Deccan Cements Debt dropped on 20.2% in 2015 while Revenue jumped on 11.9%
30-05-2015 • About Deccan Cements (
$DECCANCE) • By InTwits
Deccan Cements reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Deccan Cements has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's a lot of higher than industry average of 10.7%.
- CAPEX is quite volatile: 53.0 in FY2015, 19.9 in FY2014, 160 in FY2013, 26.9 in FY2012, 303 in FY2011
- The company has business model with low profitability: ROIC is at 9.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Deccan Cements ($DECCANCE) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,385 | 5,098 | 4,991 | 3,914 | 4,378 | 11.9% |
| EBITDA | 650 | 1,163 | 659 | 574 | 654 | 14.0% |
| Net Income | 20 | 478 | 73 | 50 | 199 | 295.7% |
Balance Sheet
|
|---|
| Cash | 450 | 558 | 214 | 433 | 263 | -39.3% |
| Short Term Debt | 369 | 351 | 323 | 675 | 745 | 10.4% |
| Long Term Debt | 2,727 | 2,237 | 2,056 | 1,716 | 1,163 | -32.2% |
Cash flow
|
|---|
| Capex | 303 | 27 | 160 | 20 | 53 | 166.0% |
Ratios
|
|---|
| Revenue growth | -35.6% | 50.6% | -2.1% | -21.6% | 11.9% | |
| EBITDA growth | -13.8% | 78.9% | -43.4% | -12.9% | 14.0% | |
| EBITDA Margin | 19.2% | 22.8% | 13.2% | 14.7% | 14.9% | 0.3% |
| Net Income Margin | 0.6% | 9.4% | 1.5% | 1.3% | 4.5% | 3.3% |
| CAPEX, % of revenue | 9.0% | 0.5% | 3.2% | 0.5% | 1.2% | 0.7% |
| ROIC | 7.6% | 17.4% | 8.0% | 6.4% | 9.1% | 2.8% |
| ROE | 1.1% | 24.3% | 3.3% | 2.2% | 8.4% | 6.2% |
| Net Debt/EBITDA | 4.1x | 1.7x | 3.3x | 3.4x | 2.5x | -0.9x |
Revenue and profitability
The company's Revenue jumped on 11.9% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 14.7 pp from 67.6% to 82.4% in FY2015.
Net Income marign increased on 3.3 pp from 1.3% to 4.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Deccan Cements's CAPEX/Revenue was 1.2% in FY2015. CAPEX/Revenue increased slightly on 0.68 pp from 0.53% in FY2012 to 1.2% in FY2015. It's average CAPEX/Revenue for the last three years was 1.6%.
Return on investment
The company operates at low ROIC (9.15%) and ROE (8.38%). ROIC increased on 2.8 pp from 6.4% to 9.1% in FY2015. ROE increased on 6.2 pp from 2.2% to 8.4% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.5x and Debt / EBITDA is 2.9x. Net Debt / EBITDA dropped on 0.9x from 3.4x to 2.5x in FY2015. Debt dropped on 20.2% in FY2015 while cash dropped on 39.3% in FY2015.
Appendix 1: Peers in Cement & Cement Products
Below you can find Deccan Cements benchmarking vs. other companies in Cement & Cement 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 |
|---|
| Heidelbergcement India ($HEIDELBERG) | | -13.1% | 37.5% | 36.3% | 2.5% |
| Shree Digvijay Cement Co ($SHREDIGCEM) | -23.4% | 14.9% | -13.5% | 24.7% | |
| Indian Hume Pipe Co ($INDIANHUME) | | -20.3% | 34.5% | 18.3% | 22.7% |
| Birla Corporation ($BIRLACORPN) | | 6.2% | 13.8% | 15.9% | 6.4% |
| Ambuja Cements ($AMBUJACEM) | -23.0% | 14.3% | -6.5% | 9.0% | |
| |
|---|
| Median (15 companies) | -23.2% | 14.7% | 11.7% | 5.1% | 6.4% |
|---|
| Deccan Cements ($DECCANCE) | | 50.6% | -2.1% | -21.6% | 11.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Saurashtra Cement ($SAURASHCEM) | 9.7% | 11.4% | 21.6% | 11.9% | 16.8% |
| India Cements ($INDIACEM) | 13.3% | 20.6% | 18.4% | 12.4% | 15.1% |
| J.K.Cement ($JKCEMENT) | 13.3% | 20.3% | 19.2% | 12.7% | 13.4% |
| K.C.P ($KCP) | 21.1% | 19.2% | 9.4% | 11.7% | 13.0% |
| Indian Hume Pipe Co ($INDIANHUME) | 10.5% | 7.0% | 8.8% | 9.3% | 11.0% |
| |
|---|
| Median (11 companies) | 13.3% | 16.2% | 13.6% | 10.6% | 9.7% |
|---|
| Deccan Cements ($DECCANCE) | 19.2% | 22.8% | 13.2% | 14.7% | 14.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Udaipur Cement Works ($UDAICEMENT) | | | | | 91.1% |
| J.K.Cement ($JKCEMENT) | 14.1% | 6.5% | 18.8% | 55.8% | 16.2% |
| Birla Corporation ($BIRLACORPN) | 23.2% | 19.1% | 7.1% | 5.5% | 6.9% |
| K.C.P ($KCP) | 28.2% | 8.6% | 9.9% | 12.6% | 5.2% |
| India Cements ($INDIACEM) | 23.9% | 14.3% | 10.9% | 4.8% | 5.1% |
| |
|---|
| Median (9 companies) | 7.7% | 6.5% | 7.8% | 8.3% | 5.1% |
|---|
| Deccan Cements ($DECCANCE) | 9.0% | 0.5% | 3.2% | 0.5% | 1.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | 15.5% | 7.6% | 13.8% | 15.0% | 18.0% |
| Saurashtra Cement ($SAURASHCEM) | 4.3% | 38.6% | 42.7% | 13.9% | 26.9% |
| Ambuja Cements ($AMBUJACEM) | 17.0% | 19.4% | 11.2% | 13.0% | |
| Acc ($ACC) | 18.5% | 20.2% | 12.7% | 11.0% | |
| K.C.P ($KCP) | 14.9% | 17.6% | 6.7% | 7.1% | 9.3% |
| |
|---|
| Median (16 companies) | 10.2% | 13.7% | 9.8% | 6.4% | 7.3% |
|---|
| Deccan Cements ($DECCANCE) | 7.6% | 17.4% | 8.0% | 6.4% | 9.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Prism Cement ($PRISMCEM) | 3.4x | 4.8x | 6.0x | 10.0x | 6.0x |
| J.K.Cement ($JKCEMENT) | 4.5x | 2.3x | 2.3x | 6.9x | 5.8x |
| India Cements ($INDIACEM) | 4.8x | 3.2x | 3.5x | 5.5x | 4.6x |
| Visaka Industries ($VIKASAS) | 1.3x | 1.3x | 2.2x | 3.8x | 2.7x |
| K.C.P ($KCP) | 2.6x | 1.1x | 3.0x | 3.6x | 2.3x |
| |
|---|
| Median (13 companies) | 2.4x | 2.1x | 2.6x | 3.0x | 3.6x |
|---|
| Deccan Cements ($DECCANCE) | 4.1x | 1.7x | 3.3x | 3.4x | 2.5x |
