iifl-logo-icon 1
IIFL

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp

  • Open Demat with exclusive Advice & Services
  • Get a dedicated Relationship Manager to help you grow your wealth
  • Exclusive advisory on 20+ trading & wealth-based investment options
  • One tap Investments, Automated trading & much more
  • Minimum 1 lakh margin required
sidebar image

SIS (I) Ltd: Focus on margin expansion

16 Feb 2024 , 01:47 PM

Analysts of IIFL Securities hosted the management of SIS at IIFL’s Enterprising Bharat Conference. SIS sees India Security business growing at 15-20% and the Facility Management (FM) business growing at 20-25%. Both will benefit from higher outsourcing (especially the latter) and the overall growth of the market. SIS targets 18-20% return on capital and 50%+ FCF-to-Ebitda ratio. Weak headcount addition was due to focus on margins (profitable contracts) as opposed to volumes. This also drove significant margin expansion (6%+) in India Security segment, similar to pre-Covid levels. SIS expects FM segment margin to recover to pre-Covid levels in 2-3 quarters. ETR for Q3FY24 was higher since DTA pertaining to 80JJAA benefits had to be reversed as the headcount addition in FY24 has been weak. 

Wage hike and government entities are drivers for India security: 

Wage hike is a growth driver for India Security business as the wages are mandatorily passed on. The other drivers are more business from existing clients and addition of new clients. Government entities like Railways are increasingly resorting to also outsourcing. The India security market is highly fragmented. SIS, despite being the market leader, has single digit market share. While SIS and G4S are relatively big, the industry has a long tail. 

V-Protect is highly sticky business; diversifying cash management business: 

Most investments in the ManTech portion of the security business is on V-Protect (remote alarm monitoring) related hardware. VProtect is operational on ~22k sites (ATMs and bank branches). These contracts are for 4-5 years and add to customer stickiness. In cash management, SIS-Prosegur (49% owned JV by SIS) is consciously moving away from ATMs (3 years back ATM was 50% of the revenue now ~20%) and is focusing on bullion movement, doorstep banking (retail cash management), treasury management, etc. 

Henderson (Singapore) has turned Ebitda positive: 

In the international Security segment, Henderson (Singapore) achieved a small positive Ebitda in Q3FY24 after going through a challenging phase. Contract-wise costing analysis, change in incentive conditions as well as onerous clauses, and improved availability of labour from Malaysia after the post-Covid reopening helped.

Related Tags

  • SIS (I) Ltd
sidebar mobile

BLOGS AND PERSONAL FINANCE

Images
15 Apr 2024   |   12:16 PM
Images
15 Apr 2024   |   10:33 AM
Images
15 Apr 2024   |   09:44 AM
Read More

Most Read News

15 Apr 2024   |   08:44 PM
15 Apr 2024   |   08:41 PM
15 Apr 2024   |   08:40 PM
15 Apr 2024   |   08:40 PM
Read More
Knowledge Centerplus
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Knowledge Centerplus

Follow us on

facebooktwitterrssyoutubeinstagramlinkedin

2024, IIFL Securities Ltd. All Rights Reserved

ATTENTION INVESTORS
  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

RISK DISCLOSURE ON DERIVATIVES
  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

plus
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.

closeIcon

Get better recommendations & make better investments

Invest wise with Expert advice

By continuing, I accept the T&C and agree to receive communication on Whatsapp