Vimta Labs reports 61.8% Net Income decline and 9.3% Revenue decline

28-05-2015 • About Vimta Labs ($VIMTALABS) • By InTwits

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

EBITDA Margin is quite volatile: 16.2% in FY2015, 22.6% in FY2014, 19.3% in FY2013, 2.1% in FY2012, 16.6% in FY2011
Vimta Labs has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.2%. At the same time it's in pair with industry average of 5.8%.
CAPEX is quite volatile: 76.2 in FY2015, 86.6 in FY2014, 39.3 in FY2013, 38.6 in FY2012, 32.7 in FY2011
The company has potentially unprofitable business model: ROIC is at 5.0%

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

Vimta Labs ($VIMTALABS) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	957	873	1,091	1,183	1,073	-9.3%
EBITDA	159	18	210	267	174	-34.8%
Net Income	-47	-154	42	132	51	-61.8%
Balance Sheet
Cash	10	7	5	18	7	-60.0%
Short Term Debt	185	206	116	66	35	-46.6%
Long Term Debt	67	0	0	0	0
Cash flow
Capex	33	39	39	87	76	-11.9%
Ratios
Revenue growth	-18.5%	-8.7%	24.9%	8.4%	-9.3%
EBITDA growth	-27.9%	-88.5%	1,053.2%	27.0%	-34.8%
EBITDA Margin	16.6%	2.1%	19.3%	22.6%	16.2%	-6.3%
Net Income Margin	-4.9%	-17.6%	3.9%	11.2%	4.7%	-6.5%
CAPEX, % of revenue	3.4%	4.4%	3.6%	7.3%	7.1%	-0.2%
ROIC	-0.7%	-9.9%	4.7%	13.7%	5.0%	-8.7%
ROE	-3.6%	-13.1%	3.8%	11.4%	4.2%	-7.2%
Net Debt/EBITDA	1.5x	10.9x	0.5x	0.2x	0.2x	-0.0x

Revenue and profitability

Vimta Labs's Revenue decreased on 9.3% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 6.3 pp from 22.6% to 16.2% in FY2015.

Net Income marign decreased on 6.5 pp from 11.2% to 4.7% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 7.1%. Vimta Labs's CAPEX/Revenue increased on 2.7 pp from 4.4% in FY2012 to 7.1% in FY2015. For the last three years the average CAPEX/Revenue was 6.0%.

Return on investment

The company operates at low ROIC (4.95%) and ROE (4.17%). ROIC decreased on 8.7 pp from 13.7% to 5.0% in FY2015. ROE decreased on 7.2 pp from 11.4% to 4.2% in FY2015.

Leverage (Debt)

Debt level is 0.2x Net Debt / EBITDA and 0.2x Debt / EBITDA. Net Debt / EBITDA decreased slightly on 0.019x from 0.2x to 0.2x in FY2015. Debt dropped on 46.6% in FY2015 while cash dropped on 60.0% in FY2015.

Valuation

Vimta Labs's trades at EV/EBITDA 2.4x and P/E 7.6x while industy averages are 10.5x and 26.1x. Vimta Labs's EV/(EBITDA-CAPEX) is 4.2x with the industry average at 4.7x.

Appendix 1: Peers in Healthcare Services

Below you can find Vimta Labs benchmarking vs. other companies in Healthcare Services 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	FY2011	FY2012	FY2013	FY2014	FY2015
Kovai Medical Center & Hospital ($KOVAI)	-63.8%	27.3%	33.6%	12.4%
Fortis Malar Hospitals ($FORTISMLR)		13.5%	2.2%	11.1%	9.2%
Dr.Agarwal'S Eye Hospital ($DRAGARWQ)		0.7%	4.4%	4.3%	4.2%
Median (3 companies)	-63.8%	13.5%	4.4%	11.1%	6.7%
Vimta Labs ($VIMTALABS)		-8.7%	24.9%	8.4%	-9.3%

Top companies by EBITDA margin, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
N.G.Industries ($NGIND)					17.9%
Dr.Agarwal'S Eye Hospital ($DRAGARWQ)	12.5%	10.7%	11.0%	8.8%	10.9%
Fortis Malar Hospitals ($FORTISMLR)	14.8%	14.7%	12.5%	8.3%	6.4%
Oceanaa Biotek Industries ($OBIL)					4.4%
Median (4 companies)	14.8%	14.7%	12.5%	8.8%	8.7%
Vimta Labs ($VIMTALABS)	16.6%	2.1%	19.3%	22.6%	16.2%

Top companies by CAPEX/Revenue, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Kovai Medical Center & Hospital ($KOVAI)	55.9%	34.8%	3.4%	4.5%
Median (1 company)	9.6%	10.4%	3.4%	4.5%
Vimta Labs ($VIMTALABS)	3.4%	4.4%	3.6%	7.3%	7.1%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Kovai Medical Center & Hospital ($KOVAI)	14.5%	11.5%	18.0%	18.4%
Kmc Speciality Hospitals (India) ($KMCSHIL)	0.9%	11.0%	17.6%	-9.9%
N.G.Industries ($NGIND)	12.2%	14.3%	13.1%
Secunderabad Healthcare ($SECHE)	0.4%	0.2%	-0.1%
Chennai Meenakshi Multispeciality Hospital ($CMMHOSP)	6.0%	11.3%	19.8%
Median (8 companies)	12.2%	11.5%	16.7%	4.3%
Vimta Labs ($VIMTALABS)	-0.7%	-9.9%	4.7%	13.7%	5.0%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Kmc Speciality Hospitals (India) ($KMCSHIL)	6.0x	3.2x	2.3x	7.7x
Kovai Medical Center & Hospital ($KOVAI)	4.4x	4.5x	2.5x	2.0x
N.G.Industries ($NGIND)	0.2x	-0.2x	0.8x	0.0x	0.0x
Chennai Meenakshi Multispeciality Hospital ($CMMHOSP)	14.5x	8.7x	4.6x	0.0x
Fortis Malar Hospitals ($FORTISMLR)	0.6x	0.5x	-0.2x	0.0x	0.0x
Median (6 companies)	4.4x	3.2x	2.3x	0.0x	0.0x
Vimta Labs ($VIMTALABS)	1.5x	10.9x	0.5x	0.2x	0.2x

Vimta Labs stock price chart

Vimta Labs financials

mln.	FY2010	FY2011	FY2012

Revenue	1,174	957.0	873.4
EBITDA	220.5	158.9	18.250
Net income	26.586	-46.651	-153.763
CAPEX	219.8	32.652	38.631
Debt	274.0	252.7	206.0
Cash	19.366	9.739	7.102

About Vimta Labs

Vimta Labs Limited provides contract research and testing services primarily in India. It offers analytical testing services for food and agri products, and drugs and pharma products, as well as tests water samples for various purposes and specifications. The company also provides environmental assessment services, including site selection and liability studies; environmental impact assessments; environment management plans; carrying capacity based regional studies; environmental audits; solid and hazardous waste management; risk assessments and disaster management plans; occupational health and safety, and industrial hygiene; environmental baseline monitoring for air, meteorology, water, soil, noise, ecology, socio-economic, demography, etc.; and industrial emission source monitoring services. In addition, it offers offshore sampling and analysis of marine water and sediments; marine ecological studies; marine impact assessment; rehabilitation and resettlement studies; forestry and ecological studies; geo-technical studies; geological and hydro-geological studies; land use/ land cover studies based on remote sensing; socio-economic studies; due diligence studies; epidemiological studies; wasteland management studies; and study on bio-indicators, as well as offers various other services under environment chemistry. Further, the company provides clinical research services, including Phase-I/ bioequivalence studies, as well as screening and recruitment services; and conducts studies on arious dosage forms, such as tablets, capsules, extended release preparations, gels, jellies, solutions, transdermal patches, injectibles, etc. Additionally, it offers clinical reference lab services; pre-clinical services, including drug discovery services to pharmaceutical and biotech companies in the areas of pharmacology, DMPK/ADME, toxicology, and bioanalytical; and services in the area of cell and molecular biology. The company was founded in 1984 and is based in Hyderabad, India.