Balkrishna Industries CAPEX dropped on 58.2% in 2015 while Revenue increased slightly on 1.2%
14-05-2015 • About Balkrishna Industries (
$BALKRISIND) • By InTwits
Balkrishna Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Balkrishna Industries has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.5%. At the same time it's a lot of higher than industry average of 5.1%.
- CAPEX is quite volatile: 3,708 in FY2015, 8,866 in FY2014, 10,143 in FY2013, 7,049 in FY2012, 2,306 in FY2011
- The company has business model with average profitability: ROIC is at 10.4%
- It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is 0.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Balkrishna Industries ($BALKRISIND) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 21,322 | 30,166 | 33,939 | 37,719 | 38,168 | 1.2% |
| EBITDA | 3,760 | 5,120 | 6,835 | 9,820 | 7,286 | -25.8% |
| Net Income | 1,945 | 2,689 | 3,499 | 4,746 | 4,726 | -0.4% |
Balance Sheet
|
|---|
| Cash | 113 | 577 | 101 | 143 | 4,334 | 2,931.4% |
| Short Term Debt | 5,921 | 7,694 | 5,973 | 7,321 | 9,986 | 36.4% |
| Long Term Debt | 478 | 9,398 | 15,666 | 17,064 | 13,593 | -20.3% |
Cash flow
|
|---|
| Capex | 2,306 | 7,049 | 10,143 | 8,866 | 3,708 | -58.2% |
Ratios
|
|---|
| Revenue growth | -54.5% | 41.5% | 12.5% | 11.1% | 1.2% | |
| EBITDA growth | -2.5% | 36.2% | 33.5% | 43.7% | -25.8% | |
| EBITDA Margin | 17.6% | 17.0% | 20.1% | 26.0% | 19.1% | -6.9% |
| Net Income Margin | 9.1% | 8.9% | 10.3% | 12.6% | 12.4% | -0.2% |
| CAPEX, % of revenue | 10.8% | 23.4% | 29.9% | 23.5% | 9.7% | -13.8% |
| ROIC | 17.4% | 17.7% | 17.3% | 19.7% | 10.4% | -9.3% |
| ROE | 25.2% | 27.3% | 27.4% | 28.4% | 22.7% | -5.8% |
| Net Debt/EBITDA | 1.7x | 3.2x | 3.2x | 2.5x | 2.6x | 0.2x |
Revenue and profitability
The company's Revenue increased slightly on 1.2% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.3 pp from 14.2% to 23.5% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 9.7% in FY2015. The company showed big decline in CAPEX/Revenue of 13.7 pp from 23.4% in FY2012 to 9.7% in FY2015. It's average CAPEX/Revenue for the last three years was 21.0%.The company invested a large share of EBITDA (50.9%) to CAPEX.
Return on investment
The company operates at good ROE (22.66%) while ROIC is low (10.39%). ROIC decreased on 9.3 pp from 19.7% to 10.4% in FY2015. ROE decreased on 5.8 pp from 28.4% to 22.7% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 3.2x. Net Debt / EBITDA surged on 0.2x from 2.5x to 2.6x in FY2015. Debt decreased on 3.3% in FY2015 while cash jumped on 2,931% in FY2015.
Valuation
Balkrishna Industries's trades at EV/EBITDA 12.6x and P/E 15.3x while industy averages are 10.5x and 26.1x. Balkrishna Industries's EV/(EBITDA-CAPEX) is 25.6x with the industry average at 4.7x.
Appendix 1: Peers in Auto Tyres & Rubber Products
Below you can find Balkrishna Industries 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 ($RUBFILA) | -58.0% | 20.9% | 4.7% | 25.1% | |
| Ceat ($CEATLTD) | -46.5% | 28.0% | 8.7% | 9.9% | |
| Apollo Tyres ($APOLLOTYRE) | | 37.1% | 5.3% | 4.0% | -4.4% |
| Goodyear India ($GOODYEAR) | -12.8% | -2.1% | 5.9% | 0.7% | |
| Pix Transmissions ($PIXTRANS) | -2.5% | -5.8% | 12.3% | -14.1% | |
| |
|---|
| Median (5 companies) | -29.6% | 20.9% | 5.9% | 4.0% | -4.4% |
|---|
| Balkrishna Industries ($BALKRISIND) | | 41.5% | 12.5% | 11.1% | 1.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pix Transmissions ($PIXTRANS) | 19.0% | 20.4% | 21.7% | 16.9% | |
| Apollo Tyres ($APOLLOTYRE) | 11.0% | 9.7% | 11.4% | 14.2% | 15.2% |
| Rubfila International ($RUBFILA) | 6.0% | 12.3% | 14.9% | 12.6% | |
| Ceat ($CEATLTD) | 4.6% | 6.1% | 9.0% | 11.9% | |
| Goodyear India ($GOODYEAR) | | | 9.4% | 9.8% | |
| |
|---|
| Median (5 companies) | 8.5% | 11.0% | 11.4% | 12.6% | 15.2% |
|---|
| Balkrishna Industries ($BALKRISIND) | 17.6% | 17.0% | 20.1% | 26.0% | 19.1% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rubfila International ($RUBFILA) | 2.2% | 0.3% | 9.1% | 5.0% | |
| Apollo Tyres ($APOLLOTYRE) | 12.6% | 6.5% | 4.9% | 3.7% | 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% | 4.0% | 3.4% | 5.0% |
|---|
| Balkrishna Industries ($BALKRISIND) | 10.8% | 23.4% | 29.9% | 23.5% | 9.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ceat ($CEATLTD) | 8.5% | 11.4% | 19.1% | 27.6% | |
| Goodyear India ($GOODYEAR) | 33.1% | 25.5% | 30.3% | 26.7% | |
| Apollo Tyres ($APOLLOTYRE) | 15.0% | 14.7% | 16.8% | 23.6% | 23.9% |
| Rubfila International ($RUBFILA) | 12.5% | 35.1% | 26.2% | 22.7% | |
| Multibase India ($MULTIBASE) | 17.6% | 12.3% | 22.8% | 22.0% | |
| |
|---|
| Median (8 companies) | 13.8% | 11.8% | 19.1% | 23.6% | 23.9% |
|---|
| Balkrishna Industries ($BALKRISIND) | 17.4% | 17.7% | 17.3% | 19.7% | 10.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ceat ($CEATLTD) | 5.8x | 4.5x | 2.1x | 1.3x | |
| Apollo Tyres ($APOLLOTYRE) | 2.3x | 2.4x | 1.3x | 0.3x | 0.3x |
| Tirupati Foam ($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 | 0.3x |
|---|
| Balkrishna Industries ($BALKRISIND) | 1.7x | 3.2x | 3.2x | 2.5x | 2.6x |
