Jsw Steel Debt surged on 20.3% in 2015 and EBITDA increased on 2.5%
15-05-2015 • About Jsw Steel (
$JSWSTEEL) • By InTwits
Jsw Steel reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Jsw Steel has high CAPEX intensity: 5 year average CAPEX/Revenue was 14.5%. At the same time it's in pair with industry average of 13.6%.
- CAPEX is quite volatile: 5,463 in FY2015, 4,299 in FY2014, 5,587 in FY2013, 3,853 in FY2012, 8,968 in FY2011
- The company has business model with low profitability: ROIC is at 9.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Jsw Steel ($JSWSTEEL) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 241,059 | 343,681 | 382,097 | 512,196 | 529,715 | 3.4% |
| EBITDA | 48,797 | 61,154 | 65,205 | 91,686 | 94,023 | 2.5% |
| Net Income | 17,540 | 5,377 | 9,631 | 4,520 | 17,966 | 297.5% |
Balance Sheet
|
|---|
| Cash | 20,254 | 2,639 | 3,256 | 6,630 | 19,133 | 188.6% |
| Short Term Debt | 54,114 | 78,240 | 42,974 | 48,871 | 43,132 | -11.7% |
| Long Term Debt | 113,349 | 128,891 | 173,932 | 267,026 | 336,766 | 26.1% |
Cash flow
|
|---|
| Capex | 53,144 | 40,795 | 56,301 | 57,629 | 67,206 | 16.6% |
Ratios
|
|---|
| Revenue growth | -69.8% | 42.6% | 11.2% | 34.0% | 3.4% | |
| EBITDA growth | 16.9% | 25.3% | 6.6% | 40.6% | 2.5% | |
| EBITDA Margin | 20.2% | 17.8% | 17.1% | 17.9% | 17.7% | -0.2% |
| Net Income Margin | 7.3% | 1.6% | 2.5% | 0.9% | 3.4% | 2.5% |
| CAPEX, % of revenue | 22.0% | 11.9% | 14.7% | 11.3% | 12.7% | 1.4% |
| ROIC | 9.7% | 11.0% | 10.3% | 12.1% | 9.9% | -2.2% |
| ROE | 13.7% | 3.1% | 5.6% | 2.2% | 8.1% | 5.9% |
| Net Debt/EBITDA | 3.0x | 3.3x | 3.3x | 3.4x | 3.8x | 0.5x |
Revenue and profitability
The company's Revenue increased on 3.4% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 11.1% to 9.1% in FY2015.
Net Income marign increased on 2.5 pp from 0.88% to 3.4% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 12.7%. Jsw Steel's CAPEX/Revenue increased slightly on 0.82 pp from 11.9% in FY2012 to 12.7% in FY2015. It's average CAPEX/Revenue for the last three years was 12.9%.The company maintained rich investment policy and has spent a big chunk of EBITDA (71.5%) to CAPEX.
Return on investment
The company operates at low ROIC (9.90%) and ROE (8.11%). ROIC decreased on 2.2 pp from 12.1% to 9.9% in FY2015. ROE increased on 5.9 pp from 2.2% to 8.1% in FY2015.
Leverage (Debt)
Debt level is 3.8x Net Debt / EBITDA and 4.0x Debt / EBITDA. Net Debt / EBITDA jumped on 0.5x from 3.4x to 3.8x in FY2015. Debt jumped on 20.3% in FY2015 while cash surged on 189% in FY2015.
Appendix 1: Peers in Iron & Steel/Interm.Products
Below we provide Jsw Steel benchmarking against other companies in Iron & Steel/Interm.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 |
|---|
| Inducto Steel ($INDCTST) | | | 54.5% | 150.2% | |
| Kamdhenu Ispat ($KIL) | -65.5% | 25.7% | 13.7% | 68.3% | |
| Metkore Alloys & Industries ($METKORE) | -49.1% | 43.7% | -10.9% | 53.4% | |
| Tata Metaliks ($TATAMETALI) | | -7.0% | -19.0% | 44.6% | -1.3% |
| Visa Steel ($VISASTEEL) | -12.5% | 3.3% | -24.1% | 42.0% | |
| |
|---|
| Median (31 companies) | -35.9% | 11.9% | 3.2% | 2.8% | 4.8% |
|---|
| Jsw Steel ($JSWSTEEL) | | 42.6% | 11.2% | 34.0% | 3.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Steel & Power ($JINDALSTEL) | 48.3% | 37.5% | 30.5% | 28.1% | |
| Bhushan Steel ($BHUSANSTL) | 29.0% | 31.2% | 32.3% | 28.1% | |
| Sarda Energy & Minerals ($SARDAEN) | 15.2% | 16.3% | 21.5% | 21.3% | |
| Jai Corp ($JAICORPLTD) | 18.4% | 14.1% | 16.3% | 16.0% | 12.7% |
| Prakash Industries ($PRAKASH) | 20.7% | 17.8% | 13.0% | 14.5% | |
| |
|---|
| Median (28 companies) | 13.0% | 9.4% | 9.0% | 7.0% | 10.9% |
|---|
| Jsw Steel ($JSWSTEEL) | 20.2% | 17.8% | 17.1% | 17.9% | 17.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Steel & Power ($JINDALSTEL) | 64.7% | 34.2% | 47.6% | 69.6% | |
| Bhushan Steel ($BHUSANSTL) | 81.1% | 47.2% | 44.0% | 50.4% | |
| Jayaswal Neco Industries ($JAYNECOIND) | 27.9% | 20.4% | 44.0% | 31.1% | |
| Surana Industries ($SURANAIND) | | 41.3% | 54.8% | 21.5% | |
| Steel Authority Of India ($SAIL) | 25.3% | 20.9% | 20.7% | 19.3% | |
| |
|---|
| Median (20 companies) | 11.9% | 7.5% | 10.4% | 6.6% | 3.2% |
|---|
| Jsw Steel ($JSWSTEEL) | 22.0% | 11.9% | 14.7% | 11.3% | 12.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Metaliks ($TATAMETALI) | 3.1% | -23.5% | -3.7% | 19.9% | 57.4% |
| Nova Iron & Steel ($NOVIS) | | | | 15.4% | |
| Kirloskar Ferrous Industries ($KIRLFER) | 20.0% | 19.1% | 16.8% | 12.4% | 14.7% |
| Pennar Industries ($PENIND) | 31.6% | 26.8% | 18.4% | 12.3% | 15.7% |
| Tata Steel ($TATASTEEL) | 12.8% | 7.6% | 6.2% | 8.9% | |
| |
|---|
| Median (40 companies) | 9.4% | 6.8% | 5.5% | 5.5% | 15.2% |
|---|
| Jsw Steel ($JSWSTEEL) | 9.7% | 11.0% | 10.3% | 12.1% | 9.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jai Balaji Industries ($JAIBALAJI) | 5.5x | | | 89.7x | |
| Visa Steel ($VISASTEEL) | 6.9x | 20.1x | | 24.4x | |
| Ismt ($ISMTLTD) | 4.4x | 5.3x | 9.8x | 19.9x | |
| Kic Metaliks ($KAJARIR) | 6.6x | 9.2x | 3.0x | 18.2x | |
| Bhushan Steel ($BHUSANSTL) | 8.1x | 6.3x | 8.6x | 12.9x | |
| |
|---|
| Median (29 companies) | 3.8x | 4.6x | 4.4x | 3.2x | 0.8x |
|---|
| Jsw Steel ($JSWSTEEL) | 3.0x | 3.3x | 3.3x | 3.4x | 3.8x |
