Eye on Alicon Castalloy as a growth stock
07-05-2015 • About Alicon Castalloy (
$ALICON) • By InTwits
Alicon Castalloy is a fast-growing stock in Aluminium industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Alicon Castalloy showed growth in the last financial year. Alicon Castalloy's revenue surged on 34.0% in FY2015. At the same time Alicon Castalloy well managed its profitability and also showed EBITDA growth of 32.9% for the same period.
In the last 3 years the company showed fast revenue growth of 15.0% from FY2012 to FY2015 annually. EBITDA surged on 15.8% from FY2012 to FY2015 annually.
Alicon Castalloy ($ALICON) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 3,187 | 4,687 | 5,246 | 5,325 | 7,136 |
|---|
| Revenue growth, % | | 47.1% | 11.9% | 1.5% | 34.0% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 402 | 457 | 463 | 534 | 709 |
|---|
| EBITDA growth, % | | 13.7% | 1.2% | 15.3% | 32.9% |
|---|
| EBITDA margin, % | 12.6% | 9.76% | 8.82% | 10.0% | 9.94% |
|---|
| Net Income | 155 | 144 | 169 | 192 | 198 |
|---|
| Net Income margin, % | 4.85% | 3.08% | 3.22% | 3.60% | 2.78% |
|---|
| |
| CAPEX | 314 | 395 | 195 | 277 | 853 |
|---|
| CAPEX/Revenue, % | 9.85% | 8.44% | 3.71% | 5.21% | 12.0% |
|---|
| Debt | 838 | 1,125 | 1,049 | 1,143 | 1,723 |
|---|
| Cash | 61 | 89 | 69 | 60 | 96 |
|---|
| Net Debt/EBITDA | 1.9x | 2.3x | 2.1x | 2.0x | 2.3x |
|---|
| |
| ROIC, % | | 16.4% | 13.0% | 14.8% | 16.7% |
|---|
| ROE, % | | 20.2% | 20.0% | 19.4% | 16.9% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the last 3 years EBITDA margin increased slightly on 0.100 pp from 9.80% in FY2012 to 9.90% in FY2015.
We call Alicon Castalloy an attractive growth stock as together with the growth it delivers high ROIC at 16.7%. During the last three years it increased slightly - it was 16.4% in FY2012. For the last three years the average ROIC was 14.9%.
Alicon Castalloy showed big decline in Net Income margin of 0.800 pp from 3.60% to 2.80% in FY2015. In the longer period Net Income margin decreased on 0.300 pp from 3.10% in FY2012 to 2.80% in FY2015.
Alicon Castalloy operates at ROE of 16.9%. It's average level of ROE for the last three years was 18.8%.
Capital expenditures (CAPEX)
To fuel this fast growth the company had to invest in CAPEX.Alicon Castalloy's CAPEX/Revenue was 12.0% in FY2015. The company's CAPEX/Revenue surged on 3.52 pp from 8.44% in FY2012 to 12.0% in FY2015. Average CAPEX/Revenue for the last three years was 6.96%.
Leverage (Debt)
Alicon Castalloy has medium debt level at 2.3x Net Debt/EBITDA to maintain high growth. In the last 3 years the company's leverage increased slightly on 0.03x from 2.27x in FY2012 to 2.29x in FY2015.
Valuation vs. comparable companies
At the end of trading day today Alicon Castalloy traded at 6.6x EV/EBITDA which is 52.2% lower than 13.9x Aluminium peer group avearge calculated on the basis of 22 companies. At the end of trading day today Alicon Castalloy traded at 15.6x P/E which is 44.3% higher than 10.8x Aluminium peer group avearge calculated on the basis of 2 companies.
Peers in Aluminium
Below we provide Alicon Castalloy benchmarking against other companies in Aluminium 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Bothra Metals & Alloys ($BMAL) | -67.0% | 12.1% | 57.0% | 27.3% | |
| Gujarat Foils ($GUJFOIL) | -61.0% | 16.7% | 31.4% | 25.2% | |
| Hindalco Industries ($HINDALCO) | 18.6% | 12.7% | -1.0% | 9.0% | |
| Pg Foils ($PGFOILQ) | -46.6% | 36.1% | -4.3% | 2.6% | |
| |
|---|
| Median (4 companies) | -53.8% | 14.7% | 15.2% | 17.1% | |
|---|
| Alicon Castalloy ($ALICON) | | 47.1% | 11.9% | 1.5% | 34.0% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Gujarat Foils ($GUJFOIL) | 10.1% | | 12.3% | 11.7% | |
| Hindalco Industries ($HINDALCO) | 11.0% | 10.9% | 10.3% | 9.3% | |
| Bothra Metals & Alloys ($BMAL) | 6.9% | 6.5% | 5.1% | 3.6% | |
| Pg Foils ($PGFOILQ) | 8.7% | 3.7% | 0.7% | 0.4% | |
| |
|---|
| Median (4 companies) | 9.4% | 6.5% | 7.7% | 6.5% | |
|---|
| Alicon Castalloy ($ALICON) | 12.6% | 9.8% | 8.8% | 10.0% | 9.9% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Hindalco Industries ($HINDALCO) | 11.0% | 15.5% | 14.8% | 10.8% | |
| |
|---|
| Median (1 company) | 9.0% | 5.2% | 14.8% | 10.8% | |
|---|
| Alicon Castalloy ($ALICON) | 9.8% | 8.4% | 3.7% | 5.2% | 12.0% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Hindalco Industries ($HINDALCO) | 8.7% | 8.6% | 6.2% | 4.6% | |
| Tentiwal Wire Products ($TWPL) | 12.7% | 12.5% | 12.6% | | |
| Sacheta Metals ($SACHEMT) | -2.7% | -3.1% | | | |
| Bothra Metals & Alloys ($BMAL) | 21.4% | 15.2% | 13.8% | | |
| Gujarat Foils ($GUJFOIL) | 9.6% | | | | |
| |
|---|
| Median (6 companies) | 9.2% | 8.6% | 9.4% | 4.6% | |
|---|
| Alicon Castalloy ($ALICON) | | 16.4% | 13.0% | 14.8% | 16.7% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Hindalco Industries ($HINDALCO) | 3.5x | 4.3x | 6.6x | 7.5x | |
| Sacheta Metals ($SACHEMT) | 12.7x | 14.3x | 0.0x | 0.0x | |
| Tentiwal Wire Products ($TWPL) | 5.8x | 4.9x | 5.2x | 0.0x | |
| Bothra Metals & Alloys ($BMAL) | 2.2x | 4.1x | 3.1x | 0.0x | |
| Gujarat Foils ($GUJFOIL) | 5.0x | | 3.7x | 0.0x | |
| |
|---|
| Median (6 companies) | 4.4x | 4.9x | 4.5x | 0.0x | |
|---|
| Alicon Castalloy ($ALICON) | 1.9x | 2.3x | 2.1x | 2.0x | 2.3x |
