K.C.P reports 53.8% CAPEX decline while 12.4% Revenue growth
19-05-2015 • About K.C.P (
$KCP) • By InTwits
K.C.P reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- K.C.P has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.9%. At the same time it's in pair with industry average of 15.7%.
- CAPEX is quite volatile: 606 in FY2015, 1,311 in FY2014, 1,124 in FY2013, 875 in FY2012, 1,857 in FY2011
- The company has business model with low profitability: ROIC is at 9.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
K.C.P ($KCP) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,587 | 10,163 | 11,354 | 10,424 | 11,716 | 12.4% |
| EBITDA | 1,391 | 1,951 | 1,072 | 1,219 | 1,526 | 25.1% |
| Net Income | 787 | 1,060 | 652 | 345 | 504 | 46.1% |
Balance Sheet
|
|---|
| Cash | 217 | 435 | 770 | 252 | 1,011 | 301.2% |
| Short Term Debt | 1,498 | 844 | 2,020 | 1,548 | 1,325 | -14.4% |
| Long Term Debt | 2,290 | 1,810 | 1,925 | 3,125 | 3,183 | 1.8% |
Cash flow
|
|---|
| Capex | 1,857 | 875 | 1,124 | 1,311 | 606 | -53.8% |
Ratios
|
|---|
| Revenue growth | -51.9% | 54.3% | 11.7% | -8.2% | 12.4% | |
| EBITDA growth | -14.2% | 40.3% | -45.0% | 13.7% | 25.1% | |
| EBITDA Margin | 21.1% | 19.2% | 9.4% | 11.7% | 13.0% | 1.3% |
| Net Income Margin | 12.0% | 10.4% | 5.7% | 3.3% | 4.3% | 1.0% |
| CAPEX, % of revenue | 28.2% | 8.6% | 9.9% | 12.6% | 5.2% | -7.4% |
| ROIC | 14.9% | 17.6% | 6.7% | 7.1% | 9.3% | 2.3% |
| ROE | 19.6% | 22.7% | 12.9% | 6.6% | 9.8% | 3.2% |
| Net Debt/EBITDA | 2.6x | 1.1x | 3.0x | 3.6x | 2.3x | -1.3x |
Revenue and profitability
K.C.P's Revenue jumped on 12.4% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.4 pp from 18.8% to 20.2% in FY2015.
Net Income marign increased slightly on 0.99 pp from 3.3% to 4.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
K.C.P's CAPEX/Revenue was 5.2% in FY2015. CAPEX/Revenue decreased on 3.4 pp from 8.6% in FY2012 to 5.2% in FY2015. Average CAPEX/Revenue for the last three years was 9.2%.
Return on investment
The company operates at low ROIC (9.32%) and ROE (9.79%). ROIC increased on 2.3 pp from 7.1% to 9.3% in FY2015. ROE increased on 3.2 pp from 6.6% to 9.8% in FY2015.
Leverage (Debt)
Debt level is 2.3x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA dropped on 1.3x from 3.6x to 2.3x in FY2015. Debt decreased on 3.5% in FY2015 while cash surged on 301% in FY2015.
Valuation
K.C.P's trades at EV/EBITDA 7.9x and P/E 16.9x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 13.1x with the industry average at 4.7x.
Appendix 1: Peers in Cement & Cement Products
Below we provide K.C.P 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 ($AMBUJACEM) | -23.0% | 14.3% | -6.5% | 9.0% | |
| |
|---|
| Median (15 companies) | -38.5% | 14.7% | 11.4% | 5.1% | 9.5% |
|---|
| K.C.P ($KCP) | | 54.3% | 11.7% | -8.2% | 12.4% |
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 ($JKCEMENT) | 13.3% | 20.3% | 19.2% | 12.7% | |
| |
|---|
| Median (14 companies) | 13.3% | 16.2% | 13.6% | 10.7% | 9.5% |
|---|
| K.C.P ($KCP) | 21.1% | 19.2% | 9.4% | 11.7% | 13.0% |
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% | |
| 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% | |
| Ambuja Cements ($AMBUJACEM) | 7.7% | 7.2% | 8.5% | 8.3% | |
| |
|---|
| Median (11 companies) | 7.7% | 5.5% | 7.1% | 5.5% | 3.2% |
|---|
| K.C.P ($KCP) | 28.2% | 8.6% | 9.9% | 12.6% | 5.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | 15.5% | 7.6% | 13.8% | 15.0% | |
| Saurashtra Cement ($SAURASHCEM) | 4.3% | 38.6% | 42.7% | 13.9% | 26.9% |
| Ambuja Cements ($AMBUJACEM) | 17.0% | 19.4% | 11.2% | 13.0% | |
| Acc ($ACC) | 18.5% | 20.2% | 12.7% | 11.0% | |
| Deccan Cements ($DECCANCE) | 7.6% | 17.4% | 8.0% | 6.4% | |
| |
|---|
| Median (16 companies) | 7.6% | 13.7% | 9.8% | 6.4% | 7.0% |
|---|
| K.C.P ($KCP) | 14.9% | 17.6% | 6.7% | 7.1% | 9.3% |
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 |
| Deccan Cements ($DECCANCE) | 4.1x | 1.7x | 3.3x | 3.4x | |
| |
|---|
| Median (13 companies) | 2.8x | 2.1x | 2.6x | 3.0x | 2.7x |
|---|
| K.C.P ($KCP) | 2.6x | 1.1x | 3.0x | 3.6x | 2.3x |
