Va Tech Wabag demonstrated healthy growth over the last few years
02-06-2014 • About Va Tech Wabag (
$WABAG) • By InTwits
Pay attention to Va Tech Wabag as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Va Tech Wabag showed growth in the last financial year. Va Tech Wabag's revenue surged on 38.3% in FY2014. The growth also happened in EBITDA of 35.3% for the same period.
In the last 3 years the company showed fast revenue growth of 21.7% from FY2011 to FY2014 annually. EBITDA surged on 20.1% from FY2011 to FY2014 annually.
Va Tech Wabag ($WABAG) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 30,497 | 12,418 | 14,435 | 16,189 | 22,386 |
|---|
| Revenue growth, % | | -59.3% | 16.2% | 12.1% | 38.3% |
|---|
| Gross margin, % | 30.2% | 25.5% | | | 24.6% |
|---|
| SG&A, % | 7.33% | | | | |
|---|
| EBITDA | 1,171 | 1,210 | 1,318 | 1,549 | 2,096 |
|---|
| EBITDA growth, % | | 3.3% | 8.9% | 17.5% | 35.3% |
|---|
| EBITDA margin, % | 3.84% | 9.75% | 9.13% | 9.57% | 9.36% |
|---|
| Net Income | 448 | 526 | 738 | 903 | 1,134 |
|---|
| Net Income margin, % | 1.47% | 4.23% | 5.11% | 5.58% | 5.06% |
|---|
| |
| CAPEX | 160 | 196 | 226 | 419 | 1,033 |
|---|
| CAPEX/Revenue, % | 0.524% | 1.58% | 1.56% | 2.59% | 4.61% |
|---|
| Debt | 391 | 427 | 1,248 | 822 | 1,583 |
|---|
| Cash | 2,185 | 2,975 | 3,381 | 2,866 | 2,668 |
|---|
| Net Debt/EBITDA | -1.5x | -2.1x | -1.6x | -1.3x | -0.5x |
|---|
| |
| ROIC, % | 24.0% | 21.2% | 17.9% | 18.2% | 21.1% |
|---|
| ROE, % | 11.6% | 10.8% | 12.2% | 13.3% | 14.6% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 9.60% in FY2013 to 9.40% in FY2014. If we look for the longer period EBITDA margin decreased slightly on 0.300 pp from 9.70% in FY2011 to 9.40% in FY2014.
Va Tech Wabag shows attractive ROIC at 21.1% for the last 12 months which assumes stable development model. Three years ago it was about the same at 21.2%. Average ROIC for the last three years was 19.1%.
Va Tech Wabag showed decline of 0.500 pp from 5.60% to 5.10% in FY2014. In the longer period the company's Net Income margin surged on 0.900 pp from 4.20% in FY2011 to 5.10% in FY2014.
Va Tech Wabag operates at ROE of 14.6%. It's average level of ROE for the last three years was 13.3%.
Capital expenditures (CAPEX)
In FY2014 the company had CAPEX/Revenue of 4.61%. CAPEX/Revenue surged on 3.03 pp from 1.58% in FY2011 to 4.61% in FY2014. It's average level of CAPEX/Revenue for the last three years was 2.92%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -0.5x Net Debt/EBITDA. If we look for the longer period leverage surged on 1.59x from -2.11x in FY2011 to -0.52x in FY2014.
Valuation vs. comparable companies
At the end of trading day today Va Tech Wabag traded at 14.6x EV/EBITDA which is 8.57% lower than 16.0x Utilities:Non-Elec. peer group avearge calculated on the basis of 6 companies. The company trades at 28.0x P/E which is the same as 28.0x Utilities:Non-Elec. industry avearge calculated based on 1 company.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The market closed today at 28.8x EV/(EBITDA-CAPEX) for Va Tech Wabag which is higher vs. -1.0x Utilities:Non-Elec. peer group avearge calculated on the basis of 1 company.
Management team
Va Tech Wabag is headed by Rajiv Devaraj Mittal as a CEO.
Peers in Utilities:Non-Elec.
Below we provide Va Tech Wabag benchmarking against other companies in Utilities:Non-Elec. 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 |
|---|
| Gail (India) ($GAIL) | | 36.7% | 25.5% | 15.5% | 21.1% |
| |
|---|
| Median (1 company) | | 36.7% | 25.5% | 15.5% | 21.1% |
|---|
| Va Tech Wabag ($WABAG) | | -59.3% | 16.2% | 12.1% | 38.3% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Gail (India) ($GAIL) | 21.3% | 18.5% | 16.0% | 14.7% | 13.0% |
| |
|---|
| Median (1 company) | 21.3% | 18.5% | 16.0% | 14.7% | 13.0% |
|---|
| Va Tech Wabag ($WABAG) | 3.8% | 9.7% | 9.1% | 9.6% | 9.4% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Gail (India) ($GAIL) | 23.2% | 20.6% | 22.4% | 17.7% | 8.5% |
| |
|---|
| Median (1 company) | 23.2% | 20.6% | 22.4% | 17.7% | 8.5% |
|---|
| Va Tech Wabag ($WABAG) | 0.5% | 1.6% | 1.6% | 2.6% | 4.6% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Gail (India) ($GAIL) | 17.3% | 18.2% | 16.5% | 13.8% | 12.1% |
| |
|---|
| Median (1 company) | 17.3% | 18.2% | 16.5% | 13.8% | 12.1% |
|---|
| Va Tech Wabag ($WABAG) | 24.0% | 21.2% | 17.9% | 18.2% | 21.1% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Gail (India) ($GAIL) | 0.2x | 0.7x | 1.4x | 1.8x | 1.9x |
| |
|---|
| Median (1 company) | 0.2x | 0.7x | 1.4x | 1.8x | 1.9x |
|---|
| Va Tech Wabag ($WABAG) | -1.5x | -2.1x | -1.6x | -1.3x | -0.5x |
