Skipper's growth is outstanding: revenue grew 27.5% and EBITDA 30.1% annually over the last three years
25-07-2014 • About Skipper (
$SKIPPER) • By InTwits
Skipper is a fast-growing stock in Construction & Engineering industry. Its revenue performance, profitability and financial model stands it out vs. other public companies on the market.
Growth story
Skipper showed fast growth in the last financial year. Skipper's revenue surged on 15.7% in FY2014. EBITDA also increased considerably: 28.7% for the same period.
In the longer period the company showed fast revenue growth of 27.5% from FY2011 to FY2014 annually. EBITDA surged on 30.1% from FY2011 to FY2014 annually.
Skipper ($SKIPPER) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 15,470 | 5,025 | 7,412 | 9,003 | 10,415 |
|---|
| Revenue growth, % | | -67.5% | 47.5% | 21.5% | 15.7% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 363 | 506 | 631 | 867 | 1,115 |
|---|
| EBITDA growth, % | | 39.5% | 24.6% | 37.5% | 28.7% |
|---|
| EBITDA margin, % | 2.35% | 10.1% | 8.51% | 9.63% | 10.7% |
|---|
| Net Income | 136 | 176 | 99 | 187 | 269 |
|---|
| Net Income margin, % | 0.877% | 3.51% | 1.33% | 2.08% | 2.58% |
|---|
| |
| CAPEX | 1,016 | 681 | 564 | 591 | 327 |
|---|
| CAPEX/Revenue, % | 6.57% | 13.6% | 7.61% | 6.57% | 3.14% |
|---|
| Debt | 1,992 | 3,505 | 2,994 | 3,976 | 4,395 |
|---|
| Cash | 9 | 7 | 86 | 128 | 263 |
|---|
| Net Debt/EBITDA | 5.5x | 6.9x | 4.6x | 4.4x | 3.7x |
|---|
| |
| ROIC, % | 12.9% | 10.6% | 10.4% | 13.5% | 14.7% |
|---|
| ROE, % | 13.9% | 14.8% | 5.8% | 11.0% | 12.3% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. EBITDA margin surged on 1.10 pp from 9.60% to 10.7% in FY2014. If we look for the longer period Skipper's EBITDA margin increased on 0.600 pp from 10.1% in FY2011 to 10.7% in FY2014.
We call Skipper an attractive growth stock as together with the growth it delivers high ROIC at 14.7%. Three years ago it was a bit lower at 10.6%. It's average ROIC for the last three years was 12.9%.
Skipper showed fast Net Income margin growth of 0.500 pp from 2.10% to 2.60% in FY2014. If we look for the longer period Skipper's Net Income margin dropped on 0.900 pp from 3.50% in FY2011 to 2.60% in FY2014.
Skipper operates at ROE of 12.3%. For the last three years the average ROE was 9.69%.
Capital expenditures (CAPEX)
The company's CAPEX/Revenue was 3.14% in FY2014. The company's CAPEX/Revenue dropped on 10.4 pp from 13.6% in FY2011 to 3.14% in FY2014. For the last three years the average CAPEX/Revenue was 5.77%.
Leverage (Debt)
Having such a fast growth profile Skipper keeps medium debt level at 3.7x Net Debt/EBITDA. If we look for the longer period leverage dropped on 3.21x from 6.91x in FY2011 to 3.70x in FY2014.
Valuation vs. comparable companies
The market closed today at 7.3x EV/EBITDA for Skipper which is 54.1% lower than 16.0x Construction & Engineering peer group avearge calculated on the basis of 114 companies. The company trades at 15.1x P/E which is 44.3% lower than 27.1x Construction & Engineering industry avearge calculated based on 10 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 10.4x EV/(EBITDA-CAPEX) which is 6.09% lower than 11.1x Construction & Engineering industry avearge calculated based on 7 companies.
Peers in Construction & Engineering
Below you can find Skipper benchmarking vs. other companies in Construction & Engineering 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 |
|---|
| Madhucon Projects ($MADHUCON) | | -72.3% | -19.5% | 61.7% | 81.2% |
| Mbl Infrastructures ($MBLINFRA) | | -58.2% | 26.3% | 7.1% | 30.3% |
| Atlanta ($ATLANTA) | | -61.5% | -47.6% | 115.1% | 28.1% |
| Arss Infrastructure Projects ($ARSSINFRA) | | 59.0% | -5.3% | -34.8% | 17.8% |
| Simplex Projects ($SIMPLEX) | | 28.6% | -38.5% | -0.6% | 16.0% |
| |
|---|
| Median (28 companies) | | -9.9% | 12.4% | 6.7% | 4.7% |
|---|
| Skipper ($SKIPPER) | | -67.5% | 47.5% | 21.5% | 15.7% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Jaiprakash Associates ($JPASSOCIAT) | 9.2% | 44.0% | 36.9% | 35.9% | 32.4% |
| Atlanta ($ATLANTA) | 14.5% | 44.1% | 28.5% | 34.6% | 30.8% |
| Shristi Infrastructure Development Corporation ($SHRISTI) | 11.3% | 28.0% | 27.2% | 30.0% | 30.0% |
| Madhucon Projects ($MADHUCON) | 6.9% | 11.6% | 8.4% | 31.9% | 22.1% |
| Arss Infrastructure Projects ($ARSSINFRA) | 23.9% | 21.8% | 14.0% | 13.9% | 22.0% |
| |
|---|
| Median (26 companies) | 7.8% | 12.5% | 12.8% | 11.4% | 10.4% |
|---|
| Skipper ($SKIPPER) | 2.3% | 10.1% | 8.5% | 9.6% | 10.7% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Madhucon Projects ($MADHUCON) | 43.1% | 149.8% | 234.5% | 155.1% | 76.0% |
| Jaiprakash Associates ($JPASSOCIAT) | 38.6% | 114.7% | 97.0% | 65.5% | 45.0% |
| Supreme Infrastructure India ($SUPREMEINF) | 3.1% | 16.7% | 46.6% | 31.1% | 43.1% |
| Man Infraconstruction ($MANINFRA) | 8.4% | 11.5% | 7.8% | 1.6% | 25.0% |
| Jmc Projects (India) ($JMCPROJECT) | 1.0% | 7.8% | 4.5% | 1.7% | 18.9% |
| |
|---|
| Median (21 companies) | 2.4% | 5.7% | 7.0% | 8.6% | 6.6% |
|---|
| Skipper ($SKIPPER) | 6.6% | 13.6% | 7.6% | 6.6% | 3.1% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Mbl Infrastructures ($MBLINFRA) | 21.4% | 24.3% | 21.3% | 13.4% | 14.0% |
| Voltas ($VOLTAS) | 37.1% | 32.9% | 19.6% | 11.7% | 11.8% |
| Supreme Infrastructure India ($SUPREMEINF) | | 15.0% | 15.4% | 12.4% | 10.6% |
| Reliance Industrial Infrastructure ($RIIL) | 9.0% | 5.1% | 10.8% | 12.7% | 10.5% |
| Unity Infraprojects ($UNITY) | 16.6% | 15.4% | 16.8% | 15.0% | 9.1% |
| |
|---|
| Median (38 companies) | 13.5% | 11.3% | 8.6% | 7.1% | 5.9% |
|---|
| Skipper ($SKIPPER) | 12.9% | 10.6% | 10.4% | 13.5% | 14.7% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Coromandel Engineering Company ($COROENGG) | 9.7x | 7.1x | | 14.4x | 54.6x |
| Welspun Projects ($WELPROJ) | 10.4x | 71.3x | 6.0x | 2.6x | 20.8x |
| Punj Lloyd ($PUNJLLOYD) | 9.4x | 6.5x | 6.7x | 6.8x | 16.5x |
| Madhucon Projects ($MADHUCON) | 12.4x | 40.1x | 96.8x | 19.0x | 16.4x |
| Hindustan Construction Co ($HCC) | 9.1x | 10.0x | 18.8x | 20.3x | 12.3x |
| |
|---|
| Median (29 companies) | 2.7x | 3.7x | 4.6x | 5.8x | 6.4x |
|---|
| Skipper ($SKIPPER) | 5.5x | 6.9x | 4.6x | 4.4x | 3.7x |
