Cmc revenue growth decelerated to 12.7% in FY2015 vs. 15.8% a year earliner
09-04-2015 • About Cmc (
$CMC) • By InTwits
Cmc reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cmc has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.8%. At the same time it's a lot of higher than industry average of 3.7%.
- CAPEX is quite volatile: 712 in FY2015, 1,150 in FY2014, 1,683 in FY2013, 1,148 in FY2012, 805 in FY2011
- The company has highly profitable business model: ROIC is at 26.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cmc ($CMC) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,844 | 14,693 | 19,261 | 22,309 | 25,135 | 12.7% |
| EBITDA | 2,107 | 2,243 | 3,185 | 4,022 | 3,989 | -0.8% |
| Net Income | 1,794 | 1,518 | 2,302 | 2,804 | 2,771 | -1.2% |
Balance Sheet
|
|---|
| Cash | 386 | 534 | 1,328 | 1,221 | 823 | -32.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 992 | 1,196 | 847 | 888 | 801 | -9.8% |
Ratios
|
|---|
| Revenue growth | -65.2% | 35.5% | 31.1% | 15.8% | 12.7% | |
| EBITDA growth | 21.3% | 6.5% | 42.0% | 26.3% | -0.8% | |
| EBITDA Margin | 19.4% | 15.3% | 16.5% | 18.0% | 15.9% | -2.2% |
| Net Income Margin | 16.5% | 10.3% | 12.0% | 12.6% | 11.0% | -1.5% |
| CAPEX, % of revenue | 9.2% | 8.1% | 4.4% | 4.0% | 3.2% | -0.8% |
| ROIC | 31.5% | 26.2% | 33.2% | 35.3% | 26.0% | -9.3% |
| ROE | 30.8% | 21.3% | 26.8% | 26.7% | 22.1% | -4.6% |
| Net Debt/EBITDA | -0.2x | -0.2x | -0.4x | -0.3x | -0.2x | 0.1x |
Revenue and profitability
The company's Revenue surged on 12.7% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.2 pp from 18.0% to 15.9% in FY2015.
Net Income marign decreased slightly on 1.5 pp from 12.6% to 11.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Cmc's CAPEX/Revenue was 3.2% in FY2015. Cmc showed decline in CAPEX/Revenue of 5.0 pp from 8.1% in FY2012 to 3.2% in FY2015. It's average CAPEX/Revenue for the last three years was 3.9%.
Return on investment
The company operates at high and attractive ROIC (26.00%) and ROE (22.07%). ROIC decreased on 9.3 pp from 35.3% to 26.0% in FY2015. ROE decreased on 4.6 pp from 26.7% to 22.1% in FY2015.
Leverage (Debt)
The company has no debt. Cash dropped on 32.6% in FY2015.
Management team
The company's CEO Ramanathan Ramanan has spent 14 years at the company. J K Gupta is a Cmc's CFO. J K Gupta has spent 16 years at the company.
Appendix 1: Peers in IT Consulting & Software
Below we provide Cmc benchmarking against other companies in IT Consulting & Software 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tech Mahindra ($TECHM) | -85.8% | 6.8% | 25.2% | 174.0% | |
| Tata Consultancy Services ($TCS) | 24.3% | 31.0% | 28.8% | 29.9% | |
| Mindtree ($MINDTREE) | -65.0% | 26.6% | 23.2% | 28.8% | |
| Infinite Computer Solutions (India) ($INFINITE) | -57.9% | 19.5% | 31.7% | 24.6% | |
| Infosys ($INFY) | 20.9% | 22.7% | 19.6% | 24.2% | |
| |
|---|
| Median (21 companies) | -44.3% | 22.7% | 20.4% | 14.0% | |
|---|
| Cmc ($CMC) | | 35.5% | 31.1% | 15.8% | 12.7% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Consultancy Services ($TCS) | | | | 47.4% | |
| Infosys ($INFY) | 45.3% | 41.3% | 98.1% | 35.9% | |
| Wipro ($WIPRO) | 31.5% | 29.2% | 30.4% | 32.0% | |
| |
|---|
| Median (3 companies) | 34.7% | 32.7% | 36.2% | 35.9% | |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oracle Financial Services Software ($OFSS) | 37.4% | 35.3% | 35.2% | 37.4% | |
| Tata Consultancy Services ($TCS) | 29.9% | 29.5% | 28.6% | 30.7% | |
| Infosys ($INFY) | 32.5% | 31.6% | 27.9% | 26.3% | |
| Wipro ($WIPRO) | 21.1% | 19.1% | 20.9% | 22.4% | |
| Tech Mahindra ($TECHM) | 19.5% | 16.7% | 20.7% | 22.2% | |
| |
|---|
| Median (18 companies) | 18.0% | 15.1% | 17.8% | 18.5% | |
|---|
| Cmc ($CMC) | 19.4% | 15.3% | 16.5% | 18.0% | 15.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ramco Systems ($RAMCOSYS) | 16.4% | | 22.1% | 15.3% | |
| Niit Technologies ($NIITTECH) | 4.1% | 5.9% | 4.6% | 6.1% | |
| Infosys ($INFY) | 4.7% | 4.9% | 5.2% | 5.5% | |
| Mindtree ($MINDTREE) | 5.6% | 2.5% | 4.5% | 5.0% | |
| Tech Mahindra ($TECHM) | 3.0% | 5.4% | 2.6% | 5.0% | |
| |
|---|
| Median (17 companies) | 4.0% | 3.7% | 3.2% | 2.6% | |
|---|
| Cmc ($CMC) | 9.2% | 8.1% | 4.4% | 4.0% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Consultancy Services ($TCS) | 47.1% | 48.6% | 48.4% | 50.2% | |
| Tech Mahindra ($TECHM) | 19.2% | 15.4% | 20.1% | 43.0% | |
| Geometric ($GEOMETRIC) | 19.6% | 29.9% | 46.4% | 41.1% | |
| Mindtree ($MINDTREE) | 14.9% | 24.9% | 34.6% | 36.2% | |
| Hexaware Technologies ($HEXAWARE) | 23.8% | 33.5% | 39.2% | 34.7% | |
| |
|---|
| Median (30 companies) | 16.0% | 19.1% | 20.4% | 22.9% | |
|---|
| Cmc ($CMC) | 31.5% | 26.2% | 33.2% | 35.3% | 26.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 3I Infotech ($3IINFOTECH) | 3.5x | 8.5x | 20.3x | 27.7x | |
| Ramco Systems ($RAMCOSYS) | 4.0x | 8.8x | | 27.6x | |
| Starcom Information Technology ($STARCOM) | | | | 17.4x | |
| Onward Technologies ($ONWARDTEC) | 2.7x | 2.4x | 2.2x | 4.1x | |
| Kpit Technologies ($KPIT) | -0.7x | 0.3x | 0.5x | 0.7x | |
| |
|---|
| Median (23 companies) | -0.1x | -0.0x | -0.2x | -0.2x | |
|---|
| Cmc ($CMC) | -0.2x | -0.2x | -0.4x | -0.3x | -0.2x |
