Magma Fincorp Net Income surged on 19.0% in 2015 while EBITDA Margin decreased on 4.1 pp from 66.5% to 62.4%
08-05-2015 • About Magma Fincorp (
$MAGMA) • By InTwits
Magma Fincorp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company has potentially unprofitable business model: ROIC is at 2.1%
- It operates with high leverage: Net Debt/EBITDA is 7.7x while industry average is 3.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Magma Fincorp ($MAGMA) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 8,742 | 10,796 | 17,016 | 21,172 | 23,812 | 12.5% |
| EBITDA | 5,626 | 7,583 | 11,764 | 14,074 | 14,862 | 5.6% |
| Net Income | 1,201 | 740 | 1,382 | 1,518 | 1,807 | 19.0% |
Balance Sheet
|
|---|
| Cash | 2,784 | 3,284 | 4,387 | 4,222 | 3,068 | -27.3% |
| Short Term Debt | 5,928 | 40,595 | 65,931 | 70,066 | 81,455 | 16.3% |
| Long Term Debt | 5,462 | 21,245 | 38,693 | 32,189 | 35,686 | 10.9% |
Cash flow
|
|---|
| Capex | 75 | | | | | |
Ratios
|
|---|
| Revenue growth | -70.2% | 23.5% | 57.6% | 24.4% | 12.5% | |
| EBITDA growth | 20.1% | 34.8% | 55.1% | 19.6% | 5.6% | |
| EBITDA Margin | 64.4% | 70.2% | 69.1% | 66.5% | 62.4% | -4.1% |
| Net Income Margin | 13.7% | 6.9% | 8.1% | 7.2% | 7.6% | 0.4% |
| CAPEX, % of revenue | 0.9% | | | | | 0.0% |
| ROIC | | | | 2.0% | 2.1% | 0.0% |
| ROE | 23.3% | 7.5% | 10.0% | 9.6% | 10.7% | 1.1% |
| Net Debt/EBITDA | 1.5x | 7.7x | 8.5x | 7.0x | 7.7x | 0.7x |
Revenue and profitability
The company's Revenue surged on 12.5% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 4.1 pp from 66.5% to 62.4% in FY2015.
Net Income marign showed almost no change in FY2015.
Return on investment
The company operates at low ROIC (2.07%) and ROE (10.70%). ROIC showed almost no change in FY2015. ROE increased slightly on 1.1 pp from 9.6% to 10.7% in FY2015.
Leverage (Debt)
Debt level is 7.7x Net Debt / EBITDA and 7.9x Debt / EBITDA. Net Debt / EBITDA jumped on 0.7x from 7.0x to 7.7x in FY2015. Debt surged on 14.6% in FY2015 while cash dropped on 27.3% in FY2015.
Valuation
The company's trades at EV/EBITDA 8.9x and P/E 9.7x while industy averages are 10.5x and 26.1x.
Appendix 1: Peers in Finance (including NBFCs)
Below you can find Magma Fincorp 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) | | -62.8% | -25.6% | 55.0% | 47.3% |
| Muthoot Capital Services ($MUTHTFN) | -83.3% | 81.1% | 59.3% | 48.1% | |
| |
|---|
| Median (23 companies) | -51.4% | 23.2% | 24.4% | 19.8% | 11.9% |
|---|
| Magma Fincorp ($MAGMA) | | 23.5% | 57.6% | 24.4% | 12.5% |
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 ($SREINFRA) | 78.5% | 80.6% | 83.9% | 83.7% | 78.5% |
| |
|---|
| Median (24 companies) | 69.5% | 64.8% | 65.4% | 65.5% | 67.5% |
|---|
| Magma Fincorp ($MAGMA) | 64.4% | 70.2% | 69.1% | 66.5% | 62.4% |
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 ($AKCAPIT) | 1.9% | 0.3% | 2.9% | 4.1% | |
| |
|---|
| Median (21 companies) | 1.8% | 0.8% | 0.7% | 1.0% | 0.7% |
|---|
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Motilal Oswal Financial Services ($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% | 4.2% | 5.0% |
|---|
| Magma Fincorp ($MAGMA) | | | | 2.0% | 2.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pnb Gilts ($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) | 3.0x | 4.4x | 3.6x | 2.9x | 5.5x |
|---|
| Magma Fincorp ($MAGMA) | 1.5x | 7.7x | 8.5x | 7.0x | 7.7x |
