Sarda Energy & Minerals reports 39.7% Net Income decline while 10.6% Revenue growth
23-05-2015 • About Sarda Energy & Minerals (
$SARDAEN) • By InTwits
Sarda Energy & Minerals reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sarda Energy & Minerals has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.6%. At the same time it's a lot of higher than industry average of 12.8%.
- CAPEX is quite volatile: 967 in FY2015, 970 in FY2014, 3,344 in FY2013, 5,420 in FY2012, 2,530 in FY2011
- The company has business model with low profitability: ROIC is at 9.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sarda Energy & Minerals ($SARDAEN) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 8,910 | 11,082 | 13,871 | 15,914 | 17,599 | 10.6% |
| EBITDA | 1,353 | 1,811 | 2,977 | 3,388 | 3,778 | 11.5% |
| Net Income | 715 | 871 | 1,615 | 910 | 549 | -39.7% |
Balance Sheet
|
|---|
| Cash | 151 | 793 | 700 | 1,023 | 108 | -89.4% |
| Short Term Debt | 3,247 | 3,238 | 5,145 | 8,530 | 6,609 | -22.5% |
| Long Term Debt | 4,624 | 8,059 | 9,125 | 8,836 | 8,212 | -7.1% |
Cash flow
|
|---|
| Capex | 2,530 | 5,420 | 3,344 | 970 | 967 | -0.3% |
Ratios
|
|---|
| Revenue growth | -59.0% | 24.4% | 25.2% | 14.7% | 10.6% | |
| EBITDA growth | 54.9% | 33.8% | 64.4% | 13.8% | 11.5% | |
| EBITDA Margin | 15.2% | 16.3% | 21.5% | 21.3% | 21.5% | 0.2% |
| Net Income Margin | 8.0% | 7.9% | 11.6% | 5.7% | 3.1% | -2.6% |
| CAPEX, % of revenue | 28.4% | 48.9% | 24.1% | 6.1% | 5.5% | -0.6% |
| ROIC | 5.1% | 6.1% | 9.7% | 8.7% | 9.7% | 1.0% |
| ROE | 9.8% | 10.2% | 16.5% | 8.3% | 4.7% | -3.6% |
| Net Debt/EBITDA | 5.7x | 5.8x | 4.6x | 4.8x | 3.9x | -0.9x |
Revenue and profitability
Sarda Energy & Minerals's Revenue surged on 10.6% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.5 pp from 17.5% to 20.0% in FY2015.
Net Income marign decreased on 2.6 pp from 5.7% to 3.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 5.5%. CAPEX/Revenue dropped on 43.4 pp from 48.9% in FY2012 to 5.5% in FY2015. For the last three years the average CAPEX/Revenue was 11.9%.
Return on investment
The company operates at low ROIC (9.71%) and ROE (4.66%). ROIC increased slightly on 1.0 pp from 8.7% to 9.7% in FY2015. ROE decreased on 3.6 pp from 8.3% to 4.7% in FY2015.
Leverage (Debt)
Debt level is 3.9x Net Debt / EBITDA and 3.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.9x from 4.8x to 3.9x in FY2015. Debt dropped on 14.7% in FY2015 while cash dropped on 89.4% in FY2015.
Appendix 1: Peers in Iron & Steel/Interm.Products
Below we provide Sarda Energy & Minerals 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 ($VISASTEEL) | -12.5% | 3.3% | -24.1% | 42.0% | |
| |
|---|
| Median (31 companies) | -35.0% | 11.9% | 3.2% | 2.8% | 3.4% |
|---|
| Sarda Energy & Minerals ($SARDAEN) | | 24.4% | 25.2% | 14.7% | 10.6% |
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% | |
| 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% |
| Prakash Industries ($PRAKASH) | 20.7% | 17.8% | 13.0% | 14.5% | |
| |
|---|
| Median (28 companies) | 13.0% | 9.4% | 9.0% | 7.0% | 10.1% |
|---|
| Sarda Energy & Minerals ($SARDAEN) | 15.2% | 16.3% | 21.5% | 21.3% | 21.5% |
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 ($SAIL) | 25.3% | 20.9% | 20.7% | 19.3% | |
| |
|---|
| Median (20 companies) | 11.9% | 7.5% | 10.4% | 7.7% | 4.3% |
|---|
| Sarda Energy & Minerals ($SARDAEN) | 28.4% | 48.9% | 24.1% | 6.1% | 5.5% |
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 ($JSWSTEEL) | 9.7% | 11.0% | 10.3% | 12.1% | 9.9% |
| |
|---|
| Median (40 companies) | 9.6% | 7.2% | 5.5% | 5.5% | 9.9% |
|---|
| Sarda Energy & Minerals ($SARDAEN) | 5.1% | 6.1% | 9.7% | 8.7% | 9.7% |
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 ($BHUSANSTL) | 8.1x | 6.3x | 8.6x | 12.9x | |
| |
|---|
| Median (29 companies) | 3.6x | 4.2x | 4.3x | 3.2x | 1.5x |
|---|
| Sarda Energy & Minerals ($SARDAEN) | 5.7x | 5.8x | 4.6x | 4.8x | 3.9x |
