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Gvk Power & Infrastructure CAPEX dropped on 47.7% in 2015 while Revenue increased on 8.1%

16-05-2015 • About Gvk Power & Infrastructure ($GVKPIL) • By InTwits

Gvk Power & Infrastructure reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Gvk Power & Infrastructure doesn't have a profitable business model yet: FY2015 ROIC is 1.6%
  • Gvk Power & Infrastructure has high CAPEX intensity: 5 year average CAPEX/Revenue was 102.8%. At the same time it's a lot of higher than industry average of 52.2%.
  • CAPEX is quite volatile: 16,086 in FY2015, 30,764 in FY2014, 35,642 in FY2013, 34,662 in FY2012, 14,612 in FY2011
  • The company has potentially unprofitable business model: ROIC is at 1.6%
  • It operates with high leverage: Net Debt/EBITDA is 20.2x while industry average is 8.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Gvk Power & Infrastructure ($GVKPIL) key annual financial indicators

mln. INR201120122013201420152015/2014
P&L
Revenue19,14724,91826,07728,20930,4978.1%
EBITDA5,2467,0617,13710,50211,65110.9%
Net Income1,549615-3,360-3,687-8,347
Balance Sheet
Cash3,1777,94414,74213,76113,082-4.9%
Short Term Debt11,48531,41935,40430,08256,51987.9%
Long Term Debt42,113111,155150,236194,555192,218-1.2%
Cash flow
Capex14,61234,66235,64230,76416,086-47.7%
Ratios
Revenue growth-45.5%30.1%4.6%8.2%8.1%
EBITDA growth8.6%34.6%1.1%47.2%10.9%
EBITDA Margin27.4%28.3%27.4%37.2%38.2%1.0%
Net Income Margin8.1%2.5%-12.9%-13.1%-27.4%-14.3%
CAPEX, % of revenue76.3%139.1%136.7%109.1%52.7%-56.3%
ROIC3.8%2.9%1.6%2.3%1.6%-0.7%
ROE4.7%1.8%-9.9%-11.8%-33.4%-21.5%
Net Debt/EBITDA9.6x19.1x23.9x20.1x20.2x0.1x

Revenue and profitability


Gvk Power & Infrastructure's Revenue increased on 8.1% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.5 pp from 18.6% to 17.1% in FY2015.

Net Income marign dropped on 14.3 pp from -13.1% to -27.4% in FY2015.

Capital expenditures (CAPEX) and working capital investments


In FY2015 the company had CAPEX/Revenue of 52.7%. The company showed big decline in CAPEX/Revenue of 86.4 pp from 139% in FY2012 to 52.7% in FY2015. It's average CAPEX/Revenue for the last three years was 99.5%.Gvk Power & Infrastructure investments to CAPEX were large: 138% of EBITDA.

Return on investment


The company operates at low but positive ROIC (1.59%) and negative ROE (-33.35%). ROIC decreased slightly on 0.68 pp from 2.3% to 1.6% in FY2015. ROE dropped on 21.5 pp from -11.8% to -33.4% in FY2015.

Leverage (Debt)


Debt level is 20.2x Net Debt / EBITDA and 21.3x Debt / EBITDA. Net Debt / EBITDA surged on 0.1x from 20.1x to 20.2x in FY2015. Debt jumped on 10.7% in FY2015 while cash decreased on 4.9% in FY2015.

Appendix 1: Peers in Electric Utilities


Below we provide Gvk Power & Infrastructure benchmarking against other companies in Electric Utilities 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
Adani Power ($ADANIPOWER)91.5%65.7%128.0%21.7%
Nava Bharat Ventures ($NBVENTURES)-50.8%-10.4%15.3%51.6%
Ptc India ($PTC)-53.9%-12.1%14.2%31.5%
Bf Utilities ($BFUTILITIE)-79.1%41.4%9.2%20.6%
Power Grid Corporation Of India ($POWERGRID)-63.7%19.7%27.2%18.9%
 
Median (16 companies)-49.0%32.0%15.3%8.8%19.8%
Gvk Power & Infrastructure ($GVKPIL)30.1%4.6%8.2%8.1%


Top companies by EBITDA margin, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Power Grid Corporation Of India ($POWERGRID)85.4%83.7%85.6%84.9%
Bf Utilities ($BFUTILITIE)36.4%43.9%55.1%61.2%
Jaiprakash Power Ventures ($JPPOWER)88.6%91.7%70.6%60.1%
Nhpc ($NHPC)69.6%71.4%66.5%59.3%
Orient Green Power Company ($GREENPOWER)42.7%24.4%53.3%57.8%
 
Median (17 companies)31.9%24.4%24.7%25.0%20.2%
Gvk Power & Infrastructure ($GVKPIL)27.4%28.3%27.4%37.2%38.2%


Top companies by CAPEX/Revenue, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Jaiprakash Power Ventures ($JPPOWER)590.3%378.9%341.9%229.9%
Power Grid Corporation Of India ($POWERGRID)160.8%184.3%172.4%173.4%
Orient Green Power Company ($GREENPOWER)340.9%422.5%170.0%77.0%
Nava Bharat Ventures ($NBVENTURES)39.1%69.0%30.5%70.6%
Ksk Energy Ventures ($KSK)132.8%161.9%80.3%57.0%
 
Median (15 companies)67.4%67.4%39.8%30.3%13.3%
Gvk Power & Infrastructure ($GVKPIL)76.3%139.1%136.7%109.1%52.7%


Top companies by ROIC, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Alstom T&D India ($ALSTOMT&D)11.2%0.0%15.7%14.6%16.1%
Ptc India ($PTC)8.1%11.2%10.4%13.6%
Nava Bharat Ventures ($NBVENTURES)11.7%5.3%6.3%9.2%
Ntpc ($NTPC)8.7%9.0%9.6%9.1%
Tata Power Co ($TATAPOWER)10.1%8.9%8.8%9.0%
 
Median (19 companies)4.5%5.6%5.8%5.5%8.1%
Gvk Power & Infrastructure ($GVKPIL)3.8%2.9%1.6%2.3%1.6%


Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Ksk Energy Ventures ($KSK)13.1x16.3x16.2x27.0x
Lanco Infratech ($LITL)9.3x16.3x12.9x19.2x
Jaiprakash Power Ventures ($JPPOWER)18.9x11.6x13.1x16.7x
Gmr Infrastructure ($GMRINFRA)7.9x19.5x15.1x16.7x
Bf Utilities ($BFUTILITIE)32.2x19.4x17.3x13.2x
 
Median (19 companies)6.1x8.6x6.6x6.2x3.6x
Gvk Power & Infrastructure ($GVKPIL)9.6x19.1x23.9x20.1x20.2x


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