Sks Microfinance reports 169% Net Income growth and 47.3% Revenue growth
04-05-2015 • About Sks Microfinance (
$SKSMICRO) • By InTwits
Sks Microfinance reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 59.4% in FY2015 vs. 52.9% in FY2014 vs. 46.4% in FY2011
- Sks Microfinance has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has potentially unprofitable business model: ROIC is at 6.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.9x while industry average is 3.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sks Microfinance ($SKSMICRO) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 12,695 | 4,722 | 3,515 | 5,446 | 8,025 | 47.3% |
| EBITDA | 5,892 | -11,345 | -1,486 | 2,879 | 4,766 | 65.5% |
| Net Income | 1,116 | -13,606 | -2,971 | 699 | 1,877 | 168.7% |
Balance Sheet
|
|---|
| Cash | 3,891 | 4,521 | 6,583 | 4,152 | 14,375 | 246.2% |
| Short Term Debt | 15,950 | 7,360 | 13,528 | 12,311 | 22,226 | 80.5% |
| Long Term Debt | 6,402 | 2,846 | 2,656 | 3,002 | 10,572 | 252.2% |
Cash flow
|
|---|
| Capex | 232 | 27 | 8 | 41 | 48 | 17.1% |
Ratios
|
|---|
| Revenue growth | 36.7% | -62.8% | -25.6% | 55.0% | 47.3% | |
| EBITDA growth | 4.2% | -292.6% | -86.9% | -293.7% | 65.5% | |
| EBITDA Margin | 46.4% | -240.3% | -42.3% | 52.9% | 59.4% | 6.5% |
| Net Income Margin | 8.8% | -288.1% | -84.5% | 12.8% | 23.4% | 10.6% |
| CAPEX, % of revenue | 1.8% | 0.6% | 0.2% | 0.7% | 0.6% | -0.2% |
| ROIC | | | | 4.1% | 6.6% | 2.5% |
| ROE | 8.1% | -123.1% | -72.4% | 16.4% | 24.9% | 8.5% |
| Net Debt/EBITDA | 3.1x | | | 3.9x | 3.9x | -0.0x |
Revenue and profitability
The company's Revenue surged on 47.3% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.7 pp from 54.6% to 50.9% in FY2015.
Net Income marign surged on 10.6 pp from 12.8% to 23.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 0.59%. Sks Microfinance's CAPEX/Revenue showed almost no change from FY2012 to FY2015. It's average CAPEX/Revenue for the last three years was 0.52%.
Return on investment
The company operates at good ROE (24.93%) while ROIC is low (6.61%). ROIC increased on 2.5 pp from 4.1% to 6.6% in FY2015. ROE increased on 8.5 pp from 16.4% to 24.9% in FY2015.
Leverage (Debt)
Debt level is 3.9x Net Debt / EBITDA and 6.9x Debt / EBITDA. Net Debt / EBITDA decreased slightly on 0.010x from 3.9x to 3.9x in FY2015. Debt surged on 114% in FY2015 while cash jumped on 246% in FY2015.
Valuation
Sks Microfinance's trades at EV/EBITDA 16.1x and P/E 31.1x while industy averages are 10.5x and 26.1x.
Appendix 1: Peers in Finance (including NBFCs)
Below we provide Sks Microfinance benchmarking against other companies in Finance (including NBFCs) industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
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 ($IITL) | -88.9% | 119.2% | 72.5% | 76.4% | |
| Muthoot Capital Services ($MUTHTFN) | -83.3% | 81.1% | 59.3% | 48.1% | |
| Mahindra & Mahindra Financial Services ($M&MFIN) | | 40.2% | 41.4% | 28.9% | 14.3% |
| |
|---|
| Median (23 companies) | -51.6% | 23.5% | 26.9% | 19.8% | 10.6% |
|---|
| Sks Microfinance ($SKSMICRO) | | -62.8% | -25.6% | 55.0% | 47.3% |
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% | 96.1% |
| Bajaj Holdings & Investment ($BAJAJHLDNG) | 98.7% | 96.2% | 95.5% | 94.4% | |
| IDFC Limited ($IDFC) | 85.3% | 88.1% | 89.6% | 87.0% | 81.7% |
| Srei Infrastructure Finance ($SREINFRA) | 78.5% | 80.6% | 83.9% | 83.7% | 78.5% |
| |
|---|
| Median (24 companies) | 69.5% | 70.0% | 67.8% | 66.4% | 69.4% |
|---|
| Sks Microfinance ($SKSMICRO) | 46.4% | -240.3% | -42.3% | 52.9% | 59.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Srei Infrastructure Finance ($SREINFRA) | 34.8% | 29.3% | 8.3% | 12.6% | 5.4% |
| Clarus Finance & Securities ($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 ($AKCAPIT) | 1.9% | 0.3% | 2.9% | 4.1% | |
| |
|---|
| Median (20 companies) | 1.7% | 1.0% | 0.8% | 1.1% | 0.7% |
|---|
| Sks Microfinance ($SKSMICRO) | 1.8% | 0.6% | 0.2% | 0.7% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Motilal Oswal Financial Services ($MOTILALOFS) | | | 12.0% | 9.7% | 11.9% |
| Shriram City Union Finance ($SHRIRAMCIT) | | 6.1% | 5.8% | 5.8% | 5.7% |
| 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 ($IDFC) | 4.8% | 4.8% | 5.0% | 4.3% | 3.4% |
| |
|---|
| Median (52 companies) | 6.0% | 4.1% | 4.6% | 3.9% | 4.2% |
|---|
| Sks Microfinance ($SKSMICRO) | | | | 4.1% | 6.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pnb Gilts ($PNBGILTS) | 9.0x | 14.2x | 11.2x | 11.3x | 8.8x |
| Fortune Financial Services (India) ($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 ($SREINFRA) | 6.4x | 7.0x | 6.2x | 7.5x | 8.0x |
| |
|---|
| Median (39 companies) | 2.6x | 4.7x | 3.6x | 2.9x | 6.9x |
|---|
| Sks Microfinance ($SKSMICRO) | 3.1x | | | 3.9x | 3.9x |
