Sasken Communication Technologies Net Income jumped on 132% in 2015 while Revenue decreased on 6.6%
23-04-2015 • About Sasken Communication Technologies (
$SASKEN) • By InTwits
Sasken Communication Technologies reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sasken Communication Technologies is a company in decline: FY2015 revenue growth was -6.6%, 5 years revenue CAGR was -3.6%
- EBITDA Margin is quite volatile: 7.5% in FY2015, 11.7% in FY2014, 8.9% in FY2013, 15.1% in FY2012, 18.3% in FY2011
- Sasken Communication Technologies has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's a lot of higher than industry average of 10.7%.
- CAPEX is quite volatile: 40.6 in FY2015, 46.5 in FY2014, 59.3 in FY2013, 204 in FY2012, 136 in FY2011
- The company has potentially unprofitable business model: ROIC is at 4.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sasken Communication Technologies ($SASKEN) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 5,464 | 5,200 | 4,748 | 4,580 | 4,280 | -6.6% |
| EBITDA | 1,003 | 786 | 421 | 538 | 322 | -40.1% |
| Net Income | 733 | 640 | 320 | 515 | 1,196 | 132.3% |
Balance Sheet
|
|---|
| Cash | 247 | 226 | 317 | 328 | 1,246 | 280.0% |
| Short Term Debt | 0 | 0 | 14 | 12 | 11 | -9.4% |
| Long Term Debt | 0 | 23 | 9 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 136 | 204 | 59 | 46 | 41 | -12.6% |
Ratios
|
|---|
| Revenue growth | 6.2% | -4.8% | -8.7% | -3.5% | -6.6% | |
| EBITDA growth | -3.8% | -21.6% | -46.5% | 27.8% | -40.1% | |
| EBITDA Margin | 18.3% | 15.1% | 8.9% | 11.7% | 7.5% | -4.2% |
| Net Income Margin | 13.4% | 12.3% | 6.7% | 11.2% | 27.9% | 16.7% |
| CAPEX, % of revenue | 2.5% | 3.9% | 1.2% | 1.0% | 0.9% | -0.1% |
| ROIC | 13.2% | 12.7% | 5.2% | 10.0% | 4.9% | -5.2% |
| ROE | 15.4% | 14.4% | 7.3% | 12.4% | 28.0% | 15.5% |
| Net Debt/EBITDA | -0.2x | -0.3x | -0.7x | -0.6x | -3.8x | -3.2x |
Revenue and profitability
Sasken Communication Technologies's Revenue decreased on 6.6% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.2 pp from 11.7% to 7.5% in FY2015.
Net Income marign jumped on 16.7 pp from 11.2% to 27.9% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.95% in FY2015. CAPEX/Revenue decreased on 3.0 pp from 3.9% in FY2012 to 0.95% in FY2015. Average CAPEX/Revenue for the last three years was 1.1%.
Return on investment
The company operates at good ROE (27.98%) while ROIC is low (4.86%). ROIC decreased on 5.2 pp from 10.0% to 4.9% in FY2015. ROE jumped on 15.5 pp from 12.4% to 28.0% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -3.8x and Debt / EBITDA is 0.0x. Net Debt / EBITDA dropped on 3.2x from -0.6x to -3.8x in FY2015. Debt decreased on 9.4% in FY2015 while cash jumped on 280% in FY2015.
Appendix 1: Peers in IT Consulting & Software
Below you can find Sasken Communication Technologies benchmarking vs. other companies in IT Consulting & Software 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 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 ($INFY) | 20.9% | 22.7% | 19.6% | 24.2% | |
| |
|---|
| Median (21 companies) | -40.7% | 22.9% | 20.6% | 14.3% | 15.7% |
|---|
| Sasken Communication Technologies ($SASKEN) | | -4.8% | -8.7% | -3.5% | -6.6% |
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% | 17.8% | 18.5% | 19.4% |
|---|
| Sasken Communication Technologies ($SASKEN) | 18.3% | 15.1% | 8.9% | 11.7% | 7.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ramco Systems ($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) | 4.2% | 3.7% | 3.5% | 3.5% | 3.0% |
|---|
| Sasken Communication Technologies ($SASKEN) | 2.5% | 3.9% | 1.2% | 1.0% | 0.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Consultancy Services ($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% | 19.6% | 21.4% | 23.2% | 26.0% |
|---|
| Sasken Communication Technologies ($SASKEN) | 13.2% | 12.7% | 5.2% | 10.0% | 4.9% |
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 ($KPIT) | -0.7x | 0.3x | 0.5x | 0.7x | |
| |
|---|
| Median (23 companies) | -0.1x | -0.0x | -0.2x | -0.2x | -0.7x |
|---|
| Sasken Communication Technologies ($SASKEN) | -0.2x | -0.3x | -0.7x | -0.6x | -3.8x |
