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Vesuvius India is an attractive growth stock

06-03-2017 • About Vesuvius India ($VESUVIUS) • By InTwits

Vesuvius India is a growth stock in Other Industrial Goods industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story


Vesuvius India showed fast growth in the last financial year. Vesuvius India's revenue surged on 17.3% in FY2016. The growth also happened in EBITDA of 17.9% for the same period.

In the last 3 years Vesuvius India showed fast revenue growth of 10.9% from FY2013 to FY2016 annually. EBITDA surged on 9.48% from FY2013 to FY2016 annually.

Vesuvius India ($VESUVIUS) financials for the last 5 years

mln. INR FY2012 FY2013 FY2014 FY2015 FY2016
Revenue5,6236,0126,5176,9858,192
Revenue growth, %6.9%8.4%7.2%17.3%
SG&A, %
EBITDA9941,1271,0151,2551,479
EBITDA growth, %13.4%-10.0%23.6%17.9%
EBITDA margin, %17.7%18.8%15.6%18.0%18.1%
Net Income558652592736871
Net Income margin, % 9.92%10.8%9.08%10.5%10.6%
 
CAPEX2382422211850
CAPEX/Revenue, %4.22%4.02%3.39%2.65%0%
Debt00000
Cash154599471,7301,989
Net Debt/EBITDA-0.2x-0.1x-0.9x-1.4x-1.3x
 
ROIC, %25.0%25.0%19.3%21.6%22.6%
ROE, %17.4%17.6%14.1%15.7%16.4%

Profitability and return on investment


Margin expansion supported EBITDA growth. EBITDA margin increased slightly on 0.100 pp from 18% to 18.1% in FY2016. In the last 3 years EBITDA margin decreased slightly on 0.700 pp from 18.8% in FY2013 to 18.1% in FY2016.

We call Vesuvius India an attractive growth stock as together with the growth it delivers high ROIC at 22.6%. Three years ago it was a bit higher at 25.0%. It's average ROIC for the last three years was 21.2%.

Vesuvius India's Net Income margin increased slightly on 0.100 pp from 10.5% to 10.6% in FY2016. If we look for the longer period Vesuvius India showed small Net Income margin decline of 0.200 pp from 10.8% in FY2013 to 10.6% in FY2016.

Vesuvius India operates at ROE of 16.4%. Average ROE for the last three years was 15.4%.

Capital expenditures (CAPEX)


In FY2016 Vesuvius India had CAPEX/Revenue of 0%. Vesuvius India's CAPEX/Revenue dropped on 4.02 pp from 4.02% in FY2013 to 0% in FY2016.

Leverage (Debt)


Having such a fast growth profile the company keeps negative net debt at -1.3x Net Debt/EBITDA. If we look for the longer period leverage surged on 1.29x from -0.05x in FY2013 to -1.34x in FY2016.

Valuation vs. comparable companies


The company trades at 14.7x EV/EBITDA which is 40% lower than 24.5x Other Industrial Goods industry avearge calculated based on 42 companies. The market closed today at 27.3x P/E for Vesuvius India which is 54.2% higher than 17.7x Other Industrial Goods peer group avearge calculated on the basis of 6 companies.

Peers in Other Industrial Goods


Below you can find Vesuvius India benchmarking vs. other companies in Other Industrial Goods 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 5
Hariyana Ship Breakers ($HRYNSHP)75.6%-54.7%-49.6%54.7%
Gee ($GEE)7.6%-10.2%7.6%5.2%
Orient Refractories ($ORIENTREF)20.0%11.9%11.9%1.7%
Amd Industries ($AMDIND)-15.5%21.0%-9.9%-0.3%
Ifgl Refractories ($IFGLREFRAC)11.2%15.9%1.2%-8.9%
 
Median (7 companies)12.4%3.4%-12.4%-0.3%
Vesuvius India ($VESUVIUS)6.9%8.4%7.2%17.3%


Top companies by EBITDA margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Snl Bearings ($SNL)29.0%
Orient Refractories ($ORIENTREF)16.7%18.7%19.7%17.9%18.6%
Heg ($HEG)17.0%18.1%16.9%16.3%15.2%
Amd Industries ($AMDIND)15.3%12.3%16.4%15.3%15.1%
Ifgl Refractories ($IFGLREFRAC)13.2%8.5%15.1%11.3%11.3%
 
Median (9 companies)14.3%10.4%15.1%11.3%13.2%
Vesuvius India ($VESUVIUS)17.7%18.8%15.6%18.0%18.1%


Top companies by CAPEX/Revenue, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Heg ($HEG)14.4%9.3%18.7%2.6%3.9%
Orient Refractories ($ORIENTREF)2.1%1.8%1.7%2.5%2.0%
Ifgl Refractories ($IFGLREFRAC)0.8%2.9%1.3%2.5%2.4%
Insilco ($INSILCO)1.6%
Graphite India ($GRPHIDM)7.1%2.7%1.2%1.6%3.6%
 
Median (5 companies)2.8%2.7%1.7%2.5%3.0%
Vesuvius India ($VESUVIUS)4.2%4.0%3.4%2.7%


Top companies by ROIC, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Orient Refractories ($ORIENTREF)62.1%59.3%46.3%40.9%
Ifgl Refractories ($IFGLREFRAC)20.0%11.7%23.5%15.7%13.5%
Graphite India ($GRPHIDM)12.6%8.6%8.0%4.2%4.3%
Heg ($HEG)9.0%10.4%8.3%5.5%2.5%
De Nora India ($DENORA)61.7%19.1%
 
Median (13 companies)15.3%12.3%21.9%10.6%8.9%
Vesuvius India ($VESUVIUS)25.0%25.0%19.3%21.6%22.6%


Top companies by Net Debt / EBITDA

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Heg ($HEG)5.2x4.1x3.3x4.1x5.0x
Graphite India ($GRPHIDM)2.0x2.7x1.7x2.4x2.0x
Ifgl Refractories ($IFGLREFRAC)1.2x2.1x0.7x0.9x0.2x
Gee ($GEE)3.2x2.8x0.0x0.0x0.0x
Snl Bearings ($SNL)0.2x0.6x1.1x0.0x0.0x
 
Median (8 companies)1.3x2.1x0.7x0.0x0.0x
Vesuvius India ($VESUVIUS)-0.2x-0.1x-0.9x-1.4x-1.3x