Suzlon Energy Net Debt / EBITDA dropped on 68.5x from 87.6x to 19.1x in 2015 while Debt increased on 4.4%
29-05-2015 • About Suzlon Energy (
$SUZLON) • By InTwits
Suzlon Energy reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Suzlon Energy doesn't have a profitable business model yet: FY2015 ROIC is -0.1%
- EBITDA Margin is quite volatile: 4.0% in FY2015, 0.8% in FY2014, -5.3% in FY2013, 8.9% in FY2012, 5.5% in FY2011
- Suzlon Energy has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.9%. At the same time it's in pair with industry average of 10.1%.
- CAPEX is quite volatile: 2,697 in FY2015, 2,201 in FY2014, 5,083 in FY2013, 3,614 in FY2012, 2,017 in FY2011
- The company has unprofitable business model: ROIC is at -0.1%
- It operates with high leverage: Net Debt/EBITDA is 19.1x while industry average is 3.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Suzlon Energy ($SUZLON) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 178,791 | 210,824 | 187,431 | 202,116 | 198,367 | -1.9% |
| Gross Profit | 54,251 | 70,086 | 51,035 | 57,762 | 62,180 | 7.6% |
| EBITDA | 9,827 | 18,805 | -9,897 | 1,668 | 8,011 | 380.3% |
| Net Income | -13,240 | -4,786 | -45,600 | -33,768 | -91,577 | |
Balance Sheet
|
|---|
| Cash | 26,860 | 26,323 | 19,590 | 24,479 | 25,428 | 3.9% |
| Short Term Debt | 25,861 | 66,693 | 43,331 | 54,124 | 70,244 | 29.8% |
| Long Term Debt | 96,776 | 73,647 | 108,577 | 116,409 | 107,866 | -7.3% |
Cash flow
|
|---|
| Capex | 8,227 | 8,947 | 6,900 | 6,905 | 7,363 | 6.6% |
Ratios
|
|---|
| Revenue growth | -13.3% | 17.9% | -11.1% | 7.8% | -1.9% | |
| EBITDA growth | -15.5% | 91.4% | -152.6% | -116.9% | 380.3% | |
| Gross Margin | 30.3% | 33.2% | 27.2% | 28.6% | 31.3% | 2.8% |
| EBITDA Margin | 5.5% | 8.9% | -5.3% | 0.8% | 4.0% | 3.2% |
| Net Income Margin | -7.4% | -2.3% | -24.3% | -16.7% | -46.2% | -29.5% |
| CAPEX, % of revenue | 4.6% | 4.2% | 3.7% | 3.4% | 3.7% | 0.3% |
| ROIC | 1.7% | 6.2% | -9.4% | -3.5% | -0.1% | 3.5% |
| ROE | -20.2% | -8.2% | -149.9% | | | 0.0% |
| Net Debt/EBITDA | 9.7x | 6.1x | | 87.6x | 19.1x | -68.5x |
Revenue and profitability
Suzlon Energy's Revenue decreased slightly on 1.9% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.2 pp from 0.83% to 4.0% in FY2015.
Gross Margin increased on 2.8 pp from 28.6% to 31.3% in FY2015.
Net Income marign dropped on 29.5 pp from -16.7% to -46.2% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 3.7% in FY2015. Suzlon Energy's CAPEX/Revenue decreased slightly on 0.53 pp from 4.2% in FY2012 to 3.7% in FY2015. It's average CAPEX/Revenue for the last three years was 3.6%.Suzlon Energy invested a big chunk of EBITDA (91.9%) to CAPEX which didn't stop revenue from falling.
Leverage (Debt)
Company's Net Debt / EBITDA is 19.1x and Debt / EBITDA is 22.2x. Net Debt / EBITDA dropped on 68.5x from 87.6x to 19.1x in FY2015. Debt increased on 4.4% in FY2015 while cash increased on 3.9% in FY2015.
Appendix 1: Peers in Heavy Electrical Equipment
Below we provide Suzlon Energy benchmarking against other companies in Heavy Electrical 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 |
|---|
| Swelect Energy Systems ($SWELECTES) | | 17.5% | -70.6% | -0.0% | 25.7% |
| T D Power Systems ($TDPOWERSYS) | | 19.4% | -43.1% | -18.2% | 24.4% |
| Sterlite Technologies ($STRTECH) | | 15.9% | 17.9% | -17.1% | 20.8% |
| Voltamp Transformers ($VOLTAMP) | | 4.3% | -7.7% | -13.7% | 16.2% |
| Techno Electric And Engineering Co. ($TECHNO) | | 13.6% | -15.7% | 1.7% | 12.6% |
| |
|---|
| Median (13 companies) | 4.1% | 13.6% | -7.7% | 1.7% | 8.2% |
|---|
| Suzlon Energy ($SUZLON) | | 17.9% | -11.1% | 7.8% | -1.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ujaas Energy ($UJAAS) | 9.3% | 1.2% | 18.7% | 17.4% | 38.1% |
| Techno Electric And Engineering Co. ($TECHNO) | 23.3% | 27.0% | 34.5% | 28.5% | 26.5% |
| Techno Electric & Engineering Company ($TECHELE) | 23.3% | 27.0% | 34.5% | 28.5% | 26.5% |
| Sterlite Technologies ($STRTECH) | 11.8% | 7.5% | 7.5% | 10.8% | 15.0% |
| Emco ($EMCO) | -1.0% | 7.4% | 9.5% | 11.3% | 9.3% |
| |
|---|
| Median (13 companies) | 12.5% | 9.4% | 8.8% | 6.8% | 8.4% |
|---|
| Suzlon Energy ($SUZLON) | 5.5% | 8.9% | -5.3% | 0.8% | 4.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sterlite Technologies ($STRTECH) | 19.8% | 24.9% | 47.2% | 64.9% | 37.4% |
| Swelect Energy Systems ($SWELECTES) | 2.9% | 5.1% | 42.5% | 50.8% | 21.8% |
| Transformers And Rectifiers (India) ($TRIL) | 2.5% | 5.7% | 8.4% | 2.8% | 5.8% |
| T D Power Systems ($TDPOWERSYS) | 1.5% | 3.7% | 14.5% | 15.1% | 3.8% |
| Crompton Greaves ($CROMPGREAV) | 7.5% | 3.3% | 1.8% | 2.2% | 3.6% |
| |
|---|
| Median (13 companies) | 5.4% | 5.7% | 3.0% | 2.3% | 2.5% |
|---|
| Suzlon Energy ($SUZLON) | 4.6% | 4.2% | 3.7% | 3.4% | 3.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ujaas Energy ($UJAAS) | 10.6% | 0.0% | 28.5% | 33.7% | 10.2% |
| Alstom India ($AIL) | 44.3% | 27.2% | 25.6% | 13.2% | 10.7% |
| Bharat Heavy Electricals ($BHEL) | 46.1% | 41.5% | 29.5% | 10.3% | 4.0% |
| Crompton Greaves ($CROMPGREAV) | 32.5% | 12.9% | 3.5% | 10.1% | 4.1% |
| Bgr Energy Systems ($BGRENERGY) | 25.9% | 15.5% | 11.9% | 9.7% | 2.8% |
| |
|---|
| Median (17 companies) | 19.5% | 15.3% | 7.1% | 9.3% | 4.5% |
|---|
| Suzlon Energy ($SUZLON) | 1.7% | 6.2% | -9.4% | -3.5% | -0.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bgr Energy Systems ($BGRENERGY) | 1.9x | 2.6x | 3.5x | 4.1x | 13.0x |
| Sterlite Technologies ($STRTECH) | 2.8x | 4.6x | 10.2x | 15.4x | 11.1x |
| Emco ($EMCO) | | 8.1x | 7.3x | 5.7x | 7.3x |
| Transformers And Rectifiers (India) ($TRIL) | 0.8x | -0.9x | 4.2x | 4.1x | 4.8x |
| Crompton Greaves ($CROMPGREAV) | 0.1x | 0.6x | 3.9x | 1.9x | 2.8x |
| |
|---|
| Median (13 companies) | 1.0x | 1.5x | 2.6x | 2.5x | 2.6x |
|---|
| Suzlon Energy ($SUZLON) | 9.7x | 6.1x | | 87.6x | 19.1x |
