Voltas reports 72.4% EBITDA growth while 1.2% Revenue decline

21-05-2015 • About Voltas ($VOLTAS) • By InTwits

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

Voltas has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
The company has highly profitable business model: ROIC is at 19.3%

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

Voltas ($VOLTAS) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	51,914	51,857	55,310	52,437	51,831	-1.2%
EBITDA	4,797	3,597	2,473	2,693	4,641	72.4%
Net Income	3,572	1,621	2,078	2,454	3,843	56.6%
Balance Sheet
Cash	4,094	2,536	3,413	2,742	2,434	-11.2%
Short Term Debt	1,274	2,175	2,564	2,587	1,174	-54.6%
Long Term Debt	93	76	60	54	47	-12.6%
Cash flow
Capex	446	314	438	245	344	39.9%
Ratios
Revenue growth	-13.6%	-0.1%	6.7%	-5.2%	-1.2%
EBITDA growth	3.2%	-25.0%	-31.3%	8.9%	72.4%
EBITDA Margin	9.2%	6.9%	4.5%	5.1%	9.0%	3.8%
Net Income Margin	6.9%	3.1%	3.8%	4.7%	7.4%	2.7%
CAPEX, % of revenue	0.9%	0.6%	0.8%	0.5%	0.7%	0.2%
ROIC	32.9%	19.6%	11.7%	11.8%	19.3%	7.5%
ROE	29.2%	11.4%	13.4%	14.2%	19.6%	5.4%
Net Debt/EBITDA	-0.6x	-0.1x	-0.3x	-0.0x	-0.3x	-0.2x

Revenue and profitability

Voltas's Revenue decreased slightly on 1.2% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.8 pp from 5.1% to 9.0% in FY2015.

Net Income marign increased on 2.7 pp from 4.7% to 7.4% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 0.66%. Voltas's CAPEX/Revenue showed almost no change from FY2012 to FY2015. It's average level of CAPEX/Revenue for the last three years was 0.64%.

Return on investment

The company operates at good ROIC (19.26%) and ROE (19.60%). ROIC increased on 7.5 pp from 11.8% to 19.3% in FY2015. ROE increased on 5.4 pp from 14.2% to 19.6% in FY2015.

Leverage (Debt)

Debt level is -0.3x Net Debt / EBITDA and 0.3x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from -0.037x to -0.3x in FY2015. Debt dropped on 53.8% in FY2015 while cash dropped on 11.2% in FY2015.

Appendix 1: Peers in Construction & Engineering

Below we provide Voltas benchmarking against other companies in Construction & Engineering 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
Madhucon Projects ($MADHUCON)	-72.3%	-19.5%	61.7%	81.2%
C & C Constructions ($CANDC)	7.1%	-11.6%	-12.2%	31.7%
Mbl Infrastructures ($MBLINFRA)	-58.2%	26.3%	7.1%	30.3%
Atlanta ($ATLANTA)	-61.5%	-47.6%	115.1%	28.1%
Arss Infrastructure Projects ($ARSSINFRA)		-5.3%	-34.8%	17.8%	-27.8%
Median (31 companies)	-26.2%	11.4%	6.9%	7.1%	7.6%
Voltas ($VOLTAS)		-0.1%	6.7%	-5.2%	-1.2%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Jaiprakash Associates ($JPASSOCIAT)	44.0%	36.9%	35.9%	32.4%
Atlanta ($ATLANTA)	44.1%	28.5%	34.6%	30.8%
Shristi Infrastructure Development Corporation ($SHRISTI)	28.0%	27.2%	30.0%	30.0%
Madhucon Projects ($MADHUCON)	11.6%	8.4%	31.9%	22.1%
Arss Infrastructure Projects ($ARSSINFRA)	21.8%	14.0%	13.9%	22.0%	31.3%
Median (29 companies)	12.4%	12.4%	11.3%	10.7%	12.4%
Voltas ($VOLTAS)	9.2%	6.9%	4.5%	5.1%	9.0%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Madhucon Projects ($MADHUCON)	149.8%	234.5%	155.1%	76.0%
Jaiprakash Associates ($JPASSOCIAT)	114.7%	97.0%	65.5%	45.0%
Supreme Infrastructure India ($SUPREMEINF)	16.7%	46.6%	31.1%	43.1%
Man Infraconstruction ($MANINFRA)	11.5%	7.8%	1.6%	25.0%
Jmc Projects (India) ($JMCPROJECT)	7.8%	4.5%	1.7%	18.9%
Median (23 companies)	6.1%	7.7%	8.6%	6.6%	2.8%
Voltas ($VOLTAS)	0.9%	0.6%	0.8%	0.5%	0.7%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Skipper ($SKIPPER)	10.6%	10.4%	13.5%	14.7%
Mbl Infrastructures ($MBLINFRA)	24.3%	21.3%	13.4%	14.0%
Supreme Infrastructure India ($SUPREMEINF)	15.0%	15.4%	12.4%	10.6%
Reliance Industrial Infrastructure ($RIIL)	5.1%	10.8%	12.7%	10.5%	5.7%
Unity Infraprojects ($UNITY)	15.4%	16.8%	15.0%	9.1%
Median (42 companies)	10.5%	8.6%	7.1%	5.6%	7.0%
Voltas ($VOLTAS)	32.9%	19.6%	11.7%	11.8%	19.3%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Coromandel Engineering Company ($COROENGG)	7.1x		14.4x	54.6x	3.2x
Welspun Projects ($WELPROJ)	71.3x	6.0x	2.6x	20.8x
Punj Lloyd ($PUNJLLOYD)	6.5x	6.7x	6.8x	16.5x
Madhucon Projects ($MADHUCON)	40.1x	96.8x	19.0x	16.4x
Hindustan Construction Co ($HCC)	10.0x	18.8x	20.3x	12.3x	9.3x
Median (32 companies)	3.7x	4.7x	5.7x	6.6x	3.1x
Voltas ($VOLTAS)	-0.6x	-0.1x	-0.3x	-0.0x	-0.3x

Voltas stock price chart

Voltas financials

mln.	FY2010	FY2011	FY2012

Revenue	60,068	51,914	51,857
EBITDA	4,649	4,797	3,597
Net income	3,810	3,572	1,621
CAPEX	317.0	445.8	313.5
Debt	1,117	1,367	2,252
Cash	4,689	4,094	2,536

About Voltas

Voltas Limited provides engineering solutions and project services in India, the Middle East, Singapore, and internationally. It operates through Electro-Mechanical Projects and Services, Engineering Products and Services, Unitary Cooling Products for Comfort and Commercial Use, and Others segments. The company undertakes electro-mechanical and instrumentation projects; and offers engineering products and services for textile machinery and mining and construction equipment. It also provides mining and construction machinery, including mining excavators, dump trucks, track mounted crushers, screens, crawler and tower cranes, concrete batching plants, sand washing systems, conical thickener and automatic filter press, magnetic separators, and trailer mounted and stationary crushing and screening plants. In addition, the company offers textile machinery comprising spinning, weaving, and knitting machinery and accessories, as well as processing and finishing equipment; and heating, ventilation, air conditioning, and refrigeration (HVAC&R) equipment, such as packaged and ductable split AC units, variable refrigerant flow systems, chillers and condensing units, vapor absorption machines, indoor air quality systems, STP/kitchen exhaust systems, UVGI systems, and air handling units. Further, it provides HVAC&R solutions for services and industrial segments; split, window, cassette, and slimline air-conditioners; deep freezers; chest, visi, and water coolers; and water dispensers. Additionally, the company offers equipment for water and wastewater management/treatment, including fixed and floating surface aerators, oil separators, bridge/column mounted clarifiers, dissolved air flotation units, grit removal mechanisms, screens, reactor clarifiers, sludge thickeners, and screw pumps. It also manufactures and trades galvanized iron, aluminum, black mild steel, and stainless steel ducts and accessories. Voltas Limited was founded in 1954 and is headquartered in Mumbai, India.