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Reliance Infrastructure Net Debt / EBITDA surged on 2.5x from 8.4x to 10.9x in 2015 while EBITDA dropped on 17.8%

27-05-2015 • About Reliance Infrastructure ($RELINFRA) • By InTwits

Reliance Infrastructure reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Reliance Infrastructure is a company in decline: FY2015 revenue growth was -8.6%, 5 years revenue CAGR was -3.4%
  • The company has potentially unprofitable business model: ROIC is at 2.8%
  • It operates with high leverage: Net Debt/EBITDA is 10.9x while industry average is 8.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Reliance Infrastructure ($RELINFRA) key annual financial indicators

mln. INR201120122013201420152015/2014
P&L
Revenue98,095173,632155,101132,815121,403-8.6%
EBITDA17,95727,25929,58628,05923,053-17.8%
Net Income15,51615,86822,46819,13718,002-5.9%
Balance Sheet
Cash6,35813,5904,9176,5045,351-17.7%
Short Term Debt34,08065,89493,40592,40095,9733.9%
Long Term Debt82,665117,003126,357150,491161,7257.5%
Cash flow
Ratios
Revenue growth-32.1%77.0%-10.7%-14.4%-8.6%
EBITDA growth39.9%51.8%8.5%-5.2%-17.8%
EBITDA Margin18.3%15.7%19.1%21.1%19.0%-2.1%
Net Income Margin15.8%9.1%14.5%14.4%14.8%0.4%
ROIC3.9%5.9%5.2%4.5%2.8%-1.7%
ROE7.0%6.6%8.9%7.3%6.7%-0.5%
Net Debt/EBITDA6.1x6.2x7.3x8.4x10.9x2.5x

Revenue and profitability


Reliance Infrastructure's Revenue decreased on 8.6% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 21.1% to 19.0% in FY2015.

Net Income marign showed almost no change in FY2015.

Return on investment


The company operates at low ROIC (2.79%) and ROE (6.72%). ROIC decreased slightly on 1.7 pp from 4.5% to 2.8% in FY2015. ROE decreased slightly on 0.54 pp from 7.3% to 6.7% in FY2015.

Leverage (Debt)


Debt level is 10.9x Net Debt / EBITDA and 11.2x Debt / EBITDA. Net Debt / EBITDA jumped on 2.5x from 8.4x to 10.9x in FY2015. Debt increased on 6.1% in FY2015 while cash dropped on 17.7% in FY2015.

Appendix 1: Peers in Electric Utilities


Below you can find Reliance Infrastructure benchmarking vs. other companies in Electric Utilities 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
Adani Power ($ADANIPOWER)91.5%65.7%128.0%21.7%
Nava Bharat Ventures ($NBVENTURES)-50.8%-10.4%15.3%51.6%
Ptc India ($PTC)-53.9%-12.1%14.2%31.5%
Bf Utilities ($BFUTILITIE)-79.1%41.4%9.2%20.6%
Power Grid Corporation Of India ($POWERGRID)-63.7%19.7%27.2%18.9%
 
Median (16 companies)-53.9%30.1%15.3%8.8%6.8%
Reliance Infrastructure ($RELINFRA)77.0%-10.7%-14.4%-8.6%


Top companies by EBITDA margin, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Power Grid Corporation Of India ($POWERGRID)85.4%83.7%85.6%84.9%
Bf Utilities ($BFUTILITIE)36.4%43.9%55.1%61.2%
Jaiprakash Power Ventures ($JPPOWER)88.6%91.7%70.6%60.1%
Nhpc ($NHPC)69.6%71.4%66.5%59.3%
Orient Green Power Company ($GREENPOWER)42.7%24.4%53.3%57.8%82.8%
 
Median (17 companies)31.9%28.3%25.5%26.2%24.5%
Reliance Infrastructure ($RELINFRA)18.3%15.7%19.1%21.1%19.0%


Top companies by CAPEX/Revenue, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Jaiprakash Power Ventures ($JPPOWER)590.3%378.9%341.9%229.9%
Power Grid Corporation Of India ($POWERGRID)160.8%184.3%172.4%173.4%
Gvk Power & Infrastructure ($GVKPIL)76.3%139.1%136.7%109.1%52.7%
Orient Green Power Company ($GREENPOWER)340.9%422.5%170.0%77.0%19.3%
Nava Bharat Ventures ($NBVENTURES)39.1%69.0%30.5%70.6%
 
Median (16 companies)71.8%69.0%43.3%35.1%14.8%


Top companies by ROIC, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Alstom T&D India ($ALSTOMT&D)11.2%0.0%15.7%14.6%16.1%
Ptc India ($PTC)8.1%11.2%10.4%13.6%
Nava Bharat Ventures ($NBVENTURES)11.7%5.3%6.3%9.2%
Ntpc ($NTPC)8.7%9.0%9.6%9.1%
Tata Power Co ($TATAPOWER)10.1%8.9%8.8%9.0%7.1%
 
Median (19 companies)4.5%4.8%5.8%5.5%6.8%
Reliance Infrastructure ($RELINFRA)3.9%5.9%5.2%4.5%2.8%


Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Ksk Energy Ventures ($KSK)13.1x16.3x16.2x27.0x
Gvk Power & Infrastructure ($GVKPIL)9.6x19.1x23.9x20.1x20.2x
Lanco Infratech ($LITL)9.3x16.3x12.9x19.2x
Jaiprakash Power Ventures ($JPPOWER)18.9x11.6x13.1x16.7x
Gmr Infrastructure ($GMRINFRA)7.9x19.5x15.1x16.7x
 
Median (19 companies)7.9x11.3x8.0x6.2x7.2x
Reliance Infrastructure ($RELINFRA)6.1x6.2x7.3x8.4x10.9x