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Mbl Infrastructures is an attractive growth stock: revenue grew 20.8% and EBITDA 11.1% annually over the last three years

02-06-2014 • About Mbl Infrastructures ($MBLINFRA) • By InTwits

Mbl Infrastructures is a fast-growing stock in Construction & Engineering industry. Its revenue performance, profitability and financial model stands it out vs. other public companies on the market.

Growth story


Mbl Infrastructures showed growth in the last financial year. The company's revenue surged on 30.3% in FY2014. The growth also happened in EBITDA of 30.9% for the same period.

In the last 3 years the company showed fast revenue growth of 20.8% from FY2011 to FY2014 annually. EBITDA surged on 11.1% from FY2011 to FY2014 annually.

Mbl Infrastructures ($MBLINFRA) financials for the last 5 years

mln. INR FY2010 FY2011 FY2012 FY2013 FY2014
Revenue23,95010,01612,65313,55417,663
Revenue growth, %-58.2%26.3%7.1%30.3%
SG&A, %
EBITDA9141,3711,6791,4381,882
EBITDA growth, %50.1%22.4%-14.4%30.9%
EBITDA margin, %3.82%13.7%13.3%10.6%10.7%
Net Income370617725566770
Net Income margin, % 1.54%6.16%5.73%4.18%4.36%
 
CAPEX3213068821,7252,065
CAPEX/Revenue, %1.34%3.05%6.97%12.7%11.7%
Debt2,1392,8184,6726,7678,311
Cash7761121629682
Net Debt/EBITDA2.3x2.0x2.7x4.3x4.1x
 
ROIC, %21.4%24.3%21.3%13.4%14.0%
ROE, %23.0%24.5%23.1%15.2%17.8%

Profitability and return on investment


EBITDA growth was supported by margin expansion. Mbl Infrastructures showed small growth in EBITDA margin of 0.100 pp from 10.6% to 10.7% in FY2014. In the last 3 years Mbl Infrastructures showed big decline in EBITDA margin of 3 pp from 13.7% in FY2011 to 10.7% in FY2014.

We call Mbl Infrastructures an attractive growth stock as together with the growth it delivers high ROIC at 14.0%. During the last three years it dropped - it was 24.3% in FY2011. For the last three years the average ROIC was 16.2%.

Net Income margin increased slightly on 0.200 pp from 4.20% to 4.40% in FY2014. In the longer period Net Income margin dropped on 1.80 pp from 6.20% in FY2011 to 4.40% in FY2014.

Mbl Infrastructures operates at ROE of 17.8%. Average ROE for the last three years was 18.7%.

Capital expenditures (CAPEX)


To this fast growth the company had to invest in CAPEX.Mbl Infrastructures's CAPEX/Revenue was 11.7% in FY2014. CAPEX/Revenue surged on 8.63 pp from 3.05% in FY2011 to 11.7% in FY2014. It's average level of CAPEX/Revenue for the last three years was 10.5%.

Leverage (Debt)


Mbl Infrastructures has high debt level at 4.1x Net Debt/EBITDA to maintain high growth. This could become a risk fastor if the growth slows down but the company doesn't decrease debt level by that time. In the longer period the company's leverage surged on 2.04x from 2.01x in FY2011 to 4.05x in FY2014.

Valuation vs. comparable companies


The company trades at 6.6x EV/EBITDA which is 58.9% lower than 16.0x Construction & Engineering industry avearge calculated based on 114 companies. The market closed today at 6.2x P/E for Mbl Infrastructures which is 77.3% lower than 27.1x Construction & Engineering peer group avearge calculated on the basis of 10 companies.

Peers in Construction & Engineering


Below we provide Mbl Infrastructures benchmarking against other companies in Construction & Engineering industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.

Top companies by Revenue growth, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Arss Infrastructure Projects ($ARSSINFRA)59.0%-5.3%-34.8%17.8%
Hindustan Construction Co ($HCC)80.0%14.0%4.3%13.6%
Electrosteel Castings ($ELECTCAST)18.3%12.4%5.3%11.1%
Ncc ($NCC)-46.6%7.0%4.5%7.1%
Punj Lloyd ($PUNJLLOYD)-6.5%30.6%9.1%-3.8%
 
Median (7 companies)5.9%13.2%4.9%7.1%
Mbl Infrastructures ($MBLINFRA)-58.2%26.3%7.1%30.3%


Top companies by EBITDA margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Arss Infrastructure Projects ($ARSSINFRA)23.9%21.8%14.0%13.9%22.0%
Electrosteel Castings ($ELECTCAST)21.2%14.4%9.9%8.9%14.4%
Ncc ($NCC)5.7%11.7%15.0%12.2%10.2%
Hindustan Construction Co ($HCC)14.2%8.7%5.3%5.3%8.8%
Welspun Projects ($WELPROJ)3.9%2.2%16.4%34.0%6.2%
 
Median (7 companies)5.7%9.5%9.3%8.4%8.8%
Mbl Infrastructures ($MBLINFRA)3.8%13.7%13.3%10.6%10.7%


Top companies by CAPEX/Revenue, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Hindustan Construction Co ($HCC)32.9%21.9%12.7%12.4%13.3%
Electrosteel Castings ($ELECTCAST)11.3%6.6%11.9%13.7%6.6%
Coromandel Engineering Company ($COROENGG)0.6%4.9%4.6%3.9%3.9%
Punj Lloyd ($PUNJLLOYD)3.7%4.5%8.8%6.6%3.6%
Ncc ($NCC)7.3%19.9%11.2%1.6%2.1%
 
Median (6 companies)7.8%6.1%9.5%6.6%3.7%
Mbl Infrastructures ($MBLINFRA)1.3%3.1%7.0%12.7%11.7%


Top companies by ROIC, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Reliance Industrial Infrastructure ($RIIL)9.0%5.1%10.8%12.7%10.5%
Ncc ($NCC)11.0%9.2%9.5%8.4%7.7%
Electrosteel Castings ($ELECTCAST)10.1%6.7%4.3%3.4%6.3%
Hindustan Construction Co ($HCC)7.0%5.2%1.9%1.3%4.8%
Punj Lloyd ($PUNJLLOYD)2.5%3.2%4.8%5.5%-0.0%
 
Median (11 companies)9.6%6.0%4.6%4.3%4.8%
Mbl Infrastructures ($MBLINFRA)21.4%24.3%21.3%13.4%14.0%


Top companies by Net Debt / EBITDA

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Coromandel Engineering Company ($COROENGG)9.7x7.1x14.4x54.6x
Welspun Projects ($WELPROJ)10.4x71.3x6.0x2.6x20.8x
Punj Lloyd ($PUNJLLOYD)9.4x6.5x6.7x6.8x16.5x
Hindustan Construction Co ($HCC)9.1x10.0x18.8x20.3x12.3x
Electrosteel Castings ($ELECTCAST)3.8x5.7x9.0x11.6x6.9x
 
Median (10 companies)6.7x5.7x6.0x7.2x6.0x
Mbl Infrastructures ($MBLINFRA)2.3x2.0x2.7x4.3x4.1x


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