Steel Strips Wheels Net Debt / EBITDA dropped on 0.9x from 6.5x to 5.6x in 2015 while Revenue increased on 8.4%
24-04-2015 • About Steel Strips Wheels (
$SSWL) • By InTwits
Steel Strips Wheels reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Steel Strips Wheels has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.4%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: 517 in FY2015, 616 in FY2014, 1,109 in FY2013, 1,272 in FY2012, 1,446 in FY2011
- The company has potentially unprofitable business model: ROIC is at 6.7%
- It operates with high leverage: Net Debt/EBITDA is 5.6x while industry average is 1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Steel Strips Wheels ($SSWL) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,562 | 9,572 | 9,699 | 10,638 | 11,528 | 8.4% |
| EBITDA | 872 | 919 | 950 | 995 | 1,076 | 8.2% |
| Net Income | 298 | 288 | 250 | 243 | 394 | 62.0% |
Balance Sheet
|
|---|
| Cash | 215 | 77 | 179 | 124 | 159 | 28.3% |
| Short Term Debt | 1,981 | 2,292 | 3,265 | 3,275 | 3,282 | 0.2% |
| Long Term Debt | 2,255 | 2,757 | 2,855 | 3,303 | 2,852 | -13.7% |
Cash flow
|
|---|
| Capex | 1,446 | 1,272 | 1,109 | 616 | 517 | -16.1% |
Ratios
|
|---|
| Revenue growth | -51.6% | 45.9% | 1.3% | 9.7% | 8.4% | |
| EBITDA growth | 39.4% | 5.4% | 3.4% | 4.7% | 8.2% | |
| EBITDA Margin | 13.3% | 9.6% | 9.8% | 9.3% | 9.3% | -0.0% |
| Net Income Margin | 4.5% | 3.0% | 2.6% | 2.3% | 3.4% | 1.1% |
| CAPEX, % of revenue | 22.0% | 13.3% | 11.4% | 5.8% | 4.5% | -1.3% |
| ROIC | 9.0% | 6.4% | 5.0% | 4.6% | 6.7% | 2.0% |
| ROE | 12.6% | 9.7% | 7.7% | 6.9% | 10.3% | 3.4% |
| Net Debt/EBITDA | 4.6x | 5.4x | 6.3x | 6.5x | 5.6x | -0.9x |
Revenue and profitability
The company's Revenue increased on 8.4% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.4 pp from 18.8% to 20.2% in FY2015.
Net Income marign increased slightly on 1.1 pp from 2.3% to 3.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Steel Strips Wheels had CAPEX/Revenue of 4.5%. The company showed decline in CAPEX/Revenue of 8.8 pp from 13.3% in FY2012 to 4.5% in FY2015. It's average level of CAPEX/Revenue for the last three years was 7.2%.
Return on investment
The company operates at low ROIC (6.65%) and ROE (10.33%). ROIC increased on 2.0 pp from 4.6% to 6.7% in FY2015. ROE increased on 3.4 pp from 6.9% to 10.3% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.6x and Debt / EBITDA is 5.7x. Net Debt / EBITDA dropped on 0.9x from 6.5x to 5.6x in FY2015. Debt decreased on 6.8% in FY2015 while cash surged on 28.3% in FY2015.
Valuation
Steel Strips Wheels's trades at EV/EBITDA 9.9x and P/E 11.9x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 19.1x with the industry average at 4.7x.
Appendix 1: Peers in Auto Parts & Equipment
Below you can find Steel Strips Wheels benchmarking vs. other companies in Auto Parts & Equipment 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 |
|---|
| Exide Industries ($EXIDEIND) | -59.6% | 11.5% | 19.7% | 30.6% | |
| Motherson Sumi Systems ($MOTHERSUMI) | -86.4% | 79.1% | 71.3% | 20.2% | |
| Fiem Industries ($FIEMIND) | -54.4% | 25.2% | 13.4% | 18.7% | |
| Suprajit Engineering ($SUPRAJIT) | -53.1% | 22.2% | 9.4% | 17.9% | |
| Amara Raja Batteries ($AMARAJABAT) | -66.9% | 34.3% | 25.1% | 16.1% | |
| |
|---|
| Median (35 companies) | -36.0% | 16.9% | 2.7% | 4.9% | -8.8% |
|---|
| Steel Strips Wheels ($SSWL) | | 45.9% | 1.3% | 9.7% | 8.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tube Investments Of India ($TUBEINVEST) | 33.7% | 18.4% | 24.4% | 28.3% | |
| Shanthi Gears ($SHANTIGEAR) | 44.6% | 37.9% | 30.2% | 27.8% | |
| Amtek Auto ($AMTEKAUTO) | | 25.1% | | 20.7% | 14.8% |
| Shivam Autotech ($SHIVAMAUTO) | 23.2% | 24.1% | 24.1% | 20.6% | |
| Suprajit Engineering ($SUPRAJIT) | 16.5% | 16.2% | 17.0% | 17.2% | |
| |
|---|
| Median (34 companies) | 10.8% | 11.1% | 9.9% | 10.8% | 6.3% |
|---|
| Steel Strips Wheels ($SSWL) | 13.3% | 9.6% | 9.8% | 9.3% | 9.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Amtek Auto ($AMTEKAUTO) | | 18.9% | | 27.1% | 30.3% |
| Amara Raja Batteries ($AMARAJABAT) | 2.9% | 3.7% | 2.5% | 10.9% | |
| Subros ($SUBROS) | 11.6% | 16.6% | 10.7% | 9.3% | |
| Lumax Auto Technologies ($LUMAXTECH) | 3.7% | 5.1% | 7.3% | 7.8% | |
| Sona Koyo Steering Systems ($SONASTEER) | 5.9% | 9.8% | 6.6% | 7.1% | |
| |
|---|
| Median (24 companies) | 7.6% | 5.6% | 4.5% | 4.8% | 30.3% |
|---|
| Steel Strips Wheels ($SSWL) | 22.0% | 13.3% | 11.4% | 5.8% | 4.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 30.5% | 32.1% | 34.5% | 30.3% | |
| Exide Industries ($EXIDEIND) | 34.2% | 24.2% | 24.3% | 29.5% | |
| Suprajit Engineering ($SUPRAJIT) | 32.4% | 31.8% | 28.0% | 26.1% | |
| Motherson Sumi Systems ($MOTHERSUMI) | 23.7% | 13.5% | 16.5% | 25.0% | |
| Munjal Showa ($MUNJALSHOW) | 18.8% | 29.9% | 23.8% | 22.5% | |
| |
|---|
| Median (48 companies) | 16.5% | 16.4% | 12.7% | 14.5% | 4.2% |
|---|
| Steel Strips Wheels ($SSWL) | 9.0% | 6.4% | 5.0% | 4.6% | 6.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tube Investments Of India ($TUBEINVEST) | 8.1x | 17.6x | 17.8x | 17.3x | |
| Autoline Industries ($AUTOIND) | 3.1x | 3.2x | 4.0x | 12.0x | |
| Reil Electricals India ($REILELEC) | -0.1x | -0.0x | 1.5x | 9.1x | |
| Automotive Stampings & Assemblies ($ASAL) | 1.8x | 1.1x | 3.9x | 6.3x | |
| Ucal Fuel Systems ($UCALFUEL) | 4.1x | 4.3x | 5.6x | 5.7x | |
| |
|---|
| Median (44 companies) | 2.1x | 1.2x | 1.8x | 0.7x | 5.8x |
|---|
| Steel Strips Wheels ($SSWL) | 4.6x | 5.4x | 6.3x | 6.5x | 5.6x |
