Bajaj Finserv Debt surged on 56.2% in 2015 and Revenue jumped on 26.8%

20-05-2015 • About Bajaj Finserv ($BAJAJFINSV) • By InTwits

Bajaj Finserv reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts: It operates with high leverage: Net Debt/EBITDA is 5.4x while industry average is 3.2x.

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

Bajaj Finserv ($BAJAJFINSV) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	24,446	39,048	50,029	59,453	75,410	26.8%
EBITDA	18,293		38,632	44,141	54,647	23.8%
Net Income	11,148	13,378	15,736	15,441	16,898	9.4%
Balance Sheet
Cash	8,368	7,035	10,840	12,591	9,756	-22.5%
Short Term Debt	24,689	40,310	61,944	92,083	125,378	36.2%
Long Term Debt	28,441	63,829	73,606	103,003	179,310	74.1%
Cash flow
Capex	0	0	0	0	0
Ratios
Revenue growth	-71.5%	59.7%	28.1%	18.8%	26.8%
EBITDA growth				14.3%	23.8%
EBITDA Margin	74.8%	0.0%	77.2%	74.2%	72.5%	-1.8%
Net Income Margin	45.6%	34.3%	31.5%	26.0%	22.4%	-3.6%
ROE	35.1%	30.3%	24.4%	17.9%	16.4%	-1.4%
Net Debt/EBITDA	2.4x		3.2x	4.1x	5.4x	1.3x

Revenue and profitability

Bajaj Finserv's Revenue surged on 26.8% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.8 pp from 74.2% to 72.5% in FY2015.

Net Income marign decreased on 3.6 pp from 26.0% to 22.4% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 5.4x and Debt / EBITDA is 5.6x. Net Debt / EBITDA jumped on 1.3x from 4.1x to 5.4x in FY2015. Debt jumped on 56.2% in FY2015 while cash dropped on 22.5% in FY2015.

Valuation

Bajaj Finserv's trades at EV/EBITDA 9.6x and P/E 13.6x while industy averages are 10.5x and 26.1x.

Appendix 1: Peers in Finance (including NBFCs)

Below we provide Bajaj Finserv benchmarking against other companies in Finance (including NBFCs) 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
Advance Powerinfra Tech ($ADVPOWER)				209.3%
Vishwamitra Financial Services ($VISHWAFIN)			65.2%	118.5%
Industrial Investment Trust ($IITL)	-88.9%	119.2%	72.5%	76.4%
Sks Microfinance ($SKSMICRO)		-62.8%	-25.6%	55.0%	47.3%
Muthoot Capital Services ($MUTHTFN)	-83.3%	81.1%	59.3%	48.1%
Median (23 companies)	-47.1%	23.2%	24.4%	20.8%	12.9%
Bajaj Finserv ($BAJAJFINSV)		59.7%	28.1%	18.8%	26.8%

Top companies by EBITDA margin, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Pnb Gilts ($PNBGILTS)	91.8%	94.0%	96.4%	96.4%	96.1%
Jsw Holdings ($JSWHL)					93.8%
Tci Finance ($TCIFINANCE)					87.6%
IDFC Limited ($IDFC)	85.3%	88.1%	89.6%	87.0%	81.7%
Srei Infrastructure Finance ($SREINFRA)	78.5%	80.6%	83.9%	83.7%	78.5%
Median (23 companies)	68.2%	67.4%	65.4%	65.5%	62.4%
Bajaj Finserv ($BAJAJFINSV)	74.8%		77.2%	74.2%	72.5%

Top companies by CAPEX/Revenue, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Srei Infrastructure Finance ($SREINFRA)	34.8%	29.3%	8.3%	12.6%	5.4%
Clarus Finance & Securities ($CLARUS)				6.9%
Industrial Investment Trust ($IITL)	3.7%	1.1%	0.3%	4.9%
Fortune Financial Services (India) ($FORTUNEF)	5.5%	1.0%	1.3%	4.5%	7.3%
A.K.Capital Services ($AKCAPIT)	1.9%	0.3%	2.9%	4.1%
Median (20 companies)	1.8%	1.0%	0.8%	1.1%	0.7%
Bajaj Finserv ($BAJAJFINSV)	0.0%	0.0%	0.0%	0.0%	0.0%

Top companies by ROIC, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Motilal Oswal Financial Services ($MOTILALOFS)			12.0%	9.7%	11.9%
Shriram City Union Finance ($SHRIRAMCIT)		6.1%	5.8%	5.8%	5.7%
Mahindra & Mahindra Financial Services ($M&MFIN)	7.3%	6.4%	6.3%	5.3%	4.2%
Rural Electrification Corporation ($RECLTD)			4.7%	5.2%
IDFC Limited ($IDFC)	4.8%	4.8%	5.0%	4.3%	3.4%
Median (52 companies)	6.0%	4.1%	4.6%	4.1%	4.2%
Bajaj Finserv ($BAJAJFINSV)

Top companies by Net Debt / EBITDA

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Pnb Gilts ($PNBGILTS)	9.0x	14.2x	11.2x	11.3x	8.8x
Fortune Financial Services (India) ($FORTUNEF)	4.7x	9.0x		10.8x	8.9x
Vibrant Global Capital ($VGCL)	7.8x	23.1x	32.8x	10.7x
Rural Electrification Corporation ($RECLTD)	8.1x	8.3x	8.0x	7.5x
Srei Infrastructure Finance ($SREINFRA)	6.4x	7.0x	6.2x	7.5x	8.0x
Median (39 companies)	3.0x	4.7x	3.6x	2.9x	3.0x
Bajaj Finserv ($BAJAJFINSV)	2.4x		3.2x	4.1x	5.4x

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