Looking for growth stocks? Pay attention to Motherson Sumi Systems
29-05-2014 • About Motherson Sumi Systems (
$MOTHERSUMI) • By InTwits
Motherson Sumi Systems is a fast-growing stock in Auto Parts & Equipment industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Motherson Sumi Systems showed fast growth in the last financial year. The company's revenue surged on 20.2% in FY2014. The growth also happened in EBITDA of 47.7% for the same period.
In the last 3 years the company showed fast revenue growth of 54.5% from FY2011 to FY2014 annually. EBITDA surged on 47.5% from FY2011 to FY2014 annually.
Motherson Sumi Systems ($MOTHERSUMI) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 605,147 | 82,491 | 147,766 | 253,124 | 304,279 |
|---|
| Revenue growth, % | | -86.4% | 79.1% | 71.3% | 20.2% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 5,952 | 9,028 | 10,896 | 19,607 | 28,955 |
|---|
| EBITDA growth, % | | 51.7% | 20.7% | 79.9% | 47.7% |
|---|
| EBITDA margin, % | 0.984% | 10.9% | 7.37% | 7.75% | 9.52% |
|---|
| Net Income | 2,428 | 3,908 | 2,596 | 4,445 | 7,650 |
|---|
| Net Income margin, % | 0.401% | 4.74% | 1.76% | 1.76% | 2.51% |
|---|
| |
| CAPEX | 4,129 | 7,874 | 10,758 | 11,389 | 14,120 |
|---|
| CAPEX/Revenue, % | 0.682% | 9.55% | 7.28% | 4.50% | 4.64% |
|---|
| Debt | 8,179 | 12,607 | 46,023 | 49,039 | 48,397 |
|---|
| Cash | 3,431 | 3,532 | 4,557 | 5,944 | 9,061 |
|---|
| Net Debt/EBITDA | 0.8x | 1.0x | 3.8x | 2.2x | 1.4x |
|---|
| |
| ROIC, % | 15.9% | 23.7% | 13.5% | 16.5% | 25.0% |
|---|
| ROE, % | 24.9% | 28.2% | 14.9% | 21.4% | 29.2% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. Motherson Sumi Systems showed fast EBITDA margin growth of 1.80 pp from 7.70% to 9.50% in FY2014. In the last 3 years the company's EBITDA margin dropped on 1.40 pp from 10.9% in FY2011 to 9.50% in FY2014.
We call Motherson Sumi Systems an attractive growth stock as together with the growth it delivers high ROIC at 25.0%. During the last three years it increased - it was 23.7% in FY2011. It's average level of ROIC for the last three years was 18.3%.
The company showed fast Net Income margin growth of 0.700 pp from 1.80% to 2.50% in FY2014. If we look for the longer period Motherson Sumi Systems showed big decline in Net Income margin of 2.20 pp from 4.70% in FY2011 to 2.50% in FY2014.
Motherson Sumi Systems operates at ROE of 29.2%. It's average ROE for the last three years was 21.8%.
Capital expenditures (CAPEX)
In FY2014 Motherson Sumi Systems had CAPEX/Revenue of 4.64%. The company's CAPEX/Revenue dropped on 4.90 pp from 9.55% in FY2011 to 4.64% in FY2014. It's average CAPEX/Revenue for the last three years was 5.47%.
Leverage (Debt)
Having such a fast growth profile the company keeps medium debt level at 1.4x Net Debt/EBITDA. In the longer period the company's leverage surged on 0.35x from 1.01x in FY2011 to 1.36x in FY2014.
Peers in Auto Parts & Equipment
Below you can find Motherson Sumi Systems benchmarking vs. other companies in Auto Parts & Equipment 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 5 |
|---|
| Exide Industries ($EXIDEIND) | | -59.6% | 11.5% | 19.7% | 30.6% |
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | | -48.0% | 27.7% | 4.8% | 15.9% |
| Munjal Auto Industries ($MUNJALAU) | | -50.8% | 30.8% | 5.5% | 13.8% |
| Gabriel India ($GABRIEL) | | -43.2% | 16.0% | 7.2% | 6.6% |
| Wheels India ($WHEELS) | | -29.6% | 10.1% | -7.3% | 5.0% |
| |
|---|
| Median (11 companies) | | -35.9% | 16.0% | -3.9% | 4.9% |
|---|
| Motherson Sumi Systems ($MOTHERSUMI) | | -86.4% | 79.1% | 71.3% | 20.2% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tube Investments Of India ($TUBEINVEST) | 7.2% | 33.7% | 18.4% | 24.4% | 28.3% |
| Shanthi Gears ($SHANTIGEAR) | 27.8% | 44.6% | 37.9% | 30.2% | 27.8% |
| Amtek Auto ($AMTEKAUTO) | | | 25.1% | | 20.7% |
| Exide Industries ($EXIDEIND) | 8.3% | 20.0% | 14.3% | 13.5% | 13.8% |
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | 5.6% | 12.6% | 11.8% | 9.4% | 11.4% |
| |
|---|
| Median (12 companies) | 6.1% | 10.8% | 12.2% | 9.9% | 10.5% |
|---|
| Motherson Sumi Systems ($MOTHERSUMI) | 1.0% | 10.9% | 7.4% | 7.7% | 9.5% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Amtek Auto ($AMTEKAUTO) | | | 18.9% | | 27.1% |
| Munjal Auto Industries ($MUNJALAU) | 3.7% | 8.4% | 2.5% | 2.0% | 6.7% |
| Tube Investments Of India ($TUBEINVEST) | 2.1% | 4.7% | 6.0% | 8.0% | 6.2% |
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | 1.3% | 9.8% | 3.5% | 6.5% | 6.0% |
| Wheels India ($WHEELS) | 2.6% | 2.9% | 3.3% | 6.2% | 4.3% |
| |
|---|
| Median (11 companies) | 2.0% | 6.2% | 4.0% | 4.6% | 3.2% |
|---|
| Motherson Sumi Systems ($MOTHERSUMI) | 0.7% | 9.5% | 7.3% | 4.5% | 4.6% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Exide Industries ($EXIDEIND) | 45.9% | 34.2% | 24.2% | 24.3% | 29.5% |
| Munjal Auto Industries ($MUNJALAU) | 23.6% | 26.3% | 30.6% | 21.5% | 21.1% |
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | | 20.3% | 22.6% | 15.2% | 21.0% |
| Gabriel India ($GABRIEL) | 14.5% | 20.3% | 19.9% | 15.5% | 18.0% |
| Harita Seating Systems ($HARITASEAT) | | 11.9% | 16.6% | 16.2% | 12.7% |
| |
|---|
| Median (16 companies) | 12.3% | 17.9% | 17.5% | 15.2% | 12.5% |
|---|
| Motherson Sumi Systems ($MOTHERSUMI) | 15.9% | 23.7% | 13.5% | 16.5% | 25.0% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Tube Investments Of India ($TUBEINVEST) | 5.8x | 8.1x | 17.6x | 17.8x | 17.3x |
| Automotive Stampings & Assemblies ($ASAL) | 1.8x | 1.8x | 1.1x | 3.9x | 6.3x |
| Ucal Fuel Systems ($UCALFUEL) | 8.4x | 4.1x | 4.3x | 5.6x | 5.7x |
| Amtek Auto ($AMTEKAUTO) | | | 4.8x | | 5.3x |
| Wheels India ($WHEELS) | 4.2x | 2.5x | 2.0x | 2.4x | 2.2x |
| |
|---|
| Median (16 companies) | 2.0x | 1.7x | 1.1x | 1.5x | 0.7x |
|---|
| Motherson Sumi Systems ($MOTHERSUMI) | 0.8x | 1.0x | 3.8x | 2.2x | 1.4x |
