Saksoft reports 11.6% Net Income decline and almost no change in EBITDA Margin of 10.0%
25-05-2015 • About Saksoft (
$SAKSOFT) • By InTwits
Saksoft reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 10.0% in FY2015 vs. 10.5% in FY2014 vs. 10.1% in FY2011
- It operates with high leverage: Net Debt/EBITDA is 1.2x while industry average is 0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Saksoft ($SAKSOFT) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 1,056 | 1,228 | 1,590 | 2,244 | 2,314 | 3.1% |
| EBITDA | 106 | 133 | 173 | 235 | 232 | -1.1% |
| Net Income | 50 | 70 | 109 | 149 | 132 | -11.6% |
Balance Sheet
|
|---|
| Cash | 86 | 105 | 92 | | 152 | |
| Short Term Debt | 5 | 1 | 64 | | 127 | |
| Long Term Debt | 482 | 470 | 428 | | 296 | |
Cash flow
|
|---|
| Capex | 9 | 8 | | | 5 | |
Ratios
|
|---|
| Revenue growth | -60.3% | 16.3% | 29.5% | 41.1% | 3.1% | |
| EBITDA growth | -34.3% | 24.8% | 30.1% | 36.0% | -1.1% | |
| EBITDA Margin | 10.1% | 10.8% | 10.9% | 10.5% | 10.0% | -0.4% |
| Net Income Margin | 4.8% | 5.7% | 6.9% | 6.7% | 5.7% | -1.0% |
| CAPEX, % of revenue | 0.9% | 0.6% | | | 0.2% | 0.2% |
| ROIC | 9.3% | 11.0% | 13.5% | | | 0.0% |
| ROE | 10.9% | 12.1% | 15.5% | | | 0.0% |
| Net Debt/EBITDA | 3.8x | 2.8x | 2.3x | 0.0x | 1.2x | 1.2x |
Revenue and profitability
The company's Revenue increased on 3.1% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 7.5% to 9.4% in FY2015.
Net Income marign decreased slightly on 0.95 pp from 6.7% to 5.7% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Saksoft had CAPEX/Revenue of 0.23%. CAPEX/Revenue showed almost no change from FY2012 to FY2015.
Leverage (Debt)
Debt level is 1.2x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA jumped1.2x from 0x to 1.2x in FY2015. Debt jumped while cash surged.
Valuation
The company's trades at EV/EBITDA 7.8x and P/E 11.6x while industy averages are 10.5x and 26.1x.
Appendix 1: Peers in IT Software Products
Below you can find Saksoft benchmarking vs. other companies in IT Software Products industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Blue Star Infotech ($BLUESTINFO) | | 5.1% | 49.2% | 43.3% | -2.0% |
| Twinstar Industries ($TWINSTAR) | -90.5% | 204.5% | 59.8% | 38.8% | |
| Datamatics Global Services ($DATAMATICS) | -71.6% | 60.5% | 24.5% | 33.4% | |
| Trigyn Technologies ($TRIGYN) | | 16.8% | 27.1% | 29.8% | 9.1% |
| Tata Elxsi ($TATAELXSI) | | 29.5% | 15.4% | 24.6% | 9.6% |
| |
|---|
| Median (15 companies) | -45.2% | 15.3% | 15.4% | 14.2% | 9.1% |
|---|
| Saksoft ($SAKSOFT) | | 16.3% | 29.5% | 41.1% | 3.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Atishay Infotech ($ATISHAY) | 19.6% | 35.7% | 28.1% | 25.8% | 24.5% |
| Subex ($SUBEX) | 26.8% | 27.3% | 17.0% | 24.9% | 23.6% |
| Tata Elxsi ($TATAELXSI) | 11.4% | 13.8% | 11.9% | 17.6% | 20.9% |
| Datamatics Global Services ($DATAMATICS) | 5.6% | 9.2% | 9.4% | 12.4% | |
| Aurionpro Solutions ($AURIONPRO) | 21.4% | 15.9% | 14.5% | 12.0% | |
| |
|---|
| Median (13 companies) | 8.7% | 7.5% | 8.5% | 9.9% | 9.4% |
|---|
| Saksoft ($SAKSOFT) | 10.1% | 10.8% | 10.9% | 10.5% | 10.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dion Global Solutions ($DION) | 10.7% | 39.9% | 11.9% | 29.6% | |
| Datamatics Global Services ($DATAMATICS) | 5.7% | 20.2% | 3.1% | 12.9% | |
| Aurionpro Solutions ($AURIONPRO) | 15.7% | 17.5% | 12.3% | 12.6% | |
| Atishay Infotech ($ATISHAY) | 3.8% | 41.7% | 8.6% | 10.0% | |
| Tata Elxsi ($TATAELXSI) | 7.0% | 5.3% | 5.4% | 3.1% | 3.9% |
| |
|---|
| Median (11 companies) | 5.2% | 4.5% | 5.4% | 2.3% | 3.9% |
|---|
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Elxsi ($TATAELXSI) | 13.2% | 22.5% | 19.1% | 38.3% | 55.4% |
| Trigyn Technologies ($TRIGYN) | 15.7% | 15.2% | 21.1% | 26.2% | |
| Mindteck (India) ($MINDTECK) | 6.7% | -2.6% | 1.2% | 20.0% | |
| Atishay Infotech ($ATISHAY) | 30.9% | 27.2% | 15.7% | 19.2% | |
| Datamatics Global Services ($DATAMATICS) | 2.5% | 9.8% | 11.4% | 16.4% | |
| |
|---|
| Median (31 companies) | 3.9% | 3.8% | 4.7% | 16.3% | 16.2% |
|---|
| Saksoft ($SAKSOFT) | 9.3% | 11.0% | 13.5% | | |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Subex ($SUBEX) | 4.2x | 4.6x | 13.1x | 8.5x | 8.0x |
| Aurionpro Solutions ($AURIONPRO) | 1.1x | 1.7x | 1.7x | 1.9x | |
| Datamatics Global Services ($DATAMATICS) | 0.2x | 0.5x | 0.3x | 0.5x | |
| Atishay Infotech ($ATISHAY) | -1.0x | -0.2x | -0.0x | 0.3x | 0.0x |
| Ace Software Exports ($ACESOFT) | | | | 0.0x | |
| |
|---|
| Median (14 companies) | 0.1x | 0.5x | 0.0x | 0.0x | 0.0x |
|---|
| Saksoft ($SAKSOFT) | 3.8x | 2.8x | 2.3x | 0.0x | 1.2x |
