Indian Metals & Ferro Alloys reports 46.0% CAPEX decline while 2.0% Revenue growth
14-05-2015 • About Indian Metals & Ferro Alloys (
$INDMETA-B) • By InTwits
Indian Metals & Ferro Alloys reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Indian Metals & Ferro Alloys has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.0%. At the same time it's a lot of higher than industry average of 14.7%.
- CAPEX is quite volatile: 722 in FY2015, 1,336 in FY2014, 2,380 in FY2013, 3,848 in FY2012, 2,820 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 4.3x while industry average is 3.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Indian Metals & Ferro Alloys ($INDMETA-B) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 10,405 | 11,456 | 12,733 | 13,179 | 13,448 | 2.0% |
| EBITDA | 3,437 | 2,340 | 2,723 | 3,062 | 2,408 | -21.4% |
| Net Income | 1,622 | 616 | 528 | 349 | 37 | -89.5% |
Balance Sheet
|
|---|
| Cash | 377 | 285 | 740 | 313 | 855 | 173.4% |
| Short Term Debt | 1,424 | 2,443 | 3,233 | 2,978 | 3,456 | 16.1% |
| Long Term Debt | 5,053 | 7,254 | 7,764 | 7,901 | 7,824 | -1.0% |
Cash flow
|
|---|
| Capex | 2,820 | 3,848 | 2,380 | 1,336 | 722 | -46.0% |
Ratios
|
|---|
| Revenue growth | -34.5% | 10.1% | 11.1% | 3.5% | 2.0% | |
| EBITDA growth | 141.7% | -31.9% | 16.4% | 12.4% | -21.4% | |
| EBITDA Margin | 33.0% | 20.4% | 21.4% | 23.2% | 17.9% | -5.3% |
| Net Income Margin | 15.6% | 5.4% | 4.1% | 2.6% | 0.3% | -2.4% |
| CAPEX, % of revenue | 27.1% | 33.6% | 18.7% | 10.1% | 5.4% | -4.8% |
| ROIC | 24.0% | 10.6% | 9.9% | 7.8% | 5.6% | -2.2% |
| ROE | 24.1% | 8.1% | 6.5% | 4.0% | 0.4% | -3.6% |
| Net Debt/EBITDA | 1.8x | 4.0x | 3.8x | 3.5x | 4.3x | 0.9x |
Revenue and profitability
The company's Revenue increased on 2.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.9 pp from 6.8% to 14.6% in FY2015.
Net Income marign decreased on 2.4 pp from 2.6% to 0.27% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Indian Metals & Ferro Alloys had CAPEX/Revenue of 5.4%. Indian Metals & Ferro Alloys showed big decline in CAPEX/Revenue of 28.2 pp from 33.6% in FY2012 to 5.4% in FY2015. Average CAPEX/Revenue for the last three years was 11.4%.
Return on investment
The company operates at low ROIC (5.63%) and ROE (0.42%). ROIC decreased on 2.2 pp from 7.8% to 5.6% in FY2015. ROE decreased on 3.6 pp from 4.0% to 0.42% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.3x and Debt / EBITDA is 4.7x. Net Debt / EBITDA jumped on 0.9x from 3.5x to 4.3x in FY2015. Debt increased on 3.7% in FY2015 while cash surged on 173% in FY2015.
Valuation
The company's trades at EV/EBITDA 6.2x and P/E 124.3x while industy averages are 10.5x and 26.1x. Indian Metals & Ferro Alloys's EV/(EBITDA-CAPEX) is 8.9x with the industry average at 4.7x.
Appendix 1: Peers in
Below we provide Indian Metals & Ferro Alloys benchmarking against other companies in 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 |
|---|
| Bharat Rasayan ($BHARATRA) | -82.3% | 51.3% | 32.1% | 92.7% | |
| Indbulbbph ($INDBULBBPH) | -54.2% | -3.2% | -6.5% | 33.5% | |
| Uplbbph ($UPLBBPH) | | 33.2% | 19.7% | 17.3% | 10.9% |
| Ginni Filaments ($GINNIFIL) | | 2.8% | 4.6% | 16.6% | -2.3% |
| Monetbbph ($MONETBBPH) | -58.7% | 22.3% | 3.7% | 11.6% | |
| |
|---|
| Median (17 companies) | -37.9% | 17.7% | 8.5% | 4.2% | 9.2% |
|---|
| Indian Metals & Ferro Alloys ($INDMETA-B) | | 10.1% | 11.1% | 3.5% | 2.0% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jenson & Nicholson Financial Services ($JNFSL) | | 0.0% | 0.0% | 0.0% | 0.0% |
| Bombay Drugs & Pharmas ($BOMDRDM) | | 0.0% | 0.0% | 0.0% | 0.0% |
| Southern Herbals ($SOUTHNHE) | | 0.0% | 0.0% | 0.0% | 0.0% |
| Tafnccpeq ($TAFNCCPEQ) | | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (4 companies) | | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Madras Fertilizers ($MADRASFERT) | 48.3% | 64.5% | 31.7% | 61.2% | |
| Kaleconbbph ($KALECONBBPH) | | 27.7% | 44.3% | 43.5% | |
| Indbulbbph ($INDBULBBPH) | 27.9% | 36.7% | 34.6% | 29.5% | |
| Uplbbph ($UPLBBPH) | 18.8% | 18.2% | 18.3% | 18.8% | 20.0% |
| Bharat Rasayan ($BHARATRA) | 7.5% | 12.8% | 14.9% | 18.2% | |
| |
|---|
| Median (15 companies) | 13.4% | 12.8% | 11.3% | 14.5% | 10.3% |
|---|
| Indian Metals & Ferro Alloys ($INDMETA-B) | 33.0% | 20.4% | 21.4% | 23.2% | 17.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Monetbbph ($MONETBBPH) | 9.6% | 131.4% | 5.2% | 139.2% | |
| Jklakbbph ($JKLAKBBPH) | 23.6% | 28.5% | 28.8% | 24.6% | |
| Rilbbph ($RILBBPH) | 12.7% | 4.6% | 7.7% | 13.8% | 16.9% |
| Bharat Rasayan ($BHARATRA) | 3.0% | 32.9% | 41.5% | 7.1% | |
| Merckbbph ($MERCKBBPH) | 2.7% | 2.1% | 4.3% | 4.9% | |
| |
|---|
| Median (13 companies) | 5.0% | 8.6% | 5.2% | 3.6% | 8.6% |
|---|
| Indian Metals & Ferro Alloys ($INDMETA-B) | 27.1% | 33.6% | 18.7% | 10.1% | 5.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kaleconbbph ($KALECONBBPH) | | | 89.0% | 103.8% | |
| Madras Fertilizers ($MADRASFERT) | 52.6% | 44.7% | 18.0% | 23.9% | |
| Bharat Rasayan ($BHARATRA) | 10.0% | 22.1% | 13.7% | 21.9% | |
| Ginni Filaments ($GINNIFIL) | 11.6% | -1.0% | 15.2% | 21.6% | 12.8% |
| Uplbbph ($UPLBBPH) | 16.3% | 17.1% | 15.9% | 18.2% | 22.1% |
| |
|---|
| Median (28 companies) | 10.1% | 8.4% | 5.8% | 5.3% | 0.0% |
|---|
| Indian Metals & Ferro Alloys ($INDMETA-B) | 24.0% | 10.6% | 9.9% | 7.8% | 5.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Monetbbph ($MONETBBPH) | 5.3x | 9.8x | 16.3x | 27.4x | |
| Asleyf ($ASLEYF) | 2.0x | 2.5x | 5.0x | 17.8x | 5.0x |
| Indbulbbph ($INDBULBBPH) | 8.5x | 4.3x | 4.8x | 5.5x | |
| Jklakbbph ($JKLAKBBPH) | 3.0x | 2.1x | 2.3x | 5.3x | |
| Madras Fertilizers ($MADRASFERT) | 5.5x | 3.5x | 6.5x | 5.0x | |
| |
|---|
| Median (16 companies) | 1.8x | 2.1x | 2.2x | 2.3x | 2.1x |
|---|
| Indian Metals & Ferro Alloys ($INDMETA-B) | 1.8x | 4.0x | 3.8x | 3.5x | 4.3x |
