Elecon Engineering Co Debt dropped on 12.9% in 2015 while Revenue increased on 2.8%
02-05-2015 • About Elecon Engineering Co (
$ELECON) • By InTwits
Elecon Engineering Co reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Elecon Engineering Co has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.0%. At the same time it's a lot of higher than industry average of 3.9%.
- CAPEX is quite volatile: 166 in FY2015, 351 in FY2014, 1,367 in FY2013, 1,337 in FY2012, 503 in FY2011
- The company has business model with low profitability: ROIC is at 8.2%
- It operates with high leverage: Net Debt/EBITDA is 3.1x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Elecon Engineering Co ($ELECON) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 12,843 | 16,013 | 15,268 | 12,929 | 13,289 | 2.8% |
| EBITDA | 1,993 | 2,098 | 2,086 | 1,518 | 1,701 | 12.1% |
| Net Income | 900 | 611 | 179 | 137 | 163 | 19.0% |
Balance Sheet
|
|---|
| Cash | 264 | 180 | 305 | 211 | 302 | 43.2% |
| Short Term Debt | 4,451 | 4,395 | 5,101 | 4,956 | 3,885 | -21.6% |
| Long Term Debt | 2,034 | 1,991 | 1,840 | 1,378 | 1,632 | 18.4% |
Cash flow
|
|---|
| Capex | 503 | 1,337 | 1,367 | 351 | 166 | -52.6% |
Ratios
|
|---|
| Revenue growth | -17.7% | 24.7% | -4.6% | -15.3% | 2.8% | |
| EBITDA growth | | 5.2% | -0.5% | -27.2% | 12.1% | |
| EBITDA Margin | 15.5% | 13.1% | 13.7% | 11.7% | 12.8% | 1.1% |
| Net Income Margin | 7.0% | 3.8% | 1.2% | 1.1% | 1.2% | 0.2% |
| CAPEX, % of revenue | 3.9% | 8.3% | 9.0% | 2.7% | 1.3% | -1.5% |
| ROIC | | 14.3% | 12.4% | 7.1% | 8.2% | 1.2% |
| ROE | | 13.9% | 3.6% | 2.6% | 3.1% | 0.5% |
| Net Debt/EBITDA | 3.1x | 3.0x | 3.2x | 4.0x | 3.1x | -1.0x |
Revenue and profitability
Elecon Engineering Co's Revenue increased on 2.8% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 11.0 pp from 11.2% to 0.23% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 1.3%. The company showed decline in CAPEX/Revenue of 7.1 pp from 8.3% in FY2012 to 1.3% in FY2015. It's average level of CAPEX/Revenue for the last three years was 4.3%.
Return on investment
The company operates at low ROIC (8.22%) and ROE (3.06%). ROIC increased slightly on 1.2 pp from 7.1% to 8.2% in FY2015. ROE showed almost no change in FY2015.
Leverage (Debt)
Debt level is 3.1x Net Debt / EBITDA and 3.2x Debt / EBITDA. Net Debt / EBITDA dropped on 1.0x from 4.0x to 3.1x in FY2015. Debt dropped on 12.9% in FY2015 while cash jumped on 43.2% in FY2015.
Appendix 1: Peers in Industrial Machinery
Below you can find Elecon Engineering Co benchmarking vs. other companies in Industrial Machinery 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 |
|---|
| Forbes & Company ($FORBESCO) | -66.3% | 22.4% | 13.0% | 53.4% | |
| Nitin Fire Protection Industries ($NITINFIRE) | -67.4% | 22.3% | 31.5% | 44.2% | |
| Gmm Pfaudler ($GMM) | -47.2% | -26.1% | 47.8% | 31.0% | |
| Kabra Extrusiontechnik ($KABRAEXTRU) | -32.6% | -13.3% | -8.7% | 28.4% | |
| Veejay Lakshmi Engineering Works ($VJLAXMIE) | 27.9% | -28.8% | 5.7% | 26.6% | |
| |
|---|
| Median (26 companies) | -32.6% | 14.1% | 2.3% | 4.0% | 7.0% |
|---|
| Elecon Engineering Co ($ELECON) | | 24.7% | -4.6% | -15.3% | 2.8% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bell Agromachina ($BELAGRO) | | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (1 company) | | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lokesh Machines ($LOKESHMACH) | 14.7% | 18.9% | 21.9% | 24.0% | |
| Wendt (India) ($WENDT) | 30.8% | 28.3% | 21.6% | 18.6% | 19.0% |
| Mazda ($MAZDALTD) | 14.4% | 14.5% | 16.2% | 15.0% | |
| Ksb Pumps ($KSBPUMPS) | 9.9% | 13.1% | 14.1% | 12.6% | |
| Abc Bearings ($ABCBEARS) | 22.6% | 16.5% | 12.9% | 12.1% | |
| |
|---|
| Median (22 companies) | 13.5% | 10.7% | 9.4% | 10.0% | 13.1% |
|---|
| Elecon Engineering Co ($ELECON) | 15.5% | 13.1% | 13.7% | 11.7% | 12.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lokesh Machines ($LOKESHMACH) | 18.5% | 22.1% | | 12.9% | |
| Elgi Equipments ($ELGIEQUIP) | 2.8% | 4.0% | 24.0% | 9.8% | |
| Wendt (India) ($WENDT) | 7.2% | 13.5% | 9.0% | 8.8% | 9.4% |
| Ksb Pumps ($KSBPUMPS) | 3.3% | 7.5% | 3.5% | 5.0% | |
| Honda Siel Power Products ($HONDAPOWER) | 4.3% | 6.7% | 8.0% | 3.7% | |
| |
|---|
| Median (19 companies) | 3.4% | 5.5% | 3.7% | 3.0% | 7.1% |
|---|
| Elecon Engineering Co ($ELECON) | 3.9% | 8.3% | 9.0% | 2.7% | 1.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rexnord Electronics & Controls ($REXNORD) | 10.4% | | | 18.8% | |
| Gmm Pfaudler ($GMM) | 14.2% | -76.2% | 6.8% | 17.4% | |
| Greaves Cotton ($GREAVESCOT) | | | 24.8% | 16.3% | |
| Lakshmi Machine Works ($LAXMIMACH) | 16.8% | 18.0% | 11.7% | 16.2% | |
| Wendt (India) ($WENDT) | | 38.2% | 20.2% | 16.2% | 15.1% |
| |
|---|
| Median (51 companies) | 15.0% | 12.6% | 10.2% | 9.7% | 7.4% |
|---|
| Elecon Engineering Co ($ELECON) | | 14.3% | 12.4% | 7.1% | 8.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chemtech Industrial Valves ($CHEMTECH) | 7.7x | 6.4x | 5.3x | 8.8x | |
| Forbes & Company ($FORBESCO) | 3.5x | 2.2x | 3.3x | 4.7x | |
| Lokesh Machines ($LOKESHMACH) | 4.0x | 3.7x | 3.3x | 4.6x | |
| Lloyd Electric & Engineering ($LLOYDELENG) | 4.0x | 3.2x | 3.0x | 3.7x | |
| Abc Bearings ($ABCBEARS) | 0.5x | 1.7x | 3.5x | 3.4x | |
| |
|---|
| Median (34 companies) | 1.1x | 0.6x | 1.5x | 0.0x | 0.7x |
|---|
| Elecon Engineering Co ($ELECON) | 3.1x | 3.0x | 3.2x | 4.0x | 3.1x |
