The numbers tell that Cmc is a solid growth stock
22-04-2014 • About Cmc (
$CMC) • By InTwits
Pay attention to Cmc as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Cmc showed fast growth in the last financial year. The company's revenue surged on 15.8% in FY2014. In addition to revenue Cmc also keeps delivering EBITDA growth. It was 26.3% in FY2014
In the longer period the company showed fast revenue growth of 27.2% from FY2011 to FY2014 annually. EBITDA surged on 24.0% from FY2011 to FY2014 annually.
Cmc ($CMC) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 31,149 | 10,844 | 14,693 | 19,261 | 22,309 |
|---|
| Revenue growth, % | | -65.2% | 35.5% | 31.1% | 15.8% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 1,737 | 2,107 | 2,243 | 3,185 | 4,022 |
|---|
| EBITDA growth, % | | 21.3% | 6.5% | 42.0% | 26.3% |
|---|
| EBITDA margin, % | 5.58% | 19.4% | 15.3% | 16.5% | 18.0% |
|---|
| Net Income | 1,432 | 1,794 | 1,518 | 2,302 | 2,804 |
|---|
| Net Income margin, % | 4.60% | 16.5% | 10.3% | 12.0% | 12.6% |
|---|
| |
| CAPEX | 282 | 992 | 1,196 | 847 | 888 |
|---|
| CAPEX/Revenue, % | 0.905% | 9.15% | 8.14% | 4.40% | 3.98% |
|---|
| Debt | 135 | 0 | 0 | 0 | 0 |
|---|
| Cash | 321 | 386 | 534 | 1,328 | 1,221 |
|---|
| Net Debt/EBITDA | -0.1x | -0.2x | -0.2x | -0.4x | -0.3x |
|---|
| |
| ROIC, % | 32.0% | 31.5% | 26.2% | 33.2% | 35.3% |
|---|
| ROE, % | 31.2% | 30.8% | 21.3% | 26.8% | 26.7% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. Cmc showed EBITDA margin growth of 1.50 pp from 16.5% to 18% in FY2014. In the longer period the company showed decline of 1.40 pp from 19.4% in FY2011 to 18% in FY2014.
Cmc shows attractive ROIC at 35.3% for the last 12 months which assumes stable development model. During the last three years it surged - it was 31.5% in FY2011. It's average ROIC for the last three years was 31.6%.
Cmc showed Net Income margin growth of 0.600 pp from 12% to 12.6% in FY2014. In the last 3 years Cmc's Net Income margin dropped on 3.90 pp from 16.5% in FY2011 to 12.6% in FY2014.
Cmc operates at ROE of 26.7%. Average ROE for the last three years was 24.9%.
Capital expenditures (CAPEX)
In FY2014 the company had CAPEX/Revenue of 3.98%. Cmc showed big decline in CAPEX/Revenue of 5.17 pp from 9.15% in FY2011 to 3.98% in FY2014. For the last three years the average CAPEX/Revenue was 5.50%.
Leverage (Debt)
The company has negative net debt at -0.3x Net Debt/EBITDA - at the same time with high growth. In the longer period leverage surged on 0.12x from -0.18x in FY2011 to -0.30x in FY2014.
Management team
Ramanathan Ramanan runs Cmc as a CEO and J K Gupta is a CFO.
Peers in IT Consulting & Software
Below you can find Cmc 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Infosys ($INFY) | | 20.9% | 22.7% | 19.6% | 24.2% |
| |
|---|
| Median (1 company) | | 20.9% | 22.7% | 19.6% | 24.2% |
|---|
| Cmc ($CMC) | | -65.2% | 35.5% | 31.1% | 15.8% |
Top companies by Gross margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Infosys ($INFY) | 42.7% | 45.3% | 41.3% | 98.1% | 35.9% |
| |
|---|
| Median (1 company) | 42.7% | 45.3% | 41.3% | 98.1% | 35.9% |
|---|
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Infosys ($INFY) | 34.4% | 32.5% | 31.6% | 27.9% | 26.3% |
| |
|---|
| Median (1 company) | 34.4% | 32.5% | 31.6% | 27.9% | 26.3% |
|---|
| Cmc ($CMC) | 5.6% | 19.4% | 15.3% | 16.5% | 18.0% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Infosys ($INFY) | 3.7% | 4.7% | 4.9% | 5.2% | 5.5% |
| |
|---|
| Median (1 company) | 3.7% | 4.7% | 4.9% | 5.2% | 5.5% |
|---|
| Cmc ($CMC) | 0.9% | 9.2% | 8.1% | 4.4% | 4.0% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Infosys ($INFY) | 32.2% | 32.1% | 32.4% | 28.3% | 27.2% |
| |
|---|
| Median (1 company) | 32.2% | 32.1% | 32.4% | 28.3% | 27.2% |
|---|
| Cmc ($CMC) | 32.0% | 31.5% | 26.2% | 33.2% | 35.3% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Infosys ($INFY) | -1.5x | -1.9x | -1.9x | -1.9x | -2.0x |
| |
|---|
| Median (1 company) | -1.5x | -1.9x | -1.9x | -1.9x | -2.0x |
|---|
| Cmc ($CMC) | -0.1x | -0.2x | -0.2x | -0.4x | -0.3x |
