Lakshmi Precision Screws EBITDA surged on 89.7% in 2015 and EBITDA Margin increased on 5.3 pp from 7.0% to 12.4%

29-05-2015 • About Lakshmi Precision Screws ($LAKPRE) • By InTwits

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

The company has business model with average profitability: ROIC is at 11.9%
It operates with high leverage: Net Debt/EBITDA is 4.4x while industry average is 1.2x

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

Lakshmi Precision Screws ($LAKPRE) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	3,560	3,913	3,670	3,944	4,254	7.9%
EBITDA	517	622	594	278	527	89.7%
Net Income	123	96	53	-275	33
Balance Sheet
Cash	98	102	121	139	160	14.9%
Short Term Debt	937	1,388	1,814	1,871	1,611	-13.9%
Long Term Debt	385	383	319	525	880	67.6%
Cash flow
Capex	511	333	93
Ratios
Revenue growth	-29.7%	9.9%	-6.2%	7.5%	7.9%
EBITDA growth	32.4%	20.3%	-4.5%	-53.2%	89.7%
EBITDA Margin	14.5%	15.9%	16.2%	7.0%	12.4%	5.3%
Net Income Margin	3.4%	2.5%	1.4%	-7.0%	0.8%	7.8%
CAPEX, % of revenue	14.3%	8.5%	2.5%			0.0%
ROIC	13.7%	14.4%	11.9%	3.1%	11.9%	8.8%
ROE	11.5%	8.4%	4.4%	-25.1%	3.4%	28.5%
Net Debt/EBITDA	2.4x	2.7x	3.4x	8.1x	4.4x	-3.7x

Revenue and profitability

The company's Revenue increased on 7.9% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.2 pp from 11.7% to 7.5% in FY2015.

Net Income marign increased on 7.8 pp from -7.0% to 0.77% in FY2015.

Return on investment

The company operates at low ROIC (11.94%) and ROE (3.35%). ROIC increased on 8.8 pp from 3.1% to 11.9% in FY2015. ROE jumped on 28.5 pp from -25.1% to 3.4% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 4.4x and Debt / EBITDA is 4.7x. Net Debt / EBITDA dropped on 3.7x from 8.1x to 4.4x in FY2015. Debt increased on 3.9% in FY2015 while cash jumped on 14.9% in FY2015.

Valuation

The company's trades at EV/EBITDA 5.2x and P/E 12.3x while industy averages are 10.5x and 26.1x.

Appendix 1: Peers in Iron & Steel Products

Below we provide Lakshmi Precision Screws benchmarking against other companies in Iron & Steel Products 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
Msp Steel & Power ($MSPL)	-61.2%	19.7%	60.6%	29.4%
Apl Apollo Tubes ($APLAPOLLO)		54.5%	44.2%	24.3%	25.7%
Metal Coatings (India) ($METALCO)	-21.7%	20.4%	-15.8%	13.0%
Usha Martin ($USHAMART)		10.4%	7.8%	12.5%	12.0%
Nile ($NILE)		7.5%	-19.1%	6.9%	38.7%
Median (10 companies)	-26.7%	20.1%	-8.6%	4.8%	32.2%
Lakshmi Precision Screws ($LAKPRE)		9.9%	-6.2%	7.5%	7.9%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Gandhi Special Tubes ($GANDHITUBE)					25.5%
Usha Martin ($USHAMART)	18.7%	13.2%	18.1%	18.7%	16.5%
Apl Apollo Tubes ($APLAPOLLO)	10.6%	8.3%	7.9%	6.6%	5.9%
Bedmutha Industries ($BEDMUTHA)	11.2%	7.1%	8.0%		5.0%
Nile ($NILE)	6.4%	5.5%	5.6%	6.0%	4.4%
Median (6 companies)	6.7%	5.2%	5.6%	6.3%	5.5%
Lakshmi Precision Screws ($LAKPRE)	14.5%	15.9%	16.2%	7.0%	12.4%

Top companies by CAPEX/Revenue, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Usha Martin ($USHAMART)	26.0%	21.6%	23.5%	29.0%	13.2%
Apl Apollo Tubes ($APLAPOLLO)	8.8%	5.6%	4.2%	5.1%	5.9%
Gandhi Special Tubes ($GANDHITUBE)					4.0%
Median (3 companies)	6.5%	5.6%	2.5%	15.4%	5.9%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Apl Apollo Tubes ($APLAPOLLO)	20.5%	18.2%	19.5%	16.0%	16.6%
Gandhi Special Tubes ($GANDHITUBE)	31.2%	28.3%	18.9%	13.2%	11.1%
Usha Martin ($USHAMART)	9.5%	4.3%	6.5%	7.6%	5.6%
Msp Steel & Power ($MSPL)	6.4%	-2.8%	7.2%	5.9%
Electrotherm (India) ($ELECTHERM)	7.1%	0.0%	-5.3%	0.0%
Median (23 companies)	9.4%	8.5%	7.2%	7.6%	11.1%
Lakshmi Precision Screws ($LAKPRE)	13.7%	14.4%	11.9%	3.1%	11.9%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Msp Steel & Power ($MSPL)	9.2x		6.4x	6.6x
Usha Martin ($USHAMART)	2.6x	10.0x	4.8x	4.8x	5.2x
Apl Apollo Tubes ($APLAPOLLO)	2.5x	2.7x	2.8x	3.1x	2.3x
National Fittings ($NATFIT)	0.6x	0.8x	0.1x	0.0x
Gujarat Containers ($GUJCONT)	0.0x	2.6x	2.6x	0.0x
Median (13 companies)	2.6x	2.6x	3.9x	0.0x	0.0x
Lakshmi Precision Screws ($LAKPRE)	2.4x	2.7x	3.4x	8.1x	4.4x

Lakshmi Precision Screws stock price chart

Lakshmi Precision Screws financials

mln.	FY2010	FY2011	FY2012

Revenue	5,067	3,560	3,913
EBITDA	390.2	516.8	621.6
Net income	69.138	122.7	96.361
CAPEX	90.860	510.8	333.2
Debt	1,226	1,322	1,771
Cash	36.728	98.015	101.5

About Lakshmi Precision Screws

Lakshmi Precision Screws Limited manufactures and sells high tensile fasteners primarily in India. The company's products include bolts and screws, pins, nuts, and allen keys. Its products are used in various sectors, such as wind energy, oil and gas, locomotives, automobiles, agriculture equipment, defense, electronic and communication, construction, tool and die, machine building, and various other sectors. The company also exports its products primarily to the United States, Australia, Canada, Denmark, Dubai, France, Germany, Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Africa, Switzerland, Sweden, etc. Lakshmi Precision Screws Limited was incorporated in 1968 and is headquartered in Rohtak, India.