Visa Steel Net Debt / EBITDA surged on 162.7x from 24.4x to 187.1x in 2015 while Revenue dropped on 12.0%
29-05-2015 • About Visa Steel (
$VISASTEEL) • By InTwits
Visa Steel reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Visa Steel is a company in decline: FY2015 revenue growth was -12.0%, 5 years revenue CAGR was -3.0%
- EBITDA Margin is quite volatile: 1.4% in FY2015, 7.6% in FY2014, -2.6% in FY2013, 5.9% in FY2012, 16.4% in FY2011
- Visa Steel has high CAPEX intensity: 5 year average CAPEX/Revenue was 25.9%. At the same time it's a lot of higher than industry average of 7.9%.
- CAPEX is quite volatile: 568 in FY2015, 1,488 in FY2014, 2,766 in FY2013, 6,510 in FY2012, 5,187 in FY2011
- The company has unprofitable business model: ROIC is at -1.9%
- It operates with high leverage: Net Debt/EBITDA is 187.1x while industry average is 13.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Visa Steel ($VISASTEEL) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 13,059 | 13,496 | 10,249 | 14,549 | 12,803 | -12.0% |
| EBITDA | 2,139 | 798 | -262 | 1,111 | 179 | -83.9% |
| Net Income | 514 | -1,189 | -1,076 | -1,478 | -2,729 | |
Balance Sheet
|
|---|
| Cash | 31 | 210 | 247 | 860 | 9 | -99.0% |
| Short Term Debt | 4,745 | 6,394 | 1,098 | 4,308 | 8,696 | 101.9% |
| Long Term Debt | 9,984 | 9,839 | 22,471 | 23,686 | 24,880 | 5.0% |
Cash flow
|
|---|
| Capex | 5,187 | 6,510 | 2,766 | 1,488 | 568 | -61.8% |
Ratios
|
|---|
| Revenue growth | -12.5% | 3.3% | -24.1% | 42.0% | -12.0% | |
| EBITDA growth | 9.2% | -62.7% | -132.8% | -524.4% | -83.9% | |
| EBITDA Margin | 16.4% | 5.9% | -2.6% | 7.6% | 1.4% | -6.2% |
| Net Income Margin | 3.9% | -8.8% | -10.5% | -10.2% | -21.3% | -11.2% |
| CAPEX, % of revenue | 39.7% | 48.2% | 27.0% | 10.2% | 4.4% | -5.8% |
| ROIC | 9.6% | 1.5% | -4.0% | 1.3% | -1.9% | -3.1% |
| ROE | 15.2% | -40.0% | -46.9% | -100.6% | | 100.6% |
| Net Debt/EBITDA | 6.9x | 20.1x | | 24.4x | 187.1x | 162.7x |
Revenue and profitability
Visa Steel's Revenue dropped on 12.0% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 6.2 pp from 7.6% to 1.4% in FY2015.
Net Income marign dropped on 11.2 pp from -10.2% to -21.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Visa Steel had CAPEX/Revenue of 4.4%. The company showed big decline in CAPEX/Revenue of 43.8 pp from 48.2% in FY2012 to 4.4% in FY2015. Average CAPEX/Revenue for the last three years was 13.9%.Battling declining revenue the company made large investments to CAPEX (317% of EBITDA) but that didn't help at least in this year.
Leverage (Debt)
Company's Net Debt / EBITDA is 187.1x and Debt / EBITDA is 187.1x. Net Debt / EBITDA surged on 162.7x from 24.4x to 187.1x in FY2015. Debt jumped on 19.9% in FY2015 while cash dropped on 99.0% in FY2015.
Appendix 1: Peers in Iron & Steel/Interm.Products
Below you can find Visa Steel benchmarking vs. other companies in Iron & Steel/Interm.Products 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 |
|---|
| Inducto Steel ($INDCTST) | | | 54.5% | 150.2% | -41.7% |
| Kamdhenu Ispat ($KIL) | -65.5% | 25.7% | 13.7% | 68.3% | |
| Metkore Alloys & Industries ($METKORE) | | 43.7% | -10.9% | 53.4% | -15.7% |
| Tata Metaliks ($TATAMETALI) | | -7.0% | -19.0% | 44.6% | -1.3% |
| Jsw Steel ($JSWSTEEL) | | 42.6% | 11.2% | 34.0% | 3.4% |
| |
|---|
| Median (31 companies) | -35.9% | 12.5% | 8.8% | 2.8% | 3.4% |
|---|
| Visa Steel ($VISASTEEL) | | 3.3% | -24.1% | 42.0% | -12.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Steel & Power ($JINDALSTEL) | 48.3% | 37.5% | 30.5% | 28.1% | 29.8% |
| Bhushan Steel ($BHUSANSTL) | 29.0% | 31.2% | 32.3% | 28.1% | 20.4% |
| Sarda Energy & Minerals ($SARDAEN) | 15.2% | 16.3% | 21.5% | 21.3% | 21.5% |
| Jsw Steel ($JSWSTEEL) | 20.2% | 17.8% | 17.1% | 17.9% | 17.7% |
| Jai Corp ($JAICORPLTD) | 18.4% | 14.1% | 16.3% | 16.0% | 12.7% |
| |
|---|
| Median (28 companies) | 13.0% | 9.5% | 9.2% | 7.0% | 9.6% |
|---|
| Visa Steel ($VISASTEEL) | 16.4% | 5.9% | -2.6% | 7.6% | 1.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Steel & Power ($JINDALSTEL) | 64.7% | 34.2% | 47.6% | 69.6% | 26.4% |
| Bhushan Steel ($BHUSANSTL) | 81.1% | 47.2% | 44.0% | 50.4% | 16.2% |
| Jayaswal Neco Industries ($JAYNECOIND) | 27.9% | 20.4% | 44.0% | 31.1% | 17.3% |
| Surana Industries ($SURANAIND) | | 41.3% | 54.8% | 21.5% | |
| Steel Authority Of India ($SAIL) | 25.3% | 20.9% | 20.7% | 19.3% | 16.9% |
| |
|---|
| Median (20 companies) | 11.9% | 7.5% | 10.4% | 6.6% | 5.5% |
|---|
| Visa Steel ($VISASTEEL) | 39.7% | 48.2% | 27.0% | 10.2% | 4.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tata Metaliks ($TATAMETALI) | 3.1% | -23.5% | -3.7% | 19.9% | 57.4% |
| Nova Iron & Steel ($NOVIS) | | | | 15.4% | |
| Kirloskar Ferrous Industries ($KIRLFER) | 20.0% | 19.1% | 16.8% | 12.4% | 14.7% |
| Pennar Industries ($PENIND) | 31.6% | 26.8% | 18.4% | 12.3% | 15.7% |
| Jsw Steel ($JSWSTEEL) | 9.7% | 11.0% | 10.3% | 12.1% | 9.9% |
| |
|---|
| Median (40 companies) | 9.5% | 7.2% | 5.7% | 6.0% | 5.4% |
|---|
| Visa Steel ($VISASTEEL) | 9.6% | 1.5% | -4.0% | 1.3% | -1.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jai Balaji Industries ($JAIBALAJI) | 5.5x | | | 89.7x | |
| Ismt ($ISMTLTD) | 4.4x | 5.3x | 9.8x | 19.9x | |
| Kic Metaliks ($KAJARIR) | 6.6x | 9.2x | 3.0x | 18.2x | |
| Bhushan Steel ($BHUSANSTL) | 8.1x | 6.3x | 8.6x | 12.9x | 17.7x |
| Jayaswal Neco Industries ($JAYNECOIND) | 3.4x | 4.7x | 7.2x | 8.6x | 11.2x |
| |
|---|
| Median (29 companies) | 3.6x | 4.2x | 4.3x | 3.2x | 1.7x |
|---|
| Visa Steel ($VISASTEEL) | 6.9x | 20.1x | | 24.4x | 187.1x |
