There Is Huge Scope To Grow As a Market Leader
Do take us through your journey post-listing? How has SIS performed in these past five years?
We are a market leader in physical security, cash logistics and facility management services and operate in India, Australia, New Zealand and Singapore. During the last five years of listing, we have grown our revenues from about Rs 4,390 crore in FY2017 to more than Rs 10,000 crore in FY2022 at a CAGR of 18.1 per cent. Similarly, EBITDA has grown from Rs 220 crore to Rs 500 crore at a CAGR of 17.7 per cent. PAT has grown from Rs 110 crore to Rs 326 crore at an almost 24 per cent CAGR.
The employee base has grown from 1.5 lakh to 2.5 lakh in FY2022 and 2.8 lakh as of now. The branches have also increased from 251 to 374 and the number of customer sites has gone up significantly from 12,000 to almost 42,000 now. Overall, on the completion of five years since listing, including the two difficult years of the pandemic, we believe that we have built a highly stable and predictable business which is resilient to any economic variations, as well as from a geographic and industry standpoint. We have consistently delivered revenue and business growth every year and have continued distributions to shareholders in the form of dividends and buybacks every year. SIS has also been ranked 4 amongst the best companies to work for in India by Great Place to Work and we have also been recognised as a super brand.
What is your outlook on the domestic security services market? What are the emerging trends and opportunities for you in India?
The security services continue to grow at about 20 per cent CAGR. We still have a very small market share overall which is about 6-7 per cent in the security market. As such, there is a huge scope to grow as a market leader. Additionally, the overall GDP growth will be very rapid in the next 7-8 years and out of this GDP growth, the maximum contribution will be coming from the services and the manufacturing sectors which are also the sectors that give us maximum business.
Overall, on the back of increasing industrialisation, continued urbanisation, higher threat perception and added pressure on the existing police force, large shift from less organised local players to well organised national players and the coming of the new labour reforms will help push the overall market for SIS. Additionally, we also expect a lot of technology integration in both line-facing operations as well as internal operations.
What is the level of automation involved in some of the services of SIS India?
SIS is actively pursuing technology both for internal processes, systems and controls as well as client-facing applications. We have developed leading tech platforms. For example, MySIS. A first in industry, it is a frontline employee's mobile app for logging facial recognition-based attendance from their duty locations and accessing several other benefits digitally. Automated Recruitment Kiosk or ARK is also an industry first recruitment quality control system. Then we have SalesMaxx, a smart tablet based sales management platform, which enhances salesforce productivity and margin control.
We also have iOPS, a mobile-app based operation platform facilitating service quality assurance for our 42,888-plus customer sites and operations productivity for more than 550 area officers. It also enables workflow automation, data analytics, real-time customer reporting and performance management process (PMP) linkage. There is the M-Trainer, another industry-first digital training platform. Then we have the Quality Assurance & Compliance Assurance Portal, which is in the pilot stage. The objective is to provide customers with a dashboard for an overview of quality and compliance parameters. Customers are to be provided access reports on compliance, operations, training, billing and collection status of the contract. We have significantly invested in accelerating the adoption of technology and we are continuously investing in the best-in-class systems.
How are you leveraging technology, AI in your services? What is their role going forward in your business?
As I have mentioned already, a large part of our technology tools being implied will have AI components and tools to enhance productivity. On the client-facing fronts, SIS is using ManTech solutions where we provide total security solutions to our clients which includes software and AI. SIS also has an alarm and monitoring and response business called VProtect where there is significant technology based surveillance, video analytics, AI-based analytics to alert the clients. We also have invested in a business called Staqu which is primarily into AI & ML cloud-based analytics for CCTVs.
Among the three segments, where do you see the highest growth coming from in the next 2-3 years?
I believe that facility management and cash logistics will provide the maximum growth potential as their base is small and they provide a gamut of services. There are also a large number of services that we have started providing in both these verticals.
