Lloyd Electric & Engineering reports 35.7% EBITDA growth and 1.1 pp EBITDA Margin growth from 9.6% to 10.7%

28-05-2015 • About Lloyd Electric & Engineering ($LLOYDELENG) • By InTwits

Lloyd Electric & Engineering reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Lloyd Electric & Engineering is a fast growth stock: FY2015 revenue growth was 22.3%, 5 year revenue CAGR was 21.6% at FY2015 ROIC 13.1%
EBITDA Margin is relatively stable: 10.7% in FY2015 vs. 9.6% in FY2014 vs. 9.0% in FY2011
Lloyd Electric & Engineering has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's in pair with industry average of 12.1%.
CAPEX is quite volatile: 1,386 in FY2015, 1,625 in FY2014, 3,030 in FY2013, 2,491 in FY2012, 1,231 in FY2011
The company has highly profitable business model: ROIC is at 13.1%
It operates with high leverage: Net Debt/EBITDA is 3.2x 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.

Lloyd Electric & Engineering ($LLOYDELENG) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	10,149	13,412	14,743	17,760	21,727	22.3%
EBITDA	911	1,208	1,592	1,711	2,322	35.7%
Net Income	376	351	528	891	884	-0.8%
Balance Sheet
Cash	154	294	209	543	637	17.3%
Short Term Debt	2,033	3,074	4,053	5,473	6,897	26.0%
Long Term Debt	1,811	1,113	947	1,467	1,086	-26.0%
Cash flow
Capex	446	374	371	615	277	-54.9%
Ratios
Revenue growth	24.2%	32.2%	9.9%	20.5%	22.3%
EBITDA growth	11.2%	32.6%	31.8%	7.5%	35.7%
EBITDA Margin	9.0%	9.0%	10.8%	9.6%	10.7%	1.1%
Net Income Margin	3.7%	2.6%	3.6%	5.0%	4.1%	-0.9%
CAPEX, % of revenue	4.4%	2.8%	2.5%	3.5%	1.3%	-2.2%
ROIC	9.2%	10.0%	12.4%	11.3%	13.1%	1.8%
ROE	9.2%	7.5%	10.0%	15.0%	12.7%	-2.3%
Net Debt/EBITDA	4.0x	3.2x	3.0x	3.7x	3.2x	-0.6x

Revenue and profitability

Lloyd Electric & Engineering's Revenue surged on 22.3% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.6 pp from 14.4% to 12.8% in FY2015.

Net Income marign decreased slightly on 0.95 pp from 5.0% to 4.1% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 Lloyd Electric & Engineering had CAPEX/Revenue of 1.3%. CAPEX/Revenue decreased slightly on 1.5 pp from 2.8% in FY2012 to 1.3% in FY2015. For the last three years the average CAPEX/Revenue was 2.4%.

Return on investment

The company operates at good ROIC (13.10%) and ROE (12.66%). ROIC increased slightly on 1.8 pp from 11.3% to 13.1% in FY2015. ROE decreased on 2.3 pp from 15.0% to 12.7% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 3.2x and Debt / EBITDA is 3.4x. Net Debt / EBITDA dropped on 0.6x from 3.7x to 3.2x in FY2015. Debt jumped on 15.0% in FY2015 while cash surged on 17.3% in FY2015.

Appendix 1: Peers in Industrial Machinery

Below you can find Lloyd Electric & Engineering benchmarking vs. other companies in Industrial Machinery 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
Forbes & Company ($FORBESCO)		22.4%	13.0%	53.4%	15.6%
Nitin Fire Protection Industries ($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 ($VJLAXMIE)	27.9%	-28.8%	5.7%	26.6%
Median (26 companies)	13.8%	14.1%	2.1%	0.9%	11.3%
Lloyd Electric & Engineering ($LLOYDELENG)		32.2%	9.9%	20.5%	22.3%

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 ($GOLDINFRA)					18.1%
Median (29 companies)	14.0%	11.2%	9.4%	10.5%	10.4%
Lloyd Electric & Engineering ($LLOYDELENG)	9.0%	9.0%	10.8%	9.6%	10.7%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Texmaco Infrastructure & Holdings ($TEXINFRA)					14.0%
Wendt (India) ($WENDT)	7.2%	13.5%	9.0%	8.8%	9.4%
Ingersoll-Rand (India) ($INGERRAND)	1.3%	4.3%	10.9%	3.6%	9.2%
Kabra Extrusiontechnik ($KABRAEXTRU)	5.4%	6.5%	1.8%	0.5%	8.8%
Forbes & Company ($FORBESCO)	2.8%	1.8%	2.6%	3.0%	5.1%
Median (16 companies)	3.4%	5.8%	4.1%	2.7%	3.8%
Lloyd Electric & Engineering ($LLOYDELENG)	4.4%	2.8%	2.5%	3.5%	1.3%

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) ($WENDT)		38.2%	20.2%	16.2%	15.1%
Median (51 companies)	15.2%	13.1%	10.2%	9.2%	13.0%
Lloyd Electric & Engineering ($LLOYDELENG)	9.2%	10.0%	12.4%	11.3%	13.1%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Chemtech Industrial Valves ($CHEMTECH)	7.7x	6.4x	5.3x	8.8x
Forbes & Company ($FORBESCO)	3.5x	2.2x	3.3x	4.7x	6.3x
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
Abc Bearings ($ABCBEARS)	0.5x	1.7x	3.5x	3.4x	0.0x
Median (34 companies)	1.1x	0.6x	1.5x	0.0x	0.0x
Lloyd Electric & Engineering ($LLOYDELENG)	4.0x	3.2x	3.0x	3.7x	3.2x

Lloyd Electric & Engineering stock price chart

Lloyd Electric & Engineering financials

mln.	FY2010	FY2011	FY2012

Revenue	8,171	10,149	13,412
EBITDA	819.7	911.2	1,208
Net income	338.1	375.7	351.2
CAPEX	398.0	446.1	374.2
Debt	2,580	3,844	4,188
Cash	127.3	154.0	294.3

About Lloyd Electric & Engineering

Lloyd Electric & Engineering Limited manufactures and sells heat exchangers and evaporator coils for heating, ventilation, air-conditioning (AC), and refrigeration industry primarily in India. The company offers fin and tube type heat exchangers used in various applications, such as commercial refrigeration systems, automobile-buses/car AC, railway and marine AC, telecom/mainframe AC, and special application coils, as well as window, split, and package AC systems; packaged AC units, including the AC units for passenger coaches and locomotives in the railway industry; window/split air conditioners; oil coolers for railways; and heavy automobile and tube mill for MB radiators. It is also involved in the design, manufacture, supply, installation, and maintenance of dry coolers used in various segments, such as thermal power plants, nuclear power plants, industrial water cooling segments, oil cooling segments, cement industry, textile industry, etc. In addition, the company offers return bands, distributors, and suction/discharge lines of various sizes; and manufactures air conditioners for various brands on original equipment manufacturing and ODM basis, as well as under its own LLOYD brand. Further, it offers air conditioners, LED TVs, refrigerators, washing machines, chest freezers, water dispensers, induction cookers, room heaters, and other products; and trades in air conditioners, as well as consumer durable products, including LCD/LED products, chest freezers, etc. under the LLOYD brand. The company also exports its products primarily to the Middle East, Africa, Europe, and North America. Lloyd Electric & Engineering Limited was incorporated in 1987 and is headquartered in New Delhi, India.