Security Equipment and Services Market India

March 2012

Executive Summary
Market

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
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

Segment

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

Driver &
Challenges

Competition

Electronics Access Control Equipments

Driver

Government demand
Corporate demand
Retail and residential sector
demand

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
High duty and taxation
structure
Competition from unorganized
players

Insufficient Police
Protection
Cost of Electronics

Challenges

Challenges

Lack of proper training

Fire arms not allowed

Lack of awareness towards security and availability of

cheaper alternatives
Lack of end to end solution providers

Domestics Player
Bartronics India Ltd

Private Security Services

Driver

Foreign Player
Bosch Ltd.

Honeywell International Inc

SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

UTC Fire & Security

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

Market Introduction Products and Services

Security Equipment and Services

CCTV and other Equipment

Electronics Access Control

Equipments

CCTV

Private Security Services

Manned Security Service

Biometrics

IT Security
Detective Service

Intercom
Smart Card

ATM Security
Cash Transportation

Intrusion Detection

Others (X-Ray, Metal

Detector)

Proximity Card

VIP Security

Swipe Card

Special Event Security

Management (Exhibition,
Marriage, Common
Wealth Game)

SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

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

20--e

20--

CCTV

EAC

IT Security

2015e

20--e

Private security service

Source: Security Today; Business Standard; ET; Business Line

SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

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-Rays)

Market size of CCTV hovered at INR xx bn in

2011 and grew at yy% CAGR

However, following the terror attacks, security
spending is expected to surge by 40-50%

Market Size and Growth CCTV & Other

Equipment
INR bn
d

j
xx

b
a

0
2010

2011

2012e

2013e

2014e

2015e

Market Segmentation (2009)

India is an import-driven market with ~60% of

security and surveillance equipment imported
by foreign manufacturers with local presence
or domestic importers/distributors

CCTV
Others
Intercom
Intrusion Detection

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

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

Market Size and Growth - EAC

INR bn
j

d
xx
c

b
a

0
2010

2011

2012e

2013e

2014e

2015e

Market Segmentation (2009)

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)

Proximity Cards
Swipe Cards
Smart Cards
Biometrics

Source: Security Today; Union Budget 2009-10

SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

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 2011-12,
the network security market is growing at a
CAGR of zz%
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

Market Size and Growth IT Security

INR bn
e
c
b

xx

d
f

2010

2011

a
0
2012e

2013e

2014e

2015e

Market Segmentation Sales (2011)

UTM
Firewall
IPS
SSN/VPN
Content Management

Source: Communication Today

SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

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

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

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

Private Security workforce in India is ~5.5 mn
Only 20% of workforce is constituted by women

Market Size and Growth Private Security

Services
INR bn
j

xx

c
b

i
h

a
0
2010

2011

2012e

2013e

2014e

2015e

Segmented Market Share (2009)

Ratio of private security personnel to police in India is

2:1 and will soon reach 3:1

Organized
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

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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
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 clients 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

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
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

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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

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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

End User

Distributor

System Integrator

Installers

OEM

Wholly owned subsidiary

Source: Security Today; Netscribes Analysis
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

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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

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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

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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
633.1

-150,000
-11,000,000

11,000,000

22,000,000

Total income
aaa

Source: Annual Reports, Databases

bbb

ccc

ddd

eee

Note: All figures are in INR mn and are based on the latest financials available
SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

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Public: Domestic Company abc

Company Information

SAMPLE

Offices and Centres India

Corporate Address
Tel No.
Fax No.
Website
Year of Incorporation
Ticker Symbol
Stock Exchange
Hyderabad

Head Office

Products and Services

Category

Products/Services

Key People
Name

Source: Annual Reports; Databases; Company Websites

Designation

Note: The list of products and services is not exhaustive

SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

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Public: Domestic Company Bartronics India Ltd. (2/3)

Financial Snapshot
Total Income

Key Ratios
Net Profit/Loss

INR mn

INR mn

a
b

b
c
0

0
2008

2009

2010

2011

Financial Summary

Particulars

y-o-y change
(2011-10)

2011

2010

2009

2008

Profitability Ratios
Operating Margin
Net Margin
Profit Before Tax Margin
Return on Equity
Return on Capital Employed
Return on Working Capital
Return on Assets
Return on Fixed Assets

-5.08

17.34%

22.42% 22.73%

23.01%

0.75

11.21%

10.46%

3.47%

17.39%

-5.78

10.11%

15.89%

7.02%

21.42%

0.31

17.09%

16.78%

6.62%

17.29%

-3.04

15.82%

18.86% 18.46%

11.38%

-2.67

28.78%

31.45%

8.78%

27.40%

0.70

6.02%

5.32%

1.92%

7.40%

6.88

30.53%

23.65% 14.35%

27.53%

4.43

70.27%

65.84% 61.86%

69.21%

0.21

5.53%

5.32%

9.42%

6.27%

1.04

5.73%

4.69%

2.59%

1.22%

Cost Ratios

xxx

Operating costs (% of Sales)

Administration costs (% of
Sales)
Interest costs (% of Sales)

Liquidity Ratios
Current Ratio
Cash Ratio

5.68%

1.51

1.43

1.68

2.93

-28.99%

0.02

0.02

0.04

0.18

-14.70%

1.84

2.16

2.45

1.34

-12.83%

0.46

0.53

0.63

0.53

-36.13%

3.08

4.82

8.87

19.02

Leverage Ratios

Key Financial Performance Indicators

Indicators

Value (02/03/2012)

Market Capitalization (INR mn)

Total Enterprise Value (INR mn)
EPS (INR) *
PE Ratio (Absolute) *
Source: Annual Reports; Databases; Netscribes Analysis

Debt to Equity Ratio

Debt to Capital Ratio
Interest Coverage Ratio

Efficiency Ratios
Fixed Asset Turnover
Asset Turnover
Current Asset Turnover
Working Capital Turnover
Capital Employed Turnover

19.38%

2.68

2.24

4.09

1.57

4.69%

0.53

0.50

0.55

0.42
1.03

-4.71%

0.85

0.89

1.02

-15.37%

2.53

2.98

2.50

1.56

-5.83%

1.50

1.59

1.89

0.99

Note: * figures are as of 5th Mar 2012

SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

Improved

Decline

18

Public: Domestic Company Bartronics India Ltd. (3/3)

Key Business Segments

Key Geographic Segments

aaa

xxx
100%

100%

bbb

16%

18%

5%

3%

84%

82%

95%

97%

2008

2009

2010

2011

xxx
50%

100%

50%

0%

0%

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

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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

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Strategic Recommendations (x/x)

aaa

abc

abc

xyz

xyz

Source: Netscribes Analysis

SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

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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

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Appendix

SAMPLE

Ratio

Calculations

Ratio

Calculations

Operating Margin

(Operating
Income/Revenues)*100

Current Ratio

Current Assets / Current

Liabilities

Net Margin

(Net Profit / Revenues) *100

Cash Ratio

{(Cash & Bank Balance +

Marketable Securities) / Current
Liabilities)}

Debt to Equity

Total Liabilities / Shareholders

Equity

Debt to Capital Ratio

{Total Debt / (Shareholders

Equity + Total Debt)}

Interest Coverage Ratio

EBIT / Interest Expense

Fixed Asset Turnover

Sales / Fixed Assets

Asset Turnover

Sales / Total Assets

Profit Before Tax Margin

Return on Equity (ROE)

(Income Before Tax / Revenues

*100
(Net Income / Shareholders
Equity)*100

Return on Capital (ROCE)

EBIT / (Total Assets Current

Liabilities)*100

Return on Working Capital

(Net Income / Working Capital)

*100

Return on Assets

(Net Income / Total Assets)*100

Return on Fixed Assets

(Net Income / Fixed Assets) *100

Operating Costs (% of Sales)

(Operating Expenses / Sales)

*100

Current Asset Turnover

Sales / Current Assets

Administration Costs (% of
Sales)

(Administrative Expenses / Sales)

*100

Working Capital Turnover

Sales / Working Capital

Interest Costs (% of Sales)

(Interest Expenses / Sales) *100

Capital Employed Turnover

Sales / Shareholders Equity

SECURITY EQUIPMENT AND SERVICES MARKET - INDIA.PPT

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Thank you for the attention

The Security Equipment & Services Market report is a part of Research on Indias Information
Technology series. For more detailed information or customized research requirements please
contact:
Kalyan Banga
Phone:
E-Mail:

+91 33 4064 6215

kalyan.banga@netscribes.com

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