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Atlanta reports 50.2% revenue growth in FY2015 and 9.4 pp EBITDA Margin decline from 30.8% to 21.4%

25-05-2015 • About Atlanta ($ATLANTA) • By InTwits

Atlanta reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Atlanta has high CAPEX intensity: 5 year average CAPEX/Revenue was 83.9%. At the same time it's a lot of higher than industry average of 11.9%.
  • CAPEX is quite volatile: 69.0 in FY2015, 89.8 in FY2014, 23.5 in FY2013, 4,831 in FY2012, 1,119 in FY2011
  • The company has potentially unprofitable business model: ROIC is at 6.9%
  • It operates with high leverage: Net Debt/EBITDA is 7.6x while industry average is 5.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Atlanta ($ATLANTA) key annual financial indicators

mln. INR201120122013201420152015/2014
P&L
Revenue2,4911,3062,8103,5995,40650.2%
EBITDA1,0983729731,1081,1574.4%
Net Income440-76-39540483-10.4%
Balance Sheet
Cash9022161257130-49.5%
Short Term Debt5797461,0221,7552,03015.7%
Long Term Debt3,8523,4613,6885,5796,86423.0%
Cash flow
Capex1,1194,831249069-23.1%
Ratios
Revenue growth-61.5%-47.6%115.1%28.1%50.2%
EBITDA growth16.9%-66.2%161.9%13.9%4.4%
EBITDA Margin44.1%28.5%34.6%30.8%21.4%-9.4%
Net Income Margin17.7%-5.8%-1.4%15.0%8.9%-6.1%
CAPEX, % of revenue44.9%370.0%0.8%2.5%1.3%-1.2%
ROIC5.0%8.6%8.7%6.9%-1.8%
ROE-2.7%-1.0%8.8%7.0%-1.8%
Net Debt/EBITDA4.0x10.7x4.8x6.4x7.6x1.2x

Revenue and profitability


The company's Revenue surged on 50.2% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 9.4 pp from 30.8% to 21.4% in FY2015.

Net Income marign decreased on 6.1 pp from 15.0% to 8.9% in FY2015.

Capital expenditures (CAPEX) and working capital investments


Atlanta's CAPEX/Revenue was 1.3% in FY2015. The company's CAPEX/Revenue dropped on 369 pp from 370% in FY2012 to 1.3% in FY2015. Average CAPEX/Revenue for the last three years was 1.5%.

Return on investment


The company operates at low ROIC (6.94%) and ROE (6.95%). ROIC decreased slightly on 1.8 pp from 8.7% to 6.9% in FY2015. ROE decreased slightly on 1.8 pp from 8.8% to 7.0% in FY2015.

Leverage (Debt)


Debt level is 7.6x Net Debt / EBITDA and 7.7x Debt / EBITDA. Net Debt / EBITDA surged on 1.2x from 6.4x to 7.6x in FY2015. Debt jumped on 21.3% in FY2015 while cash dropped on 49.5% in FY2015.

Valuation


The company's trades at EV/EBITDA 11.9x and P/E 10.3x while industy averages are 10.5x and 26.1x. Atlanta's EV/(EBITDA-CAPEX) is 12.6x with the industry average at 4.7x.

Appendix 1: Peers in Construction & Engineering


Below we provide Atlanta benchmarking against other companies in Construction & Engineering 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
Madhucon Projects ($MADHUCON)-72.3%-19.5%61.7%81.2%
C & C Constructions ($CANDC)7.1%-11.6%-12.2%31.7%
Mbl Infrastructures ($MBLINFRA)26.3%7.1%30.3%11.1%
Arss Infrastructure Projects ($ARSSINFRA)-5.3%-34.8%17.8%-27.8%
Simplex Projects ($SIMPLEX)28.6%-38.5%-0.6%16.0%
 
Median (31 companies)-15.4%11.4%6.6%6.6%7.6%
Atlanta ($ATLANTA)-47.6%115.1%28.1%50.2%


Top companies by EBITDA margin, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Jaiprakash Associates ($JPASSOCIAT)44.0%36.9%35.9%32.4%
Shristi Infrastructure Development Corporation ($SHRISTI)28.0%27.2%30.0%30.0%
Madhucon Projects ($MADHUCON)11.6%8.4%31.9%22.1%
Arss Infrastructure Projects ($ARSSINFRA)21.8%14.0%13.9%22.0%31.3%
Supreme Infrastructure India ($SUPREMEINF)13.8%14.8%15.6%17.5%
 
Median (29 companies)12.0%11.9%11.2%10.2%12.1%
Atlanta ($ATLANTA)44.1%28.5%34.6%30.8%21.4%


Top companies by CAPEX/Revenue, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Madhucon Projects ($MADHUCON)149.8%234.5%155.1%76.0%
Jaiprakash Associates ($JPASSOCIAT)114.7%97.0%65.5%45.0%
Supreme Infrastructure India ($SUPREMEINF)16.7%46.6%31.1%43.1%
Man Infraconstruction ($MANINFRA)11.5%7.8%1.6%25.0%
Jmc Projects (India) ($JMCPROJECT)7.8%4.5%1.7%18.9%
 
Median (23 companies)5.5%7.3%8.6%6.6%2.8%
Atlanta ($ATLANTA)44.9%370.0%0.8%2.5%1.3%


Top companies by ROIC, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Skipper ($SKIPPER)10.6%10.4%13.5%14.7%27.4%
Mbl Infrastructures ($MBLINFRA)24.3%21.3%13.4%14.0%13.6%
Voltas ($VOLTAS)32.9%19.6%11.7%11.8%19.3%
Supreme Infrastructure India ($SUPREMEINF)15.0%15.4%12.4%10.6%
Reliance Industrial Infrastructure ($RIIL)5.1%10.8%12.7%10.5%5.7%
 
Median (42 companies)10.6%8.6%7.1%5.6%8.8%
Atlanta ($ATLANTA)5.0%8.6%8.7%6.9%


Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Coromandel Engineering Company ($COROENGG)7.1x14.4x54.6x3.2x
Welspun Projects ($WELPROJ)71.3x6.0x2.6x20.8x
Punj Lloyd ($PUNJLLOYD)6.5x6.7x6.8x16.5x
Madhucon Projects ($MADHUCON)40.1x96.8x19.0x16.4x
Hindustan Construction Co ($HCC)10.0x18.8x20.3x12.3x9.3x
 
Median (32 companies)3.7x4.5x5.7x6.1x3.0x
Atlanta ($ATLANTA)4.0x10.7x4.8x6.4x7.6x


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