- October 2023 marks six years since the company's listing.
- The business is resilient, with recession-resistant demand.
- Despite challenges, the company's revenue has grown from ₹4,000 crore to ₹11,000 crore.
- It's a high-growth, high ROCE, and high cash business with a 20% return profile.
- The company sees itself as a platform offering security, facility management, and cash services.
- They are the largest security company, largest facility management company (pure FM), and the second-largest in cash logistics in India.
- International business is a natural hedge and has become a smaller part of their portfolio.
- They've generated ₹260 crore in cash returns to shareholders since IPO.
- Vision '25 focuses on market share growth and migrating from 'services' to 'solutions' using technology.
- India's economic activity and wage correction wave are seen as key growth drivers.
- The company aims to build three $1 billion businesses from its ecosystem.
- The leadership team has substantial experience, and the company emphasizes safety, well-being, and ESG.
- Growth drivers include minimum wage, urbanization, cross-selling, and expansion into new sectors.
- EBITDA margins are a key focus for improvement.
- VProtect is a growing business in e-surveillance.
- International markets, particularly Australia, New Zealand, and Singapore, offer growth and stability.
- Facility Management is a rising star in the company's portfolio, serving various sectors, including healthcare.
- Margin challenges in Facility Management are stabilizing, and growth is expected in Q3 and Q4.
- SIS Ltd. has experienced significant revenue and PAT growth, with revenue doubling in the past three years and PAT increasing by 2.5 times.
- PAT percentage has grown by 630 basis points.
- Return on Capital Employed (ROCE) and Return on Equity (ROE) are healthy, around 19% to 20%.
- The company has shifted its focus from ATM business to other value-added services, enhancing productivity.
- Tariff increases by the RBI and reduced insurance costs have contributed to the company's success.
- "BOSS" (Bank Outsourcing Services & Solutions) has grown at a CAGR of almost 17x in five years.
- The company has a strict criteria for M&A deals, targeting at least a 20% Internal Rate of Return (IRR).
- WeProtect, acquired from Prosegur, achieved a CAGR of almost 70% in just three years.
- Security Solutions International experienced 4.5x to 5x growth in four to five years.
- DTSS, acquired at around ₹300 crore, reached ₹1,100 crore in revenue.
- SIS Ltd. is considering M&A opportunities in India in areas like Facility Management, Security, and Cash, focusing on enhancing market share, expanding services, and geographical footprint.
- Margins in the various business segments are expected to improve, with India Security already on its way to reach 6% EBITDA margin.
- The company has demonstrated its ability to utilize tax benefits and incentive schemes for employee recruitment.
- Accounting treatment involves creating a deferred tax asset to account for benefits spread over multiple years.
- Facility Management (FM) achieved significant growth in the past but is now focusing on improving margins, resulting in slower growth.
- Cash Management achieved 40% growth in the previous year with an EBITDA margin of around 15%.
- International business expected to return to pre-COVID levels with single-digit growth and around 4% EBITDA margin.
- Slower growth can ease working capital requirements, improving OCF.