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Quote equity analyst Replybullet Topic: Zicom Electronics - Guarding the Nation!
    Posted: 15/Aug/2006 at 10:04am

Dear Sir,

Can u throw some light on Zicom Electronics and tata honeywell,both are engaged in Security systems business,does it make sense to buy them and hold for 2-3 years.
Regards
Vineet 


Edited by basant - 16/Aug/2006 at 12:54pm
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Quote basant Replybullet Posted: 16/Aug/2006 at 12:51pm

Zicom Electronic Security Systems Ltd. (CMP Rs 185) is India's largest System Integrator of Embedded Electronic Security. Over the past decade the company has developed a wide array of products and service to cater to various consumer as well as industrial requirements. Zicom is the preferred vendor in diverse companies all over India.

After the 7/11 Mumbai bomb blast disaster there has been a new found impetus to security solution products. The company has been receiving enquiries from all corporate customers as well various temples and government authorities. Immediately after the 7/11 the incident the company immediately installed systems at six locations on Western Railway. Talks are being held with the railway authorities on a large scale to offer a complete package of securities solution for the railways passengers.

The security solutions system can detect any security threats or lapses, which are likely to happen at the specified premises and the Response Executives monitor customer’s premises at all times, thus providing protection 24x7, 365 days a year, regardless whether the consumer is at home or away, awake or asleep.. To take care of the power break down situation these devices have an 8 hour power back-up facility. The Financial Snapshot of the company is as under:

C.M.P

Rs 185

Market Capitalization

Rs 173 crores

Sales FY 06

Rs 75.09 crores

Net profit FY 06

Rs 5.52 crores

Sales FY 07 Q1

Rs 30.89 crores

Net profit FY 07 Q1

Rs 2.07 crores

EPS FY 07 (E)

Rs 10.00

PE

19.2

RoE

14.72%

In FY 07 Q1 the company did a sales that was almost 40% of the total sales of Fy 06 Out of the Rs 30 crore of this quarter Rs 18.5 crore from Security Solution Group. The RoE is low but should improve over the current year. The company states that growth is coming from both the corporate sectors well as from new retail malls and multiplexes; During FY 07 the new age business (retail and residential segment) will significantly contribute to the growth. There are almost 1.8 million apartments, which are coming up in the residential segment as well as small offices and homes. Therefore the potential business is huge..

Recently the company launched its ZICOMhome and ZICOMbusiness. ZICOMhome is an electronic security system that secures a home at the press of a button. ZICOMbusiness includes products such as TFT Monitor, Digital Video Recorder, Color Dome Camera and an Intrusion Detection System that is specially designed to supplement the security needs of shops and business establishments.

Over the next few months the company has chalked out a five-pronged Sales and Marketing strategy, which includes, appointing franchisee locations, appointing distributors, appointment of Direct Sales Agents, embarking on institutional sales and mass media advertising.

Zicom admits that privacy is an issue, but the magnitude is miniscule and does not warrant any serious concern. The company has tied-up with Iffco-Tokio General Insurance to provide insurance cover to customers on burglary. Insurance cover up to Rs3 lakhs is provided on burglary to consumers who have opted for specified Zicom products. However, the amount is variable depending on the product configuration.

Recommendation: While the Zicom stock does not look cheap the immense growth that the company is looking at will make the stock cheap over the next few quarters. Long term investors should look  for an opportunity to get in because security control systems in a growing economy with increasing danger to public and private property (terrorism and otherwise) could be a huge business. 

 



Edited by basant - 16/Aug/2006 at 12:53pm
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Quote basant Replybullet Posted: 06/Sep/2006 at 10:51am
SBI Magnum IT  is the only mutual fund holding a stake in Zicom electronics. In the month of August 2006 the fund's expsoure to this company as a percentage to their total assets was increased and now stands at 2.42%.
 
                                                                 Source:valueresearchonline.com


Edited by basant - 06/Sep/2006 at 10:54am
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Quote BubbleVision Replybullet Posted: 07/Sep/2006 at 2:37pm

BasantJi,

Thanks for the information. I am in this stock from 40's since 2004. I did not see the Tech or the Funda of the company. I just saw the concept.
You can't make money if you are unwilling to lose...It's like willing to breathe in but not willing to breathe out. -- ED SEYKOTA ....Read Disclaimer!
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Quote basant Replybullet Posted: 30/Oct/2006 at 9:59pm
For the September quarter Zicom reported a net profit of Rs 2.71 crore (up 104.7% y-o-y) from Rs 1.32 crore while Its net sales increased by close to 89% at Rs 37.39 crore from Rs 19.81 crore in the corresponding period of the previous year.
 
The company experienced an contraction in operating margins at 13.55% from 14.23% but such margin swings should not worry investors as the bigger picture looks good.
 
They have been advertising heavily on the TV and I called up their customer care for a demo. She took my number and I received a call at 2.00 in the afternoon. I told the lady that I was busy and could she call me after an hour. Many times these call center guys forget to call back but this call was prompt and I received a call exactly after an hour. Their representative would be visting me in a  couple of days and the product and the business model does look mighty scalable. 
 
At a market cap of around Rs 200 crores this company does merit a closer attention (investment). 


Edited by basant - 30/Oct/2006 at 10:01pm
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Quote marketbuzz Replybullet Posted: 07/Nov/2006 at 10:31am
Also Zicom electronics is a very good player in home security solutions.
Profit has doubled QoQ .
Looks attractive @ 200.
 
I do it becoz I Like it!
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Quote RAKESH Replybullet Posted: 12/Jan/2007 at 6:42pm

 

Zicom Plans 25 Retail Outlets By December


 

Zicom Consumer Service Group (ZCSG), the latest venture from Zicom Electronic Security Systems Ltd, is planning to open 25 new retail outlets across Maharashtra by the end of 2007. The company is also planning to launch CNG leakage alarm system for vehicles, soon. Meanwhile, ZCSG on Tuesday opened its first retail outlet in Nashik. The outlet, located on Sharanpur Road here, displays the complete range of products from the Consumer Service Group. The store showcases the latest products and technologies from Zicom along with a host of complementary products and peripherals. It has been designed in an open display format to give customers a new hands-on shopping experience. Zicom has eight retail outlets in major cities across the country, including Mumbai, Ahmedabad, Rajkot, Surat, Chennai and Kolkata.


 

Speaking after the launch of the company’s first retail outlet at Nashik, Santonu Choudhury, CEO, Zicom Consumer Service Group, said, “We are planning to launch CNG leakage alarm system for vehicles within the next three months. We are also holding talks with the authorities concerned to install the security system at three major temples at Shirdi, Pandharpur and Banaras. As part of expansion, the company is planning to open 25 new retail stores across Maharashtra by December 2007.” “We see potential for our products and services in the market in Nashik, which is emerging as the next destination for electric, automobile and IT industries. Our priority is to reach the end consumer and mitigate the fear of insecurity from their minds by providing them with peace of mind,” said Choudhury.


 

The Consumer Service Group has been launched to fulfil the retail needs of the consumers. This division offers complete and packaged security solutions for individual, residential complexes, small and medium establishments, etc. It offers an extensive array of Intrusion Detection and CCTV Systems. To meet the various security and monetary needs of the customers, packages are especially designed and available at leading retail and consumer durables outlets across the country.
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Quote YOGI10 Replybullet Posted: 13/Jan/2007 at 10:27pm
basantji, you have throw light on Zicom Electronics but what about honeywell in Security systems business?

Edited by YOGI10 - 13/Jan/2007 at 10:28pm
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