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Coal India reports 19.1% CAPEX growth and 4.7% Revenue growth

28-05-2015 • About Coal India ($COALINDIA) • By InTwits

Coal India reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Coal India has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's a lot of higher than industry average of 3.0%.
  • CAPEX is quite volatile: 920 in FY2015, 1,890 in FY2014, 550 in FY2013, 1,300 in FY2012, 990 in FY2011
  • The company has highly profitable business model: ROIC is at 35.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Coal India ($COALINDIA) key annual financial indicators

mln. INR201120122013201420152015/2014
P&L
Revenue502,293624,154683,027688,100720,1464.7%
EBITDA134,933157,654182,133178,141173,518-2.6%
Net Income108,674147,882173,564151,117137,267-9.2%
Balance Sheet
Cash458,064582,028622,360523,895472,689-9.8%
Short Term Debt2,1982,2202,275672,0652,991.2%
Long Term Debt13,33813,05410,7781,7152,01817.7%
Cash flow
Capex25,68234,09424,54041,16449,01419.1%
Ratios
Revenue growth-46.9%24.3%9.4%0.7%4.7%
EBITDA growth36.6%16.8%15.5%-2.2%-2.6%
EBITDA Margin26.9%25.3%26.7%25.9%24.1%-1.8%
Net Income Margin21.6%23.7%25.4%22.0%19.1%-2.9%
CAPEX, % of revenue5.1%5.5%3.6%6.0%6.8%0.8%
ROIC31.0%28.7%28.9%30.3%35.3%5.0%
ROE36.8%40.1%39.0%33.3%33.2%-0.1%
Net Debt/EBITDA-3.3x-3.6x-3.3x-2.9x-2.7x0.2x

Revenue and profitability


Coal India's Revenue increased on 4.7% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 11.1% to 9.1% in FY2015.

Net Income marign decreased on 2.9 pp from 22.0% to 19.1% in FY2015.

Capital expenditures (CAPEX) and working capital investments


Coal India's CAPEX/Revenue was 6.8% in FY2015. The company's CAPEX/Revenue increased slightly on 1.3 pp from 5.5% in FY2012 to 6.8% in FY2015. It's average CAPEX/Revenue for the last three years was 5.5%.

Return on investment


The company operates at high and attractive ROIC (35.31%) and ROE (33.17%). ROIC increased on 5.0 pp from 30.3% to 35.3% in FY2015. ROE showed almost no change in FY2015.

Leverage (Debt)


Debt level is -2.7x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA surged on 0.2x from -2.9x to -2.7x in FY2015. Debt surged on 129% in FY2015 while cash decreased on 9.8% in FY2015.

Valuation


The company's trades at EV/EBITDA 11.3x and P/E 17.6x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 15.7x with the industry average at 4.7x.

Appendix 1: Peers in Coal


Below we provide Coal India benchmarking against other companies in Coal industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.

Top companies by Revenue growth, %

Top  FY2011 FY2012 FY2013 FY2014 FY2015
Gujarat Mineral Development Corporation ($GMDCLTD)14.7%2.3%-22.7%11.6%
Gujarat Nre Coke ($GUJNRECOKE)-22.9%45.1%-54.1%-59.4%
Gujarat Nre Coke ($GUJNREDVR)-22.9%45.1%-54.1%-59.4%
 
Median (3 companies)-22.9%45.1%-54.1%-59.4%
Coal India ($COALINDIA)24.3%9.4%0.7%4.7%


Top companies by EBITDA margin, %

Top  FY2011 FY2012 FY2013 FY2014 FY2015
Gujarat Mineral Development Corporation ($GMDCLTD)47.0%47.4%55.5%47.9%36.3%
Gujarat Nre Coke ($GUJNRECOKE)25.0%36.0%30.8%-76.1%-36.3%
Gujarat Nre Coke ($GUJNREDVR)25.0%36.0%30.8%-76.1%-36.3%
 
Median (3 companies)25.0%36.0%30.8%-76.1%-36.3%
Coal India ($COALINDIA)26.9%25.3%26.7%25.9%24.1%


Top companies by CAPEX/Revenue, %

Top  FY2011 FY2012 FY2013 FY2014 FY2015
Gujarat Mineral Development Corporation ($GMDCLTD)19.5%20.5%9.9%15.1%5.3%
Gujarat Nre Coke ($GUJNRECOKE)41.4%103.1%47.0%0.0%0.0%
Gujarat Nre Coke ($GUJNREDVR)41.4%103.1%47.0%0.0%0.0%
 
Median (3 companies)41.4%103.1%47.0%0.0%0.0%
Coal India ($COALINDIA)5.1%5.5%3.6%6.0%6.8%


Top companies by ROIC, %

Top  FY2011 FY2012 FY2013 FY2014 FY2015
Gujarat Mineral Development Corporation ($GMDCLTD)28.9%30.8%16.3%10.6%
Gujarat Nre Coke ($GUJNRECOKE)5.0%5.7%4.2%-13.3%-5.0%
Gujarat Nre Coke ($GUJNREDVR)5.0%5.7%4.2%-13.3%-5.0%
 
Median (3 companies)5.0%5.7%4.2%-13.3%-5.0%
Coal India ($COALINDIA)31.0%28.7%28.9%30.3%35.3%


Top companies by Net Debt / EBITDA

Top  FY2011 FY2012 FY2013 FY2014 FY2015
Gujarat Mineral Development Corporation ($GMDCLTD)0.3x-0.0x-0.0x-0.0x1.3x
 
Median (1 company)5.0x7.5x7.4x-0.0x1.3x
Coal India ($COALINDIA)-3.3x-3.6x-3.3x-2.9x-2.7x