Birla Corporation reports 35.0% Net Income growth and almost no change in EBITDA Margin of 9.7%
07-05-2015 • About Birla Corporation (
$BIRLACORPN) • By InTwits
Birla Corporation reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Birla Corporation has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.3%. At the same time it's a lot of higher than industry average of 10.0%.
- CAPEX is quite volatile: 2,205 in FY2015, 1,648 in FY2014, 1,848 in FY2013, 4,359 in FY2012, 5,003 in FY2011
- The company has potentially unprofitable business model: ROIC is at 3.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.7x while industry average is 2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Birla Corporation ($BIRLACORPN) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 21,538 | 22,869 | 26,030 | 30,164 | 32,099 | 6.4% |
| EBITDA | 4,470 | 3,711 | 4,093 | 2,840 | 3,126 | 10.1% |
| Net Income | 3,202 | 2,394 | 2,703 | 1,298 | 1,752 | 35.0% |
Balance Sheet
|
|---|
| Cash | 305 | 21 | 203 | 4,827 | 4,631 | -4.1% |
| Short Term Debt | 3,410 | 3,832 | 3,287 | 4,850 | 2,004 | -58.7% |
| Long Term Debt | 5,967 | 7,522 | 8,974 | 9,163 | 11,018 | 20.2% |
Cash flow
|
|---|
| Capex | 5,003 | 4,359 | 1,848 | 1,648 | 2,205 | 33.8% |
Ratios
|
|---|
| Revenue growth | -44.6% | 6.2% | 13.8% | 15.9% | 6.4% | |
| EBITDA growth | -39.8% | -17.0% | 10.3% | -30.6% | 10.1% | |
| EBITDA Margin | 20.8% | 16.2% | 15.7% | 9.4% | 9.7% | 0.3% |
| Net Income Margin | 14.9% | 10.5% | 10.4% | 4.3% | 5.5% | 1.2% |
| CAPEX, % of revenue | 23.2% | 19.1% | 7.1% | 5.5% | 6.9% | 1.4% |
| ROIC | 13.4% | 8.7% | 8.2% | 3.7% | 3.8% | 0.1% |
| ROE | 16.6% | 11.1% | 11.5% | 5.2% | 6.8% | 1.6% |
| Net Debt/EBITDA | 2.0x | 3.1x | 2.9x | 3.2x | 2.7x | -0.6x |
Revenue and profitability
The company's Revenue increased on 6.4% in FY2015. EBITDA Margin showed almost no change in FY2015.
Net Income marign increased slightly on 1.2 pp from 4.3% to 5.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Birla Corporation's CAPEX/Revenue was 6.9% in FY2015. CAPEX/Revenue dropped on 12.2 pp from 19.1% in FY2012 to 6.9% in FY2015. It's average CAPEX/Revenue for the last three years was 6.5%.Birla Corporation maintained rich investment policy and has spent a big chunk of EBITDA (70.5%) to CAPEX.
Return on investment
The company operates at low ROIC (3.80%) and ROE (6.80%). ROIC showed almost no change in FY2015. ROE increased slightly on 1.6 pp from 5.2% to 6.8% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.7x and Debt / EBITDA is 4.2x. Net Debt / EBITDA dropped on 0.6x from 3.2x to 2.7x in FY2015. Debt decreased on 7.1% in FY2015 while cash decreased on 4.1% in FY2015.
Appendix 1: Peers in Cement & Cement Products
Below you can find Birla Corporation benchmarking vs. other companies in Cement & Cement 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 |
|---|
| Heidelbergcement India ($HEIDELBERG) | -50.1% | -13.1% | 37.5% | 36.3% | |
| Shree Digvijay Cement Co ($SHREDIGCEM) | -23.4% | 14.9% | -13.5% | 24.7% | |
| Indian Hume Pipe Co ($INDIANHUME) | -43.1% | -20.3% | 34.5% | 18.3% | |
| Ambuja Cements ($AMBUJACEM) | -23.0% | 14.3% | -6.5% | 9.0% | |
| Kakatiya Cement Sugar & Industries ($KAKATCEM) | -55.2% | 67.8% | 9.0% | 8.8% | |
| |
|---|
| Median (15 companies) | -40.8% | 14.9% | 11.4% | -1.4% | 13.6% |
|---|
| Birla Corporation ($BIRLACORPN) | | 6.2% | 13.8% | 15.9% | 6.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ambuja Cements ($AMBUJACEM) | 23.4% | 25.6% | 18.2% | 19.4% | |
| Heidelbergcement India ($HEIDELBERG) | 6.9% | 8.3% | 9.3% | 15.9% | |
| Deccan Cements ($DECCANCE) | 19.2% | 22.8% | 13.2% | 14.7% | |
| Acc ($ACC) | 19.2% | 19.3% | 14.6% | 12.9% | |
| J.K.Cement ($JKCEMENT) | 13.3% | 20.3% | 19.2% | 12.7% | |
| |
|---|
| Median (14 companies) | 13.3% | 19.2% | 13.2% | 11.8% | 9.5% |
|---|
| Birla Corporation ($BIRLACORPN) | 20.8% | 16.2% | 15.7% | 9.4% | 9.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| J.K.Cement ($JKCEMENT) | 14.1% | 6.5% | 18.8% | 55.8% | |
| Acc ($ACC) | 4.8% | 5.0% | 8.6% | 13.7% | |
| K.C.P ($KCP) | 28.2% | 8.6% | 9.9% | 12.6% | |
| Visaka Industries ($VIKASAS) | 4.6% | 5.5% | 6.5% | 10.2% | 2.2% |
| Shree Digvijay Cement Co ($SHREDIGCEM) | 13.6% | 4.1% | 8.5% | 8.5% | |
| |
|---|
| Median (11 companies) | 7.7% | 5.5% | 7.8% | 8.3% | 2.2% |
|---|
| Birla Corporation ($BIRLACORPN) | 23.2% | 19.1% | 7.1% | 5.5% | 6.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | 15.5% | 7.6% | 13.8% | 15.0% | |
| Saurashtra Cement ($SAURASHCEM) | 4.3% | 38.6% | 42.7% | 13.9% | |
| Ambuja Cements ($AMBUJACEM) | 17.0% | 19.4% | 11.2% | 13.0% | |
| Acc ($ACC) | 18.5% | 20.2% | 12.7% | 11.0% | |
| K.C.P ($KCP) | 14.9% | 17.6% | 6.7% | 7.1% | |
| |
|---|
| Median (16 companies) | 7.6% | 15.8% | 9.8% | 6.4% | 8.3% |
|---|
| Birla Corporation ($BIRLACORPN) | 13.4% | 8.7% | 8.2% | 3.7% | 3.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prism Cement ($PRISMCEM) | 3.4x | 4.8x | 6.0x | 10.0x | |
| J.K.Cement ($JKCEMENT) | 4.5x | 2.3x | 2.3x | 6.9x | |
| India Cements ($INDIACEM) | 4.8x | 3.2x | 3.5x | 5.5x | |
| Visaka Industries ($VIKASAS) | 1.3x | 1.3x | 2.2x | 3.8x | 2.7x |
| K.C.P ($KCP) | 2.6x | 1.1x | 3.0x | 3.6x | |
| |
|---|
| Median (13 companies) | 2.9x | 1.8x | 2.6x | 3.0x | 2.7x |
|---|
| Birla Corporation ($BIRLACORPN) | 2.0x | 3.1x | 2.9x | 3.2x | 2.7x |
