Cyient Net Income surged on 32.8% in 2015 while EBITDA Margin decreased on 3.9 pp from 18.6% to 14.7%
23-04-2015 • About Cyient (
$CYIENT) • By InTwits
Cyient reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Cyient has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's in pair with industry average of 3.6%.
- CAPEX is quite volatile: 43.6 in FY2015, 2,284 in FY2014, 930 in FY2013, 3,745 in FY2012, 605 in FY2011
- The company has highly profitable business model: ROIC is at 18.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Cyient ($CYIENT) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 11,880 | 15,530 | 18,731 | 22,064 | 27,359 | 24.0% |
| SG&A | | | | | 6 | |
| EBITDA | 1,799 | 2,691 | 3,424 | 4,104 | 4,009 | -2.3% |
| Net Income | 1,397 | 1,614 | 2,311 | 2,660 | 3,532 | 32.8% |
Balance Sheet
|
|---|
| Cash | 1,296 | 4,442 | 4,827 | 6,763 | 5,664 | -16.2% |
| Short Term Debt | 13 | 34 | 3 | 58 | 813 | 1,297.2% |
| Long Term Debt | 0 | 0 | 0 | 0 | 467 | |
Cash flow
|
|---|
| Capex | 648 | 804 | 722 | 766 | 818 | 6.9% |
Ratios
|
|---|
| Revenue growth | -62.7% | 30.7% | 20.6% | 17.8% | 24.0% | |
| EBITDA growth | -14.0% | 49.6% | 27.2% | 19.9% | -2.3% | |
| EBITDA Margin | 15.1% | 17.3% | 18.3% | 18.6% | 14.7% | -3.9% |
| Net Income Margin | 11.8% | 10.4% | 12.3% | 12.1% | 12.9% | 0.9% |
| SG&A, % of revenue | | | | | 0.0% | 0.0% |
| CAPEX, % of revenue | 5.5% | 5.2% | 3.9% | 3.5% | 3.0% | -0.5% |
| ROIC | 13.1% | 19.8% | 22.2% | 22.9% | 18.1% | -4.8% |
| ROE | 14.4% | 14.8% | 18.6% | 18.3% | 20.6% | 2.3% |
| Net Debt/EBITDA | -0.7x | -1.6x | -1.4x | -1.6x | -1.1x | 0.5x |
Revenue and profitability
The company's Revenue surged on 24.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.89 pp from 11.7% to 12.5% in FY2015.
Net Income marign increased slightly on 0.85 pp from 12.1% to 12.9% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 3.0%. The company's CAPEX/Revenue decreased on 2.2 pp from 5.2% in FY2012 to 3.0% in FY2015. It's average level of CAPEX/Revenue for the last three years was 3.4%.
Return on investment
The company operates at high and attractive ROE (20.58%) while ROIC is a bit lower (18.14%). ROIC decreased on 4.8 pp from 22.9% to 18.1% in FY2015. ROE increased on 2.3 pp from 18.3% to 20.6% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.1x and Debt / EBITDA is 0.3x. Net Debt / EBITDA jumped on 0.5x from -1.6x to -1.1x in FY2015. Debt surged on 2,100% in FY2015 while cash dropped on 16.2% in FY2015.
Management team
The company's CEO Krishna Bodanapu has spent 4 years at the company. Cyient's CFO Ajay Aggarwal has spent 7 years at the company.
Appendix 1: Peers in IT Consulting & Software
Below we provide Cyient 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) | | 31.0% | 28.8% | 29.9% | 15.7% |
| Mindtree ($MINDTREE) | | 26.6% | 23.2% | 28.8% | 17.0% |
| Infinite Computer Solutions (India) ($INFINITE) | -57.9% | 19.5% | 31.7% | 24.6% | |
| Infosys ($INFY) | 20.9% | 22.7% | 19.6% | 24.2% | |
| |
|---|
| Median (21 companies) | -40.7% | 22.7% | 20.4% | 14.0% | 12.7% |
|---|
| Cyient ($CYIENT) | | 30.7% | 20.6% | 17.8% | 24.0% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Consultancy Services ($TCS) | | | | 47.4% | 42.4% |
| Mindtree ($MINDTREE) | 32.8% | 31.5% | 36.2% | | 34.8% |
| Wipro ($WIPRO) | 31.5% | 29.2% | 30.4% | 32.0% | 31.6% |
| |
|---|
| Median (3 companies) | 34.7% | 32.7% | 36.2% | 35.9% | 34.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Oracle Financial Services Software ($OFSS) | 37.4% | 35.3% | 35.2% | 37.4% | |
| Tata Consultancy Services ($TCS) | 29.9% | 29.5% | 28.6% | 30.7% | 26.1% |
| Infosys ($INFY) | 32.5% | 31.6% | 27.9% | 26.3% | |
| Wipro ($WIPRO) | 21.1% | 19.1% | 20.9% | 22.4% | 22.3% |
| Tech Mahindra ($TECHM) | 19.5% | 16.7% | 20.7% | 22.2% | |
| |
|---|
| Median (18 companies) | 18.0% | 15.1% | 16.5% | 18.3% | 19.4% |
|---|
| Cyient ($CYIENT) | 15.1% | 17.3% | 18.3% | 18.6% | 14.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ramco Systems ($RAMCOSYS) | 16.4% | | 22.1% | 15.3% | 12.4% |
| Niit Technologies ($NIITTECH) | 4.1% | 5.9% | 4.6% | 6.1% | |
| Infosys ($INFY) | 4.7% | 4.9% | 5.2% | 5.5% | |
| Mindtree ($MINDTREE) | 5.6% | 2.5% | 4.5% | 5.0% | 5.6% |
| Tech Mahindra ($TECHM) | 3.0% | 5.4% | 2.6% | 5.0% | |
| |
|---|
| Median (17 companies) | 4.0% | 3.7% | 3.2% | 2.6% | 3.0% |
|---|
| Cyient ($CYIENT) | 5.5% | 5.2% | 3.9% | 3.5% | 3.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Consultancy Services ($TCS) | 47.1% | 48.6% | 48.4% | 50.2% | 40.5% |
| Tech Mahindra ($TECHM) | 19.2% | 15.4% | 20.1% | 43.0% | |
| Geometric ($GEOMETRIC) | 19.6% | 29.9% | 46.4% | 41.1% | |
| Mindtree ($MINDTREE) | 14.9% | 24.9% | 34.6% | 36.2% | 32.0% |
| Cmc ($CMC) | 31.5% | 26.2% | 33.2% | 35.3% | 26.0% |
| |
|---|
| Median (30 companies) | 19.2% | 19.1% | 20.4% | 23.2% | 26.0% |
|---|
| Cyient ($CYIENT) | 13.1% | 19.8% | 22.2% | 22.9% | 18.1% |
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 | 4.2x |
| Starcom Information Technology ($STARCOM) | | | | 17.4x | |
| Onward Technologies ($ONWARDTEC) | 2.7x | 2.4x | 2.2x | 4.1x | |
| Kpit Technologies ($KPIT) | -0.7x | 0.3x | 0.5x | 0.7x | |
| |
|---|
| Median (23 companies) | -0.1x | -0.0x | -0.2x | -0.2x | -0.7x |
|---|
| Cyient ($CYIENT) | -0.7x | -1.6x | -1.4x | -1.6x | -1.1x |
