Kirloskar Ferrous Industries reports 29.6% EBITDA growth and 10.8% Revenue growth
28-04-2015 • About Kirloskar Ferrous Industries (
$KIRLFER) • By InTwits
Kirloskar Ferrous Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 10.9% in FY2015 vs. 9.3% in FY2014 vs. 9.5% in FY2011
- Kirloskar Ferrous Industries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.8%. At the same time it's in pair with industry average of 20.6%.
- CAPEX is quite volatile: 584 in FY2015, 874 in FY2014, 1,593 in FY2013, 545 in FY2012, 499 in FY2011
- The company has highly profitable business model: ROIC is at 14.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kirloskar Ferrous Industries ($KIRLFER) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,918 | 10,897 | 11,981 | 12,322 | 13,651 | 10.8% |
| EBITDA | 1,032 | 1,128 | 1,259 | 1,151 | 1,492 | 29.6% |
| Net Income | 483 | 371 | 391 | 398 | 493 | 23.7% |
Balance Sheet
|
|---|
| Cash | 122 | 125 | 132 | 96 | 80 | -16.8% |
| Short Term Debt | 0 | 550 | 901 | 1,303 | 1,227 | -5.8% |
| Long Term Debt | 0 | 0 | 805 | 602 | 100 | -83.4% |
Cash flow
|
|---|
| Capex | 499 | 545 | 1,593 | 874 | 584 | -33.1% |
Ratios
|
|---|
| Revenue growth | -33.5% | -0.2% | 10.0% | 2.8% | 10.8% | |
| EBITDA growth | 8.8% | 9.3% | 11.6% | -8.6% | 29.6% | |
| EBITDA Margin | 9.5% | 10.4% | 10.5% | 9.3% | 10.9% | 1.6% |
| Net Income Margin | 4.4% | 3.4% | 3.3% | 3.2% | 3.6% | 0.4% |
| CAPEX, % of revenue | 4.6% | 5.0% | 13.3% | 7.1% | 4.3% | -2.8% |
| ROIC | 20.0% | 19.1% | 16.8% | 12.4% | 14.7% | 2.3% |
| ROE | 14.1% | 10.0% | 9.9% | 9.6% | 11.2% | 1.6% |
| Net Debt/EBITDA | -0.1x | 0.4x | 1.3x | 1.6x | 0.8x | -0.7x |
Revenue and profitability
Kirloskar Ferrous Industries's Revenue surged on 10.8% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 7.9 pp from 6.8% to 14.6% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 4.3% in FY2015. The company showed small CAPEX/Revenue decline of 0.72 pp from 5.0% in FY2012 to 4.3% in FY2015. Average CAPEX/Revenue for the last three years was 8.2%.
Return on investment
The company operates at good ROIC (14.72%) while ROE is low (11.18%). ROIC increased on 2.3 pp from 12.4% to 14.7% in FY2015. ROE increased slightly on 1.6 pp from 9.6% to 11.2% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.8x and Debt / EBITDA is 0.9x. Net Debt / EBITDA dropped on 0.7x from 1.6x to 0.8x in FY2015. Debt dropped on 30.3% in FY2015 while cash dropped on 16.8% in FY2015.
Valuation
The company's trades at EV/EBITDA 6.1x and P/E 16.0x while industy averages are 10.5x and 26.1x. Kirloskar Ferrous Industries's EV/(EBITDA-CAPEX) is 10.1x with the industry average at 4.7x.
Management team
Ravindranath Venkatesh Gumaste is a Kirloskar Ferrous Industries's CEO. Ravindranath Venkatesh Gumaste has spent 17 years at the company. R S Srivatsan is a The company's CFO. R S Srivatsan has spent 4 years at the company.
Appendix 1: Peers in Iron & Steel/Interm.Products
Below you can find Kirloskar Ferrous Industries benchmarking vs. other companies in Iron & Steel/Interm.Products 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 |
|---|
| Inducto Steel ($INDCTST) | | | 54.5% | 150.2% | |
| Kamdhenu Ispat ($KIL) | -65.5% | 25.7% | 13.7% | 68.3% | |
| Metkore Alloys & Industries ($METKORE) | -49.1% | 43.7% | -10.9% | 53.4% | |
| Tata Metaliks ($TATAMETALI) | -20.5% | -7.0% | -19.0% | 44.6% | |
| Visa Steel ($VISASTEEL) | -12.5% | 3.3% | -24.1% | 42.0% | |
| |
|---|
| Median (31 companies) | -34.0% | 12.5% | 3.2% | 3.4% | -6.6% |
|---|
| Kirloskar Ferrous Industries ($KIRLFER) | | -0.2% | 10.0% | 2.8% | 10.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Steel & Power ($JINDALSTEL) | 48.3% | 37.5% | 30.5% | 28.1% | |
| Bhushan Steel ($BHUSANSTL) | 29.0% | 31.2% | 32.3% | 28.1% | |
| Sarda Energy & Minerals ($SARDAEN) | 15.2% | 16.3% | 21.5% | 21.3% | |
| Jsw Steel ($JSWSTEEL) | 20.2% | 17.8% | 17.1% | 17.9% | |
| Jai Corp ($JAICORPLTD) | 18.4% | 14.1% | 16.3% | 16.0% | |
| |
|---|
| Median (28 companies) | 13.4% | 9.4% | 9.0% | 7.0% | |
|---|
| Kirloskar Ferrous Industries ($KIRLFER) | 9.5% | 10.4% | 10.5% | 9.3% | 10.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Steel & Power ($JINDALSTEL) | 64.7% | 34.2% | 47.6% | 69.6% | |
| Bhushan Steel ($BHUSANSTL) | 81.1% | 47.2% | 44.0% | 50.4% | |
| Jayaswal Neco Industries ($JAYNECOIND) | 27.9% | 20.4% | 44.0% | 31.1% | |
| Surana Industries ($SURANAIND) | | 41.3% | 54.8% | 21.5% | |
| Steel Authority Of India ($SAIL) | 25.3% | 20.9% | 20.7% | 19.3% | |
| |
|---|
| Median (20 companies) | 12.3% | 9.7% | 10.4% | 7.2% | |
|---|
| Kirloskar Ferrous Industries ($KIRLFER) | 4.6% | 5.0% | 13.3% | 7.1% | 4.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Metaliks ($TATAMETALI) | 3.1% | -23.5% | -3.7% | 19.9% | |
| Nova Iron & Steel ($NOVIS) | | | | 15.4% | |
| Pennar Industries ($PENIND) | 31.6% | 26.8% | 18.4% | 12.3% | |
| Jsw Steel ($JSWSTEEL) | 9.7% | 11.0% | 10.3% | 12.1% | |
| Tata Steel ($TATASTEEL) | 12.8% | 7.6% | 6.2% | 8.9% | |
| |
|---|
| Median (40 companies) | 9.4% | 6.8% | 5.5% | 5.5% | |
|---|
| Kirloskar Ferrous Industries ($KIRLFER) | 20.0% | 19.1% | 16.8% | 12.4% | 14.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jai Balaji Industries ($JAIBALAJI) | 5.5x | | | 89.7x | |
| Visa Steel ($VISASTEEL) | 6.9x | 20.1x | | 24.4x | |
| Ismt ($ISMTLTD) | 4.4x | 5.3x | 9.8x | 19.9x | |
| Kic Metaliks ($KAJARIR) | 6.6x | 9.2x | 3.0x | 18.2x | |
| Bhushan Steel ($BHUSANSTL) | 8.1x | 6.3x | 8.6x | 12.9x | |
| |
|---|
| Median (29 companies) | 3.8x | 4.6x | 4.4x | 3.4x | |
|---|
| Kirloskar Ferrous Industries ($KIRLFER) | -0.1x | 0.4x | 1.3x | 1.6x | 0.8x |
