Dhanlaxmi Bank reports 11.5% revenue growth in FY2015

28-05-2015 • About Dhanlaxmi Bank ($DHANBANK) • By InTwits

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

Dhanlaxmi Bank doesn't have a profitable business model yet: FY2015 ROIC is -7.7%
Dhanlaxmi Bank has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's a lot of higher than industry average of 1.5%.
CAPEX is quite volatile: 111 in FY2015, 281 in FY2014, 242 in FY2013, 458 in FY2012, 719 in FY2011
The company has unprofitable business model: ROIC is at -7.7%
It operates with high leverage: Net Debt/EBITDA is 0.4x while industry average is

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

Dhanlaxmi Bank ($DHANBANK) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	10,527	15,363	14,219	12,723	14,183	11.5%
Net Income	261	-1,156	26	-2,519	-2,415
Balance Sheet
Cash	8,028	8,679	5,098	6,302	6,693	6.2%
Short Term Debt	14,117	28,257	18,504	16,323	13,764	-15.7%
Long Term Debt	2,311	5,244	4,667	3,171	1,839	-42.0%
Cash flow
Capex	719	458	242	281	111	-60.4%
Ratios
Revenue growth	-36.9%	45.9%	-7.4%	-10.5%	11.5%
Net Income Margin	2.5%	-7.5%	0.2%	-19.8%	-17.0%	2.8%
CAPEX, % of revenue	6.8%	3.0%	1.7%	2.2%	0.8%	-1.4%
ROIC	2.4%	-3.5%	-0.6%	-6.6%	-7.7%	-1.1%
ROE	4.1%	-14.7%	0.4%	-33.5%	-33.1%	0.5%

Revenue and profitability

The company's Revenue jumped on 11.5% in FY2015.

Net Income marign increased on 2.8 pp from -19.8% to -17.0% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 0.78%. CAPEX/Revenue decreased on 2.2 pp from 3.0% in FY2012 to 0.78% in FY2015. For the last three years the average CAPEX/Revenue was 1.6%.

Return on investment

The company operates at negative ROIC (-7.72%) and ROE (-33.07%). ROIC decreased slightly on 1.1 pp from -6.6% to -7.7% in FY2015. ROE showed almost no change in FY2015.

Leverage (Debt)

Debt dropped on 20.0% in FY2015 while cash increased on 6.2% in FY2015.

Management team

The company's CEO G Sreeram has spent 3 years at the company.

Appendix 1: Peers in Banks

Below we provide Dhanlaxmi Bank benchmarking against other companies in Banks 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
Kotak Mahindra Bank ($KOTAKBANK)		18.4%	22.9%	7.1%	26.1%
Dcb Bank ($DCBBANK)		26.7%	26.2%	22.5%	25.3%
Syndicate Bank ($SYNDIBANK)		32.2%	11.9%	7.9%	20.2%
Yes Bank ($YESBANK)		53.0%	33.7%	21.6%	17.7%
Axis Bank ($AXISBANK)		39.0%	24.5%	13.1%	15.6%
Median (26 companies)	-23.2%	28.5%	16.2%	10.9%	10.2%
Dhanlaxmi Bank ($DHANBANK)		45.9%	-7.4%	-10.5%	11.5%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Bank Of India ($BANKINDIA)	1.6%	2.0%	1.1%	1.5%	3.6%
State Bank Of Mysore ($MYSOREBANK)	1.3%	1.6%	1.3%		3.5%
Jammu & Kashmir Bank ($J&KBANK)	5.6%	1.4%	1.3%	2.2%	3.3%
Lakshmi Vilas Bank ($LAKSHVILAS)	4.4%	2.1%	1.4%	1.6%	2.4%
Dcb Bank ($DCBBANK)	1.6%	9.0%	7.0%	1.6%	1.9%
Median (26 companies)	1.2%	1.2%	1.1%	1.2%	1.3%
Dhanlaxmi Bank ($DHANBANK)	6.8%	3.0%	1.7%	2.2%	0.8%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Karnataka Bank ($KTKBANK)	5.5%	6.8%	10.2%	7.7%	10.4%
Axis Bank ($AXISBANK)	10.2%	9.6%	8.9%	9.1%	8.8%
Yes Bank ($YESBANK)	11.8%	9.8%	8.4%	8.4%	8.7%
Kotak Mahindra Bank ($KOTAKBANK)	7.8%	6.8%	6.5%	7.1%	8.5%
Lakshmi Vilas Bank ($LAKSHVILAS)		6.5%	7.5%	0.7%	6.1%
Median (26 companies)	7.5%	7.6%	6.3%	3.4%	4.7%
Dhanlaxmi Bank ($DHANBANK)	2.4%	-3.5%	-0.6%	-6.6%	-7.7%

Dhanlaxmi Bank stock price chart

Dhanlaxmi Bank financials

mln.	FY2010	FY2011	FY2012

Revenue	16,689	10,527	15,363
EBITDA	0.000	0.000	0.000
Net income	233.0	260.6	-1,156.270
CAPEX	543.9	718.9	457.6
Debt	3,051	16,428	33,502
Cash	6,129	8,028	8,679

About Dhanlaxmi Bank

Dhanlaxmi Bank Limited provides various banking and financial services in India. It offers deposit products, such as savings and current accounts, and term deposits; loans, including property, car, commercial, personal, education, and business loans, as well as loans against securities; and foreign exchange services comprising foreign currency cash, cheque deposits, foreign currency demand drafts, remittances, and foreign exchange cards. The company also provides investment products, such as gold coins and silver bars; export and import services; credit products comprising industrial and trade advance, import export assistance, and agricultural assistance; corporate salary products; and cash management services, as well as life, health, car, travel, and house and shop insurance products. In addition, it offers non-resident Indians banking, micro and agricultural banking, and financial planning services; and SME banking services, including working capital facilities, trade facilities, and capacity expansion services. Further, the company provides credit, debit, and gift cards; online services comprising mobile banking, bill payment, InstaPay, shopping, e-IT return filing, immediate payment, and mobile/DTH recharge services; and other services, including locker facilities and depository services. It serves corporate and institutional clients; micro, small, and medium enterprises; and individuals, traders, contractors, businessmen, professionals, etc. As of March 31, 2014, the company had 266 branches and 396 ATMs. Dhanlaxmi Bank Limited was founded in 1927 and is headquartered in Thrissur, India.