Blue Star Infotech EBITDA jumped on 22.8% in 2015 while Revenue decreased slightly on 2.0%

14-05-2015 • About Blue Star Infotech ($BLUESTINFO) • By InTwits

Blue Star Infotech reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

EBITDA Margin is quite volatile: 9.4% in FY2015, 7.5% in FY2014, 4.9% in FY2013, 1.5% in FY2012, 12.8% in FY2011
Blue Star Infotech has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's in pair with industry average of 11.7%.
CAPEX is quite volatile: 18.2 in FY2015, 62.3 in FY2014, 59.3 in FY2013, 17.3 in FY2012, 71.9 in FY2011
The company has highly profitable business model: ROIC is at 17.4%

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

Blue Star Infotech ($BLUESTINFO) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	1,203	1,264	1,885	2,702	2,649	-2.0%
EBITDA	154	19	92	203	250	22.8%
Net Income	84	36	50	149	182	22.1%
Balance Sheet
Cash	105	136	0	201	336	66.9%
Short Term Debt		0	1	45	47	3.7%
Long Term Debt		0	0	0	0
Cash flow
Capex	72	17	59	62	18	-70.8%
Ratios
Revenue growth	-61.0%	5.1%	49.2%	43.3%	-2.0%
EBITDA growth	3.0%	-87.8%	390.4%	121.9%	22.8%
EBITDA Margin	12.8%	1.5%	4.9%	7.5%	9.4%	1.9%
Net Income Margin	7.0%	2.8%	2.6%	5.5%	6.9%	1.4%
CAPEX, % of revenue	6.0%	1.4%	3.1%	2.3%	0.7%	-1.6%
ROIC			7.1%	16.3%	17.4%	1.2%
ROE	10.2%	4.3%	5.8%	15.7%	16.8%	1.1%
Net Debt/EBITDA	-0.7x	-7.3x	0.0x	-0.8x	-1.2x	-0.4x

Revenue and profitability

The company's Revenue decreased slightly on 2.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 7.5% to 9.4% in FY2015.

Net Income marign increased slightly on 1.4 pp from 5.5% to 6.9% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 0.69%. Blue Star Infotech's CAPEX/Revenue decreased slightly on 0.68 pp from 1.4% in FY2012 to 0.69% in FY2015. For the last three years the average CAPEX/Revenue was 2.0%.

Return on investment

The company operates at good ROIC (17.45%) and ROE (16.81%). ROIC increased slightly on 1.2 pp from 16.3% to 17.4% in FY2015. ROE increased slightly on 1.1 pp from 15.7% to 16.8% in FY2015.

Leverage (Debt)

Debt level is -1.2x Net Debt / EBITDA and 0.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from -0.8x to -1.2x in FY2015. Debt increased on 3.7% in FY2015 while cash jumped on 66.9% in FY2015.

Appendix 1: Peers in IT Software Products

Below we provide Blue Star Infotech benchmarking against other companies in IT Software Products 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 5	FY2011	FY2012	FY2013	FY2014	FY2015
Saksoft ($SAKSOFT)	-60.3%	16.3%	29.5%	41.1%
Twinstar Industries ($TWINSTAR)	-90.5%	204.5%	59.8%	38.8%
Datamatics Global Services ($DATAMATICS)	-71.6%	60.5%	24.5%	33.4%
Trigyn Technologies ($TRIGYN)	-59.5%	16.8%	27.1%	29.8%
Tata Elxsi ($TATAELXSI)		29.5%	15.4%	24.6%	9.6%
Median (15 companies)	-50.1%	16.5%	15.4%	14.2%	9.6%
Blue Star Infotech ($BLUESTINFO)		5.1%	49.2%	43.3%	-2.0%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Atishay Infotech ($ATISHAY)	19.6%	35.7%	28.1%	25.8%	24.5%
Subex ($SUBEX)	26.8%	27.3%	17.0%	24.9%	23.6%
Tata Elxsi ($TATAELXSI)	11.4%	13.8%	11.9%	17.6%	20.9%
Datamatics Global Services ($DATAMATICS)	5.6%	9.2%	9.4%	12.4%
Aurionpro Solutions ($AURIONPRO)	21.4%	15.9%	14.5%	12.0%
Median (13 companies)	8.1%	9.6%	9.4%	10.2%	16.4%
Blue Star Infotech ($BLUESTINFO)	12.8%	1.5%	4.9%	7.5%	9.4%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Dion Global Solutions ($DION)	10.7%	39.9%	11.9%	29.6%
Datamatics Global Services ($DATAMATICS)	5.7%	20.2%	3.1%	12.9%
Aurionpro Solutions ($AURIONPRO)	15.7%	17.5%	12.3%	12.6%
Atishay Infotech ($ATISHAY)	3.8%	41.7%	8.6%	10.0%
Tata Elxsi ($TATAELXSI)	7.0%	5.3%	5.4%	3.1%	3.9%
Median (10 companies)	4.6%	4.5%	6.9%	2.3%	3.9%
Blue Star Infotech ($BLUESTINFO)	6.0%	1.4%	3.1%	2.3%	0.7%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Tata Elxsi ($TATAELXSI)	13.2%	22.5%	19.1%	38.3%	55.4%
Trigyn Technologies ($TRIGYN)	15.7%	15.2%	21.1%	26.2%
Mindteck (India) ($MINDTECK)	6.7%	-2.6%	1.2%	20.0%
Atishay Infotech ($ATISHAY)	30.9%	27.2%	15.7%	19.2%
Datamatics Global Services ($DATAMATICS)	2.5%	9.8%	11.4%	16.4%
Median (31 companies)	4.7%	3.9%	4.7%	14.5%	12.4%
Blue Star Infotech ($BLUESTINFO)			7.1%	16.3%	17.4%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Subex ($SUBEX)	4.2x	4.6x	13.1x	8.5x	8.0x
Aurionpro Solutions ($AURIONPRO)	1.1x	1.7x	1.7x	1.9x
Datamatics Global Services ($DATAMATICS)	0.2x	0.5x	0.3x	0.5x
Atishay Infotech ($ATISHAY)	-1.0x	-0.2x	-0.0x	0.3x	0.0x
Ace Software Exports ($ACESOFT)				0.0x
Median (14 companies)	0.2x	0.7x	0.0x	0.0x	-0.3x
Blue Star Infotech ($BLUESTINFO)	-0.7x	-7.3x	0.0x	-0.8x	-1.2x

Blue Star Infotech stock price chart

Blue Star Infotech financials

mln.	FY2010	FY2011	FY2012

Revenue	3,081	1,203	1,264
EBITDA	149.2	153.6	18.690
Net income	137.8	83.985	35.708
CAPEX	17.512	71.933	17.312
Debt	0.000	0.000	0.000
Cash	91.292	104.9	135.7

About Blue Star Infotech

Blue Star Infotech Limited, an information technology and software services company, offers technology, consultancy, and outsourcing services in India and internationally. It provides application services, including IT strategy, enterprise architecture, process re-engineering, application development and maintenance, application integration, application portfolio rationalization, and legacy modernization; end-to-end BI/analytics solutions; cloud computing services, which comprise business and transition planning, technology transition, and application delivery services; and mobility solutions for enterprises. The company also offers package selection and software implementation services; product engineering services, such as product development, support, testing, SAAS enablement, localization, professional services, reverse engineering and end-of-life support, UI modernization, and product differentiators; testing services; and a range of usability analysis and consulting, user experience design, and accessibility services. In addition, it provides Mobile Vacation Planner, a travel planning solution that helps consumers plan a vacation; and is developing SmartRetreat, a tablet based mobile app that acts as a self service mobile concierge solution for hotel guests. The company serves IT, media and entertainment, manufacturing, travel and hospitality, pharmaceuticals, and health sciences companies. Blue Star Infotech Limited has strategic partnerships with Microsoft, Oracle, SAS, SAP, QlikTech, Hewlett-Packard, AmazonWebServices, Cisco, Netbiscuits, Verifaya, and HPVertica. Blue Star Infotech Limited was founded in 1983 and is headquartered in Mumbai, India.