Ceat CAPEX surged on 105% in 2015 and Revenue increased on 3.6%
22-05-2015 • About Ceat (
$CEATLTD) • By InTwits
Ceat reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 13.7% in FY2015 vs. 11.9% in FY2014 vs. 4.6% in FY2011
- EBITDA Margin is quite volatile: 13.7% in FY2015, 11.9% in FY2014, 9.0% in FY2013, 6.1% in FY2012, 4.6% in FY2011
- Ceat has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.9%. At the same time it's in pair with industry average of 5.6%.
- CAPEX is quite volatile: 3,028 in FY2015, 1,478 in FY2014, 848 in FY2013, 1,444 in FY2012, 6,075 in FY2011
- The company has highly profitable business model: ROIC is at 28.8%
- It operates with high leverage: Net Debt/EBITDA is 0.8x while industry average is 0.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ceat ($CEATLTD) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 36,311 | 46,490 | 50,522 | 55,540 | 57,521 | 3.6% |
| SG&A | | | | | 1,042 | |
| EBITDA | 1,656 | 2,839 | 4,551 | 6,584 | 7,901 | 20.0% |
| Net Income | 265 | 181 | 1,202 | 2,712 | 3,172 | 16.9% |
Balance Sheet
|
|---|
| Cash | 452 | 269 | 978 | 1,621 | 1,225 | -24.4% |
| Short Term Debt | 4,065 | 7,238 | 6,136 | 5,969 | 4,206 | -29.5% |
| Long Term Debt | 6,047 | 5,716 | 4,240 | 4,233 | 3,544 | -16.3% |
Cash flow
|
|---|
| Capex | 6,075 | 1,444 | 848 | 1,478 | 3,028 | 104.8% |
Ratios
|
|---|
| Revenue growth | -46.5% | 28.0% | 8.7% | 9.9% | 3.6% | |
| EBITDA growth | -48.6% | 71.5% | 60.3% | 44.7% | 20.0% | |
| EBITDA Margin | 4.6% | 6.1% | 9.0% | 11.9% | 13.7% | 1.9% |
| Net Income Margin | 0.7% | 0.4% | 2.4% | 4.9% | 5.5% | 0.6% |
| SG&A, % of revenue | | | | | 1.8% | 1.8% |
| CAPEX, % of revenue | 16.7% | 3.1% | 1.7% | 2.7% | 5.3% | 2.6% |
| ROIC | 8.5% | 11.4% | 19.1% | 27.6% | 28.8% | 1.1% |
| ROE | 4.1% | 2.7% | 16.4% | 29.9% | 23.4% | -6.5% |
| Net Debt/EBITDA | 5.8x | 4.5x | 2.1x | 1.3x | 0.8x | -0.5x |
Revenue and profitability
The company's Revenue increased on 3.6% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.9 pp from 11.9% to 13.7% in FY2015.
Net Income marign increased slightly on 0.63 pp from 4.9% to 5.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.3% in FY2015. CAPEX/Revenue increased on 2.2 pp from 3.1% in FY2012 to 5.3% in FY2015. Average CAPEX/Revenue for the last three years was 3.2%.
Return on investment
The company operates at high and attractive ROIC (28.77%) and ROE (23.40%). ROIC increased slightly on 1.1 pp from 27.6% to 28.8% in FY2015. ROE decreased on 6.5 pp from 29.9% to 23.4% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.8x and Debt / EBITDA is 1.0x. Net Debt / EBITDA dropped on 0.5x from 1.3x to 0.8x in FY2015. Debt dropped on 24.0% in FY2015 while cash dropped on 24.4% in FY2015.
Appendix 1: Peers in Auto Tyres & Rubber Products
Below we provide Ceat benchmarking against other companies in Auto Tyres & Rubber 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 |
|---|
| Rubfila International ($RUBFILA) | -58.0% | 20.9% | 4.7% | 25.1% | |
| Balkrishna Industries ($BALKRISIND) | | 41.5% | 12.5% | 11.1% | 1.2% |
| Apollo Tyres ($APOLLOTYRE) | | 37.1% | 5.3% | 4.0% | -4.4% |
| Goodyear India ($GOODYEAR) | -12.8% | -2.1% | 5.9% | 0.7% | |
| Pix Transmissions ($PIXTRANS) | -2.5% | -5.8% | 12.3% | -14.1% | |
| |
|---|
| Median (5 companies) | -12.8% | 20.9% | 5.9% | 4.0% | -1.6% |
|---|
| Ceat ($CEATLTD) | | 28.0% | 8.7% | 9.9% | 3.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Balkrishna Industries ($BALKRISIND) | 17.6% | 17.0% | 20.1% | 26.0% | 19.1% |
| Pix Transmissions ($PIXTRANS) | 19.0% | 20.4% | 21.7% | 16.9% | |
| Apollo Tyres ($APOLLOTYRE) | 11.0% | 9.7% | 11.4% | 14.2% | 15.2% |
| Rubfila International ($RUBFILA) | 6.0% | 12.3% | 14.9% | 12.6% | |
| Goodyear India ($GOODYEAR) | | | 9.4% | 9.8% | |
| |
|---|
| Median (5 companies) | 14.3% | 14.6% | 14.9% | 14.2% | 17.1% |
|---|
| Ceat ($CEATLTD) | 4.6% | 6.1% | 9.0% | 11.9% | 13.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Balkrishna Industries ($BALKRISIND) | 10.8% | 23.4% | 29.9% | 23.5% | 9.7% |
| Rubfila International ($RUBFILA) | 2.2% | 0.3% | 9.1% | 5.0% | |
| Apollo Tyres ($APOLLOTYRE) | 12.6% | 6.5% | 4.9% | 3.7% | 5.0% |
| Goodyear India ($GOODYEAR) | 0.0% | 0.0% | 3.2% | 3.1% | |
| |
|---|
| Median (4 companies) | 10.5% | 3.4% | 7.0% | 4.4% | 7.4% |
|---|
| Ceat ($CEATLTD) | 16.7% | 3.1% | 1.7% | 2.7% | 5.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Goodyear India ($GOODYEAR) | 33.1% | 25.5% | 30.3% | 26.7% | |
| Apollo Tyres ($APOLLOTYRE) | 15.0% | 14.7% | 16.8% | 23.6% | 23.9% |
| Rubfila International ($RUBFILA) | 12.5% | 35.1% | 26.2% | 22.7% | |
| Multibase India ($MULTIBASE) | 17.6% | 12.3% | 22.8% | 22.0% | |
| Balkrishna Industries ($BALKRISIND) | 17.4% | 17.7% | 17.3% | 19.7% | 10.4% |
| |
|---|
| Median (8 companies) | 15.5% | 13.5% | 17.7% | 22.7% | 17.2% |
|---|
| Ceat ($CEATLTD) | 8.5% | 11.4% | 19.1% | 27.6% | 28.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Balkrishna Industries ($BALKRISIND) | 1.7x | 3.2x | 3.2x | 2.5x | 2.6x |
| Apollo Tyres ($APOLLOTYRE) | 2.3x | 2.4x | 1.3x | 0.3x | 0.3x |
| Tirupati Foam ($TIRFOAM) | 3.8x | 6.4x | 5.4x | 0.0x | |
| Pix Transmissions ($PIXTRANS) | 4.6x | 4.8x | -0.6x | 0.0x | |
| Rubfila International ($RUBFILA) | 4.7x | -0.2x | -0.1x | -0.3x | |
| |
|---|
| Median (7 companies) | 3.8x | 3.2x | -0.1x | 0.0x | 1.5x |
|---|
| Ceat ($CEATLTD) | 5.8x | 4.5x | 2.1x | 1.3x | 0.8x |
