Va Tech Wabag reports 8.8% revenue growth in FY2015 and 0.74 pp EBITDA Margin decline from 9.4% to 8.6%
25-05-2015 • About Va Tech Wabag (
$WABAG) • By InTwits
Va Tech Wabag reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 8.6% in FY2015 vs. 9.4% in FY2014 vs. 9.7% in FY2011
- Va Tech Wabag has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 5.6%.
- CAPEX is quite volatile: 287 in FY2015, 1,033 in FY2014, 419 in FY2013, 226 in FY2012, 196 in FY2011
- The company has highly profitable business model: ROIC is at 18.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Va Tech Wabag ($WABAG) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 12,418 | 14,435 | 16,189 | 22,386 | 24,352 | 8.8% |
| Gross Profit | 3,173 | | | 5,498 | 5,103 | -7.2% |
| SG&A | | | | | 47 | |
| EBITDA | 1,210 | 1,318 | 1,549 | 2,096 | 2,100 | 0.2% |
| Net Income | 526 | 738 | 903 | 1,134 | 1,101 | -2.9% |
Balance Sheet
|
|---|
| Cash | 2,975 | 3,381 | 2,866 | 2,668 | 3,111 | 16.6% |
| Short Term Debt | 424 | 1,244 | 796 | 1,133 | 1,113 | -1.7% |
| Long Term Debt | 3 | 4 | 26 | 450 | 693 | 54.2% |
Cash flow
|
|---|
| Capex | 196 | 226 | 419 | 1,033 | 287 | -72.2% |
Ratios
|
|---|
| Revenue growth | -59.3% | 16.2% | 12.1% | 38.3% | 8.8% | |
| EBITDA growth | 3.3% | 8.9% | 17.5% | 35.3% | 0.2% | |
| Gross Margin | 25.5% | | | 24.6% | 21.0% | -3.6% |
| EBITDA Margin | 9.7% | 9.1% | 9.6% | 9.4% | 8.6% | -0.7% |
| Net Income Margin | 4.2% | 5.1% | 5.6% | 5.1% | 4.5% | -0.5% |
| SG&A, % of revenue | | | | | 0.2% | 0.2% |
| CAPEX, % of revenue | 1.6% | 1.6% | 2.6% | 4.6% | 1.2% | -3.4% |
| ROIC | 21.2% | 17.9% | 18.2% | 21.1% | 18.5% | -2.7% |
| ROE | 10.8% | 12.2% | 13.3% | 14.6% | 12.6% | -1.9% |
| Net Debt/EBITDA | -2.1x | -1.6x | -1.3x | -0.5x | -0.6x | -0.1x |
Revenue and profitability
The company's Revenue increased on 8.8% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 0.74 pp from 9.4% to 8.6% in FY2015.
Gross Margin decreased on 3.6 pp from 24.6% to 21.0% in FY2015.
Net Income marign decreased slightly on 0.54 pp from 5.1% to 4.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Va Tech Wabag had CAPEX/Revenue of 1.2%. Va Tech Wabag showed almost no change in CAPEX/Revenue from FY2012 to FY2015. It's average level of CAPEX/Revenue for the last three years was 2.8%.
Return on investment
The company operates at good ROIC (18.47%) and ROE (12.63%). ROIC decreased on 2.7 pp from 21.1% to 18.5% in FY2015. ROE decreased slightly on 1.9 pp from 14.6% to 12.6% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.6x and Debt / EBITDA is 0.9x. Net Debt / EBITDA dropped on 0.1x from -0.5x to -0.6x in FY2015. Debt jumped on 14.1% in FY2015 while cash jumped on 16.6% in FY2015.
Valuation
Va Tech Wabag's trades at EV/EBITDA 19.4x and P/E 38.2x while industy averages are 10.5x and 26.1x. Va Tech Wabag's EV/(EBITDA-CAPEX) is 22.5x with the industry average at 4.7x.
Management team
The company's CEO is Rajiv Devaraj Mittal. Rajiv Devaraj Mittal has 18 years tenure at the company.
Appendix 1: Peers in Utilities:Non-Elec.
Below we provide Va Tech Wabag benchmarking against other companies in Utilities:Non-Elec. 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gail (India) ($GAIL) | 36.7% | 25.5% | 15.5% | 21.1% | |
| A2Z Maintenance & Engineering Services ($A2ZMES) | 84.8% | -0.5% | -32.6% | -22.6% | |
| |
|---|
| Median (2 companies) | 60.8% | 12.5% | -8.5% | -0.7% | |
|---|
| Va Tech Wabag ($WABAG) | | 16.2% | 12.1% | 38.3% | 8.8% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gail (India) ($GAIL) | 18.5% | 16.0% | 14.7% | 13.0% | |
| A2Z Maintenance & Engineering Services ($A2ZMES) | 17.7% | 7.8% | -1.3% | -12.2% | |
| |
|---|
| Median (2 companies) | 18.1% | 11.9% | 6.7% | 0.4% | |
|---|
| Va Tech Wabag ($WABAG) | 9.7% | 9.1% | 9.6% | 9.4% | 8.6% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| A2Z Maintenance & Engineering Services ($A2ZMES) | 25.6% | 35.5% | 21.8% | 11.3% | |
| Gail (India) ($GAIL) | 20.6% | 22.4% | 17.7% | 8.5% | |
| |
|---|
| Median (2 companies) | 23.1% | 28.9% | 19.7% | 9.9% | |
|---|
| Va Tech Wabag ($WABAG) | 1.6% | 1.6% | 2.6% | 4.6% | 1.2% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gail (India) ($GAIL) | 18.2% | 16.5% | 13.8% | 12.1% | |
| A2Z Maintenance & Engineering Services ($A2ZMES) | 17.2% | 4.3% | -2.3% | -5.2% | |
| |
|---|
| Median (2 companies) | 17.7% | 10.4% | 5.7% | 3.5% | |
|---|
| Va Tech Wabag ($WABAG) | 21.2% | 17.9% | 18.2% | 21.1% | 18.5% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Gail (India) ($GAIL) | 0.7x | 1.4x | 1.8x | 1.9x | |
| |
|---|
| Median (1 company) | 1.2x | 5.9x | 1.8x | 1.9x | |
|---|
| Va Tech Wabag ($WABAG) | -2.1x | -1.6x | -1.3x | -0.5x | -0.6x |
