Ahluwalia Contracts (India) reports 231% EBITDA growth and 7.4 pp EBITDA Margin growth from 3.7% to 11.1%

21-05-2015 • About Ahluwalia Contracts (India) ($AHLUCONT) • By InTwits

Ahluwalia Contracts (India) reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

EBITDA Margin is quite volatile: 11.1% in FY2015, 3.7% in FY2014, -2.1% in FY2013, 2.2% in FY2012, 9.7% in FY2011
Ahluwalia Contracts (India) has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's in pair with industry average of 1.5%.
CAPEX is quite volatile: 219 in FY2015, 339 in FY2014, 355 in FY2013, 651 in FY2012, 845 in FY2011
The company has highly profitable business model: ROIC is at 21.2%

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

Ahluwalia Contracts (India) ($AHLUCONT) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	17,530	14,459	14,309	9,606	10,599	10.3%
EBITDA	1,697	318	-306	356	1,178	230.5%
Net Income	721	-464	-713	217	640	194.5%
Balance Sheet
Cash	944	470	359	183	765	316.9%
Short Term Debt	1,611	1,965	2,326	2,057	1,641	-20.2%
Long Term Debt	258	299	414	329	90	-72.6%
Cash flow
Capex	845	651	355	339	219	-35.3%
Ratios
Revenue growth	45.8%	-17.5%	-1.0%	-32.9%	10.3%
EBITDA growth	-5.6%	-81.3%	-196.1%	-216.6%	230.5%
EBITDA Margin	9.7%	2.2%	-2.1%	3.7%	11.1%	7.4%
Net Income Margin	4.1%	-3.2%	-5.0%	2.3%	6.0%	3.8%
CAPEX, % of revenue	4.8%	4.5%	2.5%	3.5%	2.1%	-1.5%
ROIC	29.7%	-3.2%	-15.8%	5.6%	21.2%	15.6%
ROE	25.1%	-15.5%	-29.7%	10.1%	22.7%	12.6%
Net Debt/EBITDA	0.5x	5.6x		6.2x	0.8x	-5.4x

Revenue and profitability

Ahluwalia Contracts (India)'s Revenue jumped on 10.3% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.7 pp from 0.46% to 4.1% in FY2015.

Net Income marign increased on 3.8 pp from 2.3% to 6.0% in FY2015.

Capital expenditures (CAPEX) and working capital investments

Ahluwalia Contracts (India)'s CAPEX/Revenue was 2.1% in FY2015. Ahluwalia Contracts (India)'s CAPEX/Revenue decreased on 2.4 pp from 4.5% in FY2012 to 2.1% in FY2015. It's average level of CAPEX/Revenue for the last three years was 2.7%.

Return on investment

The company operates at high and attractive ROIC (21.22%) and ROE (22.72%). ROIC jumped on 15.6 pp from 5.6% to 21.2% in FY2015. ROE surged on 12.6 pp from 10.1% to 22.7% in FY2015.

Leverage (Debt)

Debt level is 0.8x Net Debt / EBITDA and 1.5x Debt / EBITDA. Net Debt / EBITDA dropped on 5.4x from 6.2x to 0.8x in FY2015. Debt dropped on 27.4% in FY2015 while cash surged on 317% in FY2015.

Valuation

The company's trades at EV/EBITDA 14.7x and P/E 25.6x while industy averages are 10.5x and 26.1x. Ahluwalia Contracts (India)'s EV/(EBITDA-CAPEX) is 18.1x with the industry average at 4.7x.

Appendix 1: Peers in Realty

Below we provide Ahluwalia Contracts (India) benchmarking against other companies in Realty 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
Sunteck Realty ($SUNTECK)	-94.4%	-16.0%	77.7%	2,963.6%
Nitesh Estates ($NITESHEST)	-63.3%	-6.3%	-28.7%	259.1%
The Phoenix Mills ($PHOENIXLTD)	-89.4%	87.7%	19.1%	208.3%
Poddar Developers ($PODDARDEV)		-18.4%	63.9%	152.9%	56.0%
Lancor Holdings ($LANCORHOL)		-47.4%	-23.9%	74.0%	10.5%
Median (33 companies)	-16.4%	0.6%	5.6%	-1.8%	14.1%
Ahluwalia Contracts (India) ($AHLUCONT)		-17.5%	-1.0%	-32.9%	10.3%

Top companies by Gross margin, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Godrej Properties ($GODREJPROP)	28.2%	24.9%	33.3%	28.9%	19.4%
Median (1 company)	28.2%	24.9%	33.3%	28.9%	19.4%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Housing Development & Infrastructure ($HDIL)	83.7%	75.8%	40.6%	102.5%	78.9%
Hubtown ($HUBTOWN)	51.6%	53.3%	72.4%	67.6%
Oberoi Realty ($OBEROIRLTY)	58.7%	59.3%	58.9%	54.5%	56.4%
Pvp Ventures ($PVP)	-644.3%		73.2%	51.1%
The Phoenix Mills ($PHOENIXLTD)	71.8%	54.7%	56.2%	46.9%
Median (33 companies)	24.3%	20.1%	18.1%	20.1%	27.0%
Ahluwalia Contracts (India) ($AHLUCONT)	9.7%	2.2%	-2.1%	3.7%	11.1%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
The Phoenix Mills ($PHOENIXLTD)	138.3%	168.3%	108.0%	107.1%
Prestige Estates Projects ($PRESTIGE)	23.3%	37.7%	30.2%	18.8%
Brigade Enterprises ($BRIGADE)	42.6%	45.7%	10.7%	17.0%	18.5%
Parsvnath Developers ($PARSVNATH)	19.9%	15.9%		11.6%
Unitech ($UNITECH)	9.8%	4.6%	12.7%	10.6%
Median (29 companies)	5.5%	4.9%	2.5%	3.7%	2.4%
Ahluwalia Contracts (India) ($AHLUCONT)	4.8%	4.5%	2.5%	3.5%	2.1%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Sunteck Realty ($SUNTECK)	0.5%	0.4%	0.4%	24.5%
Lancor Holdings ($LANCORHOL)	38.2%	18.0%	11.6%	19.5%	17.7%
Sobha Developers ($SOBHA)	12.4%	18.8%	16.7%	14.6%	12.7%
Poddar Developers ($PODDARDEV)	4.1%	3.9%	2.6%	12.9%	19.1%
Puravankara Projects ($PURVA)	11.2%	13.3%	17.0%	12.3%	9.7%
Median (50 companies)	9.2%	5.9%	5.1%	5.7%	9.4%
Ahluwalia Contracts (India) ($AHLUCONT)	29.7%	-3.2%	-15.8%	5.6%	21.2%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Unitech ($UNITECH)	5.5x	13.1x	14.4x	28.0x
Vascon Engineers ($VASCONEQ)	2.8x	8.4x	11.2x	25.9x
Peninsula Land ($PENINLAND)	2.2x	5.5x		24.0x
Parsvnath Developers ($PARSVNATH)	4.5x	5.1x	4.7x	14.6x
D B Realty ($DBREALTY)	1.1x	13.2x	135.4x	14.0x
Median (39 companies)	4.2x	5.1x	4.8x	4.9x	4.0x
Ahluwalia Contracts (India) ($AHLUCONT)	0.5x	5.6x		6.2x	0.8x

Ahluwalia Contracts (India) stock price chart

Ahluwalia Contracts (India) financials

mln.	FY2010	FY2011	FY2012

Revenue	12,020	17,530	14,459
EBITDA	1,798	1,697	318.1
Net income	817.8	720.5	-464.293
CAPEX	496.1	845.3	651.2
Debt	1,526	1,870	2,264
Cash	1,372	944.1	469.6

About Ahluwalia Contracts (India)

Ahluwalia Contracts (India) Limited, together with its subsidiaries, is primarily engaged in the construction activities in India. It executes projects across residential, commercial complexes, hotels, institutional buildings, hospitals and medical colleges, corporate office complexes, IT parks and industrial complexes, metro rail stations and depots, power plants, motorized car parking, and other projects. The company is also involved in the provision of supply, installation, testing, and commissioning services for switchyards, DG sets, power transformers, switchboards, relay and control panels, overhead and underground electrical networks, public addresses, communication and security systems, fire alarms, computer networks, etc.; and design, supply, and installation of aluminum doors, windows, channels, and curtain walls, as well as provides marketing, project and quality management, and coordination services. In addition, it provides marketing, commercial scrutiny, costing, designing, and basic and system engineering services for plumbing systems. Ahluwalia Contracts (India) Limited was founded in 1965 and is headquartered in New Delhi, India.