Apollo Tyres CAPEX jumped on 27.7% in 2015 while Revenue decreased on 4.4%
12-05-2015 • About Apollo Tyres (
$APOLLOTYRE) • By InTwits
Apollo Tyres reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Apollo Tyres is a company in decline: FY2015 revenue growth was -4.4%, 5 years revenue CAGR was -7.5%
- EBITDA Margin is expanding: 15.2% in FY2015 vs. 14.2% in FY2014 vs. 11.0% in FY2011
- Apollo Tyres has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.6%. At the same time it's in pair with industry average of 7.9%.
- CAPEX is quite volatile: 1,131 in FY2015, 1,337 in FY2014, 1,069 in FY2013, 955 in FY2012, 272 in FY2011
- The company has highly profitable business model: ROIC is at 23.9%
- It operates with high leverage: Net Debt/EBITDA is 0.3x while industry average is 0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Apollo Tyres ($APOLLOTYRE) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 88,677 | 121,533 | 127,946 | 133,103 | 127,257 | -4.4% |
| SG&A | | | | | 2,914 | |
| EBITDA | 9,723 | 11,768 | 14,567 | 18,877 | 19,350 | 2.5% |
| Net Income | 4,402 | 4,099 | 6,126 | 10,051 | 9,776 | -2.7% |
Balance Sheet
|
|---|
| Cash | 1,671 | 1,635 | 3,245 | 4,073 | 5,909 | 45.1% |
| Short Term Debt | 12,029 | 13,589 | 6,285 | 2,751 | 7,667 | 178.7% |
| Long Term Debt | 12,281 | 16,158 | 16,531 | 7,137 | 3,339 | -53.2% |
Cash flow
|
|---|
| Capex | 11,187 | 7,930 | 6,250 | 4,989 | 6,373 | 27.7% |
Ratios
|
|---|
| Revenue growth | -52.8% | 37.1% | 5.3% | 4.0% | -4.4% | |
| EBITDA growth | -18.3% | 21.0% | 23.8% | 29.6% | 2.5% | |
| EBITDA Margin | 11.0% | 9.7% | 11.4% | 14.2% | 15.2% | 1.0% |
| Net Income Margin | 5.0% | 3.4% | 4.8% | 7.6% | 7.7% | 0.1% |
| SG&A, % of revenue | | | | | 2.3% | 2.3% |
| CAPEX, % of revenue | 12.6% | 6.5% | 4.9% | 3.7% | 5.0% | 1.3% |
| ROIC | 15.0% | 14.7% | 16.8% | 23.6% | 23.9% | 0.3% |
| ROE | 20.1% | 15.6% | 19.7% | 25.2% | 20.3% | -4.9% |
| Net Debt/EBITDA | 2.3x | 2.4x | 1.3x | 0.3x | 0.3x | -0.0x |
Revenue and profitability
The company's Revenue decreased on 4.4% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.0 pp from 14.2% to 15.2% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
Apollo Tyres's CAPEX/Revenue was 5.0% in FY2015. CAPEX/Revenue decreased slightly on 1.5 pp from 6.5% in FY2012 to 5.0% in FY2015. It's average CAPEX/Revenue for the last three years was 4.5%.
Return on investment
The company operates at high and attractive ROIC (23.92%) and ROE (20.33%). ROIC showed almost no change in FY2015. ROE decreased on 4.9 pp from 25.2% to 20.3% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.3x and Debt / EBITDA is 0.6x. Net Debt / EBITDA decreased on 0.045x from 0.3x to 0.3x in FY2015. Debt surged on 11.3% in FY2015 while cash surged on 45.1% in FY2015.
Appendix 1: Peers in Auto Tyres & Rubber Products
Below you can find Apollo Tyres benchmarking vs. other companies in Auto Tyres & Rubber 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 |
|---|
| Rubfila International ($RUBFILA) | -58.0% | 20.9% | 4.7% | 25.1% | |
| Balkrishna Industries ($BALKRISIND) | -54.5% | 41.5% | 12.5% | 11.1% | |
| Ceat ($CEATLTD) | -46.5% | 28.0% | 8.7% | 9.9% | |
| Goodyear India ($GOODYEAR) | -12.8% | -2.1% | 5.9% | 0.7% | |
| Pix Transmissions ($PIXTRANS) | -2.5% | -5.8% | 12.3% | -14.1% | |
| |
|---|
| Median (5 companies) | -46.5% | 20.9% | 8.7% | 9.9% | |
|---|
| Apollo Tyres ($APOLLOTYRE) | | 37.1% | 5.3% | 4.0% | -4.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Balkrishna Industries ($BALKRISIND) | 17.6% | 17.0% | 20.1% | 26.0% | |
| Pix Transmissions ($PIXTRANS) | 19.0% | 20.4% | 21.7% | 16.9% | |
| Rubfila International ($RUBFILA) | 6.0% | 12.3% | 14.9% | 12.6% | |
| Ceat ($CEATLTD) | 4.6% | 6.1% | 9.0% | 11.9% | |
| Goodyear India ($GOODYEAR) | | | 9.4% | 9.8% | |
| |
|---|
| Median (5 companies) | 11.8% | 14.6% | 14.9% | 12.6% | |
|---|
| Apollo Tyres ($APOLLOTYRE) | 11.0% | 9.7% | 11.4% | 14.2% | 15.2% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Balkrishna Industries ($BALKRISIND) | 10.8% | 23.4% | 29.9% | 23.5% | |
| Rubfila International ($RUBFILA) | 2.2% | 0.3% | 9.1% | 5.0% | |
| Goodyear India ($GOODYEAR) | 0.0% | 0.0% | 3.2% | 3.1% | |
| Ceat ($CEATLTD) | 16.7% | 3.1% | 1.7% | 2.7% | |
| |
|---|
| Median (4 companies) | 10.5% | 1.7% | 6.1% | 4.1% | |
|---|
| Apollo Tyres ($APOLLOTYRE) | 12.6% | 6.5% | 4.9% | 3.7% | 5.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ceat ($CEATLTD) | 8.5% | 11.4% | 19.1% | 27.6% | |
| Goodyear India ($GOODYEAR) | 33.1% | 25.5% | 30.3% | 26.7% | |
| Rubfila International ($RUBFILA) | 12.5% | 35.1% | 26.2% | 22.7% | |
| Multibase India ($MULTIBASE) | 17.6% | 12.3% | 22.8% | 22.0% | |
| Balkrishna Industries ($BALKRISIND) | 17.4% | 17.7% | 17.3% | 19.7% | |
| |
|---|
| Median (8 companies) | 14.3% | 11.8% | 19.1% | 22.7% | |
|---|
| Apollo Tyres ($APOLLOTYRE) | 15.0% | 14.7% | 16.8% | 23.6% | 23.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Balkrishna Industries ($BALKRISIND) | 1.7x | 3.2x | 3.2x | 2.5x | |
| Ceat ($CEATLTD) | 5.8x | 4.5x | 2.1x | 1.3x | |
| Tirupati Foam ($TIRFOAM) | 3.8x | 6.4x | 5.4x | 0.0x | |
| Pix Transmissions ($PIXTRANS) | 4.6x | 4.8x | -0.6x | 0.0x | |
| Rubfila International ($RUBFILA) | 4.7x | -0.2x | -0.1x | -0.3x | |
| |
|---|
| Median (7 companies) | 4.6x | 4.5x | -0.1x | 0.0x | |
|---|
| Apollo Tyres ($APOLLOTYRE) | 2.3x | 2.4x | 1.3x | 0.3x | 0.3x |
