Sunteck Realty reports 67.3% revenue decline in FY2015 and 14.0 pp EBITDA Margin growth from 30.3% to 44.2%
26-05-2015 • About Sunteck Realty (
$SUNTECK) • By InTwits
Sunteck Realty reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sunteck Realty is a company in decline: FY2015 revenue growth was -67.3%, 5 years revenue CAGR was -3.6%
- Sunteck Realty has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.6%. At the same time it's a lot of higher than industry average of 8.3%.
- CAPEX is quite volatile: 17.7 in FY2015, 10.4 in FY2014, 5.7 in FY2013, 16.9 in FY2012, 11.1 in FY2011
- The company has potentially unprofitable business model: ROIC is at 6.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 7.2x while industry average is 7.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sunteck Realty ($SUNTECK) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 202 | 170 | 302 | 9,256 | 3,028 | -67.3% |
| EBITDA | 68 | 56 | 55 | 2,801 | 1,339 | -52.2% |
| Net Income | 32 | 31 | 40 | 1,510 | 682 | -54.9% |
Balance Sheet
|
|---|
| Cash | 274 | 238 | 336 | 122 | 1,092 | 797.7% |
| Short Term Debt | 4,015 | 4,938 | 5,117 | 5,958 | 10,705 | 79.7% |
| Long Term Debt | 8 | 1 | 1 | 2 | 1 | -56.4% |
Cash flow
|
|---|
| Capex | 11 | 17 | 6 | 10 | 18 | 70.3% |
Ratios
|
|---|
| Revenue growth | -94.4% | -16.0% | 77.7% | 2,963.6% | -67.3% | |
| EBITDA growth | -48.1% | -18.2% | -1.6% | 5,010.2% | -52.2% | |
| EBITDA Margin | 33.7% | 32.8% | 18.1% | 30.3% | 44.2% | 14.0% |
| Net Income Margin | 15.7% | 18.3% | 13.3% | 16.3% | 22.5% | 6.2% |
| CAPEX, % of revenue | 5.5% | 9.9% | 1.9% | 0.1% | 0.6% | 0.5% |
| ROIC | 0.5% | 0.4% | 0.4% | 24.5% | 6.8% | -17.7% |
| ROE | 0.6% | 0.5% | 0.7% | 26.8% | 6.5% | -20.3% |
| Net Debt/EBITDA | 55.0x | 84.4x | 87.2x | 2.1x | 7.2x | 5.1x |
Revenue and profitability
Sunteck Realty's Revenue dropped on 67.3% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 14.0 pp from 30.3% to 44.2% in FY2015.
Net Income marign increased on 6.2 pp from 16.3% to 22.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.59% in FY2015. CAPEX/Revenue decreased on 9.3 pp from 9.9% in FY2012 to 0.59% in FY2015. Average CAPEX/Revenue for the last three years was 0.86%.
Return on investment
The company operates at low ROIC (6.81%) and ROE (6.47%). ROIC dropped on 17.7 pp from 24.5% to 6.8% in FY2015. ROE dropped on 20.3 pp from 26.8% to 6.5% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.2x and Debt / EBITDA is 8.0x. Net Debt / EBITDA surged on 5.1x from 2.1x to 7.2x in FY2015. Debt surged on 79.6% in FY2015 while cash surged on 798% in FY2015.
Valuation
Sunteck Realty's trades at EV/EBITDA 19.3x and P/E 23.8x while industy averages are 10.5x and 26.1x. Sunteck Realty's EV/(EBITDA-CAPEX) is 19.6x with the industry average at 4.7x.
Appendix 1: Peers in Realty
Below we provide Sunteck Realty benchmarking against other companies in Realty 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 |
|---|
| Nitesh Estates ($NITESHEST) | -63.3% | -6.3% | -28.7% | 259.1% | |
| The Phoenix Mills ($PHOENIXLTD) | -89.4% | 87.7% | 19.1% | 208.3% | |
| Poddar Developers ($PODDARDEV) | | -18.4% | 63.9% | 152.9% | 56.0% |
| Lancor Holdings ($LANCORHOL) | | -47.4% | -23.9% | 74.0% | 10.5% |
| Arihant Superstructures ($ASL) | -13.9% | -36.5% | 9.1% | 42.0% | |
| |
|---|
| Median (33 companies) | -18.9% | 0.6% | 3.4% | -4.5% | 14.1% |
|---|
| Sunteck Realty ($SUNTECK) | | -16.0% | 77.7% | 2,963.6% | -67.3% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Godrej Properties ($GODREJPROP) | 28.2% | 24.9% | 33.3% | 28.9% | 19.4% |
| |
|---|
| Median (1 company) | 28.2% | 24.9% | 33.3% | 28.9% | 19.4% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Housing Development & Infrastructure ($HDIL) | 83.7% | 75.8% | 40.6% | 102.5% | 78.9% |
| Hubtown ($HUBTOWN) | 51.6% | 53.3% | 72.4% | 67.6% | |
| Oberoi Realty ($OBEROIRLTY) | 58.7% | 59.3% | 58.9% | 54.5% | 56.4% |
| Pvp Ventures ($PVP) | -644.3% | | 73.2% | 51.1% | |
| The Phoenix Mills ($PHOENIXLTD) | 71.8% | 54.7% | 56.2% | 46.9% | |
| |
|---|
| Median (33 companies) | 23.3% | 19.4% | 13.4% | 19.8% | 25.3% |
|---|
| Sunteck Realty ($SUNTECK) | 33.7% | 32.8% | 18.1% | 30.3% | 44.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| The Phoenix Mills ($PHOENIXLTD) | 138.3% | 168.3% | 108.0% | 107.1% | |
| Prestige Estates Projects ($PRESTIGE) | 23.3% | 37.7% | 30.2% | 18.8% | |
| Brigade Enterprises ($BRIGADE) | 42.6% | 45.7% | 10.7% | 17.0% | 18.5% |
| Parsvnath Developers ($PARSVNATH) | 19.9% | 15.9% | | 11.6% | 10.6% |
| Unitech ($UNITECH) | 9.8% | 4.6% | 12.7% | 10.6% | |
| |
|---|
| Median (29 companies) | 5.3% | 4.7% | 2.6% | 3.7% | 2.6% |
|---|
| Sunteck Realty ($SUNTECK) | 5.5% | 9.9% | 1.9% | 0.1% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Lancor Holdings ($LANCORHOL) | 38.2% | 18.0% | 11.6% | 19.5% | 17.7% |
| Sobha Developers ($SOBHA) | 12.4% | 18.8% | 16.7% | 14.6% | 12.7% |
| Poddar Developers ($PODDARDEV) | 4.1% | 3.9% | 2.6% | 12.9% | 19.1% |
| Puravankara Projects ($PURVA) | 11.2% | 13.3% | 17.0% | 12.3% | 9.7% |
| The Phoenix Mills ($PHOENIXLTD) | 4.5% | 4.9% | 5.4% | 11.1% | |
| |
|---|
| Median (50 companies) | 9.4% | 5.9% | 5.1% | 5.6% | 8.5% |
|---|
| Sunteck Realty ($SUNTECK) | 0.5% | 0.4% | 0.4% | 24.5% | 6.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Unitech ($UNITECH) | 5.5x | 13.1x | 14.4x | 28.0x | |
| Vascon Engineers ($VASCONEQ) | 2.8x | 8.4x | 11.2x | 25.9x | |
| Peninsula Land ($PENINLAND) | 2.2x | 5.5x | | 24.0x | |
| Parsvnath Developers ($PARSVNATH) | 4.5x | 5.1x | 4.7x | 14.6x | 9.0x |
| D B Realty ($DBREALTY) | 1.1x | 13.2x | 135.4x | 14.0x | 54.8x |
| |
|---|
| Median (39 companies) | 3.8x | 5.1x | 4.8x | 5.0x | 4.0x |
|---|
| Sunteck Realty ($SUNTECK) | 55.0x | 84.4x | 87.2x | 2.1x | 7.2x |
