Global Economy
The global economy has seen a slow down, according to the baseline forecast, growth is
expected to decline from 3.4 per cent in 2022 to 2.8 per cent in 2023 before stabilizing
at 3.0 per cent in 2024. Advanced economies are projected to experience a notable slowdown
in growth, dropping from 2.7 per cent in 2022 to 1.3 per cent in 2023. In an alternative
scenario involving additional financial sector stress, global growth is anticipated to
decline to around 2.5 per cent in 2023, with advanced economies seeing growth rates below
1 per cent.
In the baseline projection, global headline inflation is predicted to decrease from 8.7
per cent in 2022 to 7.0 per cent in 2023, mainly due to lower commodity prices. However,
underlying (core) inflation is expected to decline at a slower pace. In most cases,
inflation is unlikely to return to the target before 2025.
Global trade continues to face pressures stemming from geopolitical tensions, weakening
global demand, and stricter monetary and fiscal policies. The volume of global trade in
goods and services is forecasted to grow by 2.3 per cent in 2023, which is significantly
below the pre-pandemic trend.
The Challenges presented by global economic outlook are to be addressed diligently by
controlling higher inflation and bringing global economy back on higher growth path.
However, Asian economies continue to do better than the global economy.
Indian Economy
In 2023, Indias GDP has reached an impressive $3.75 trillion, a significant increase
from approximately $2 trillion in 2014. This remarkable growth has propelled India from
being the 10th largest economy in the world to now occupying the 5th spot. India is widely
recognized as a Bright Spot in the global economy.
The overall growth of the Indian economy remains robust. The real GDP has experienced
an year-on-year growth of 7.2 per cent during the fiscal year 2022-23. This strong
momentum has driven the Indian economy to reach $3.3 trillion, setting the stage for
achieving the ambitious target of $5 trillion in the coming years.
Industry structure and developments
Staffing Services
The staffing services market in India is experiencing a remarkable growth rate of 14%
year-on-year. It is poised to become one of the largest industries by 2030. The demand for
contract staffing services primarily came from sectors such as FMCG, E-commerce,
Manufacturing, Healthcare, Retail, Logistics, Banking, and Energy.
However, the IT staffing sector experienced a gradual slowdown in new employment
creation starting from Q3 2022-23. This had a significant impact on the overall net
employment growth in the staffing industry for that period. Factors contributing to this
slowdown include ongoing geopolitical tensions, the impact of the Russia-Ukraine war, and
turmoil in US financial markets. The IT industry initiated rightsizing efforts since the
second half of the year, leading to caution in new employment generation across multiple
sectors. The IT contract staffing industry, in particular, witnessed a sharp drop of -7.7%
year-on-year.
The staffing industry as a whole is gradually adopting data and technology to
streamline operations. Companies now utilize data to gain valuable insights and make
informed decisions that align with their goals. Digitalization has also brought about a
shift in the staffing process to assist both job seekers and end-users. This
transformation poses a challenge to traditional staffing companies, urging them to adapt
to the new ways in order to stay competitive.
Facility Management Services
The global Integrated Facilities Management (IFM) market size was valued at USD
109155.08 million in 2022 and is expected to expand at a CAGR of 7.27% during the forecast
period (2023-2030), reaching USD 166299.5 million by 2028.
In India, The industry is expected to experience rapid growth in the forecast period of
2023-2028, with a projected CAGR of 17 percent. Several emerging trends are shaping the
field of facilities management, including smart building technology, energy efficiency,
sustainability, predictive maintenance, and flexible workspaces.
Security Services
The private security services market is experiencing significant growth worldwide. It
is estimated to grow by $56.33 billion during the period of 2022-2026, with a compounded
annual growth rate (CAGR) of 4.81%.
In India, the private security industry holds the distinction of being the largest in
the world. The sector has experienced remarkable growth in recent years and the demand for
private security personnel, remains robust not only in the corporate sector but also in
residential households and real estate complexes. Revenue is expected to show an annual
growth rate (CAGR 2023-2028) of 8.27%.
Opportunities and Threats Staffing Services
The staffing industry in India has been experiencing consistent growth of 14% per year.
This growth trend shows no signs of slowing down, as the industry is currently undergoing
a structural transformation. Employers are increasingly relying on flexible staffing to
meet their business needs, while the regulatory environment in India is also becoming more
favorable, making it easier for employers and staffing players to operate. The future of
the staffing industry is closely linked to the job market in the country. Formalizing the
non-farm sector is crucial to generate more job opportunities and promote stability in the
staffing industry.
Although the gig economy is still in its early stages in India, it is expected to grow
in the near future, similar to its growth in developed markets like the US. A recent study
by McKinsey suggests that up to 20-30% of the workforce in developed markets is engaged in
independent work. Technological advancements will play a significant role in shaping the
staffing industry. Staffing companies will need to invest in automation and technology to
improve operational efficiencies and enhance the hiring and recruitment process. In the
highly competitive staffing industry, specialization can be a key strategy to improve time
to hire or "speed to candidate." By focusing on a specific niche, staffing firms
can leverage their expertise to provide faster and more effective solutions compared to
relying solely on technology. While technology can benefit everyone, specialized players
have more flexibility and knowledge in their respective domains.
The overall challenges in the job market, such as generating enough employment
opportunities, can impact the demand for staffing services. Competition is another threat
to consider, as the industry is likely to face increasing competition from traditional
players as well as new entrants. Additionally, disruptive technologies and business models
could pose a threat to established staffing companies if they fail to adapt and embrace
innovation. Lastly, the availability of skilled talent is crucial for the success of the
staffing industry.
Facility Management Services
The facility management services sector is witnessing significant growth due to
multiple factors. Not only are buildings becoming smarter with each passing year, but
there is also increasing pressure to invest in sustainability due to new legislation.
Additionally, building users now have new types of needs and expectations, driving the
demand for workplaces that can meet these requirements. These factors, both directly and
indirectly, contribute to the growth of the facility management (FM) industry.
Facility Management in India is experiencing a surge in popularity, driven by rapid
urban development, a thriving construction sector, increased focus on green buildings, and
a growing awareness of the benefits of outsourcing non-core business activities. This
trend is expected to continue, with the market projected to grow at a healthy CAGR during
the forecast period of 2023-2028.
The Facility Management industry is undergoing a gradual shift towards automated
service delivery, with companies embracing technology-driven platforms. These
technological advancements ensure that relevant data is collected, recorded, and analysed
to enhance management efficiency. Moreover, integrating technology into buildings enables
a more innovative Facility Management workforce, resulting in reduced downtime,
maintenance costs, improved equipment and structure lifespan, optimized space flow and
capacity, enhanced customer value, and more.
As the footprint of facility management expands, there is a growing demand for focused
Engineering Services, including energy efficiency audits and Green Building concepts.
Companies are increasingly utilizing technologies like Artificial Intelligence and the
Internet of Things to improve their operational efficiency and effectiveness.
Overall, the Facility Management industry in India is witnessing substantial growth and
embracing technological innovations to drive improvements in service delivery,
cost-effectiveness, and sustainability. This trend is expected to continue, further
shaping the industry and creating new opportunities for innovation and efficiency in the
future.
Security Services
The Private Security Sector has emerged as a significant industry, employing a large
workforce, both skilled and unskilled, to cater to the increasing demand from the
corporate sector. The deployment of specialized personnel and security systems plays a
crucial role in preventing and managing security risks, including accidents and incidents,
to ensure smooth operations in various public and private spaces. Security measures and
systems are essential for maintaining safety and security in public places such as
airports, railway and metro stations, shopping malls, hotels, and public utilities, as
well as in industrial complexes, commercial spaces, offices, and residential blocks.
The industry has experienced remarkable growth in the past 6-7 years, with a notable
compound annual growth rate (CAGR) of over 25%. There are currently around 15,000
operating companies in the sector, both organized and unorganized. The industry boasts a
workforce of over 10 million private security guards, surpassing the number of police
officers, which contributes significantly to the industrys growing demand.
In conclusion, the Private Security Sector plays a vital role in meeting the security
needs of various sectors, and its growth has been substantial in recent years. However, it
is important to ensure that security personnel are fairly compensated for their services,
considering the industrys significant contribution to maintaining public safety and
security.
Segment wise or product wise performance Staffing Services
The staffing industry in India continues to experience impressive growth, with a
notable 14% increase in the number of flexi workers during the 2022-23 fiscal year. This
surge has expanded the overall contract workforce to an impressive 1.44 million,
signifying the industrys robust upward trajectory. A significant trend in 2023 is the
focus on occupancy management, where companies prioritize data quality and technology
investments to gain better insights into the workplace. This trend is particularly
relevant in the era of hybrid work culture, where Wednesday is becoming the new Monday for
many organizations.
Facility Management Services
Regarding sophistication and development, India is one of the largest markets for
outsourced facility management services. Small local companies focus on single contracts
and single-service solutions, while the regions FM business operates with integrated
contracts given by significant vendors from different continents. Given the changing
dynamics in the region, there are more chances to combine facility management and
corporate real estate in novel ways. Internet of Things (IoT) adoption quickly emerges as
a major driver in FM soft services. IoT enables improved decision-making and work process
optimization across various industry sectors by providing a continuous, real-time data
stream.
Security Services
After 2 /2.5 Years of WFM (Work from Home) and RTO (Return to Office), now the new
normal is Hybrid Model and we could see more than 70% people are working from Office. This
has resulted in increasing demand for more Real Estate places and also increasing in
demand for Man Guarding Security. However as we are growing in the Technology front,
widening skill gap or talent shortage in certain industries or regions could limit growth
opportunities and hinder the ability to meet client demands. In summary, the private
security industry needs to prioritize the standardization of training and certification,
invest in human capital development, and embrace technology to meet the evolving security
challenges effectively and provide high-quality security services. Technology has crept
into every aspect of our lives, including security. Technological evolution has completely
transformed the security industry for the better.
Risks and Concerns Staffing Services
With the rapid advancement of technology, there is a growing demand for professionals
with specialized skills and expertise. This presents a challenge for staffing companies to
keep up with the evolving technology landscape and ensure they can meet clients demands
for talent in these areas. To address this challenge, staffing firms need to invest in
training and upskilling their employees to stay updated with the latest technologies and
industry trends.
Additionally, the slowdown in western countries has yet to impact the Indian market,
although it has already affected certain prominent domains. The IT Staffing Industry, in
particular, is playing a wait-and-watch game to assess the potential impact. Monitoring
the situation and adapting to changing market conditions will be crucial for staffing
companies to navigate potential risks and concerns arising from the global economic
climate.
Facility Management Services
The supply of professionals that are able to handle large scale infrastructure projects
is still relatively low (especially when it comes to technical services) in India, and
hence keeping pace with the rapid growth the industry has to offer is a big challenge as
even today majority of the professionals require thorough training and time to understand
their role. On the other hand, although there is an abundance of unskilled manpower in the
country, there are still two underlying problems that FM companies face. The first problem
is training the unskilled manpower to adapt to systems and processes to run a professional
FM service, and the second problem is the retention of manpower as the unskilled staff is
highly prone to switching jobs.
Security Services
One of the significant concerns in the security services industry is the lack of
standardization in the training and certification of private security personnel. It is
crucial for the industry to adopt international standards to ensure that security
personnel receive comprehensive training and are equipped to handle various security
challenges effectively. In todays rapidly evolving security landscape, private security
personnel are expected to multitask and utilize technology to perform security, safety,
and facilitation functions.
Skill development, reskilling, and upskilling are essential aspects that need to be
addressed in the private security sector. Investing in the development of human capital
and embracing technology are vital steps in preparing the industry to take on greater
responsibilities. By focusing on enhancing the skills and knowledge of security personnel,
the industry can provide better security services and adapt to changing security needs.
Furthermore, the adoption of standardized training and certification processes will
ensure consistency and professionalism across the private security sector. This will not
only enhance the competency of security personnel but also contribute to building trust
and confidence among clients and the general public.
Outlook
Staffing Services
The organized staffing market in India is expanding beyond traditional skills,
positions, and industries and is now gaining prominence in various sectors. Flexi jobs in
employment, especially in key sectors like e-commerce, logistics, manufacturing, tourism
and hospitality, FMCG, consumer durables, and healthcare, are becoming increasingly
prevalent. While flexi staffing, or temporary staffing, is still in the nascent stage in
India, the industry is maturing, and established players are starting to explore new
offerings, invest in technology, enhance consultative selling capabilities, improve
operational efficiencies, and establish a strong presence in relevant locations.
Facility Management Services
The facility management market in India is being propelled by the rapid population
growth in the country. The increasing modernization and urbanization trends are also
favouring market growth. The rising demand for office modernization and service
streamlining is further supporting industry growth. The expanding real estate sector,
driven by the construction of both residential and commercial properties such as business
centres, offices, manufacturing units, and housing apartments, among other constructions,
is particularly fuelling the growth of the integrated facility management segment. The
importance of sustainability and ESG considerations in facilities management is on the
rise. There is a growing focus on reducing energy consumption, conserving water, and
minimizing waste.
Security Services
Deploying specialized personnel and systems to prevent and manage security risks and
threats, including accidents and incidents, is crucial for ensuring peaceful operations at
various locations. Therefore, it is essential to implement security measures and systems
at public places such as airports, railways and metro stations, shopping malls and
markets, hotels, public utilities, as well as industrial complexes, commercial spaces,
offices, and residential blocks. Technology has continuously evolved and transformed
services, leading to advancements in the private security market. Embracing automation is
important as it allows us to adapt and work in conjunction with technology. However, it is
important to recognize that no matter how advanced automation becomes, it cannot fully
replace human workers as there will always be a need for human involvement.
Internal control systems and their adequacy
The Management has laid down internal financial controls to be followed by the Company.
The Company has adopted policies and procedures for ensuring orderly and efficient conduct
of the business, including adherence to the Companys policies, the safeguarding of its
assets, the prevention and detection of frauds and errors, the accuracy and completeness
of the accounting records, and the timely preparation of reliable financial disclosures.
The internal control system is commensurate with the nature of business, size and
complexity of operations and has been designed to provide reasonable assurance on the
achievement of objectives, effectiveness and efficiency of operations, reliability of
financial reporting and compliance with applicable laws and regulations. The Audit
Committee of the Board oversees the internal audit function. The Audit Committee is
regularly apprised by the internal auditors through various presentations. The internal
audit function provides assurance to the Board that a system of internal control is
designed and deployed to manage key business risks and is operating effectively.
• Material developments in Human Resources / Industrial Relations front,
including number of people employed
i. The total number of personnel including Trainees and Apprentices were more than
17,000 as on March 2023 as compared to 13,615 as on March 2022.
ii. The back office or Non Billable staff strength were 348 as on March 2023 as
compared to 355 as on March 2022.
• Discussion on financial performance with respect to operational performance
A. Revenue: Revenue grew by 47% to INR 401 Lakhs as compared to the previous financial
year. Our company has registered significant growth in the revenue over the previous year.
B. EBITDA: Correspondingly, EBITDA levels have increased by 20% from INR 1309.83 in FY
2022 to INR 1570.79 in FY 23.
C. Finance Costs: Finance costs increased to INR 905.52 Lakhs from INR 665.38 Lakhs on
account of higher working capital utilization due to growth in business.
D. Depreciation: Depreciation costs decreased by INR 115.28 Lakhs.
E. Taxation during the year, the Company continued to avail the benefit of Section
80JJAA of the Income Tax Act, 1961 as well as a Deferred Tax Asset on account of time line
differences on Depreciation between IT Act & Companies Act, pursuant to which the Tax
income is INR 272.16 Lakhs in FY 2023 as against tax expense of INR 148.57 Lakhs in FY
2022.
• Ratio Analysis
Pursuant to Schedule V(B) to the Securities and Exchange Board of India (Listing
Obligations and Disclosure Requirements) Regulations, 2015.
Particulars |
2022-2023 |
2021-2022 |
Debtors Turnover (No. of Times) |
4.03 |
3.46 |
Inventory Turnover (No. of Times) |
1.87 |
1.67 |
Interest Coverage Ratio (No. of Times) |
1.31 |
1.23 |
Current Ratio (No. of Times) |
1.43 |
1.47 |
Debt Equity Ratio |
1.54 |
1.49 |
Operating Profit Margin (%) |
2.87 |
2.82 |
Net Profit Margin (%) |
1.28 |
0.91 |
Return on Net Worth (%) |
9.04 |
4.74 |
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