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Cigniti Technologies 's revenue growth was 74.3% and EBITDA growth 227% annually over the last three years

06-06-2016 • About Cigniti Technologies ($CIGNITI2) • By InTwits

Have you thought about Cigniti Technologies as a growth stock? Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


Cigniti Technologies showed growth in the last financial year. The company's revenue surged on 111% in FY2016. The growth also happened in EBITDA of 704% for the same period.

In the longer period Cigniti Technologies showed fast revenue growth of 74.3% from FY2013 to FY2016 annually. EBITDA surged on 227% from FY2013 to FY2016 annually.

Cigniti Technologies ($CIGNITI2) financials for the last 5 years

mln. INR FY2012 FY2013 FY2014 FY2015 FY2016
Revenue3381,5092,5913,7897,993
Revenue growth, %347.0%71.7%46.2%111.0%
SG&A, %
EBITDA30883563813,060
EBITDA growth, %191.0%305.7%7.0%704.2%
EBITDA margin, %8.93%5.81%13.7%10.0%38.3%
Net Income1250255254497
Net Income margin, % 3.50%3.32%9.86%6.69%6.21%
 
CAPEX0109392539909
CAPEX/Revenue, %0%7.25%15.1%14.2%11.4%
Debt131196256431966
Cash14205110742
Net Debt/EBITDA3.9x2.0x0.6x0.9x0.3x
 
ROIC, %11.1%29.7%14.0%72.3%
ROE, %10.7%30.4%13.3%15.8%

Profitability and return on investment


Margin expansion supported EBITDA growth. Cigniti Technologies showed fast EBITDA margin growth of 28.3 pp from 10% to 38.3% in FY2016. In the last 3 years the company showed fast EBITDA margin growth of 32.5 pp from 5.80% in FY2013 to 38.3% in FY2016.

We call Cigniti Technologies an attractive growth stock as together with the growth it delivers high ROIC at 72.3%. Three years ago it was considerably lower at 11.1%. It's average level of ROIC for the last three years was 38.7%.

The company showed decline of 0.500 pp from 6.70% to 6.20% in FY2016. In the last 3 years Cigniti Technologies 's Net Income margin surged on 2.90 pp from 3.30% in FY2013 to 6.20% in FY2016.

Cigniti Technologies operates at ROE of 15.8%. For the last three years the average ROE was 19.8%.

Capital expenditures (CAPEX)


To this fast growth the company had to invest in CAPEX.The company's CAPEX/Revenue was 11.4% in FY2016. CAPEX/Revenue surged on 4.11 pp from 7.25% in FY2013 to 11.4% in FY2016. It's average level of CAPEX/Revenue for the last three years was 13.6%.

Leverage (Debt)


The company has low debt level at 0.3x Net Debt/EBITDA - at the same time with high growth. In the longer period leverage dropped on 1.71x from 2.01x in FY2013 to 0.30x in FY2016.

Valuation vs. comparable companies


At the end of trading day today Cigniti Technologies traded at 3.9x EV/EBITDA which is 84.1% lower than 24.5x Internet Software & Services peer group avearge calculated on the basis of 17 companies. At the end of trading day today Cigniti Technologies traded at 22.1x P/E which is 82.8% higher than 12.1x Internet Software & Services peer group avearge calculated on the basis of 3 companies.

For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 5.5x EV/(EBITDA-CAPEX) which is 26.4% lower than 7.5x Internet Software & Services industry avearge calculated based on 3 companies.

Peers in Internet Software & Services


Below you can find Cigniti Technologies benchmarking vs. other companies in Internet Software & Services 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, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top
Intrasoft Technologies ($ISFT)33.1%68.2%131.1%109.1%
 
Median (1 company)33.1%68.2%131.1%109.1%
Cigniti Technologies ($CIGNITI2)347.0%71.7%46.2%111.0%


Top companies by EBITDA margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
United Interactive ($UNITEDINT)20.8%
Scanpoint Geomatics ($SCANPGEOM)4.2%
Intrasoft Technologies ($ISFT)22.0%8.4%-1.3%1.7%1.3%
Aashee Infotech ($AASHEE)0.0%
Net 4 India ($NET4)-99.7%
 
Median (5 companies)22.0%8.4%-1.3%1.7%1.3%
Cigniti Technologies ($CIGNITI2)8.9%5.8%13.7%10.0%38.3%


Top companies by CAPEX/Revenue, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top
Intrasoft Technologies ($ISFT)56.3%23.9%0.3%0.5%
 
Median (1 company)56.3%23.9%0.3%0.5%
Cigniti Technologies ($CIGNITI2)7.3%15.1%14.2%11.4%


Top companies by ROIC, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Scanpoint Geomatics ($SCANPGEOM)12.8%
Aashee Infotech ($AASHEE)0.7%
Net 4 India ($NET4)24.3%16.4%
Intrasoft Technologies ($ISFT)9.4%0.3%6.4%
United Interactive ($UNITEDINT)3.5%
 
Median (5 companies)9.4%8.4%6.4%
Cigniti Technologies ($CIGNITI2)11.1%29.7%14.0%72.3%


Top companies by Net Debt / EBITDA

 FY2012 FY2013 FY2014 FY2015 FY2016
Top
Scanpoint Geomatics ($SCANPGEOM)0.4x0.0x
Aashee Infotech ($AASHEE)-122.3x0.0x0.0x0.0x0.0x
United Interactive ($UNITEDINT)-0.2x0.0x
Intrasoft Technologies ($ISFT)1.4x3.3x-1.4x2.1x
 
Median (4 companies)0.4x1.8x0.0x0.0x1.1x
Cigniti Technologies ($CIGNITI2)3.9x2.0x0.6x0.9x0.3x