Amara Raja Batteries Net Income surged on 49.3% in 2015 and EBITDA Margin increased on 2.8 pp from 14.2% to 17.0%
29-05-2015 • About Amara Raja Batteries (
$AMARAJABAT) • By InTwits
Amara Raja Batteries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Amara Raja Batteries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.9%. At the same time it's in pair with industry average of 5.6%.
- CAPEX is quite volatile: 4,063 in FY2015, 3,727 in FY2014, 746 in FY2013, 873 in FY2012, 519 in FY2011
- The company has highly profitable business model: ROIC is at 35.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Amara Raja Batteries ($AMARAJABAT) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 17,599 | 23,633 | 29,574 | 34,345 | 42,113 | 22.6% |
| SG&A | | | | | 253 | |
| EBITDA | 2,641 | 3,522 | 4,638 | 4,877 | 7,175 | 47.1% |
| Net Income | 1,481 | 2,151 | 2,867 | 2,752 | 4,109 | 49.3% |
Balance Sheet
|
|---|
| Cash | 123 | 533 | 443 | 2,929 | 2,155 | -26.4% |
| Short Term Debt | 200 | 71 | 108 | 97 | 18 | -81.4% |
| Long Term Debt | 701 | 785 | 773 | 759 | 741 | -2.4% |
Cash flow
|
|---|
| Capex | 519 | 873 | 746 | 3,727 | 4,063 | 9.0% |
Ratios
|
|---|
| Revenue growth | -66.9% | 34.3% | 25.1% | 16.1% | 22.6% | |
| EBITDA growth | -10.5% | 33.3% | 31.7% | 5.2% | 47.1% | |
| EBITDA Margin | 15.0% | 14.9% | 15.7% | 14.2% | 17.0% | 2.8% |
| Net Income Margin | 8.4% | 9.1% | 9.7% | 8.0% | 9.8% | 1.7% |
| SG&A, % of revenue | | | | | 0.6% | 0.6% |
| CAPEX, % of revenue | 2.9% | 3.7% | 2.5% | 10.9% | 9.6% | -1.2% |
| ROIC | 30.5% | 32.1% | 34.5% | 30.3% | 35.4% | 5.1% |
| ROE | 24.9% | 29.3% | 30.4% | 22.7% | 26.8% | 4.1% |
| Net Debt/EBITDA | 0.3x | 0.1x | 0.1x | -0.4x | -0.2x | 0.2x |
Revenue and profitability
The company's Revenue surged on 22.6% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.8 pp from 14.2% to 17.0% in FY2015.
Net Income marign increased slightly on 1.7 pp from 8.0% to 9.8% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Amara Raja Batteries's CAPEX/Revenue was 9.6% in FY2015. CAPEX/Revenue increased on 6.0 pp from 3.7% in FY2012 to 9.6% in FY2015. It's average CAPEX/Revenue for the last three years was 7.7%.To fuel this fast growth the company invested a large share of EBITDA (56.6%) to CAPEX.
Return on investment
The company operates at high and attractive ROIC (35.38%) and ROE (26.83%). ROIC increased on 5.1 pp from 30.3% to 35.4% in FY2015. ROE increased on 4.1 pp from 22.7% to 26.8% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.2x and Debt / EBITDA is 0.1x. Net Debt / EBITDA surged on 0.2x from -0.4x to -0.2x in FY2015. Debt dropped on 11.4% in FY2015 while cash dropped on 26.4% in FY2015.
Valuation
The company's trades at EV/EBITDA 20.8x and P/E 36.6x while industy averages are 10.5x and 26.1x. Amara Raja Batteries's EV/(EBITDA-CAPEX) is 47.9x with the industry average at 4.7x.
Appendix 1: Peers in Auto Parts & Equipment
Below we provide Amara Raja Batteries 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 |
|---|
| India Nippon Electricals ($INDNIPPON) | | 13.6% | 3.2% | -2.4% | 24.8% |
| Enkei Wheels (India) ($ENKEIWHEL) | | 16.9% | 1.3% | 11.7% | 21.6% |
| Ip Rings ($IPRINGLTD) | | 4.0% | 2.4% | -0.1% | 19.5% |
| Exide Industries ($EXIDEIND) | | 11.5% | 19.7% | 30.6% | 14.8% |
| Shivam Autotech ($SHIVAMAUTO) | | 33.8% | 2.9% | 7.1% | 14.7% |
| |
|---|
| Median (31 companies) | -15.5% | 16.9% | 2.4% | 4.9% | 8.6% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | | 34.3% | 25.1% | 16.1% | 22.6% |
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% |
| Suprajit Engineering ($SUPRAJIT) | 16.5% | 16.2% | 17.0% | 17.2% | 16.2% |
| Amtek Auto ($AMTEKAUTO) | | 25.1% | | 20.7% | 14.8% |
| Triton Valves ($TRITONV) | 12.3% | 9.8% | 11.3% | 11.3% | 14.2% |
| |
|---|
| Median (35 companies) | 10.8% | 10.8% | 9.8% | 10.1% | 10.3% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 15.0% | 14.9% | 15.7% | 14.2% | 17.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Amtek Auto ($AMTEKAUTO) | | 18.9% | | 27.1% | 30.3% |
| Jbm Auto ($JBMA) | 18.1% | 9.8% | 8.4% | | 14.4% |
| Rico Auto Industries ($RICOAUTO) | 9.5% | 5.8% | 10.9% | 5.7% | 14.2% |
| Shivam Autotech ($SHIVAMAUTO) | 11.6% | 11.6% | 4.1% | 4.9% | 12.5% |
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | 9.8% | 3.5% | 6.5% | 6.0% | 8.9% |
| |
|---|
| Median (24 companies) | 8.0% | 5.8% | 4.7% | 4.8% | 4.6% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 2.9% | 3.7% | 2.5% | 10.9% | 9.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Exide Industries ($EXIDEIND) | 34.2% | 24.2% | 24.3% | 29.5% | 26.9% |
| Suprajit Engineering ($SUPRAJIT) | 32.4% | 31.8% | 28.0% | 26.1% | 22.9% |
| 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% |
| Munjal Auto Industries ($MUNJALAU) | 26.3% | 30.6% | 21.5% | 21.1% | 19.0% |
| |
|---|
| Median (48 companies) | 15.2% | 15.7% | 11.8% | 12.7% | 13.4% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 30.5% | 32.1% | 34.5% | 30.3% | 35.4% |
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 ($REILELEC) | -0.1x | -0.0x | 1.5x | 9.1x | 0.0x |
| Steel Strips Wheels ($SSWL) | 4.6x | 5.4x | 6.3x | 6.5x | 5.6x |
| Automotive Stampings & Assemblies ($ASAL) | 1.8x | 1.1x | 3.9x | 6.3x | |
| |
|---|
| Median (44 companies) | 2.2x | 1.3x | 2.2x | 0.8x | 1.1x |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 0.3x | 0.1x | 0.1x | -0.4x | -0.2x |
