Saurashtra Cement Net Income surged on 224% in 2015 and Revenue increased on 5.9%
14-05-2015 • About Saurashtra Cement (
$SAURASHCEM) • By InTwits
Saurashtra Cement reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 16.8% in FY2015, 11.9% in FY2014, 21.6% in FY2013, 11.4% in FY2012, 9.7% in FY2011
- Saurashtra Cement has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's in pair with industry average of 4.3%.
- CAPEX is quite volatile: 161 in FY2015, 81.5 in FY2014, 107 in FY2013, 60.4 in FY2012, 37.9 in FY2011
- The company has highly profitable business model: ROIC is at 26.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Saurashtra Cement ($SAURASHCEM) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,927 | 4,400 | 5,403 | 5,314 | 5,627 | 5.9% |
| EBITDA | 380 | 500 | 1,168 | 632 | 945 | 49.5% |
| Net Income | -571 | -205 | 1,837 | 209 | 676 | 223.5% |
Balance Sheet
|
|---|
| Cash | 56 | 44 | 208 | 391 | 197 | -49.6% |
| Short Term Debt | 79 | 250 | 627 | 57 | 44 | -23.0% |
| Long Term Debt | 1,213 | 1,027 | 1,145 | 378 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 38 | 60 | 107 | 82 | 161 | 96.9% |
Ratios
|
|---|
| Revenue growth | -43.4% | 12.0% | 22.8% | -1.7% | 5.9% | |
| EBITDA growth | | 31.6% | 133.5% | -45.9% | 49.5% | |
| EBITDA Margin | 9.7% | 11.4% | 21.6% | 11.9% | 16.8% | 4.9% |
| Net Income Margin | -14.5% | -4.7% | 34.0% | 3.9% | 12.0% | 8.1% |
| CAPEX, % of revenue | 1.0% | 1.4% | 2.0% | 1.5% | 2.9% | 1.3% |
| ROIC | 4.3% | 38.6% | 42.7% | 13.9% | 26.9% | 13.0% |
| ROE | | | | 13.2% | 34.1% | 20.9% |
| Net Debt/EBITDA | 3.3x | 2.5x | 1.3x | 0.1x | -0.2x | -0.2x |
Revenue and profitability
The company's Revenue increased on 5.9% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.4 pp from 22.0% to 31.3% in FY2015.
Net Income marign increased on 8.1 pp from 3.9% to 12.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Saurashtra Cement had CAPEX/Revenue of 2.9%. Saurashtra Cement's CAPEX/Revenue increased slightly on 1.5 pp from 1.4% in FY2012 to 2.9% in FY2015. For the last three years the average CAPEX/Revenue was 2.1%.
Return on investment
The company operates at high and attractive ROIC (26.87%) and ROE (34.11%). ROIC jumped on 13.0 pp from 13.9% to 26.9% in FY2015. ROE surged on 20.9 pp from 13.2% to 34.1% in FY2015.
Leverage (Debt)
Debt level is -0.2x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 0.1x to -0.2x in FY2015. Debt dropped on 89.8% in FY2015 while cash dropped on 49.6% in FY2015.
Valuation
Saurashtra Cement's trades at EV/EBITDA 2.3x and P/E 3.4x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 2.7x with the industry average at 4.7x.
Appendix 1: Peers in Cement & Cement Products
Below we provide Saurashtra Cement benchmarking against other companies in Cement & Cement 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 |
|---|
| Heidelbergcement India ($HEIDELBERG) | -50.1% | -13.1% | 37.5% | 36.3% | |
| Shree Digvijay Cement Co ($SHREDIGCEM) | -23.4% | 14.9% | -13.5% | 24.7% | |
| Indian Hume Pipe Co ($INDIANHUME) | -43.1% | -20.3% | 34.5% | 18.3% | |
| Birla Corporation ($BIRLACORPN) | | 6.2% | 13.8% | 15.9% | 6.4% |
| Ambuja Cements ($AMBUJACEM) | -23.0% | 14.3% | -6.5% | 9.0% | |
| |
|---|
| Median (15 companies) | -40.8% | 14.9% | 11.4% | 5.1% | 12.5% |
|---|
| Saurashtra Cement ($SAURASHCEM) | | 12.0% | 22.8% | -1.7% | 5.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ambuja Cements ($AMBUJACEM) | 23.4% | 25.6% | 18.2% | 19.4% | |
| Heidelbergcement India ($HEIDELBERG) | 6.9% | 8.3% | 9.3% | 15.9% | |
| Deccan Cements ($DECCANCE) | 19.2% | 22.8% | 13.2% | 14.7% | |
| Acc ($ACC) | 19.2% | 19.3% | 14.6% | 12.9% | |
| J.K.Cement ($JKCEMENT) | 13.3% | 20.3% | 19.2% | 12.7% | |
| |
|---|
| Median (14 companies) | 13.3% | 19.2% | 13.2% | 10.6% | 7.9% |
|---|
| Saurashtra Cement ($SAURASHCEM) | 9.7% | 11.4% | 21.6% | 11.9% | 16.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| J.K.Cement ($JKCEMENT) | 14.1% | 6.5% | 18.8% | 55.8% | |
| Acc ($ACC) | 4.8% | 5.0% | 8.6% | 13.7% | |
| K.C.P ($KCP) | 28.2% | 8.6% | 9.9% | 12.6% | |
| Visaka Industries ($VIKASAS) | 4.6% | 5.5% | 6.5% | 10.2% | 2.2% |
| Shree Digvijay Cement Co ($SHREDIGCEM) | 13.6% | 4.1% | 8.5% | 8.5% | |
| |
|---|
| Median (11 companies) | 9.0% | 6.5% | 7.8% | 8.3% | 5.0% |
|---|
| Saurashtra Cement ($SAURASHCEM) | 1.0% | 1.4% | 2.0% | 1.5% | 2.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | 15.5% | 7.6% | 13.8% | 15.0% | |
| Ambuja Cements ($AMBUJACEM) | 17.0% | 19.4% | 11.2% | 13.0% | |
| Acc ($ACC) | 18.5% | 20.2% | 12.7% | 11.0% | |
| K.C.P ($KCP) | 14.9% | 17.6% | 6.7% | 7.1% | |
| Deccan Cements ($DECCANCE) | 7.6% | 17.4% | 8.0% | 6.4% | |
| |
|---|
| Median (16 companies) | 10.2% | 13.7% | 8.2% | 6.4% | 5.7% |
|---|
| Saurashtra Cement ($SAURASHCEM) | 4.3% | 38.6% | 42.7% | 13.9% | 26.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prism Cement ($PRISMCEM) | 3.4x | 4.8x | 6.0x | 10.0x | 6.0x |
| J.K.Cement ($JKCEMENT) | 4.5x | 2.3x | 2.3x | 6.9x | |
| India Cements ($INDIACEM) | 4.8x | 3.2x | 3.5x | 5.5x | |
| Visaka Industries ($VIKASAS) | 1.3x | 1.3x | 2.2x | 3.8x | 2.7x |
| K.C.P ($KCP) | 2.6x | 1.1x | 3.0x | 3.6x | |
| |
|---|
| Median (13 companies) | 2.4x | 1.8x | 2.9x | 3.2x | 4.4x |
|---|
| Saurashtra Cement ($SAURASHCEM) | 3.3x | 2.5x | 1.3x | 0.1x | -0.2x |
