Cyient revenue growth decelerated from 24.0% in FY2015 to 13.1% in FY2016
21-04-2016 • About Cyient (
$CYIENT) • By InTwits
Cyient reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Cyient is a fast growth stock: FY2016 revenue growth was 13.1%, 5 year revenue CAGR was 21.1% at FY2016 ROIC 15.8%
- Cyient has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.9%. At the same time it's in pair with industry average of 3.5%
- CAPEX is quite volatile: ₹134m in FY2016, ₹44m in FY2015, ₹2,284m in FY2014, ₹930m in FY2013, ₹3,745m in FY2012
- The company has highly profitable business model: ROIC is 15.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Cyient's Revenue jumped on 13.1%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.6 pp from 1.5% to -5.1% in FY2016. During FY2012-FY2016 EBITDA Margin topped in FY2014 at 18.6% and was declining since that time.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income margin decreased on 2.4 pp from 12.9% to 10.5% in FY2016.
Investments (CAPEX, working capital and M&A)
Cyient's CAPEX/Revenue was 4.2% in FY2016. CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 3.5%. During FY2012-FY2016 CAPEX as a % of Revenue bottomed in FY2015 at 3.0%.
Return on investment
The company operates at good ROIC (15.8%) and ROE (17.4%). ROIC decreased on 2.3 pp from 18.1% to 15.8% in FY2016. ROE decreased on 3.2 pp from 20.6% to 17.4% in FY2016. During the last 5 years ROIC topped in FY2014 at 22.9% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.2x and Debt / EBITDA is 0.4x. Debt jumped on 42.8% while cash surged on 18.9%.
Cyient has no short term refinancing risk: cash is higher than short term debt (587.4%).
Management team
Cyient's CEO Krishna Bodanapu has spent 6 years with the company. The company's CFO Ajay Aggarwal has spent 9 years with the company.
Financial and operational results
Cyient ($CYIENT) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 15,530 | 18,731 | 22,064 | 27,359 | 30,956 | 13.1% |
| SG&A | | | | 6 | 5 | -5.9% |
| EBITDA | 2,691 | 3,424 | 4,104 | 4,009 | 4,208 | 5.0% |
| Net Income | 1,614 | 2,311 | 2,660 | 3,532 | 3,262 | -7.6% |
Balance Sheet
|
|---|
| Cash | 4,442 | 4,827 | 6,763 | 5,664 | 6,735 | 18.9% |
| Short Term Debt | 34 | 3 | 58 | 813 | 1,147 | 41.0% |
| Long Term Debt | 0 | 0 | 0 | 467 | 681 | 45.9% |
Cash flow
|
|---|
| Capex | 804 | 722 | 766 | 818 | 1,287 | 57.3% |
Ratios
|
|---|
| Revenue growth | 30.7% | 20.6% | 17.8% | 24.0% | 13.1% | |
| EBITDA growth | 49.6% | 27.2% | 19.9% | -2.3% | 5.0% | |
|
|---|
| EBITDA Margin | 17.3% | 18.3% | 18.6% | 14.7% | 13.6% | -1.1% |
| SG&A, % of revenue | | | | 0.0% | 0.0% | -0.0% |
| Net Income Margin | 10.4% | 12.3% | 12.1% | 12.9% | 10.5% | -2.4% |
| CAPEX, % of revenue | 5.2% | 3.9% | 3.5% | 3.0% | 4.2% | 1.2% |
|
|---|
| ROIC | 19.8% | 22.2% | 22.9% | 18.1% | 15.8% | -2.3% |
| ROE | 14.8% | 18.6% | 18.3% | 20.6% | 17.4% | -3.2% |
| Net Debt/EBITDA | -1.6x | -1.4x | -1.6x | -1.1x | -1.2x | -0.1x |
Peers in IT Consulting & Software
Below you can find Cyient benchmarking vs. other companies in IT Consulting & Software 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ramco Systems ($RAMCOSYS) | 9.3% | 7.3% | 9.9% | 37.0% | - |
| Empower India ($EMPOWER) | -3.7% | -13.2% | -32.6% | 23.9% | - |
| Hexaware Technologies ($HEXAWARE) | 34.3% | 17.3% | 13.0% | 21.0% | - |
| Tech Mahindra ($TECHM) | 6.8% | 25.2% | 174.0% | 20.1% | - |
| Mindtree ($MINDTREE) | - | 23.2% | 28.8% | 17.0% | 31.8% |
| |
|---|
| Median (22 companies) | 16.5% | 20.4% | 13.5% | 7.2% | 14.8% |
|---|
| Cyient ($CYIENT) | - | 20.6% | 17.8% | 24.0% | 13.1% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Consultancy Services ($TCS) | - | - | 47.4% | 42.4% | 43.9% |
| Infosys ($INFY) | 41.3% | 98.1% | 35.9% | 38.3% | 37.4% |
| Mindtree ($MINDTREE) | 31.5% | 36.2% | - | 34.8% | 32.4% |
| Wipro ($WIPRO) | 29.2% | 30.4% | 32.0% | 31.6% | 30.4% |
| |
|---|
| Median (4 companies) | 32.7% | 36.2% | 35.9% | 36.6% | 34.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oracle Financial Services Software ($OFSS) | 35.3% | 35.2% | 37.4% | 39.7% | - |
| Infosys ($INFY) | 31.6% | 27.9% | 26.3% | 27.1% | 27.1% |
| Tata Consultancy Services ($TCS) | 29.5% | 28.6% | 30.7% | 26.1% | 28.2% |
| Wipro ($WIPRO) | 19.1% | 20.9% | 22.4% | 22.3% | 21.1% |
| Mindtree ($MINDTREE) | 15.1% | 19.8% | 20.6% | 20.3% | 17.7% |
| |
|---|
| Median (25 companies) | 15.1% | 16.5% | 18.3% | 12.3% | 19.4% |
|---|
| Cyient ($CYIENT) | 17.3% | 18.3% | 18.6% | 14.7% | 13.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ramco Systems ($RAMCOSYS) | - | 22.1% | 15.3% | 12.4% | - |
| Niit Technologies ($NIITTECH) | 5.9% | 4.6% | 6.1% | 7.9% | - |
| Financial Technologies (India) ($FINANTECH) | 8.9% | 11.4% | - | 6.5% | 5.4% |
| Mindtree ($MINDTREE) | 2.5% | 4.5% | 5.0% | 5.6% | 3.4% |
| Tech Mahindra ($TECHM) | 5.4% | 2.6% | 5.0% | 5.0% | - |
| |
|---|
| Median (20 companies) | 3.7% | 3.2% | 2.6% | 3.1% | 3.4% |
|---|
| Cyient ($CYIENT) | 5.2% | 3.9% | 3.5% | 3.0% | 4.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Consultancy Services ($TCS) | 48.6% | 48.4% | 50.2% | 40.5% | 44.4% |
| Hexaware Technologies ($HEXAWARE) | 33.5% | 39.2% | 34.7% | 35.7% | - |
| Mindtree ($MINDTREE) | 24.9% | 34.6% | 36.2% | 32.0% | 28.9% |
| Sqs India Bfsi ($SQSBFSI) | 12.1% | 27.0% | 29.4% | 30.6% | - |
| Tech Mahindra ($TECHM) | 15.4% | 20.1% | 43.0% | 29.7% | - |
| |
|---|
| Median (30 companies) | 19.1% | 20.4% | 23.2% | 20.8% | 25.3% |
|---|
| Cyient ($CYIENT) | 19.8% | 22.2% | 22.9% | 18.1% | 15.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 3I Infotech ($3IINFOTECH) | 8.5x | 20.3x | 27.7x | 14.7x | - |
| Ramco Systems ($RAMCOSYS) | 8.8x | - | 27.6x | 4.2x | - |
| Onward Technologies ($ONWARDTEC) | 2.4x | 2.2x | 4.1x | 1.9x | - |
| Kpit Technologies ($KPIT) | 0.3x | 0.5x | 0.7x | 0.4x | - |
| Mphasis ($MPHASIS) | -0.1x | 0.2x | - | 0.2x | - |
| |
|---|
| Median (23 companies) | -0.0x | -0.2x | -0.2x | -0.2x | -0.2x |
|---|
| Cyient ($CYIENT) | -1.6x | -1.4x | -1.6x | -1.1x | -1.2x |
