Forbes & Company reports 94.0% CAPEX growth and 15.6% Revenue growth
26-05-2015 • About Forbes & Company (
$FORBESCO) • By InTwits
Forbes & Company reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Forbes & Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.1%. At the same time it's a lot of higher than industry average of 3.7%.
- CAPEX is quite volatile: 1,809 in FY2015, 932 in FY2014, 510 in FY2013, 317 in FY2012, 407 in FY2011
- The company has business model with low profitability: ROIC is at 8.0%
- It operates with high leverage: Net Debt/EBITDA is 6.3x while industry average is 0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Forbes & Company ($FORBESCO) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 14,458 | 17,695 | 19,993 | 30,672 | 35,461 | 15.6% |
| EBITDA | 865 | 1,369 | 970 | 1,552 | 1,463 | -5.7% |
| Net Income | 297 | 525 | 856 | 401 | 325 | -19.0% |
Balance Sheet
|
|---|
| Cash | 760 | 1,043 | 799 | 1,746 | 1,441 | -17.5% |
| Short Term Debt | 2,440 | 1,327 | 1,655 | 3,939 | 2,967 | -24.7% |
| Long Term Debt | 1,378 | 2,662 | 2,314 | 5,047 | 7,713 | 52.8% |
Cash flow
|
|---|
| Capex | 407 | 317 | 510 | 932 | 1,809 | 94.0% |
Ratios
|
|---|
| Revenue growth | -66.3% | 22.4% | 13.0% | 53.4% | 15.6% | |
| EBITDA growth | 42.3% | 58.3% | -29.2% | 60.0% | -5.7% | |
| EBITDA Margin | 6.0% | 7.7% | 4.9% | 5.1% | 4.1% | -0.9% |
| Net Income Margin | 2.1% | 3.0% | 4.3% | 1.3% | 0.9% | -0.4% |
| CAPEX, % of revenue | 2.8% | 1.8% | 2.6% | 3.0% | 5.1% | 2.1% |
| ROIC | 6.6% | 12.5% | 6.4% | 9.2% | 8.0% | -1.1% |
| ROE | 10.2% | 15.5% | 21.9% | 9.2% | 7.3% | -1.8% |
| Net Debt/EBITDA | 3.5x | 2.2x | 3.3x | 4.7x | 6.3x | 1.6x |
Revenue and profitability
Forbes & Company's Revenue surged on 15.6% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 9.3 pp from 14.2% to 23.5% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
Forbes & Company's CAPEX/Revenue was 5.1% in FY2015. Forbes & Company showed CAPEX/Revenue growth of 3.3 pp from 1.8% in FY2012 to 5.1% in FY2015. It's average level of CAPEX/Revenue for the last three years was 3.6%.Forbes & Company has spent a lot to CAPEX (124% of EBITDA) to secure its growth.
Return on investment
The company operates at low ROIC (8.03%) and ROE (7.35%). ROIC decreased slightly on 1.1 pp from 9.2% to 8.0% in FY2015. ROE decreased slightly on 1.8 pp from 9.2% to 7.3% in FY2015.
Leverage (Debt)
Debt level is 6.3x Net Debt / EBITDA and 7.3x Debt / EBITDA. Net Debt / EBITDA jumped on 1.6x from 4.7x to 6.3x in FY2015. Debt jumped on 18.9% in FY2015 while cash dropped on 17.5% in FY2015.
Valuation
The company's trades at EV/EBITDA 18.5x and P/E 55.0x while industy averages are 10.5x and 26.1x.
Appendix 1: Peers in Industrial Machinery
Below we provide Forbes & Company benchmarking against other companies in Industrial Machinery 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 |
|---|
| Nitin Fire Protection Industries ($NITINFIRE) | | 22.3% | 31.5% | 44.2% | 12.2% |
| Gmm Pfaudler ($GMM) | | -26.1% | 47.8% | 31.0% | 10.3% |
| Kabra Extrusiontechnik ($KABRAEXTRU) | | -13.3% | -8.7% | 28.4% | 21.6% |
| Veejay Lakshmi Engineering Works ($VJLAXMIE) | 27.9% | -28.8% | 5.7% | 26.6% | |
| Lloyd Electric & Engineering ($LLOYDELENG) | 24.2% | 32.2% | 9.9% | 20.5% | |
| |
|---|
| Median (26 companies) | 13.8% | 14.1% | 2.1% | 0.9% | 11.3% |
|---|
| Forbes & Company ($FORBESCO) | | 22.4% | 13.0% | 53.4% | 15.6% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bell Agromachina ($BELAGRO) | | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (1 company) | | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Texmaco Infrastructure & Holdings ($TEXINFRA) | | | | | 40.5% |
| Dhp India ($DHPIND) | | | | | 26.3% |
| Solitaire Machine Tools ($SOLIMAC) | | | | | 19.4% |
| Wendt (India) ($WENDT) | 30.8% | 28.3% | 21.6% | 18.6% | 19.0% |
| Goldstone Infratech ($GOLDINFRA) | | | | | 18.1% |
| |
|---|
| Median (25 companies) | 14.0% | 11.2% | 9.6% | 10.5% | 11.1% |
|---|
| Forbes & Company ($FORBESCO) | 6.0% | 7.7% | 4.9% | 5.1% | 4.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lokesh Machines ($LOKESHMACH) | 18.5% | 22.1% | | 12.9% | |
| Elgi Equipments ($ELGIEQUIP) | 2.8% | 4.0% | 24.0% | 9.8% | |
| Wendt (India) ($WENDT) | 7.2% | 13.5% | 9.0% | 8.8% | 9.4% |
| Ksb Pumps ($KSBPUMPS) | 3.3% | 7.5% | 3.5% | 5.0% | |
| Honda Siel Power Products ($HONDAPOWER) | 4.3% | 6.7% | 8.0% | 3.7% | 4.3% |
| |
|---|
| Median (19 companies) | 3.9% | 5.8% | 4.1% | 2.7% | 4.3% |
|---|
| Forbes & Company ($FORBESCO) | 2.8% | 1.8% | 2.6% | 3.0% | 5.1% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rexnord Electronics & Controls ($REXNORD) | 10.4% | | | 18.8% | |
| Gmm Pfaudler ($GMM) | 14.2% | -76.2% | 6.8% | 17.4% | 18.2% |
| Greaves Cotton ($GREAVESCOT) | | | 24.8% | 16.3% | 26.7% |
| Lakshmi Machine Works ($LAXMIMACH) | 16.8% | 18.0% | 11.7% | 16.2% | 17.6% |
| Wendt (India) ($WENDT) | | 38.2% | 20.2% | 16.2% | 15.1% |
| |
|---|
| Median (51 companies) | 15.2% | 13.1% | 10.9% | 9.7% | 13.1% |
|---|
| Forbes & Company ($FORBESCO) | 6.6% | 12.5% | 6.4% | 9.2% | 8.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chemtech Industrial Valves ($CHEMTECH) | 7.7x | 6.4x | 5.3x | 8.8x | |
| Lokesh Machines ($LOKESHMACH) | 4.0x | 3.7x | 3.3x | 4.6x | |
| Elecon Engineering Co ($ELECON) | 3.1x | 3.0x | 3.2x | 4.0x | 3.1x |
| Lloyd Electric & Engineering ($LLOYDELENG) | 4.0x | 3.2x | 3.0x | 3.7x | |
| Abc Bearings ($ABCBEARS) | 0.5x | 1.7x | 3.5x | 3.4x | 0.0x |
| |
|---|
| Median (34 companies) | 1.1x | 0.6x | 1.5x | 0.0x | 0.0x |
|---|
| Forbes & Company ($FORBESCO) | 3.5x | 2.2x | 3.3x | 4.7x | 6.3x |
