V.S.T.Tillers Tractors Net Income dropped on 16.2% in 2015 and Revenue dropped on 11.6%

29-05-2015 • About V.S.T.Tillers Tractors ($VSTTILLERS) • By InTwits

V.S.T.Tillers Tractors reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

• V.S.T.Tillers Tractors is a company in decline: FY2015 revenue growth was -11.6%, 5 years revenue CAGR was -3.7%
• V.S.T.Tillers Tractors has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 3.4%.
• CAPEX is quite volatile: 227 in FY2015, 368 in FY2014, 325 in FY2013, 127 in FY2012, 54.5 in FY2011
• The company has highly profitable business model: ROIC is at 28.0%

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

V.S.T.Tillers Tractors ($VSTTILLERS) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	4,272	5,306	4,817	6,242	5,516	-11.6%
EBITDA	725	744	726	1,199	1,054	-12.1%
Net Income	462	499	486	829	695	-16.2%
Balance Sheet
Cash	135	199	326	222	180	-19.1%
Short Term Debt	0	160	0	0	0
Long Term Debt	0	0	0	0	0
Cash flow
Capex	55	127	325	368	227	-38.3%
Ratios
Revenue growth	-36.0%	24.2%	-9.2%	29.6%	-11.6%
EBITDA growth	11.6%	2.6%	-2.4%	65.2%	-12.1%
EBITDA Margin	17.0%	14.0%	15.1%	19.2%	19.1%	-0.1%
Net Income Margin	10.8%	9.4%	10.1%	13.3%	12.6%	-0.7%
CAPEX, % of revenue	1.3%	2.4%	6.7%	5.9%	4.1%	-1.8%
ROIC	45.9%	36.4%	29.3%	41.0%	28.0%	-13.0%
ROE	31.8%	27.1%	21.6%	29.8%	20.6%	-9.2%
Net Debt/EBITDA	-0.2x	-0.1x	-0.4x	-0.2x	-0.2x	0.0x

Revenue and profitability

V.S.T.Tillers Tractors's Revenue dropped on 11.6% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 13.6 pp from 7.3% to 20.9% in FY2015.

Net Income marign decreased slightly on 0.68 pp from 13.3% to 12.6% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 V.S.T.Tillers Tractors had CAPEX/Revenue of 4.1%. V.S.T.Tillers Tractors showed small growth in CAPEX/Revenue of 1.7 pp from 2.4% in FY2012 to 4.1% in FY2015. For the last three years the average CAPEX/Revenue was 5.6%.

Return on investment

The company operates at high and attractive ROIC (27.98%) and ROE (20.58%). ROIC dropped on 13.0 pp from 41.0% to 28.0% in FY2015. ROE decreased on 9.2 pp from 29.8% to 20.6% in FY2015.

Leverage (Debt)

The company has no debt. Cash dropped on 19.1% in FY2015.

Valuation

The company's trades at EV/EBITDA 10.8x and P/E 16.7x while industy averages are 10.5x and 26.1x. V.S.T.Tillers Tractors's EV/(EBITDA-CAPEX) is 13.8x with the industry average at 4.7x.

Appendix 1: Peers in Commercial Vehicles

Below we provide V.S.T.Tillers Tractors benchmarking against other companies in Commercial Vehicles 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
Tata Motors ($TATAMOTORS)		35.7%	13.5%	23.3%	13.4%
Trf ($TRF)	-16.6%	19.2%	-16.0%	5.4%
Beml ($BEML)		2.7%	3.2%	3.7%	-3.5%
Ashok Leyland ($ASHOKLEY)		15.5%	-3.3%	-8.0%	33.6%
Abg Shipyard ($ABGSHIP)		18.2%	-17.2%	-20.5%	-72.9%
Median (6 companies)	6.6%	16.8%	-9.6%	-2.2%	5.0%
V.S.T.Tillers Tractors ($VSTTILLERS)		24.2%	-9.2%	29.6%	-11.6%

Top companies by EBITDA margin, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Tata Motors ($TATAMOTORS)	12.9%	12.3%	12.2%	13.5%	14.4%
Ashok Leyland ($ASHOKLEY)	11.0%	9.7%	7.0%	4.1%	10.7%
Brady & Morris Engineering Co ($BRADYM)					6.9%
Stone India ($STONEIN)					4.7%
Beml ($BEML)	4.1%	4.8%	-1.5%	4.0%	2.6%
Median (7 companies)	7.5%	8.0%	2.8%	4.1%	4.7%
V.S.T.Tillers Tractors ($VSTTILLERS)	17.0%	14.0%	15.1%	19.2%	19.1%

Top companies by CAPEX/Revenue, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Abg Shipyard ($ABGSHIP)	17.0%	21.0%	9.1%	15.2%	3.7%
Tata Motors ($TATAMOTORS)	6.8%	8.5%	10.2%	11.8%	12.4%
Ashok Leyland ($ASHOKLEY)	3.2%	5.4%	5.2%	3.6%	1.6%
Beml ($BEML)	6.4%	4.4%	4.8%	1.5%	1.5%
Trf ($TRF)	2.9%	1.5%	1.1%	0.4%
Median (6 companies)	4.8%	4.9%	5.0%	2.5%	2.7%
V.S.T.Tillers Tractors ($VSTTILLERS)	1.3%	2.4%	6.7%	5.9%	4.1%

Top companies by ROIC, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Tata Motors ($TATAMOTORS)	19.3%	20.1%	16.6%	17.2%	17.8%
Cranex ($CRANEX)		5.5%	5.3%	5.2%
Abg Shipyard ($ABGSHIP)	11.8%	12.0%	8.8%	5.0%	-4.8%
Beml ($BEML)	2.3%	2.6%	-2.9%	1.9%	0.6%
Trf ($TRF)	3.3%	11.4%	-4.1%	0.5%
Median (12 companies)	11.5%	10.6%	5.8%	1.2%	4.1%
V.S.T.Tillers Tractors ($VSTTILLERS)	45.9%	36.4%	29.3%	41.0%	28.0%

Top companies by Net Debt / EBITDA

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Trf ($TRF)	11.2x	5.2x		36.0x
Ashok Leyland ($ASHOKLEY)	2.0x	2.5x	5.0x	17.8x	5.0x
Abg Shipyard ($ABGSHIP)	4.3x	4.6x	6.6x	11.7x
Cranex ($CRANEX)	6.1x	10.0x	9.9x	9.0x
Beml ($BEML)	6.9x	5.8x		8.0x	6.9x
Median (7 companies)	3.3x	3.9x	2.6x	9.0x	1.2x
V.S.T.Tillers Tractors ($VSTTILLERS)	-0.2x	-0.1x	-0.4x	-0.2x	-0.2x

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