The security industry has emerged as one of the fastest growing sectors in the country with its market size expected to grow to Rs one lakh crore by FY 2020 next year. It is expected to touch a market size of Rs 1.50 lakh crore in the next 2-3 years’ time frame, and additionally create over 50 lakh jobs for the sector. Broadly speaking, the security industry can be classified into two segments—security service segment and security systems. The security service segment dominates the security industry and is one of the largest corporate taxpayers in the country. Plus in this segment, manned guarding is the largest area of scope and also a heavy resource intensive segment, creating huge employment opportunities for people among the rural population. On the other hand, the security systems segment covers security provided through electronics devices such as alarms, CCTVs, door intercoms, system integrators, access controls, etc. There have been certain structural changes in the Indian society over the years and hence it has triggered a huge growth for the security industry in the country. Few of the factors contributing to the growth of this industry are; low police to people ratio, increase in terrorist activities in the country, need for private security services at bank ATMs, increase in crime ratios, rising public events needing safety, etc. Analysts and experts are quite bullish on this industry and expect its importance to rise considerably in the future on the back of increasing urbanisation, development in infrastructure and housing sectors, growth in the retail sector and rising concerns regarding security, leading to rise in companies catering to the security industry in the country. SIS Group Enterprise started its operations in 1985 with only two employees and is today the largest security corporation in the country. The company posted stellar financial results for FY 2019 with consolidated revenue crossing 1billion dollars. The Indian security solutions business segment posted strong Q4FY2019 financial results with revenue at Rs 1,954 crore vs Rs 1592 crore in Q4FY 2018 and profit after tax climbing Rs 72.4 crore as against Rs 36.1 crore for the same period of the previous fiscal. If our country needs to create jobs for the Indian public, then it needs to change the engine of growth by producing goods for the masses which are more labour intensive. Otherwise, it could go into a middle income trap as the economic growth caters to only the top 15% of the population. Companies in the security business sector can be large employers by creating millions of jobs plus be a major source of revenue to the government. The SIS Group stock quoting at Rs 885 can be purchased by investors with a 50% price appreciation in the next 18 months’ time horizon.
Rajiv Kapoor is a share broker, certified mutual fund expert and MDRT insurance agent.