Uttam Galva Steels revenue jumped on 55.0% in 2015 while EBITDA Margin decreased on 3.5 pp from 9.7% to 6.1%
22-05-2015 • About Uttam Galva Steels (
$UTTAMSTL) • By InTwits
Uttam Galva Steels reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Uttam Galva Steels has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.1%. At the same time it's in pair with industry average of 12.9%.
- CAPEX is quite volatile: 4,488 in FY2015, 9,924 in FY2014, 5,139 in FY2013, 6,186 in FY2012, 4,022 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 7.0x while industry average is 7.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Uttam Galva Steels ($UTTAMSTL) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 50,408 | 56,474 | 62,709 | 54,405 | 84,325 | 55.0% |
| EBITDA | 4,551 | 5,280 | 6,003 | 5,272 | 5,185 | -1.7% |
| Net Income | 766 | 731 | 548 | 297 | 198 | -33.4% |
Balance Sheet
|
|---|
| Cash | 543 | 1,781 | 2,999 | 1,304 | 1,327 | 1.8% |
| Short Term Debt | 12,597 | 11,944 | 22,008 | 11,150 | 7,418 | -33.5% |
| Long Term Debt | 19,014 | 22,291 | 17,757 | 23,583 | 30,086 | 27.6% |
Cash flow
|
|---|
| Capex | 4,022 | 6,186 | 5,139 | 9,924 | 4,488 | -54.8% |
Ratios
|
|---|
| Revenue growth | -50.0% | 12.0% | 11.0% | -13.2% | 55.0% | |
| EBITDA growth | 0.4% | 16.0% | 13.7% | -12.2% | -1.7% | |
| EBITDA Margin | 9.0% | 9.3% | 9.6% | 9.7% | 6.1% | -3.5% |
| Net Income Margin | 1.5% | 1.3% | 0.9% | 0.5% | 0.2% | -0.3% |
| CAPEX, % of revenue | 8.0% | 11.0% | 8.2% | 18.2% | 5.3% | -12.9% |
| ROIC | 9.0% | 9.1% | 8.4% | 6.0% | 5.4% | -0.6% |
| ROE | 8.3% | 7.5% | 4.9% | 2.4% | 1.2% | -1.1% |
| Net Debt/EBITDA | 6.8x | 6.1x | 6.1x | 6.3x | 7.0x | 0.6x |
Revenue and profitability
The company's Revenue jumped on 55.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.4 pp from -1.3% to 6.1% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Uttam Galva Steels had CAPEX/Revenue of 5.3%. Uttam Galva Steels's CAPEX/Revenue decreased on 5.6 pp from 11.0% in FY2012 to 5.3% in FY2015. It's average CAPEX/Revenue for the last three years was 10.6%.The company invested a big chunk of EBITDA (86.6%) to CAPEX to secure its growth.
Return on investment
The company operates at low ROIC (5.41%) and ROE (1.24%). ROIC decreased slightly on 0.61 pp from 6.0% to 5.4% in FY2015. ROE decreased slightly on 1.1 pp from 2.4% to 1.2% in FY2015.
Leverage (Debt)
Debt level is 7.0x Net Debt / EBITDA and 7.2x Debt / EBITDA. Net Debt / EBITDA surged on 0.6x from 6.3x to 7.0x in FY2015. Debt increased on 8.0% in FY2015 while cash increased slightly on 1.8% in FY2015.
Valuation
The company's trades at EV/EBITDA 8.4x and P/E 37.8x while industy averages are 10.5x and 26.1x. Uttam Galva Steels's EV/(EBITDA-CAPEX) is 62.6x with the industry average at 4.7x.
Appendix 1: Peers in Iron & Steel/Interm.Products
Below we provide Uttam Galva Steels benchmarking against other companies in Iron & Steel/Interm.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 |
|---|
| Inducto Steel ($INDCTST) | | | 54.5% | 150.2% | |
| Kamdhenu Ispat ($KIL) | -65.5% | 25.7% | 13.7% | 68.3% | |
| Metkore Alloys & Industries ($METKORE) | -49.1% | 43.7% | -10.9% | 53.4% | |
| Tata Metaliks ($TATAMETALI) | | -7.0% | -19.0% | 44.6% | -1.3% |
| Visa Steel ($VISASTEEL) | -12.5% | 3.3% | -24.1% | 42.0% | |
| |
|---|
| Median (31 companies) | -35.9% | 12.3% | 3.2% | 3.4% | 1.1% |
|---|
| Uttam Galva Steels ($UTTAMSTL) | | 12.0% | 11.0% | -13.2% | 55.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Steel & Power ($JINDALSTEL) | 48.3% | 37.5% | 30.5% | 28.1% | |
| Bhushan Steel ($BHUSANSTL) | 29.0% | 31.2% | 32.3% | 28.1% | |
| Sarda Energy & Minerals ($SARDAEN) | 15.2% | 16.3% | 21.5% | 21.3% | |
| Jsw Steel ($JSWSTEEL) | 20.2% | 17.8% | 17.1% | 17.9% | 17.7% |
| Jai Corp ($JAICORPLTD) | 18.4% | 14.1% | 16.3% | 16.0% | 12.7% |
| |
|---|
| Median (28 companies) | 13.4% | 9.5% | 9.0% | 7.0% | 10.9% |
|---|
| Uttam Galva Steels ($UTTAMSTL) | 9.0% | 9.3% | 9.6% | 9.7% | 6.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Steel & Power ($JINDALSTEL) | 64.7% | 34.2% | 47.6% | 69.6% | |
| Bhushan Steel ($BHUSANSTL) | 81.1% | 47.2% | 44.0% | 50.4% | |
| Jayaswal Neco Industries ($JAYNECOIND) | 27.9% | 20.4% | 44.0% | 31.1% | |
| Surana Industries ($SURANAIND) | | 41.3% | 54.8% | 21.5% | |
| Steel Authority Of India ($SAIL) | 25.3% | 20.9% | 20.7% | 19.3% | |
| |
|---|
| Median (20 companies) | 12.3% | 7.5% | 11.6% | 6.6% | 3.8% |
|---|
| Uttam Galva Steels ($UTTAMSTL) | 8.0% | 11.0% | 8.2% | 18.2% | 5.3% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Metaliks ($TATAMETALI) | 3.1% | -23.5% | -3.7% | 19.9% | 57.4% |
| Nova Iron & Steel ($NOVIS) | | | | 15.4% | |
| Kirloskar Ferrous Industries ($KIRLFER) | 20.0% | 19.1% | 16.8% | 12.4% | 14.7% |
| Pennar Industries ($PENIND) | 31.6% | 26.8% | 18.4% | 12.3% | 15.7% |
| Jsw Steel ($JSWSTEEL) | 9.7% | 11.0% | 10.3% | 12.1% | 9.9% |
| |
|---|
| Median (40 companies) | 9.6% | 6.8% | 5.5% | 5.5% | 12.3% |
|---|
| Uttam Galva Steels ($UTTAMSTL) | 9.0% | 9.1% | 8.4% | 6.0% | 5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jai Balaji Industries ($JAIBALAJI) | 5.5x | | | 89.7x | |
| Visa Steel ($VISASTEEL) | 6.9x | 20.1x | | 24.4x | |
| Ismt ($ISMTLTD) | 4.4x | 5.3x | 9.8x | 19.9x | |
| Kic Metaliks ($KAJARIR) | 6.6x | 9.2x | 3.0x | 18.2x | |
| Bhushan Steel ($BHUSANSTL) | 8.1x | 6.3x | 8.6x | 12.9x | |
| |
|---|
| Median (29 companies) | 3.6x | 4.2x | 4.3x | 3.2x | 1.3x |
|---|
| Uttam Galva Steels ($UTTAMSTL) | 6.8x | 6.1x | 6.1x | 6.3x | 7.0x |
