Shriram City Union Finance revenue growth accelerated to 10.3% in FY2015 vs. 5.6% a year earliner
28-04-2015 • About Shriram City Union Finance (
$SHRIRAMCIT) • By InTwits
Shriram City Union Finance reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 62.7% in FY2015 vs. 66.3% in FY2014 vs. 69.5% in FY2011
- Shriram City Union Finance has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's a lot of higher than industry average of 39.4%.
- CAPEX is quite volatile: 427 in FY2015, 343 in FY2014, 620 in FY2013, 376 in FY2012, 167 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.7%
- It operates with high leverage: Net Debt/EBITDA is 5.5x while industry average is 3.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Shriram City Union Finance ($SHRIRAMCIT) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 13,233 | 20,567 | 30,996 | 32,728 | 36,096 | 10.3% |
| EBITDA | 9,196 | 14,615 | 21,011 | 21,711 | 22,631 | 4.2% |
| Net Income | 2,406 | 3,381 | 4,494 | 5,322 | 5,714 | 7.4% |
Balance Sheet
|
|---|
| Cash | 20,127 | 9,592 | 17,685 | 11,741 | 3,905 | -66.7% |
| Short Term Debt | 31,941 | 33,082 | 44,528 | 31,188 | 46,744 | 49.9% |
| Long Term Debt | 41,337 | 63,140 | 82,759 | 89,304 | 80,897 | -9.4% |
Cash flow
|
|---|
| Capex | 167 | 376 | 620 | 343 | 427 | 24.5% |
Ratios
|
|---|
| Revenue growth | -70.5% | 55.4% | 50.7% | 5.6% | 10.3% | |
| EBITDA growth | | 58.9% | 43.8% | 3.3% | 4.2% | |
| EBITDA Margin | 69.5% | 71.1% | 67.8% | 66.3% | 62.7% | -3.6% |
| Net Income Margin | 18.2% | 16.4% | 14.5% | 16.3% | 15.8% | -0.4% |
| CAPEX, % of revenue | 1.3% | 1.8% | 2.0% | 1.0% | 1.2% | 0.1% |
| ROIC | | 6.1% | 5.8% | 5.8% | 5.7% | -0.1% |
| ROE | | 23.0% | 22.4% | 20.1% | 15.8% | -4.3% |
| Net Debt/EBITDA | 5.8x | 5.9x | 5.2x | 5.0x | 5.5x | 0.5x |
Revenue and profitability
The company's Revenue surged on 10.3% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.3 pp from 14.2% to 23.5% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Shriram City Union Finance had CAPEX/Revenue of 1.2%. The company showed small CAPEX/Revenue decline of 0.65 pp from 1.8% in FY2012 to 1.2% in FY2015. It's average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at good ROE (15.84%) while ROIC is low (5.68%). ROIC showed almost no change in FY2015. ROE decreased on 4.3 pp from 20.1% to 15.8% in FY2015.
Leverage (Debt)
Debt level is 5.5x Net Debt / EBITDA and 5.6x Debt / EBITDA. Net Debt / EBITDA jumped on 0.5x from 5.0x to 5.5x in FY2015. Debt increased on 5.9% in FY2015 while cash dropped on 66.7% in FY2015.
Valuation
Shriram City Union Finance's trades at EV/EBITDA 11.0x and P/E 21.8x while industy averages are 10.5x and 26.1x. Shriram City Union Finance's EV/(EBITDA-CAPEX) is 11.2x with the industry average at 4.7x.
Management team
Shriram City Union Finance's CEO is Duruvasan Ramachandra. Duruvasan Ramachandra has 6 years tenure at the company.
Appendix 1: Peers in Finance (including NBFCs)
Below you can find Shriram City Union Finance benchmarking vs. other companies in Finance (including NBFCs) 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 |
|---|
| Advance Powerinfra Tech ($ADVPOWER) | | | | 209.3% | |
| Vishwamitra Financial Services ($VISHWAFIN) | | | 65.2% | 118.5% | |
| Industrial Investment Trust ($IITL) | -88.9% | 119.2% | 72.5% | 76.4% | |
| Sks Microfinance ($SKSMICRO) | 36.7% | -62.8% | -25.6% | 55.0% | |
| Muthoot Capital Services ($MUTHTFN) | -83.3% | 81.1% | 59.3% | 48.1% | |
| |
|---|
| Median (23 companies) | -50.5% | 23.2% | 24.4% | 20.8% | 13.3% |
|---|
| Shriram City Union Finance ($SHRIRAMCIT) | | 55.4% | 50.7% | 5.6% | 10.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rural Electrification Corporation ($RECLTD) | 97.1% | 97.2% | 97.3% | 96.7% | |
| Pnb Gilts ($PNBGILTS) | 91.8% | 94.0% | 96.4% | 96.4% | |
| Bajaj Holdings & Investment ($BAJAJHLDNG) | 98.7% | 96.2% | 95.5% | 94.4% | |
| IDFC Limited ($IDFC) | 85.3% | 88.1% | 89.6% | 87.0% | |
| Srei Infrastructure Finance ($SREINFRA) | 78.5% | 80.6% | 83.9% | 83.7% | |
| |
|---|
| Median (24 companies) | 68.2% | 64.8% | 65.4% | 65.5% | 67.5% |
|---|
| Shriram City Union Finance ($SHRIRAMCIT) | 69.5% | 71.1% | 67.8% | 66.3% | 62.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Srei Infrastructure Finance ($SREINFRA) | 34.8% | 29.3% | 8.3% | 12.6% | |
| Clarus Finance & Securities ($CLARUS) | | | | 6.9% | |
| Industrial Investment Trust ($IITL) | 3.7% | 1.1% | 0.3% | 4.9% | |
| Fortune Financial Services (India) ($FORTUNEF) | 5.5% | 1.0% | 1.3% | 4.5% | |
| A.K.Capital Services ($AKCAPIT) | 1.9% | 0.3% | 2.9% | 4.1% | |
| |
|---|
| Median (20 companies) | 1.8% | 0.6% | 0.7% | 1.0% | 0.7% |
|---|
| Shriram City Union Finance ($SHRIRAMCIT) | 1.3% | 1.8% | 2.0% | 1.0% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Motilal Oswal Financial Services ($MOTILALOFS) | | | 12.0% | 9.7% | |
| Mahindra & Mahindra Financial Services ($M&MFIN) | 7.3% | 6.4% | 6.3% | 5.3% | 4.2% |
| Rural Electrification Corporation ($RECLTD) | | | 4.7% | 5.2% | |
| IDFC Limited ($IDFC) | 4.8% | 4.8% | 5.0% | 4.3% | |
| Sks Microfinance ($SKSMICRO) | | | | 4.1% | |
| |
|---|
| Median (52 companies) | 6.0% | 3.6% | 4.4% | 3.8% | 3.8% |
|---|
| Shriram City Union Finance ($SHRIRAMCIT) | | 6.1% | 5.8% | 5.8% | 5.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pnb Gilts ($PNBGILTS) | 9.0x | 14.2x | 11.2x | 11.3x | |
| Fortune Financial Services (India) ($FORTUNEF) | 4.7x | 9.0x | | 10.8x | |
| Vibrant Global Capital ($VGCL) | 7.8x | 23.1x | 32.8x | 10.7x | |
| Rural Electrification Corporation ($RECLTD) | 8.1x | 8.3x | 8.0x | 7.5x | |
| Srei Infrastructure Finance ($SREINFRA) | 6.4x | 7.0x | 6.2x | 7.5x | |
| |
|---|
| Median (39 companies) | 2.6x | 4.4x | 3.6x | 2.9x | 7.0x |
|---|
| Shriram City Union Finance ($SHRIRAMCIT) | 5.8x | 5.9x | 5.2x | 5.0x | 5.5x |
