Is Ashapura Minechem a solid growth stock? - The numbers tells it is
05-06-2014 • About Ashapura Minechem (
$ASHAPURMIN) • By InTwits
Ashapura Minechem is a growth stock in Mining industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Ashapura Minechem showed growth in the last financial year. Ashapura Minechem's revenue surged on 40.3% in FY2014. At the same time Ashapura Minechem well managed its profitability and also showed EBITDA growth of 36.2% for the same period.
In the last 3 years the company showed fast revenue growth of 19.4% from FY2011 to FY2014 annually. EBITDA dropped on 5.75% from FY2011 to FY2014 annually.
Ashapura Minechem ($ASHAPURMIN) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 21,357 | 6,356 | 6,526 | 7,719 | 10,832 |
|---|
| Revenue growth, % | | -70.2% | 2.7% | 18.3% | 40.3% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 823 | 2,148 | 766 | 1,321 | 1,798 |
|---|
| EBITDA growth, % | | 161.0% | -64.3% | 72.4% | 36.2% |
|---|
| EBITDA margin, % | 3.85% | 33.8% | 11.7% | 17.1% | 16.6% |
|---|
| Net Income | 307 | -6,021 | -336 | 441 | 1,742 |
|---|
| Net Income margin, % | 1.44% | -94.7% | -5.16% | 5.72% | 16.1% |
|---|
| |
| CAPEX | 193 | 196 | 420 | 409 | 399 |
|---|
| CAPEX/Revenue, % | 0.902% | 3.09% | 6.44% | 5.30% | 3.68% |
|---|
| Debt | 4,756 | 4,422 | 4,477 | 4,125 | 2,850 |
|---|
| Cash | 307 | 233 | 131 | 279 | 318 |
|---|
| Net Debt/EBITDA | 5.4x | 2.0x | 5.7x | 2.9x | 1.4x |
|---|
| |
| ROIC, % | 7.9% | 45.1% | 39.1% | 87.6% | 90.5% |
|---|
| ROE, % | 10.8% | | | | |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 17.1% in FY2013 to 16.6% in FY2014. In the last 3 years Ashapura Minechem showed big decline in EBITDA margin of 17.2 pp from 33.8% in FY2011 to 16.6% in FY2014.
We call Ashapura Minechem an attractive growth stock as together with the growth it delivers high ROIC at 90.5%. Three years ago it was considerably lower at 45.1%. Average ROIC for the last three years was 72.4%.
Ashapura Minechem's Net Income margin surged on 10.4 pp from 5.70% to 16.1% in FY2014. If we look for the longer period Net Income margin surged on 111 pp from -94.7% in FY2011 to 16.1% in FY2014.
Ashapura Minechem operates at ROE of .
Capital expenditures (CAPEX)
Ashapura Minechem's CAPEX/Revenue was 3.68% in FY2014. CAPEX/Revenue surged on 0.593 pp from 3.09% in FY2011 to 3.68% in FY2014. It's average level of CAPEX/Revenue for the last three years was 5.14%.
Leverage (Debt)
Having such a fast growth profile the company keeps medium debt level at 1.4x Net Debt/EBITDA. In the last 3 years the company's leverage dropped on 0.54x from 1.95x in FY2011 to 1.41x in FY2014.
Valuation vs. comparable companies
The company trades at 5.1x EV/EBITDA which is 70.2% lower than 17.2x Mining industry avearge calculated based on 234 companies. At the end of trading day today Ashapura Minechem traded at 3.9x P/E which is 93.2% lower than 57.0x Mining peer group avearge calculated on the basis of 5 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. At the end of trading day today Ashapura Minechem traded at 6.6x EV/(EBITDA-CAPEX) which is 46.1% lower than 12.2x Mining peer group avearge calculated on the basis of 4 companies.
Peers in Mining
Below you can find Ashapura Minechem benchmarking vs. other companies in Mining 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 |
|---|
| Moil ($MOIL) | | 20.9% | -21.1% | 7.5% | 5.6% |
| 20 Microns ($20MICRONS) | | -40.1% | 18.4% | 3.6% | 5.0% |
| |
|---|
| Median (2 companies) | | -9.6% | -1.4% | 5.6% | 5.3% |
|---|
| Ashapura Minechem ($ASHAPURMIN) | | -70.2% | 2.7% | 18.3% | 40.3% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Moil ($MOIL) | 77.6% | 67.5% | 48.3% | 45.2% | 54.6% |
| 20 Microns ($20MICRONS) | 4.9% | 10.6% | 12.7% | 12.4% | 9.2% |
| |
|---|
| Median (2 companies) | 4.9% | 39.1% | 30.5% | 28.8% | 31.9% |
|---|
| Ashapura Minechem ($ASHAPURMIN) | 3.9% | 33.8% | 11.7% | 17.1% | 16.6% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Moil ($MOIL) | 2.4% | 4.3% | 4.6% | 4.9% | 7.5% |
| |
|---|
| Median (1 company) | 3.4% | 5.8% | 9.9% | 4.9% | 7.5% |
|---|
| Ashapura Minechem ($ASHAPURMIN) | 0.9% | 3.1% | 6.4% | 5.3% | 3.7% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Moil ($MOIL) | 46.6% | 38.6% | 17.7% | 15.6% | 17.8% |
| Southern Magnesium & Chemicals ($SOUTHMG) | | | | | |
| 20 Microns ($20MICRONS) | 13.1% | 13.7% | 15.8% | 13.4% | |
| |
|---|
| Median (3 companies) | 29.8% | 26.1% | 16.8% | 14.5% | 17.8% |
|---|
| Ashapura Minechem ($ASHAPURMIN) | 7.9% | 45.1% | 39.1% | 87.6% | 90.5% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Southern Magnesium & Chemicals ($SOUTHMG) | | | 15.3x | 3.9x | |
| 20 Microns ($20MICRONS) | 4.0x | 4.0x | 3.9x | 3.6x | 0.0x |
| Moil ($MOIL) | -0.0x | -0.0x | -0.0x | -0.1x | -5.0x |
| |
|---|
| Median (3 companies) | 2.0x | 2.0x | 3.9x | 3.6x | -2.5x |
|---|
| Ashapura Minechem ($ASHAPURMIN) | 5.4x | 2.0x | 5.7x | 2.9x | 1.4x |
