Cairn India CAPEX jumped on 94.0% in 2015 while Revenue dropped on 21.9%
23-04-2015 • About Cairn India (
$CAIRN) • By InTwits
Cairn India reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cairn India is a company in decline: FY2015 revenue growth was -21.9%, 5 years revenue CAGR was -7.0%
- Cairn India has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.6%. At the same time it's in pair with industry average of 28.0%.
- CAPEX is quite volatile: 55,744 in FY2015, 28,733 in FY2014, 16,313 in FY2013, 29,558 in FY2012, 25,648 in FY2011
- The company has business model with average profitability: ROIC is at 10.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cairn India ($CAIRN) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 102,308 | 118,171 | 175,195 | 187,612 | 146,454 | -21.9% |
| EBITDA | 83,859 | 92,851 | 130,746 | 137,429 | 107,077 | -22.1% |
| Net Income | 63,344 | 79,377 | 120,564 | 124,318 | 44,796 | -64.0% |
Balance Sheet
|
|---|
| Cash | 11,468 | 44,464 | 463 | 2,279 | 3,716 | 63.1% |
| Short Term Debt | 44 | 12,518 | 0 | 0 | 0 | |
| Long Term Debt | 26,738 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 25,648 | 29,558 | 16,313 | 28,733 | 55,744 | 94.0% |
Ratios
|
|---|
| Revenue growth | -51.5% | 15.5% | 48.3% | 7.1% | -21.9% | |
| EBITDA growth | 937.4% | 10.7% | 40.8% | 5.1% | -22.1% | |
| EBITDA Margin | 82.0% | 78.6% | 74.6% | 73.3% | 73.1% | -0.1% |
| Net Income Margin | 61.9% | 67.2% | 68.8% | 66.3% | 30.6% | -35.7% |
| CAPEX, % of revenue | 25.1% | 25.0% | 9.3% | 15.3% | 38.1% | 22.7% |
| ROIC | 17.6% | 16.6% | 22.7% | 21.3% | 10.0% | -11.3% |
| ROE | 17.1% | 17.9% | 25.1% | 23.6% | 7.7% | -15.9% |
| Net Debt/EBITDA | 0.2x | -0.3x | -0.0x | -0.0x | -0.0x | -0.0x |
Revenue and profitability
Cairn India's Revenue dropped on 21.9% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.89 pp from 32.4% to 31.5% in FY2015.
Net Income marign dropped on 35.7 pp from 66.3% to 30.6% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Cairn India's CAPEX/Revenue was 38.1% in FY2015. CAPEX/Revenue jumped on 13.0 pp from 25.0% in FY2012 to 38.1% in FY2015. It's average level of CAPEX/Revenue for the last three years was 20.9%.Battling declining revenue the company invested a large share of EBITDA (52.1%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (10.04%) and ROE (7.70%). ROIC dropped on 11.3 pp from 21.3% to 10.0% in FY2015. ROE dropped on 15.9 pp from 23.6% to 7.7% in FY2015.
Leverage (Debt)
The company has no debt. Cash surged on 63.1% in FY2015.
Valuation
Cairn India's trades at EV/EBITDA 3.7x and P/E 8.9x while industy averages are 10.5x and 26.1x. Cairn India's EV/(EBITDA-CAPEX) is 7.7x with the industry average at 4.7x.
Appendix 1: Peers in Exploration & Production
Below you can find Cairn India benchmarking vs. other companies in Exploration & Production 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, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oil And Natural Gas Corporation ($ONGC) | 15.5% | 24.5% | 10.3% | 7.3% | |
| Aban Offshore ($ABAN) | -35.4% | -5.5% | 16.1% | 7.2% | |
| Oil India ($OIL) | -26.6% | 18.5% | 1.1% | -2.8% | |
| Shiv-Vani Oil & Gas Exploration Services ($SHIV-VANI) | 503.4% | 1.5% | -16.5% | -72.5% | |
| |
|---|
| Median (4 companies) | -5.6% | 10.0% | 5.7% | 2.2% | |
|---|
| Cairn India ($CAIRN) | | 15.5% | 48.3% | 7.1% | -21.9% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aban Offshore ($ABAN) | 65.6% | 59.7% | 55.4% | 57.0% | |
| Oil India ($OIL) | 43.9% | 42.7% | 43.7% | 37.6% | |
| Oil And Natural Gas Corporation ($ONGC) | 36.1% | 33.9% | 27.3% | 28.4% | |
| |
|---|
| Median (3 companies) | 46.0% | 44.7% | 44.4% | 37.6% | |
|---|
| Cairn India ($CAIRN) | 82.0% | 78.6% | 74.6% | 73.3% | 73.1% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aban Offshore ($ABAN) | 16.8% | 20.9% | 25.4% | 36.1% | |
| Oil India ($OIL) | 11.4% | 9.4% | 17.9% | 29.4% | |
| Oil And Natural Gas Corporation ($ONGC) | 16.8% | 13.1% | 11.1% | 8.6% | |
| |
|---|
| Median (3 companies) | 14.1% | 17.0% | 17.9% | 29.4% | |
|---|
| Cairn India ($CAIRN) | 25.1% | 25.0% | 9.3% | 15.3% | 38.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Selan Exploration Technology ($SELAN) | 19.6% | 23.2% | 21.9% | 18.6% | |
| Oil And Natural Gas Corporation ($ONGC) | 24.3% | 25.2% | 18.6% | 15.8% | |
| Oil India ($OIL) | 21.1% | 19.8% | 18.3% | 10.5% | |
| Aban Offshore ($ABAN) | 10.7% | 8.6% | 9.2% | 9.4% | |
| Shiv-Vani Oil & Gas Exploration Services ($SHIV-VANI) | 13.1% | 11.7% | 8.0% | | |
| |
|---|
| Median (5 companies) | 19.6% | 19.8% | 18.3% | 13.1% | |
|---|
| Cairn India ($CAIRN) | 17.6% | 16.6% | 22.7% | 21.3% | 10.0% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Aban Offshore ($ABAN) | 5.7x | 7.1x | 6.6x | 6.5x | |
| Oil India ($OIL) | 0.2x | -0.0x | 0.2x | 2.7x | |
| Oil And Natural Gas Corporation ($ONGC) | -0.3x | -0.2x | 0.0x | 0.5x | |
| Selan Exploration Technology ($SELAN) | 0.8x | -1.7x | -0.2x | -2.2x | |
| |
|---|
| Median (4 companies) | 0.8x | -0.0x | 0.2x | 1.6x | |
|---|
| Cairn India ($CAIRN) | 0.2x | -0.3x | -0.0x | -0.0x | -0.0x |
