Jm Financial reports 110% CAPEX growth and 39.4% Revenue growth

29-05-2015 • About Jm Financial ($JMFINANCIL) • By InTwits

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

Jm Financial has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.2%. At the same time it's a lot of higher than industry average of 2.9%.
CAPEX is quite volatile: 2,378 in FY2015, 1,131 in FY2014, 95.6 in FY2013, 74.5 in FY2012, 90.3 in FY2011
It operates with high leverage: Net Debt/EBITDA is 4.8x while industry average is 1.1x

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

Jm Financial ($JMFINANCIL) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	8,959	8,740	10,422	10,067	14,030	39.4%
EBITDA	5,045	4,922	6,454	6,069	9,622	58.6%
Net Income	1,746	1,212	1,829	2,095	3,305	57.7%
Balance Sheet
Cash	340	429	547	980	609	-37.8%
Short Term Debt	33,214	29,311	37,708	25,727	44,600	73.4%
Long Term Debt	258	2,713	4,254	4,144	2,614	-36.9%
Cash flow
Capex	90	75	96	1,131	2,378	110.2%
Ratios
Revenue growth	-45.8%	-2.4%	19.3%	-3.4%	39.4%
EBITDA growth	84.1%	-2.5%	31.1%	-6.0%	58.6%
EBITDA Margin	56.3%	56.3%	61.9%	60.3%	68.6%	8.3%
Net Income Margin	19.5%	13.9%	17.6%	20.8%	23.6%	2.7%
CAPEX, % of revenue	1.0%	0.9%	0.9%	11.2%	16.9%	5.7%
ROE	9.1%	6.2%	9.2%	9.9%	13.9%	4.1%
Net Debt/EBITDA	6.6x	6.4x	6.4x	4.8x	4.8x	0.1x

Revenue and profitability

The company's Revenue jumped on 39.4% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.9 pp from 6.8% to 14.6% in FY2015.

Net Income marign increased on 2.7 pp from 20.8% to 23.6% in FY2015.

Capital expenditures (CAPEX) and working capital investments

The company's CAPEX/Revenue was 16.9% in FY2015. CAPEX/Revenue surged on 16.1 pp from 0.85% in FY2012 to 16.9% in FY2015. It's average level of CAPEX/Revenue for the last three years was 9.7%.

Leverage (Debt)

Company's Net Debt / EBITDA is 4.8x and Debt / EBITDA is 4.9x. Net Debt / EBITDA increased on 0.1x from 4.8x to 4.8x in FY2015. Debt jumped on 58.1% in FY2015 while cash dropped on 37.8% in FY2015.

Appendix 1: Peers in Other Financial Services

Below you can find Jm Financial benchmarking vs. other companies in Other Financial 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 5	FY2011	FY2012	FY2013	FY2014	FY2015
Lkp Finance ($LKPFIN)		-35.0%	20.8%	-4.3%	89.8%
Aditya Birla Money ($BIRLAMONEY)		-21.5%	-13.3%	-10.6%	49.0%
Geojit Bnp Paribas Financial Services ($GEOJITBNPP)		-8.6%	2.0%	-12.6%	42.3%
Capital First ($CAPF)		90.7%	9.9%	31.5%	35.8%
Indiabulls Securities ($IBSEC)		-48.1%	0.1%	58.0%	31.6%
Median (9 companies)	-21.0%	10.3%	8.1%	12.2%	31.6%
Jm Financial ($JMFINANCIL)		-2.4%	19.3%	-3.4%	39.4%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Twentyfirst Century Management Services ($21STCENMGM)					91.9%
Frontline Securities ($FRONTSEC)					87.0%
Shardul Securities ($SHARDUL)					84.6%
Wallfort Financial Services ($WALLFORT)					82.5%
Winro Commercial (India) ($WINROC)					73.4%
Median (23 companies)	33.2%	33.5%	36.2%	33.3%	39.9%
Jm Financial ($JMFINANCIL)	56.3%	56.3%	61.9%	60.3%	68.6%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Geojit Bnp Paribas Financial Services ($GEOJITBNPP)	5.6%	5.7%	7.8%	3.7%	4.8%
Multi Commodity Exchange Of India ($MCX)	8.5%	3.8%	8.8%	1.7%	3.8%
Icra ($ICRA)	2.4%	2.0%	2.1%	13.2%	1.5%
Lkp Finance ($LKPFIN)	1.2%	3.6%	1.6%	3.9%	1.1%
Indiabulls Securities ($IBSEC)	1.0%	8.1%	1.8%	1.8%	1.1%
Median (8 companies)	2.9%	3.8%	1.6%	1.7%	1.1%
Jm Financial ($JMFINANCIL)	1.0%	0.9%	0.9%	11.2%	16.9%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Crisil ($CRISIL)	60.1%	62.5%	53.7%	46.4%
Icra ($ICRA)	24.5%	20.7%	17.0%	20.9%	21.1%
Multi Commodity Exchange Of India ($MCX)	21.9%	35.4%	27.2%	9.9%	4.8%
Religare Enterprises ($RELIGARE)	-2.7%	2.0%	3.4%	2.7%	4.1%
Iris Mediaworks ($IRISMEDIA)		-1.1%	-0.2%	-0.2%
Median (34 companies)	21.9%	5.4%	10.2%	9.9%	4.8%
Jm Financial ($JMFINANCIL)

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Capital First ($CAPF)	9.1x	7.5x	9.2x	9.1x	7.7x
Religare Enterprises ($RELIGARE)	20.2x	9.2x	6.1x	7.0x	7.2x
Intec Capital ($INTECCAP)		5.1x	4.9x	4.6x	4.5x
Indiabulls Securities ($IBSEC)	1.6x	1.6x	2.5x	1.9x	4.0x
Lkp Finance ($LKPFIN)	2.2x	6.9x	5.8x	4.5x	3.5x
Median (21 companies)	-0.0x	-0.1x	0.7x	0.0x	0.0x
Jm Financial ($JMFINANCIL)	6.6x	6.4x	6.4x	4.8x	4.8x

Jm Financial stock price chart

Jm Financial financials

mln.	FY2010	FY2011	FY2012

Revenue	16,541	8,959	8,740
EBITDA	2,740	5,045	4,922
Net income	1,517	1,746	1,212
CAPEX	107.8	90.300	74.500
Debt	18,420	33,472	32,024
Cash	373.1	339.5	428.6

About Jm Financial

JM Financial Limited provides a range of financial products and services to public and private sector corporations, multinational corporations, financial institutions, institutional investors, high net-worth individuals, retail investors, and market intermediaries in India. It operates through four segments: Investment Banking and Securities Business, Fund Based Activities, Alternative Asset Management, and Asset Management. The Investment Banking and Securities Business segment offers advisory services for capital market transactions, including fund raising in public markets and from private equity investors, as well as mergers, acquisitions, restructuring, and financial advisory services; and distributes financial products through a network of franchisees and independent financial distributors. The Fund Based Activities segment provides finance against securities/commercial real estate to a range of corporate and non-corporate clients. This segment also trades in corporate bonds and government securities, as well as identifies, acquires, and sells down debt assets through a range of structured products. The Alternative Asset Management segment manages funds of institutional and large non-institutional investors raised under various schemes for investments under mandated charter, such as private equity and real estate fund management. The Asset management segment manages mutual fund assets through various schemes; and offers a range of investment options to various investors. The company also provides research, private and corporate wealth management, fixed income products structuring, investments, portfolio management, commodity broking, non banking financial activities, and asset reconstruction services. JM Financial Limited was founded in 1973 and is based in Mumbai, India.