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Fortune Financial Services (India) reports 371% CAPEX growth and 188% Revenue growth

13-05-2015 • About Fortune Financial Services (India) ($FORTUNEF) • By InTwits

Fortune Financial Services (India) reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is quite volatile: 31.2% in FY2015, 31.3% in FY2014, -7.6% in FY2013, 20.9% in FY2012, 32.5% in FY2011
  • Fortune Financial Services (India) has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.9%. At the same time it's a lot of higher than industry average of 1.9%.
  • CAPEX is quite volatile: 116 in FY2015, 24.7 in FY2014, 7.9 in FY2013, 8.3 in FY2012, 49.5 in FY2011
  • It operates with high leverage: Net Debt/EBITDA is 8.9x while industry average is 3.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Fortune Financial Services (India) ($FORTUNEF) key annual financial indicators

mln. INR201120122013201420152015/2014
P&L
Revenue8937895935511,589188.4%
EBITDA290164-45172496187.9%
Net Income114-22-126-1215
Balance Sheet
Cash127658659208251.5%
Short Term Debt1,4871,5471,2721,9184,384128.5%
Long Term Debt3000217
Cash flow
Capex498825116370.7%
Ratios
Revenue growth-51.9%-11.7%-24.9%-7.1%188.4%
EBITDA growth-10.4%-43.3%-127.4%-482.5%187.9%
EBITDA Margin32.5%20.9%-7.6%31.3%31.2%-0.1%
Net Income Margin12.7%-2.8%-21.3%-2.3%0.9%3.2%
CAPEX, % of revenue5.5%1.0%1.3%4.5%7.3%2.8%
ROE10.4%-1.9%-11.5%-0.9%0.8%1.7%
Net Debt/EBITDA4.7x9.0x10.8x8.9x-1.9x

Revenue and profitability


Fortune Financial Services (India)'s Revenue jumped on 188% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 29.6 pp from 18.8% to -10.8% in FY2015.

Net Income marign increased on 3.2 pp from -2.3% to 0.93% in FY2015.

Capital expenditures (CAPEX) and working capital investments


In FY2015 Fortune Financial Services (India) had CAPEX/Revenue of 7.3%. CAPEX/Revenue increased on 6.3 pp from 1.0% in FY2012 to 7.3% in FY2015. It's average level of CAPEX/Revenue for the last three years was 4.4%.

Leverage (Debt)


Debt level is 8.9x Net Debt / EBITDA and 9.3x Debt / EBITDA. Net Debt / EBITDA dropped on 1.9x from 10.8x to 8.9x in FY2015. Debt surged on 140% in FY2015 while cash surged on 251% in FY2015.

Valuation


The company's trades at EV/EBITDA 20.0x and P/E 371.8x while industy averages are 10.5x and 26.1x. Fortune Financial Services (India)'s EV/(EBITDA-CAPEX) is 26.1x with the industry average at 4.7x.

Appendix 1: Peers in Finance (including NBFCs)


Below you can find Fortune Financial Services (India) 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%23.5%26.9%20.8%12.5%
Fortune Financial Services (India) ($FORTUNEF)-11.7%-24.9%-7.1%188.4%


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%70.0%67.8%66.4%67.5%
Fortune Financial Services (India) ($FORTUNEF)32.5%20.9%-7.6%31.3%31.2%


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 ($IITL)3.7%1.1%0.3%4.9%
A.K.Capital Services ($AKCAPIT)1.9%0.3%2.9%4.1%
Reliance Capital ($RELCAPITAL)1.8%2.0%0.7%2.5%
 
Median (20 companies)1.7%0.6%0.7%0.9%0.7%
Fortune Financial Services (India) ($FORTUNEF)5.5%1.0%1.3%4.5%7.3%


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%4.1%4.2%
Fortune Financial Services (India) ($FORTUNEF)


Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Pnb Gilts ($PNBGILTS)9.0x14.2x11.2x11.3x8.8x
Vibrant Global Capital ($VGCL)7.8x23.1x32.8x10.7x
Rural Electrification Corporation ($RECLTD)8.1x8.3x8.0x7.5x
Srei Infrastructure Finance ($SREINFRA)6.4x7.0x6.2x7.5x8.0x
Cholamandalam Investment And Finance Company ($CHOLAFIN)9.4x9.0x7.9x7.4x7.2x
 
Median (39 companies)2.6x4.4x3.6x2.9x3.9x
Fortune Financial Services (India) ($FORTUNEF)4.7x9.0x10.8x8.9x


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