SecUR Credentials – unique service offering makes it a play on rising employment

(kaustubhkale) #21

I completely agree with your point. I think receivables and cash flow stress is key monitorable to be tracked.

(kush_gangar) #22

Receivables would be high mainly because of 12-15 Cr sales in the last 3 months itself as the growth picked up…Hence, no. of days would not be more than 90-100.

At the end this is a B2B business and will have high number of receivable days (minimum would be 2 months)

(shyam) #23

First major mainstream media mention that I have seen of the co,doesn’t include much new info though.

Financial Express

(lastgenesis) #24

Thanks @kaustubhkale, for highlighting an extremely interesting opportunity, primarily in the uniqueness of the model in the listed space.

Couple of observations, opportunity wise as others have mentioned it is quite huge as very few companies to my mind are doing proper (or any) background checks and this is something that will to my mind most definitely come into vogue in future with increasing incidents of fraud, especially given the “once bitten twice shy” phenomenon.

The opportunities for operating leverage are huge, essentially cost will only be the software (which is already largely done) and the people. Given that this is broadly a startup they can probably handle a much larger turnover with less than proportionate increase in costs.

Also there can be opportunities for global scaling up if you develop/ buy databases there or partner with existing cos in that space for outsourcing. There would be a good amount of cost arbitrage i assume.

In that context Authbridge whom @jatin had linked seems to be a global player with 140 countries presence, obviously it has a 11 year start on Secur having commenced operations in 2005 but shows you the chance is there. Does anyone know anything more about Authbridge or any other player in the industry? Might give an idea of how much of the market is already penetrated.

BTW Aadhaar will not a alternative for this, as it gives only proof of identity, in addition to that potential employers will want proof of qualifications (educational and career), criminal check etc which Aadhaar will not provide and I am quite sceptic on potential of any Government database filling in for that.

Disc: not invested but interested after reading this post… (interesting website worth checking out)

(lastgenesis) #25

Got the numbers of Authbridge who is market leader as per earlier post, Brief financial position is below:

While we do not have latest year nos, Secur seems to have got a similar turnover in 1 year what this chap has done after doing business for a decade and supposedly having a global presence. I don’t understand it, either Secur is a real stud or this guy is incompetent (or possibly not the main competitor - though he does seem to have a lot of media coverage). Also it kind of tends to make one think how large the market actually is, while in theory this should be a huge opportunity, I am less sure now.

The stated intent of increasing sales thru better credit terms (as per DHRP) is worrying. Also I found it weird that for a company with a turnover of 30 cr, they are budgeting a marketing & PR expense of 5 cr. Extremely high! While I understand this is a micro cap and operational & management risks cannot be comparable to normal midcap/ small cap stuff but this needs more introspection and a few more quarters of results before taking any action for me…

(Sarabjeet Singh) #26

@lastgenesis : thanks buddy, good info.

Could you please share the source of Authbridge numbers.

(lastgenesis) #27

Got it from the MCA website. Available for a fee, full AR is there but not sure if we can share it so have made a snapshot.

([email protected]) #28

It’s a public document if extracted from MCA. Nothing stops u from sharing it.

Since authbridge is a Pvt not sure if they r required to submit an AR. Only balance sheet maybe available without schedule

(lastgenesis) #29

it is a 20 odd page document with auditor report, schedules, cash flow etc. there is no Management discussion analysis kind of section if that is what you are referring to but full financials are there. In any case we are not investing in Authbridge, so all data that may not be needed WRT looking at Secur.

(vipsy) #30

Anyone attended AGM? I want to read some notes if available.

(kush_gangar) #31

Yes i attended the AGM…The details are as follows:-

  1. Tech Mahindra, Wirpo, ICICI Bank, Flipkart and Future Group are the top 5 customers of the company accounting for 40% of revenue.
  2. They feel they should double the revenues for FY19 (did a run-rate of 15 Cr for Q4’18) while maintaining margins.
  3. No threat from Aadhar/NAD as they act as enablers as is the case in developed countries.
  4. Being a B2B player, their debtor days are around 90-100 days and should stay at these levels going forward. Evaluating ways to reduce it but i dont see any significant reduction possible.
  5. They should declare interim dividend during H1’19 results.
  6. Authbridge had some funding issues and hence couldnot grow much. They did around 45 Cr of sales in FY18 but should grow at faster rate going forward with their issues being sorted.
  7. The company wants to add 2 customers out of top 4 IT companies i.e. Infy, TCS, HCL Tech and Cognizant. Also, they are speaking with some of the top private banks. The company currently has 1000 customers and plans to close the year with around 1500 customers.
  8. Flipkart, Future Retail ect. are doing very well and there should be good amount of hiring with their big billion sale coming up.
  9. The company targets to have 10 lakh plus database in Symphony by year end post which they may do a soft launch of the software.
  10. They have opened offices in Bangalore, Delhi and Chennai (all these centers are doing very well).

(Sarabjeet Singh) #32

Company gave a really rosy picture at AGM, however I always question myself:

  1. Are receivables real or significant portion may be written off at a later date ?

In March 2017, Annual Sales were 979.56 Lakh and Receivables at 203 Lakh
In March 2018, Annual Sales were 3655.55 Lakh and receivables at 1530.92 Lakh

DSO jumped from 75 to 153.

  1. If they are doing so well, why is the stock price tanking so much. I am sure HNIs would have evaluated it also have better access to management. If they are not buying then there is something which retail investors may get to know later. As even in this chaos there are few good SMEs which are doing well.

Disc : Invested since IPO

(Sarabjeet Singh) #33

Minutes of AGM that happened couple of months back

(Sarabjeet Singh) #34

SecURresults14112018.pdf (1.6 MB)

H1 numbers for SecUR … not so good.

(ceoji) #37

There seems to be an adverse article on Secur in Value research. Does anyone have sight of it? Please do share.