
Source: Annual Reports; Databases; Company Websites Note: Business Segments and Geographic Segments are based on total revenues
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 19
20. SAMPLE
Product Portfolio 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
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 20
22. •Market Introduction
•Market Overview
•Types of Products
•Market Entry Strategy
•Vendor Opportunity
•Driver & Challenges
•Future Outlook
•Competition
•Strategic Recommendations
•Appendix
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 22
23. Appendix
Ratio
SAMPLE
Calculations Ratio Calculations
(Operating Current Assets / Current
Operating Margin Current Ratio
Income/Revenues)*100 Liabilities
Net Margin (Net Profit / Revenues) *100 {(Cash & Bank Balance +
Cash Ratio Marketable Securities) / Current
(Income Before Tax / Revenues Liabilities)}
Profit Before Tax Margin
*100
Total Liabilities / Shareholders
Debt to Equity
(Net Income / Shareholders Equity
Return on Equity (ROE)
Equity)*100
{Total Debt / (Shareholders
Debt to Capital Ratio
EBIT / (Total Assets – Current Equity + Total Debt)}
Return on Capital (ROCE)
Liabilities)*100
Interest Coverage Ratio EBIT / Interest Expense
(Net Income / Working Capital)
Return on Working Capital
*100
Fixed Asset Turnover Sales / Fixed Assets
Return on Assets (Net Income / Total Assets)*100
Asset Turnover Sales / Total Assets
Return on Fixed Assets (Net Income / Fixed Assets) *100
(Operating Expenses / Sales) Current Asset Turnover Sales / Current Assets
Operating Costs (% of Sales)
*100
Administration Costs (% of (Administrative Expenses / Sales) Working Capital Turnover Sales / Working Capital
Sales) *100
Interest Costs (% of Sales) (Interest Expenses / Sales) *100 Capital Employed Turnover Sales / Shareholders Equity
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT 23
24. Thank you for the attention
The Security Equipment & Services Market report is a part of Research on India’s Information
Technology series. For more detailed information or customized research requirements please
contact:
Kalyan Banga
Phone: +91 33 4064 6215
E-Mail: kalyan.banga@netscribes.com
Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick
insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on
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Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd.
or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior
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