Syndicate Bank revenue growth accelerated from 7.9% in FY2014 to 20.2% in FY2015

09-05-2015 • About Syndicate Bank ($SYNDIBANK) • By InTwits

Syndicate Bank reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Syndicate Bank has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%.
The company has potentially unprofitable business model: ROIC is at 2.1%
It operates with high leverage: Net Debt/EBITDA is 4.6x while industry average is

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Syndicate Bank ($SYNDIBANK) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	123,663	163,445	182,951	197,414	237,251	20.2%
Net Income	10,492	13,144	22,064	18,551	16,641	-10.3%
Balance Sheet
Cash	104,431	88,086	80,953	127,120	119,745	-5.8%
Short Term Debt	11,208	6,012	8,849	392,412	508,643	29.6%
Long Term Debt	231,212	272,553	366,439	110,446	153,666	39.1%
Cash flow
Capex	726	1,134	2,127	1,823	3,543	94.4%
Ratios
Revenue growth	-67.8%	32.2%	11.9%	7.9%	20.2%
Net Income Margin	8.5%	8.0%	12.1%	9.4%	7.0%	-2.4%
CAPEX, % of revenue	0.6%	0.7%	1.2%	0.9%	1.5%	0.6%
ROIC			3.5%	2.8%	2.1%	-0.8%
ROE	16.5%	16.3%	21.1%	14.9%	12.2%	-2.7%

Revenue and profitability

Syndicate Bank's Revenue jumped on 20.2% in FY2015.

Net Income marign decreased on 2.4 pp from 9.4% to 7.0% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 Syndicate Bank had CAPEX/Revenue of 1.5%. Syndicate Bank's CAPEX/Revenue increased slightly on 0.80 pp from 0.69% in FY2012 to 1.5% in FY2015. Average CAPEX/Revenue for the last three years was 1.2%.

Return on investment

The company operates at good ROE (12.21%) while ROIC is low (2.06%). ROIC decreased slightly on 0.78 pp from 2.8% to 2.1% in FY2015. ROE decreased on 2.7 pp from 14.9% to 12.2% in FY2015.

Leverage (Debt)

Debt surged on 31.7% in FY2015 while cash decreased on 5.8% in FY2015.

Appendix 1: Peers in Banks

Below you can find Syndicate Bank benchmarking vs. other companies in Banks 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
Dcb Bank ($DCBBANK)		26.7%	26.2%	22.5%	25.3%
Yes Bank ($YESBANK)		53.0%	33.7%	21.6%	17.7%
Bank Of India ($BANKINDIA)	-66.6%	30.3%	12.4%	18.1%
Karur Vysya Bank ($KARURVYSYA)		45.9%	29.7%	16.5%	11.0%
Union Bank Of India ($UNIONBANK)	-70.8%	26.9%	19.5%	15.7%
Median (28 companies)	-55.6%	28.5%	16.2%	10.9%	10.5%
Syndicate Bank ($SYNDIBANK)		32.2%	11.9%	7.9%	20.2%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Kotak Mahindra Bank ($KOTAKBANK)	1.3%	1.4%	1.4%	2.6%	1.4%
Karur Vysya Bank ($KARURVYSYA)	4.2%	2.0%	2.9%	2.5%	1.7%
Dhanlaxmi Bank ($DHANBANK)	6.8%	3.0%	1.7%	2.2%
Jammu & Kashmir Bank ($J&KBANK)	5.6%	1.4%	1.3%	2.2%
Lakshmi Vilas Bank ($LAKSHVILAS)	4.4%	2.1%	1.4%	1.6%	2.4%
Median (27 companies)	1.3%	1.2%	1.1%	1.3%	1.4%
Syndicate Bank ($SYNDIBANK)	0.6%	0.7%	1.2%	0.9%	1.5%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Axis Bank ($AXISBANK)	10.2%	9.6%	8.9%	9.1%	8.8%
Yes Bank ($YESBANK)	11.8%	9.8%	8.4%	8.4%	8.7%
Karnataka Bank ($KTKBANK)	5.5%	6.8%	10.2%	7.7%
Kotak Mahindra Bank ($KOTAKBANK)	7.8%	6.8%	6.5%	7.1%	8.5%
Oriental Bank Of Commerce ($ORIENTBANK)	12.4%	7.6%	7.4%	6.7%
Median (28 companies)	7.1%	7.2%	6.3%	3.4%	5.5%
Syndicate Bank ($SYNDIBANK)			3.5%	2.8%	2.1%

Syndicate Bank stock price chart

Syndicate Bank financials

mln.	FY2010	FY2011	FY2012

Revenue	384,333	123,663	163,445
EBITDA	0.000	0.000	0.000
Net income	8,143	10,492	13,144
CAPEX	612.6	725.5	1,134
Debt	309,133	242,420	278,565
Cash	71,891	104,431	88,086

About Syndicate Bank

Syndicate Bank Limited provides a range of banking products and services to corporate, small to medium-sized enterprises, and retail customers in India. The company offers deposit services, including savings bank accounts, current accounts, and term deposits. It also provides housing loans, retail trade loans, vehicle loans, consumer loans, education loans, mortgage loans, investment loans, and short-term loans to the agricultural sector and for associated activities. In addition, the company offers a range of services comprising credit and debit cards, locker facilities, cash management services, remittance services, and direct tax collections. Further, it provides e-payment services; back office services to its clients and other financial institutions; and Internet, mobile, and SMS banking services; life and non-life insurance products; and mutual fund services. Additionally, Syndicate Bank Limited offers outsourcing service, such as hardware testing, retail loan follow-up, card personalization, and database services. As of September 22, 2014, it operated 3,300 branches. The company was formerly known as Canara Industrial and Banking Syndicate, Ltd. Syndicate Bank Limited was founded in 1925 and is headquartered in Manipal, India.