Rane Engine Valve Net Income surged on 181% in 2015 while EBITDA Margin decreased on 3.8 pp from 11.9% to 8.1%
22-05-2015 • About Rane Engine Valve (
$RANENGIN) • By InTwits
Rane Engine Valve reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Rane Engine Valve doesn't have a profitable business model yet: FY2015 ROIC is 1.3%
- EBITDA Margin is quite volatile: 8.1% in FY2015, 11.9% in FY2014, 3.5% in FY2013, 15.4% in FY2012, 15.3% in FY2011
- Rane Engine Valve has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.2%. At the same time it's a lot of higher than industry average of 1.5%.
- CAPEX is quite volatile: 239 in FY2015, 107 in FY2014, 289 in FY2013, 350 in FY2012, 242 in FY2011
- The company has potentially unprofitable business model: ROIC is at 1.3%
- It operates with high leverage: Net Debt/EBITDA is 4.8x while industry average is 3.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Rane Engine Valve ($RANENGIN) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,883 | 3,070 | 2,628 | 2,595 | 3,876 | 49.3% |
| EBITDA | 441 | 473 | 93 | 309 | 315 | 1.7% |
| Net Income | 108 | 208 | -126 | -291 | 235 | |
Balance Sheet
|
|---|
| Cash | 73 | 26 | 64 | 30 | 18 | -38.3% |
| Short Term Debt | 434 | 606 | 514 | 644 | 950 | 47.5% |
| Long Term Debt | 392 | 392 | 592 | 770 | 582 | -24.4% |
Cash flow
|
|---|
| Capex | 242 | 350 | 289 | 107 | 239 | 122.9% |
Ratios
|
|---|
| Revenue growth | -36.1% | 6.5% | -14.4% | -1.2% | 49.3% | |
| EBITDA growth | 48.0% | 7.1% | -80.4% | 233.8% | 1.7% | |
| EBITDA Margin | 15.3% | 15.4% | 3.5% | 11.9% | 8.1% | -3.8% |
| Net Income Margin | 3.7% | 6.8% | -4.8% | -11.2% | 6.1% | 17.3% |
| CAPEX, % of revenue | 8.4% | 11.4% | 11.0% | 4.1% | 6.2% | 2.0% |
| ROIC | 15.1% | 14.5% | -5.7% | 5.3% | 1.3% | -3.9% |
| ROE | 12.5% | 21.3% | -12.8% | -37.6% | 26.3% | 63.9% |
| Net Debt/EBITDA | 1.7x | 2.1x | 11.3x | 4.5x | 4.8x | 0.3x |
Revenue and profitability
The company's Revenue jumped on 49.3% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 4.9 pp from 3.3% to 8.2% in FY2015.
Net Income marign surged on 17.3 pp from -11.2% to 6.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 6.2% in FY2015. Rane Engine Valve showed decline in CAPEX/Revenue of 5.2 pp from 11.4% in FY2012 to 6.2% in FY2015. Average CAPEX/Revenue for the last three years was 7.1%.Rane Engine Valve invested a big chunk of EBITDA (76.0%) to CAPEX to secure its growth.
Return on investment
The company operates at good ROE (26.32%) while ROIC is low (1.34%). ROIC decreased on 3.9 pp from 5.3% to 1.3% in FY2015. ROE jumped on 63.9 pp from -37.6% to 26.3% in FY2015.
Leverage (Debt)
Debt level is 4.8x Net Debt / EBITDA and 4.9x Debt / EBITDA. Net Debt / EBITDA jumped on 0.3x from 4.5x to 4.8x in FY2015. Debt increased on 8.3% in FY2015 while cash dropped on 38.3% in FY2015.
Valuation
The company's trades at EV/EBITDA 14.2x and P/E 12.5x while industy averages are 10.5x and 26.1x. Rane Engine Valve's EV/(EBITDA-CAPEX) is 59.0x with the industry average at 4.7x.
Appendix 1: Peers in
Below we provide Rane Engine Valve benchmarking against other companies in 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 |
|---|
| Bharat Rasayan ($BHARATRA) | -82.3% | 51.3% | 32.1% | 92.7% | |
| Indbulbbph ($INDBULBBPH) | | -3.2% | -6.5% | 33.5% | 49.2% |
| Uplbbph ($UPLBBPH) | | 33.2% | 19.7% | 17.3% | 10.9% |
| Ginni Filaments ($GINNIFIL) | | 2.8% | 4.6% | 16.6% | -2.3% |
| Monetbbph ($MONETBBPH) | -58.7% | 22.3% | 3.7% | 11.6% | |
| |
|---|
| Median (17 companies) | -33.8% | 17.7% | 10.8% | 4.2% | 9.2% |
|---|
| Rane Engine Valve ($RANENGIN) | | 6.5% | -14.4% | -1.2% | 49.3% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jenson & Nicholson Financial Services ($JNFSL) | | 0.0% | 0.0% | 0.0% | 0.0% |
| Bombay Drugs & Pharmas ($BOMDRDM) | | 0.0% | 0.0% | 0.0% | 0.0% |
| Southern Herbals ($SOUTHNHE) | | 0.0% | 0.0% | 0.0% | 0.0% |
| Tafnccpeq ($TAFNCCPEQ) | | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (4 companies) | | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Paushak ($PAUSHAK) | | | | | 25.6% |
| The United Nilgiri Tea Estates Company ($UNITEDTEA) | | | | | 24.7% |
| Indbulbbph ($INDBULBBPH) | 27.9% | 36.7% | 34.6% | 29.5% | 23.5% |
| Uplbbph ($UPLBBPH) | 18.8% | 18.2% | 18.3% | 18.8% | 20.0% |
| Indian Metals & Ferro Alloys ($INDMETA-B) | 33.0% | 20.4% | 21.4% | 23.2% | 17.9% |
| |
|---|
| Median (13 companies) | 13.4% | 12.8% | 13.7% | 14.7% | 11.0% |
|---|
| Rane Engine Valve ($RANENGIN) | 15.3% | 15.4% | 3.5% | 11.9% | 8.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jklakbbph ($JKLAKBBPH) | 23.6% | 28.5% | 28.8% | 24.6% | 23.6% |
| Rilbbph ($RILBBPH) | 12.7% | 4.6% | 7.7% | 13.8% | 16.9% |
| Gkw ($GKW) | | | | | 15.5% |
| Paushak ($PAUSHAK) | | | | | 12.3% |
| The United Nilgiri Tea Estates Company ($UNITEDTEA) | | | | | 8.8% |
| |
|---|
| Median (11 companies) | 5.0% | 8.6% | 5.2% | 3.6% | 5.4% |
|---|
| Rane Engine Valve ($RANENGIN) | 8.4% | 11.4% | 11.0% | 4.1% | 6.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kaleconbbph ($KALECONBBPH) | | | 89.0% | 103.8% | |
| Madras Fertilizers ($MADRASFERT) | 52.6% | 44.7% | 18.0% | 23.9% | |
| Bharat Rasayan ($BHARATRA) | 10.0% | 22.1% | 13.7% | 21.9% | |
| Ginni Filaments ($GINNIFIL) | 11.6% | -1.0% | 15.2% | 21.6% | 12.8% |
| Uplbbph ($UPLBBPH) | 16.3% | 17.1% | 15.9% | 18.2% | 22.1% |
| |
|---|
| Median (28 companies) | 10.1% | 8.4% | 7.6% | 5.9% | 5.6% |
|---|
| Rane Engine Valve ($RANENGIN) | 15.1% | 14.5% | -5.7% | 5.3% | 1.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Monetbbph ($MONETBBPH) | 5.3x | 9.8x | 16.3x | 27.4x | |
| Asleyf ($ASLEYF) | 2.0x | 2.5x | 5.0x | 17.8x | 5.0x |
| Indbulbbph ($INDBULBBPH) | 8.5x | 4.3x | 4.8x | 5.5x | 9.6x |
| Jklakbbph ($JKLAKBBPH) | 3.0x | 2.1x | 2.3x | 5.3x | 5.5x |
| Madras Fertilizers ($MADRASFERT) | 5.5x | 3.5x | 6.5x | 5.0x | |
| |
|---|
| Median (16 companies) | 1.8x | 2.1x | 2.2x | 2.3x | 3.4x |
|---|
| Rane Engine Valve ($RANENGIN) | 1.7x | 2.1x | 11.3x | 4.5x | 4.8x |
