Deep Industries CAPEX dropped on 39.1% in 2015 while Revenue jumped on 11.5%
11-05-2015 • About Deep Industries (
$DEEPIND) • By InTwits
Deep Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Deep Industries has high CAPEX intensity: 5 year average CAPEX/Revenue was 68.0%. At the same time it's a lot of higher than industry average of 18.1%.
- CAPEX is quite volatile: 365 in FY2015, 600 in FY2014, 181 in FY2013, 991 in FY2012, 228 in FY2011
- The company has highly profitable business model: ROIC is at 12.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Deep Industries ($DEEPIND) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 494 | 605 | 653 | 908 | 1,013 | 11.5% |
| EBITDA | 260 | 288 | 362 | 525 | 552 | 5.1% |
| Net Income | 119 | 120 | 122 | 200 | 212 | 6.2% |
Balance Sheet
|
|---|
| Cash | 1 | 3 | 2 | 0 | 7 | 1,264.6% |
| Short Term Debt | 64 | 79 | 144 | 282 | 404 | 43.1% |
| Long Term Debt | 333 | 935 | 731 | 839 | 737 | -12.2% |
Cash flow
|
|---|
| Capex | 228 | 991 | 181 | 600 | 365 | -39.1% |
Ratios
|
|---|
| Revenue growth | -56.2% | 22.5% | 8.0% | 39.1% | 11.5% | |
| EBITDA growth | -16.0% | 10.8% | 25.8% | 45.0% | 5.1% | |
| EBITDA Margin | 52.6% | 47.6% | 55.5% | 57.8% | 54.5% | -3.3% |
| Net Income Margin | 24.0% | 19.8% | 18.6% | 22.0% | 21.0% | -1.1% |
| CAPEX, % of revenue | 46.1% | 164.0% | 27.8% | 66.1% | 36.1% | -30.0% |
| ROIC | 11.6% | 9.6% | 9.5% | 13.1% | 12.3% | -0.8% |
| ROE | 10.3% | 8.6% | 7.5% | 10.9% | 10.3% | -0.7% |
| Net Debt/EBITDA | 1.5x | 3.5x | 2.4x | 2.1x | 2.1x | -0.1x |
Revenue and profitability
The company's Revenue jumped on 11.5% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 16.3 pp from 27.5% to 43.7% in FY2015.
Net Income marign decreased slightly on 1.1 pp from 22.0% to 21.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Deep Industries had CAPEX/Revenue of 36.1%. Deep Industries showed big decline in CAPEX/Revenue of 128 pp from 164% in FY2012 to 36.1% in FY2015. For the last three years the average CAPEX/Revenue was 43.3%.To deliver this fast growth Deep Industries invested a large share of EBITDA (66.2%) to CAPEX.
Return on investment
The company operates at good ROIC (12.32%) while ROE is low (10.28%). ROIC decreased slightly on 0.80 pp from 13.1% to 12.3% in FY2015. ROE decreased slightly on 0.66 pp from 10.9% to 10.3% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.1x and Debt / EBITDA is 2.1x. Net Debt / EBITDA decreased on 0.1x from 2.1x to 2.1x in FY2015. Debt increased slightly on 1.7% in FY2015 while cash surged on 1,265% in FY2015.
Valuation
Deep Industries's trades at EV/EBITDA 6.4x and P/E 11.3x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 19.0x with the industry average at 4.7x.
Appendix 1: Peers in Integrated Oil & Gas
Below we provide Deep Industries benchmarking against other companies in Integrated Oil & Gas 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Essar Oil ($ESSAROIL) | 28.9% | 24.0% | 51.8% | 11.3% | |
| Reliance Industries ($RELIANCE) | | 34.9% | 10.8% | 9.4% | -13.6% |
| |
|---|
| Median (2 companies) | 28.9% | 29.4% | 31.3% | 10.4% | -13.6% |
|---|
| Deep Industries ($DEEPIND) | | 22.5% | 8.0% | 39.1% | 11.5% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Reliance Industries ($RELIANCE) | 14.2% | 9.7% | 8.3% | 8.1% | 10.0% |
| Essar Oil ($ESSAROIL) | 5.3% | 4.0% | 4.2% | 5.1% | |
| |
|---|
| Median (2 companies) | 9.8% | 6.8% | 6.2% | 6.6% | 10.0% |
|---|
| Deep Industries ($DEEPIND) | 52.6% | 47.6% | 55.5% | 57.8% | 54.5% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Reliance Industries ($RELIANCE) | 12.7% | 4.6% | 7.7% | 13.8% | 16.9% |
| Essar Oil ($ESSAROIL) | 9.3% | 4.8% | 2.5% | 1.4% | |
| |
|---|
| Median (2 companies) | 11.0% | 4.7% | 5.1% | 7.6% | 16.9% |
|---|
| Deep Industries ($DEEPIND) | 46.1% | 164.0% | 27.8% | 66.1% | 36.1% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Essar Oil ($ESSAROIL) | 10.1% | 7.8% | 9.9% | 14.6% | |
| Reliance Industries ($RELIANCE) | 10.1% | 8.5% | 7.6% | 7.3% | 7.0% |
| |
|---|
| Median (2 companies) | 10.1% | 8.2% | 8.7% | 11.0% | 7.0% |
|---|
| Deep Industries ($DEEPIND) | 11.6% | 9.6% | 9.5% | 13.1% | 12.3% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Essar Oil ($ESSAROIL) | 5.2x | 7.4x | 6.6x | 3.9x | |
| Reliance Industries ($RELIANCE) | 1.8x | 1.7x | 2.1x | 2.9x | 3.9x |
| |
|---|
| Median (2 companies) | 3.5x | 4.5x | 4.4x | 3.4x | 3.9x |
|---|
| Deep Industries ($DEEPIND) | 1.5x | 3.5x | 2.4x | 2.1x | 2.1x |
