Aditya Birla Nuvo reports 57.1% CAPEX decline while 2.4% Revenue growth

14-05-2015 • About Aditya Birla Nuvo ($ABIRLANUVO) • By InTwits

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

EBITDA Margin is expanding: 20.4% in FY2015 vs. 17.7% in FY2014 vs. 17.0% in FY2011
Aditya Birla Nuvo has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.9%. At the same time it's a lot of higher than industry average of 5.1%.
CAPEX is quite volatile: 19,003 in FY2015, 44,275 in FY2014, 16,609 in FY2013, 16,701 in FY2012, 28,815 in FY2011
The company has business model with average profitability: ROIC is at 10.3%
It operates with high leverage: Net Debt/EBITDA is 4.6x while industry average is 2.3x

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

Aditya Birla Nuvo ($ABIRLANUVO) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	179,995	218,403	254,902	258,915	265,155	2.4%
SG&A				5,942	6,739	13.4%
EBITDA	30,645	29,383	37,892	45,864	53,971	17.7%
Net Income	8,221	8,901	10,589	11,429	14,155	23.9%
Balance Sheet
Cash	8,014	13,148	8,275	7,155	11,247	57.2%
Short Term Debt	48,457	56,849	71,667	65,343	111,816	71.1%
Long Term Debt	44,552	52,835	88,870	118,956	150,366	26.4%
Cash flow
Capex	28,815	16,701	16,609	44,275	19,003	-57.1%
Ratios
Revenue growth	-59.7%	21.3%	16.7%	1.6%	2.4%
EBITDA growth	110.6%	-4.1%	29.0%	21.0%	17.7%
EBITDA Margin	17.0%	13.5%	14.9%	17.7%	20.4%	2.6%
Net Income Margin	4.6%	4.1%	4.2%	4.4%	5.3%	0.9%
SG&A, % of revenue				2.3%	2.5%	0.2%
CAPEX, % of revenue	16.0%	7.6%	6.5%	17.1%	7.2%	-9.9%
ROIC	14.1%	10.3%	10.8%	10.3%	10.3%	0.1%
ROE	13.6%	12.6%	12.5%	11.1%	11.8%	0.7%
Net Debt/EBITDA	2.8x	3.3x	4.0x	3.9x	4.6x	0.8x

Revenue and profitability

Aditya Birla Nuvo's Revenue increased on 2.4% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.6 pp from 17.7% to 20.4% in FY2015.

SG&A as a % of Revenue showed almost no change in FY2015.

Net Income marign increased slightly on 0.92 pp from 4.4% to 5.3% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 Aditya Birla Nuvo had CAPEX/Revenue of 7.2%. CAPEX/Revenue showed almost no change from FY2012 to FY2015. For the last three years the average CAPEX/Revenue was 10.3%.

Return on investment

The company operates at low ROIC (10.32%) and ROE (11.77%). ROIC showed almost no change in FY2015. ROE increased slightly on 0.66 pp from 11.1% to 11.8% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 4.6x and Debt / EBITDA is 4.9x. Net Debt / EBITDA surged on 0.8x from 3.9x to 4.6x in FY2015. Debt jumped on 42.3% in FY2015 while cash jumped on 57.2% in FY2015.

Appendix 1: Peers in Diversified

Below we provide Aditya Birla Nuvo benchmarking against other companies in Diversified 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
Dcm Shriram ($DCMSHRIRAM)		21.2%	10.2%	11.6%	-9.0%
3M India ($3MINDIA)	-48.0%	17.9%	12.0%	8.5%
Mercator ($MERCATOR)	-22.6%	30.8%	0.9%	-7.4%
Median (3 companies)	-35.3%	21.2%	10.2%	8.5%	-9.0%
Aditya Birla Nuvo ($ABIRLANUVO)		21.3%	16.7%	1.6%	2.4%

Top companies by EBITDA margin, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Mercator ($MERCATOR)	22.8%	15.8%	13.6%	18.6%
Dcm Shriram ($DCMSHRIRAM)	5.2%	6.9%	10.0%	8.4%	7.3%
3M India ($3MINDIA)	13.1%	8.7%	7.3%	7.2%
Median (3 companies)	13.1%	8.7%	10.0%	8.4%	7.3%
Aditya Birla Nuvo ($ABIRLANUVO)	17.0%	13.5%	14.9%	17.7%	20.4%

Top companies by CAPEX/Revenue, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Mercator ($MERCATOR)	48.5%	7.4%	2.0%	11.4%
Dcm Shriram ($DCMSHRIRAM)	2.2%	1.3%	1.4%	1.5%	1.9%
3M India ($3MINDIA)	0.0%	0.0%	0.0%	0.0%
Median (3 companies)	2.2%	1.3%	1.4%	1.5%	1.9%
Aditya Birla Nuvo ($ABIRLANUVO)	16.0%	7.6%	6.5%	17.1%	7.2%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Dcm Shriram ($DCMSHRIRAM)	1.8%	5.9%	12.3%	12.1%	10.3%
3M India ($3MINDIA)		15.5%	10.4%	8.9%
Mercator ($MERCATOR)	5.5%	3.4%	1.0%	3.5%
Advanced Micronic Devices ($ADVNCMIC)	9.2%	9.1%	-2.8%
Raja Bahadur International ($RAJABAH)
Median (6 companies)	5.5%	9.1%	5.7%	8.9%	10.3%
Aditya Birla Nuvo ($ABIRLANUVO)	14.1%	10.3%	10.8%	10.3%	10.3%

Top companies by Net Debt / EBITDA


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Mercator ($MERCATOR)	4.9x	4.9x	5.4x	4.7x
Dcm Shriram ($DCMSHRIRAM)	7.5x	4.7x	2.6x	1.7x	1.6x
3M India ($3MINDIA)	-0.2x	0.2x	1.0x	0.5x
Swasti Vinayaka Art And Heritage Corporation ($SVARTCORP)	2.7x	2.8x	0.0x	0.0x
Median (4 companies)	2.7x	4.5x	2.6x	1.1x	1.6x
Aditya Birla Nuvo ($ABIRLANUVO)	2.8x	3.3x	4.0x	3.9x	4.6x

Aditya Birla Nuvo stock price chart

Aditya Birla Nuvo financials

mln.	FY2010	FY2011	FY2012

Revenue	446,166	179,995	218,403
EBITDA	14,549	30,645	29,383
Net income	1,546	8,221	8,901
CAPEX	14,661	28,815	16,701
Debt	74,803	93,009	109,684
Cash	7,327	8,014	13,148

About Aditya Birla Nuvo

Aditya Birla Nuvo Limited, together with its subsidiaries, is engaged in the financial services, telecom, fashion and lifestyle, and manufacturing businesses worldwide. It provides life insurance products comprising protection, children's future, wealth with protection, and health and wellness solutions, as well as retirement solutions; and other financial services, such as asset management, non-bank financial services, private equity, equity and commodity broking, wealth management, and general insurance advisory services. The company also offers GSM mobile telephony services under the Idea brand; and fashion and lifestyle products, including branded apparels and accessories under the Louis Philippe, Van Heusen, Allen Solly, Peter England, Planet Fashion, Collective, People, and Pantaloons brands. In addition, the company manufactures and retails linen fabric, linen yarn, worsted yarn, and wool tops through Linen Club stores. Further, it manufactures and sells urea, agricultural seeds, and agrochemicals; viscose filament yarn under the Ray One brand; caustic soda for various applications; and insulators that are used by power utilities and multinational companies in sub-station and transmission systems. The company was formerly known as Indian Rayon And Industries Limited and changed its name to Aditya Birla Nuvo Limited in November 2005. Aditya Birla Nuvo Limited was incorporated in 1956 and is based in Mumbai, India.