J.K.Cement reports 64.7% CAPEX decline while 21.2% Revenue growth
23-05-2015 • About J.K.Cement (
$JKCEMENT) • By InTwits
J.K.Cement reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- J.K.Cement has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.3%. At the same time it's a lot of higher than industry average of 12.7%.
- CAPEX is quite volatile: 5,502 in FY2015, 15,595 in FY2014, 5,464 in FY2013, 1,662 in FY2012, 2,940 in FY2011
- The company has potentially unprofitable business model: ROIC is at 6.3%
- It operates with high leverage: Net Debt/EBITDA is 5.8x while industry average is 3.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
J.K.Cement ($JKCEMENT) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 20,831 | 25,378 | 29,120 | 27,958 | 33,874 | 21.2% |
| SG&A | | | | | 1,385 | |
| EBITDA | 2,775 | 5,163 | 5,594 | 3,542 | 4,528 | 27.8% |
| Net Income | 626 | 1,746 | 2,308 | 772 | 1,436 | 86.2% |
Balance Sheet
|
|---|
| Cash | 744 | 685 | 927 | 3,279 | 3,959 | 20.7% |
| Short Term Debt | 2,608 | 2,633 | 3,186 | 3,416 | 3,007 | -12.0% |
| Long Term Debt | 10,584 | 9,967 | 10,595 | 24,415 | 27,301 | 11.8% |
Cash flow
|
|---|
| Capex | 2,940 | 1,662 | 5,464 | 15,595 | 5,502 | -64.7% |
Ratios
|
|---|
| Revenue growth | -49.3% | 21.8% | 14.7% | -4.0% | 21.2% | |
| EBITDA growth | -37.1% | 86.0% | 8.4% | -36.7% | 27.8% | |
| EBITDA Margin | 13.3% | 20.3% | 19.2% | 12.7% | 13.4% | 0.7% |
| Net Income Margin | 3.0% | 6.9% | 7.9% | 2.8% | 4.2% | 1.5% |
| SG&A, % of revenue | | | | | 4.1% | 4.1% |
| CAPEX, % of revenue | 14.1% | 6.5% | 18.8% | 55.8% | 16.2% | -39.5% |
| ROIC | 5.9% | 13.2% | 13.6% | 5.4% | 6.3% | 0.9% |
| ROE | 4.6% | 12.0% | 14.4% | 4.5% | 8.5% | 4.1% |
| Net Debt/EBITDA | 4.5x | 2.3x | 2.3x | 6.9x | 5.8x | -1.1x |
Revenue and profitability
J.K.Cement's Revenue jumped on 21.2% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.70 pp from 12.7% to 13.4% in FY2015.
Net Income marign increased slightly on 1.5 pp from 2.8% to 4.2% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 J.K.Cement had CAPEX/Revenue of 16.2%. J.K.Cement showed CAPEX/Revenue growth of 9.7 pp from 6.5% in FY2012 to 16.2% in FY2015. Average CAPEX/Revenue for the last three years was 30.3%.J.K.Cement has spent a lot to CAPEX (122% of EBITDA) to secure its growth.
Return on investment
The company operates at low ROIC (6.28%) and ROE (8.54%). ROIC increased slightly on 0.90 pp from 5.4% to 6.3% in FY2015. ROE increased on 4.1 pp from 4.5% to 8.5% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.8x and Debt / EBITDA is 6.7x. Net Debt / EBITDA dropped on 1.1x from 6.9x to 5.8x in FY2015. Debt increased on 8.9% in FY2015 while cash surged on 20.7% in FY2015.
Appendix 1: Peers in Cement & Cement Products
Below we provide J.K.Cement benchmarking against other companies in Cement & Cement 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 |
|---|
| Heidelbergcement India ($HEIDELBERG) | -50.1% | -13.1% | 37.5% | 36.3% | |
| Shree Digvijay Cement Co ($SHREDIGCEM) | -23.4% | 14.9% | -13.5% | 24.7% | |
| Indian Hume Pipe Co ($INDIANHUME) | -43.1% | -20.3% | 34.5% | 18.3% | |
| Birla Corporation ($BIRLACORPN) | | 6.2% | 13.8% | 15.9% | 6.4% |
| Ambuja Cements ($AMBUJACEM) | -23.0% | 14.3% | -6.5% | 9.0% | |
| |
|---|
| Median (15 companies) | -38.5% | 14.7% | 11.4% | 5.1% | 9.4% |
|---|
| J.K.Cement ($JKCEMENT) | | 21.8% | 14.7% | -4.0% | 21.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ambuja Cements ($AMBUJACEM) | 23.4% | 25.6% | 18.2% | 19.4% | |
| Heidelbergcement India ($HEIDELBERG) | 6.9% | 8.3% | 9.3% | 15.9% | |
| Deccan Cements ($DECCANCE) | 19.2% | 22.8% | 13.2% | 14.7% | |
| Acc ($ACC) | 19.2% | 19.3% | 14.6% | 12.9% | |
| India Cements ($INDIACEM) | 13.3% | 20.6% | 18.4% | 12.4% | |
| |
|---|
| Median (14 companies) | 13.3% | 16.2% | 13.2% | 10.6% | 9.5% |
|---|
| J.K.Cement ($JKCEMENT) | 13.3% | 20.3% | 19.2% | 12.7% | 13.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Acc ($ACC) | 4.8% | 5.0% | 8.6% | 13.7% | |
| K.C.P ($KCP) | 28.2% | 8.6% | 9.9% | 12.6% | 5.2% |
| Visaka Industries ($VIKASAS) | 4.6% | 5.5% | 6.5% | 10.2% | 2.2% |
| Shree Digvijay Cement Co ($SHREDIGCEM) | 13.6% | 4.1% | 8.5% | 8.5% | |
| Ambuja Cements ($AMBUJACEM) | 7.7% | 7.2% | 8.5% | 8.3% | |
| |
|---|
| Median (11 companies) | 7.7% | 5.5% | 7.1% | 5.5% | 4.2% |
|---|
| J.K.Cement ($JKCEMENT) | 14.1% | 6.5% | 18.8% | 55.8% | 16.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | 15.5% | 7.6% | 13.8% | 15.0% | |
| Saurashtra Cement ($SAURASHCEM) | 4.3% | 38.6% | 42.7% | 13.9% | 26.9% |
| Ambuja Cements ($AMBUJACEM) | 17.0% | 19.4% | 11.2% | 13.0% | |
| Acc ($ACC) | 18.5% | 20.2% | 12.7% | 11.0% | |
| K.C.P ($KCP) | 14.9% | 17.6% | 6.7% | 7.1% | 9.3% |
| |
|---|
| Median (16 companies) | 10.2% | 15.8% | 8.2% | 6.4% | 8.3% |
|---|
| J.K.Cement ($JKCEMENT) | 5.9% | 13.2% | 13.6% | 5.4% | 6.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prism Cement ($PRISMCEM) | 3.4x | 4.8x | 6.0x | 10.0x | 6.0x |
| India Cements ($INDIACEM) | 4.8x | 3.2x | 3.5x | 5.5x | |
| Visaka Industries ($VIKASAS) | 1.3x | 1.3x | 2.2x | 3.8x | 2.7x |
| K.C.P ($KCP) | 2.6x | 1.1x | 3.0x | 3.6x | 2.3x |
| Deccan Cements ($DECCANCE) | 4.1x | 1.7x | 3.3x | 3.4x | |
| |
|---|
| Median (13 companies) | 2.4x | 1.8x | 2.9x | 3.0x | 2.7x |
|---|
| J.K.Cement ($JKCEMENT) | 4.5x | 2.3x | 2.3x | 6.9x | 5.8x |
