Allsec Technologies revenue dropped on 24.4% in 2015 while EBITDA Margin increased on 7.4 pp from -13.5% to -6.1%

20-05-2015 • About Allsec Technologies ($ALLSEC) • By InTwits

Allsec Technologies reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Allsec Technologies is a company in decline: FY2015 revenue growth was -24.4%, 5 years revenue CAGR was -2.4%
The company operates at negative EBITDA Margin: -6.1%
The company has unprofitable business model: ROIC is at -26.5%
It operates with high leverage: Net Debt/EBITDA is 2.1x while industry average is -0.4x

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Allsec Technologies ($ALLSEC) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	1,585	1,831	3,201	1,996	1,509	-24.4%
EBITDA	30	-4	366	-269	-91
Net Income	-76	-170	20	-250	-141
Balance Sheet
Cash	73	39	125	41	67	64.8%
Short Term Debt	30	18	15	142	120	-15.7%
Long Term Debt	4	2	33	26	8	-68.5%
Cash flow
Capex	83	120	185	118		-100.0%
Ratios
Revenue growth	-6.8%	15.5%	74.8%	-37.6%	-24.4%
EBITDA growth	-204.5%	-114.2%	-8,616.3%	-173.5%	-66.0%
EBITDA Margin	1.9%	-0.2%	11.4%	-13.5%	-6.1%	7.4%
Net Income Margin	-4.8%	-9.3%	0.6%	-12.5%	-9.3%	3.2%
CAPEX, % of revenue	5.2%	6.6%	5.8%	5.9%		-5.9%
ROIC	-8.7%	-13.0%	19.9%	-40.1%	-26.5%	13.7%
ROE	-6.3%	-15.7%	1.9%	-27.7%	-19.9%	7.7%
Net Debt/EBITDA	-1.3x		-0.2x			0.0x

Revenue and profitability

Allsec Technologies's Revenue dropped on 24.4% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.4 pp from -13.5% to -6.1% in FY2015.

Net Income marign increased on 3.2 pp from -12.5% to -9.3% in FY2015.

Return on investment

The company operates at negative ROIC (-26.47%) and ROE (-19.94%). ROIC surged on 13.7 pp from -40.1% to -26.5% in FY2015. ROE increased on 7.7 pp from -27.7% to -19.9% in FY2015.

Leverage (Debt)

Debt level is 2.1x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2015. Debt dropped on 23.9% in FY2015 while cash surged on 64.8% in FY2015.

Appendix 1: Peers in BPO/KPO

Below you can find Allsec Technologies benchmarking vs. other companies in BPO/KPO industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Eclerx Services ($ECLERX)	-69.1%	38.2%	39.7%	27.3%
Hinduja Global Solutions ($HGS)	-66.6%	44.8%	27.6%	26.3%
Vakrangee ($VAKRANGEE)	-72.2%	52.1%	14.3%	26.2%
Xchanging Solutions ($XCHANGING)	65.8%	-62.2%	16.4%	18.0%
Firstsource Solutions ($FSL)		12.1%	25.0%	10.2%	-2.3%
Median (5 companies)	-67.8%	38.2%	25.0%	26.2%	-2.3%
Allsec Technologies ($ALLSEC)		15.5%	74.8%	-37.6%	-24.4%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Eclerx Services ($ECLERX)	55.9%	40.4%	38.7%	42.0%
Vakrangee ($VAKRANGEE)	15.6%	17.8%	24.7%	27.4%
Hinduja Global Solutions ($HGS)	14.6%	11.9%	11.3%	13.0%
Firstsource Solutions ($FSL)	14.5%	8.7%	9.9%	11.7%	12.5%
Xchanging Solutions ($XCHANGING)	3.1%	13.1%	10.1%	4.1%
Median (5 companies)	14.6%	13.1%	11.3%	13.0%	12.5%
Allsec Technologies ($ALLSEC)	1.9%	-0.2%	11.4%	-13.5%	-6.1%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Vakrangee ($VAKRANGEE)	6.8%	27.7%	6.0%	11.7%
Hinduja Global Solutions ($HGS)	6.0%	31.5%	7.2%	6.1%
Eclerx Services ($ECLERX)	7.0%	5.3%	4.0%	2.5%
Xchanging Solutions ($XCHANGING)	2.5%	3.4%	2.0%	1.8%
Firstsource Solutions ($FSL)	2.1%	2.3%	1.4%	1.2%	1.5%
Median (5 companies)	6.0%	5.3%	4.0%	2.5%	1.5%
Allsec Technologies ($ALLSEC)	5.2%	6.6%	5.8%	5.9%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Eclerx Services ($ECLERX)	83.3%	61.1%	58.7%	62.4%
Vakrangee ($VAKRANGEE)	17.1%	20.2%	21.3%	28.3%
Hinduja Global Solutions ($HGS)	9.9%	8.1%	8.2%	12.4%
Firstsource Solutions ($FSL)	7.0%	4.0%	7.0%	9.0%	9.5%
Xchanging Solutions ($XCHANGING)	1.4%	8.3%	6.6%	2.2%
Median (7 companies)	11.9%	8.3%	7.0%	12.4%	9.5%
Allsec Technologies ($ALLSEC)	-8.7%	-13.0%	19.9%	-40.1%	-26.5%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Firstsource Solutions ($FSL)	4.3x	4.2x	4.2x	2.8x	2.5x
Hinduja Global Solutions ($HGS)	-3.0x	0.8x	1.7x	1.5x
Vakrangee ($VAKRANGEE)	1.1x	1.9x	1.4x	0.9x
Eclerx Services ($ECLERX)	-0.1x	-0.7x	-0.5x	-0.7x
Xchanging Solutions ($XCHANGING)	-1.2x	-0.8x	-2.8x	-6.2x
Median (5 companies)	-0.0x	0.8x	1.4x	0.9x	2.5x

Allsec Technologies stock price chart

Allsec Technologies financials

mln.	FY2010	FY2011	FY2012

Revenue	1,700	1,585	1,831
EBITDA	-28.886	30.200	-4.300
Net income	-101.047	-75.800	-169.800
CAPEX	187.2	83.100	120.3
Debt	25.604	33.600	20.000
Cash	35.436	72.500	38.500

About Allsec Technologies

Allsec Technologies Limited provides information technology (IT) enabled services in India, the United States, the United Kingdom, and internationally. The company operates through two segments, IT Enabled Services and Mortgage Services. It is engaged in data verification, processing of orders received through telephone calls, telemarketing, monitoring of calls, customer services, and HR and payroll processing services. The company offers Web development, Web design, search engine optimization, strategic tele services, customer care, and quality management services. It also provides loss mitigation, portfolio management, and management consulting services, including advisory, component, and subservicing services for mortgage lenders, servicers, asset managers, and investors; and management consultancy services in health care and business analytics. The company provides outsourced solutions in customer engagement, sales and retention, and quality assurance for businesses, such as BFSI, insurance, telecommunication, retail, healthcare, energy and utilities, and technology. Allsec Technologies Limited also exports its services. The company was founded in 1998 and is headquartered in Chennai, India.