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Jsw Steel's growth is outstanding: revenue grew 28.6% and EBITDA 23.4% annually over the last three years

03-06-2014 • About Jsw Steel ($JSWSTEEL) • By InTwits

Jsw Steel is a fast-growing stock in Iron & Steel/Interm.Products industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.

Growth story


Jsw Steel showed growth in the last financial year. The company's revenue surged on 34.0% in FY2014. At the same time Jsw Steel well managed its profitability and showed even faster growth in EBITDA of 40.6% for the same period.

In the last 3 years the company showed fast revenue growth of 28.6% from FY2011 to FY2014 annually. EBITDA surged on 23.4% from FY2011 to FY2014 annually.

Jsw Steel ($JSWSTEEL) financials for the last 5 years

mln. INR FY2010 FY2011 FY2012 FY2013 FY2014
Revenue799,440241,059343,681382,097512,196
Revenue growth, %-69.8%42.6%11.2%34.0%
SG&A, %
EBITDA41,73848,79761,15465,20591,686
EBITDA growth, %16.9%25.3%6.6%40.6%
EBITDA margin, %5.22%20.2%17.8%17.1%17.9%
Net Income15,97617,5405,3779,6314,520
Net Income margin, % 2.00%7.28%1.56%2.52%0.882%
 
CAPEX27,53753,14440,79556,30157,629
CAPEX/Revenue, %3.44%22.0%11.9%14.7%11.3%
Debt212,228167,463207,131216,906315,897
Cash1,32320,2542,6393,2566,630
Net Debt/EBITDA5.1x3.0x3.3x3.3x3.4x
 
ROIC, %9.0%9.7%11.0%10.3%12.1%
ROE, %19.0%13.7%3.1%5.6%2.2%

Profitability and return on investment


Margin expansion supported EBITDA growth. The company's EBITDA margin increased slightly on 0.800 pp from 17.1% to 17.9% in FY2014. If we look for the longer period Jsw Steel's EBITDA margin dropped on 2.30 pp from 20.2% in FY2011 to 17.9% in FY2014.

Jsw Steel shows attractive ROIC at 12.1% for the last 12 months which assumes stable development model. During the last three years it surged - it was 9.75% in FY2011. It's average ROIC for the last three years was 11.1%.

Jsw Steel showed big decline in Net Income margin of 1.60 pp from 2.50% to 0.900% in FY2014. In the last 3 years the company's Net Income margin dropped on 6.40 pp from 7.30% in FY2011 to 0.900% in FY2014.

Jsw Steel operates at ROE of 2.22%. It's average ROE for the last three years was 3.64%.

Capital expenditures (CAPEX)


To this fast growth Jsw Steel had to invest in CAPEX.Jsw Steel's CAPEX/Revenue was 11.3% in FY2014. Jsw Steel's CAPEX/Revenue dropped on 10.8 pp from 22.0% in FY2011 to 11.3% in FY2014. Average CAPEX/Revenue for the last three years was 12.6%.

Leverage (Debt)


Having such a fast growth profile Jsw Steel keeps medium debt level at 3.4x Net Debt/EBITDA. If we look for the longer period Jsw Steel showed fast leverage growth of 0.36x from 3.02x in FY2011 to 3.37x in FY2014.

Peers in Iron & Steel/Interm.Products


Below you can find Jsw Steel benchmarking vs. other companies in Iron & Steel/Interm.Products industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Inducto Steel ($INDCTST)54.5%150.2%
Tata Metaliks ($TATAMETALI)-20.5%-7.0%-19.0%44.6%
Visa Steel ($VISASTEEL)-12.5%3.3%-24.1%42.0%
Jayaswal Neco Industries ($JAYNECOIND)-34.1%14.6%-1.6%24.0%
Rmg Alloy Steel ($RMGALLOY)48.4%-1.8%-39.6%18.2%
 
Median (15 companies)-30.9%4.1%0.9%7.6%
Jsw Steel ($JSWSTEEL)-69.8%42.6%11.2%34.0%


Top companies by EBITDA margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Jindal Steel & Power ($JINDALSTEL)23.7%48.3%37.5%30.5%28.1%
Sarda Energy & Minerals ($SARDAEN)4.0%15.2%16.3%21.5%21.3%
Jai Corp ($JAICORPLTD)10.6%18.4%14.1%16.3%16.0%
Jayaswal Neco Industries ($JAYNECOIND)8.5%15.8%13.5%12.5%12.8%
Tata Steel ($TATASTEEL)7.9%13.7%9.4%9.2%11.1%
 
Median (14 companies)7.9%13.3%9.4%9.2%8.6%
Jsw Steel ($JSWSTEEL)5.2%20.2%17.8%17.1%17.9%


Top companies by CAPEX/Revenue, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Jindal Steel & Power ($JINDALSTEL)26.4%64.7%34.2%47.6%69.6%
Jayaswal Neco Industries ($JAYNECOIND)1.9%27.9%20.4%44.0%31.1%
Tata Steel ($TATASTEEL)7.0%8.2%9.1%11.6%11.1%
Visa Steel ($VISASTEEL)20.8%39.7%48.2%27.0%10.2%
Kirloskar Ferrous Industries ($KIRLFER)1.5%4.6%5.0%13.3%7.1%
 
Median (11 companies)4.8%12.8%7.1%11.7%6.1%
Jsw Steel ($JSWSTEEL)3.4%22.0%11.9%14.7%11.3%


Top companies by ROIC, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Tata Metaliks ($TATAMETALI)7.1%3.1%-23.5%-3.7%19.9%
Kirloskar Ferrous Industries ($KIRLFER)19.3%20.0%19.1%16.8%12.4%
Pennar Industries ($PENIND)31.6%26.8%18.4%12.3%
Tata Steel ($TATASTEEL)4.1%12.8%7.6%6.2%8.9%
Sarda Energy & Minerals ($SARDAEN)3.5%5.1%6.1%9.7%8.7%
 
Median (16 companies)7.3%12.8%6.1%5.6%7.3%
Jsw Steel ($JSWSTEEL)9.0%9.7%11.0%10.3%12.1%


Top companies by Net Debt / EBITDA

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Visa Steel ($VISASTEEL)5.8x6.9x20.1x24.4x
Jayaswal Neco Industries ($JAYNECOIND)3.9x3.4x4.7x7.2x8.6x
Jindal Steel & Power ($JINDALSTEL)1.4x2.1x2.5x4.0x6.6x
Sarda Energy & Minerals ($SARDAEN)6.4x5.7x5.8x4.6x4.8x
Maithan Alloys ($MAITHANALL)1.5x0.6x1.9x2.1x4.6x
 
Median (13 companies)3.9x2.6x2.5x4.2x3.2x
Jsw Steel ($JSWSTEEL)5.1x3.0x3.3x3.3x3.4x