Ramco Industries reports 3,023% Net Income growth and 1.3 pp EBITDA Margin growth from 7.7% to 9.0%
29-05-2015 • About Ramco Industries (
$RAMCOIND) • By InTwits
Ramco Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 9.0% in FY2015, 7.7% in FY2014, 14.4% in FY2013, 17.0% in FY2012, 18.4% in FY2011
- Ramco Industries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.1%. At the same time it's a lot of higher than industry average of 3.8%.
- CAPEX is quite volatile: 249 in FY2015, 1,686 in FY2014, 333 in FY2013, 975 in FY2012, 419 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.6%
- It operates with high leverage: Net Debt/EBITDA is 4.7x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Ramco Industries ($RAMCOIND) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 6,723 | 7,890 | 9,093 | 8,150 | 8,945 | 9.8% |
| EBITDA | 1,240 | 1,338 | 1,312 | 628 | 804 | 27.9% |
| Net Income | 607 | 769 | 675 | -31 | 901 | |
Balance Sheet
|
|---|
| Cash | 513 | 263 | 189 | 195 | 364 | 86.3% |
| Short Term Debt | 1,477 | 587 | 1,084 | 2,254 | 3,001 | 33.2% |
| Long Term Debt | 907 | 1,187 | 1,842 | 1,830 | 1,130 | -38.3% |
Cash flow
|
|---|
| Capex | 419 | 975 | 333 | 1,686 | 249 | -85.2% |
Ratios
|
|---|
| Revenue growth | -36.6% | 17.3% | 15.3% | -10.4% | 9.8% | |
| EBITDA growth | 21.4% | 7.9% | -1.9% | -52.1% | 27.9% | |
| EBITDA Margin | 18.4% | 17.0% | 14.4% | 7.7% | 9.0% | 1.3% |
| Net Income Margin | 9.0% | 9.7% | 7.4% | -0.4% | 10.1% | 10.4% |
| CAPEX, % of revenue | 6.2% | 12.4% | 3.7% | 20.7% | 2.8% | -17.9% |
| ROIC | 14.1% | 14.4% | 12.0% | 1.6% | 5.6% | 4.0% |
| ROE | 15.9% | 17.6% | 13.5% | -0.6% | 15.9% | 16.5% |
| Net Debt/EBITDA | 1.5x | 1.1x | 2.1x | 6.2x | 4.7x | -1.5x |
Revenue and profitability
The company's Revenue increased on 9.8% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.4 pp from 1.4% to 4.8% in FY2015.
Net Income marign surged on 10.4 pp from -0.38% to 10.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Ramco Industries's CAPEX/Revenue was 2.8% in FY2015. CAPEX/Revenue decreased on 9.6 pp from 12.4% in FY2012 to 2.8% in FY2015. It's average CAPEX/Revenue for the last three years was 9.0%.
Return on investment
The company operates at good ROE (15.90%) while ROIC is low (5.60%). ROIC increased on 4.0 pp from 1.6% to 5.6% in FY2015. ROE surged on 16.5 pp from -0.59% to 15.9% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.7x and Debt / EBITDA is 5.1x. Net Debt / EBITDA dropped on 1.5x from 6.2x to 4.7x in FY2015. Debt increased slightly on 1.1% in FY2015 while cash jumped on 86.3% in FY2015.
Valuation
The company's trades at EV/EBITDA 13.6x and P/E 8.0x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 19.8x with the industry average at 4.7x.
Management team
Prem G Shanker is a the company's CEO. Prem G Shanker has spent 10 years at the company.
Appendix 1: Peers in Construction Materials
Below you can find Ramco Industries benchmarking vs. other companies in Construction Materials 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 |
|---|
| Pokarna ($POKARNA) | | 8.4% | 12.6% | 13.3% | 41.5% |
| |
|---|
| Median (1 company) | | 8.4% | 12.6% | 13.3% | 41.5% |
|---|
| Ramco Industries ($RAMCOIND) | | 17.3% | 15.3% | -10.4% | 9.8% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pokarna ($POKARNA) | 15.7% | 15.8% | 17.2% | 20.9% | 25.7% |
| Milestone Global ($MILESTONE) | | | | | 3.9% |
| |
|---|
| Median (2 companies) | 15.7% | 15.8% | 17.2% | 20.9% | 14.8% |
|---|
| Ramco Industries ($RAMCOIND) | 18.4% | 17.0% | 14.4% | 7.7% | 9.0% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pokarna ($POKARNA) | 3.5% | 2.0% | 5.0% | 2.4% | 4.9% |
| |
|---|
| Median (1 company) | 3.5% | 2.0% | 5.0% | 2.4% | 4.9% |
|---|
| Ramco Industries ($RAMCOIND) | 6.2% | 12.4% | 3.7% | 20.7% | 2.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pokarna ($POKARNA) | 1.9% | 3.0% | 4.5% | 8.8% | 17.9% |
| Triveni Glass ($TRIVENIGQ) | -20.3% | | | | |
| Milestone Global ($MILESTONE) | | | | | |
| Oriental Trimex ($ORIENTALTL) | 8.8% | 8.5% | -2.8% | | |
| Pg Industry ($PGINDST) | | 12.3% | 16.1% | | |
| |
|---|
| Median (8 companies) | 4.3% | 7.1% | 6.7% | 8.8% | 17.9% |
|---|
| Ramco Industries ($RAMCOIND) | 14.1% | 14.4% | 12.0% | 1.6% | 5.6% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pokarna ($POKARNA) | 11.8x | 8.2x | 7.6x | 6.4x | 3.3x |
| Milestone Global ($MILESTONE) | | 2.3x | 0.0x | 0.0x | 0.0x |
| Madhav Marbles & Granites ($MADHAV) | 0.6x | -0.0x | -0.7x | 0.0x | |
| Glittek Granites ($GLITTEKG) | 3.7x | 3.4x | 4.0x | 0.0x | |
| |
|---|
| Median (4 companies) | 4.4x | 2.8x | 3.5x | 0.0x | 1.7x |
|---|
| Ramco Industries ($RAMCOIND) | 1.5x | 1.1x | 2.1x | 6.2x | 4.7x |
