Binani Industries Net Debt / EBITDA jumped on 20.8x from 15.2x to 36.1x in 2015 while Revenue decreased on 8.5%

30-05-2015 • About Binani Industries ($BINANIIND) • By InTwits

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

Binani Industries is a company in decline: FY2015 revenue growth was -8.5%, 5 years revenue CAGR was -4.4%
EBITDA Margin is quite volatile: 3.6% in FY2015, 7.0% in FY2014, 11.8% in FY2013, 10.1% in FY2012, 11.5% in FY2011
Binani Industries has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.8%. At the same time it's a lot of higher than industry average of 3.0%.
CAPEX is quite volatile: 930 in FY2015, 2,645 in FY2014, 2,860 in FY2013, 24,507 in FY2012, 4,848 in FY2011
The company has unprofitable business model: ROIC is at -2.0%
It operates with high leverage: Net Debt/EBITDA is 36.1x while industry average is 13.4x

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

Binani Industries ($BINANIIND) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	24,272	30,694	44,811	47,356	43,312	-8.5%
SG&A					315
EBITDA	2,789	3,111	5,310	3,324	1,573	-52.7%
Net Income	-484	-1,660	-2,085	-6,632	-6,401
Balance Sheet
Cash	2,982	4,067	963	569	2,015	254.4%
Short Term Debt	8,186	9,946	9,671	13,023	10,102	-22.4%
Long Term Debt	17,613	34,451	33,943	38,194	48,667	27.4%
Cash flow
Capex	4,848	24,507	2,860	2,645	930	-64.9%
Ratios
Revenue growth	-55.2%	26.5%	46.0%	5.7%	-8.5%
EBITDA growth	-56.6%	11.5%	70.7%	-37.4%	-52.7%
EBITDA Margin	11.5%	10.1%	11.8%	7.0%	3.6%	-3.4%
Net Income Margin	-2.0%	-5.4%	-4.7%	-14.0%	-14.8%	-0.8%
SG&A, % of revenue					0.7%	0.7%
CAPEX, % of revenue	20.0%	79.8%	6.4%	5.6%	2.1%	-3.4%
ROIC	4.4%	3.2%	4.9%	0.7%	-2.0%	-2.7%
ROE	-10.2%	-41.3%	-71.6%			0.0%
Net Debt/EBITDA	8.2x	13.0x	8.0x	15.2x	36.1x	20.8x

Revenue and profitability

The company's Revenue decreased on 8.5% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 3.4 pp from 7.0% to 3.6% in FY2015.

Net Income marign decreased slightly on 0.78 pp from -14.0% to -14.8% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 Binani Industries had CAPEX/Revenue of 2.1%. CAPEX/Revenue dropped on 77.7 pp from 79.8% in FY2012 to 2.1% in FY2015. It's average CAPEX/Revenue for the last three years was 4.7%.Battling declining revenue the company invested a large share of EBITDA (59.1%) to CAPEX but that didn't help at least in this year.

Leverage (Debt)

Company's Net Debt / EBITDA is 36.1x and Debt / EBITDA is 37.4x. Net Debt / EBITDA surged on 20.8x from 15.2x to 36.1x in FY2015. Debt jumped on 14.7% in FY2015 while cash jumped on 254% in FY2015.

Appendix 1: Peers in Holding Companies

Below we provide Binani Industries benchmarking against other companies in Holding Companies 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	FY2011	FY2012	FY2013	FY2014	FY2015
Network18 Media & Investments ($NETWORK18)		33.4%	19.4%	14.0%	15.8%
Kirloskar Brothers Investments ($KBIL)		8,068.8%	-2.8%	-4.6%	5.2%
Median (2 companies)		4,051.1%	8.3%	4.7%	10.5%
Binani Industries ($BINANIIND)		26.5%	46.0%	5.7%	-8.5%

Top companies by EBITDA margin, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Kirloskar Brothers Investments ($KBIL)	95.9%	13.2%	14.6%	13.2%	9.6%
Network18 Media & Investments ($NETWORK18)	2.2%	-13.9%	-1.7%	3.7%	5.0%
Median (2 companies)	49.1%	-0.3%	6.4%	8.5%	7.3%
Binani Industries ($BINANIIND)	11.5%	10.1%	11.8%	7.0%	3.6%

Top companies by CAPEX/Revenue, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Network18 Media & Investments ($NETWORK18)	2.2%	4.4%	3.0%	4.4%	4.3%
Kirloskar Brothers Investments ($KBIL)	0.3%	3.7%	4.8%	4.3%	2.7%
Median (2 companies)	1.3%	4.0%	3.9%	4.3%	3.5%
Binani Industries ($BINANIIND)	20.0%	79.8%	6.4%	5.6%	2.1%

Top companies by ROIC, %


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Kirloskar Brothers Investments ($KBIL)	30.4%	34.9%	20.6%	15.8%	9.4%
Network18 Media & Investments ($NETWORK18)	-0.7%	-10.8%	-2.8%	0.3%	1.6%
Median (2 companies)	14.8%	12.0%	8.9%	8.0%	5.5%
Binani Industries ($BINANIIND)	4.4%	3.2%	4.9%	0.7%	-2.0%

Top companies by Net Debt / EBITDA


Top	FY2011	FY2012	FY2013	FY2014	FY2015
Network18 Media & Investments ($NETWORK18)	41.0x			7.4x	4.2x
Kirloskar Brothers Investments ($KBIL)	-1.9x	0.3x	-0.1x	-0.2x	-0.2x
Median (2 companies)	19.6x	0.3x	-0.1x	3.6x	2.0x
Binani Industries ($BINANIIND)	8.2x	13.0x	8.0x	15.2x	36.1x

Binani Industries stock price chart

Binani Industries financials

mln.	FY2010	FY2011	FY2012

Revenue	54,180	24,272	30,694
EBITDA	6,422	2,789	3,111
Net income	1,851	-483.993	-1,659.680
CAPEX	3,225	4,848	24,507
Debt	18,524	25,799	44,397
Cash	1,600	2,982	4,067

About Binani Industries

Binani Industries Limited, through its subsidiaries, manufactures and sells cement, zinc, and glass fiber and related composites in India and internationally. It provides ordinary portland cement of grades 43 and 53, Pozzolona Portland cement, and ground granulated blast-furnace slag; and high-grade electrolytic zinc, including zinc ingots, zinc alloys, and zinc dust primarily for use in galvanizing steel, manufacturing LPG regulators, automobile components, zippers, dry cell batteries, specialty chemicals, alloys, doorknobs, door handles and fittings, paint, and rubber and car tires, as well as sulfuric acid and cadmium plates. The company also offers fiberglass products and technologies for the reinforcement of thermoplastics and thermo sets, high-grade glass fiber, and glass reinforced plastics that are used to produce sheet molding compounds, as well as dough molding compounds for water storage, electrical, and industrial sectors; and long fiber thermoplastic composite materials for medical, construction, electronics, agriculture, recreation, industrial, appliances, automotive, and furniture industries. In addition, it provides engineering, procurement, and construction services; consultancy and engineering; and manufacturing services. Further, the company publishes a portfolio of trade journals, which provide information on the happenings in the metals, construction, and infrastructure industries, such as Minerals and Metals Review, a monthly magazine; Minerals and Metals Review Weekly, a tabloid that provides weekly updates on metal prices; Metals Today Daily, a daily electronic newsletter; and Construction Industry Review, a weekly tabloid. Binani Industries Limited was founded in 1872 and is based in Mumbai, India.