Remsons Industries EBITDA dropped on 26.2% in 2015 while Revenue increased on 4.3%

27-05-2015 • About Remsons Industries ($REMSONSIND) • By InTwits

Remsons Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

The company has potentially unprofitable business model: ROIC is at 5.2%
It operates with high leverage: Net Debt/EBITDA is 5.7x while industry average is 1.6x

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Remsons Industries ($REMSONSIND) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	947	1,152	1,076	1,106	1,154	4.3%
EBITDA	67	97	55	61	45	-26.2%
Net Income	34	33	4	15	0	-97.1%
Balance Sheet
Cash	2	7	2	2	7	187.4%
Short Term Debt	114	182	154	136	183	34.4%
Long Term Debt	103	95	84	84	80	-5.8%
Cash flow
Capex	76	38
Ratios
Revenue growth	-27.6%	21.6%	-6.6%	2.8%	4.3%
EBITDA growth	11.8%	45.0%	-43.5%	11.9%	-26.2%
EBITDA Margin	7.0%	8.4%	5.1%	5.5%	3.9%	-1.6%
Net Income Margin	3.6%	2.8%	0.4%	1.3%	0.0%	-1.3%
CAPEX, % of revenue	8.0%	3.3%				0.0%
ROIC	15.2%	18.4%	7.3%	9.3%	5.2%	-4.0%
ROE	33.7%	24.3%	2.5%	9.2%	0.3%	-8.9%
Net Debt/EBITDA	3.2x	2.8x	4.3x	3.6x	5.7x	2.1x

Revenue and profitability

Remsons Industries's Revenue increased on 4.3% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.4 pp from 86.6% to 88.0% in FY2015.

Net Income marign decreased slightly on 1.3 pp from 1.3% to 0.037% in FY2015.

Return on investment

The company operates at low ROIC (5.23%) and ROE (0.25%). ROIC decreased on 4.0 pp from 9.3% to 5.2% in FY2015. ROE decreased on 8.9 pp from 9.2% to 0.25% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 5.7x and Debt / EBITDA is 5.8x. Net Debt / EBITDA jumped on 2.1x from 3.6x to 5.7x in FY2015. Debt surged on 19.0% in FY2015 while cash jumped on 187% in FY2015.

Valuation

Remsons Industries's trades at EV/EBITDA 23.0x and P/E 1,835.3x while industy averages are 10.5x and 26.1x.

Appendix 1: Peers in Auto Parts & Equipment

Below we provide Remsons Industries benchmarking against other companies in Auto Parts & Equipment 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
Exide Industries ($EXIDEIND)		11.5%	19.7%	30.6%	14.8%
Motherson Sumi Systems ($MOTHERSUMI)		79.1%	71.3%	20.2%	14.0%
Fiem Industries ($FIEMIND)	-54.4%	25.2%	13.4%	18.7%
Suprajit Engineering ($SUPRAJIT)	-53.1%	22.2%	9.4%	17.9%
Amara Raja Batteries ($AMARAJABAT)	-66.9%	34.3%	25.1%	16.1%
Median (35 companies)	-35.4%	16.9%	2.7%	5.0%	8.3%
Remsons Industries ($REMSONSIND)		21.6%	-6.6%	2.8%	4.3%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Tube Investments Of India ($TUBEINVEST)	33.7%	18.4%	24.4%	28.3%	30.0%
Shivam Autotech ($SHIVAMAUTO)	23.2%	24.1%	24.1%	20.6%	18.7%
Amtek Auto ($AMTEKAUTO)		25.1%		20.7%	14.8%
Triton Valves ($TRITONV)	12.3%	9.8%	11.3%	11.3%	14.2%
Sona Koyo Steering Systems ($SONASTEER)	13.0%	13.2%	11.3%	12.2%	13.9%
Median (28 companies)	10.9%	11.1%	9.9%	10.8%	10.3%
Remsons Industries ($REMSONSIND)	7.0%	8.4%	5.1%	5.5%	3.9%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Amtek Auto ($AMTEKAUTO)		18.9%		27.1%	30.3%
Amara Raja Batteries ($AMARAJABAT)	2.9%	3.7%	2.5%	10.9%
Subros ($SUBROS)	11.6%	16.6%	10.7%	9.3%	7.9%
Lumax Auto Technologies ($LUMAXTECH)	3.7%	5.1%	7.3%	7.8%	3.8%
Sona Koyo Steering Systems ($SONASTEER)	5.9%	9.8%	6.6%	7.1%	5.3%
Median (25 companies)	7.6%	5.8%	4.6%	4.9%	3.8%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Amara Raja Batteries ($AMARAJABAT)	30.5%	32.1%	34.5%	30.3%
Exide Industries ($EXIDEIND)	34.2%	24.2%	24.3%	29.5%	26.9%
Suprajit Engineering ($SUPRAJIT)	32.4%	31.8%	28.0%	26.1%
Motherson Sumi Systems ($MOTHERSUMI)	23.7%	13.5%	16.5%	25.0%	24.9%
Munjal Showa ($MUNJALSHOW)	18.8%	29.9%	23.8%	22.5%	24.9%
Median (48 companies)	16.5%	15.7%	12.7%	14.5%	12.4%
Remsons Industries ($REMSONSIND)	15.2%	18.4%	7.3%	9.3%	5.2%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Tube Investments Of India ($TUBEINVEST)	8.1x	17.6x	17.8x	17.3x	16.4x
Autoline Industries ($AUTOIND)	3.1x	3.2x	4.0x	12.0x
Reil Electricals India ($REILELEC)	-0.1x	-0.0x	1.5x	9.1x
Steel Strips Wheels ($SSWL)	4.6x	5.4x	6.3x	6.5x	5.6x
Automotive Stampings & Assemblies ($ASAL)	1.8x	1.1x	3.9x	6.3x
Median (44 companies)	2.1x	1.2x	1.8x	0.7x	0.4x
Remsons Industries ($REMSONSIND)	3.2x	2.8x	4.3x	3.6x	5.7x

Remsons Industries stock price chart

Remsons Industries financials

mln.	FY2010	FY2011	FY2012

Revenue	1,309	947.2	1,152
EBITDA	59.504	66.536	96.502
Net income	16.709	34.012	32.571
CAPEX	28.408	75.797	38.137
Debt	171.2	216.8	277.7
Cash	1.742	2.169	7.395

About Remsons Industries

Remsons Industries Limited manufactures and sells automotive component parts in India. The company offers various cables, including clutch, accelerator/throttle/gasoline, parking brake, shift gear, reverse gear, choke, engine stop, speedometer, fare meter, de-compressor, body, HVAC, door, pull-to-stop, drive change, and seat cables used in two, three, and four wheelers; and light, medium, and heavy commercial vehicles, as well as in construction, mining, and farm equipment. It also provides flexible shafts used in speedometers, tachometers, power tools/machinery, power seats, and farm and earth moving equipment; and gear shift systems and push pull cables used in passenger cars, light commercial vehicles, medium commercial vehicles, heavy commercial vehicles, and rear engine buses. The company exports its products to the United States, Colombia, Central America, the United Kingdom, Italy, Spain, Belgium, France, and Singapore. Remsons Industries Limited was founded in 1959 and is based in Mumbai, India.