Lanco Infratech Net Debt / EBITDA dropped on 1.7x from 19.2x to 17.5x in 2015 while EBITDA jumped on 16.6%

30-05-2015 • About Lanco Infratech ($LITL) • By InTwits

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

Lanco Infratech is a company in decline: FY2015 revenue growth was -10.1%, 5 years revenue CAGR was -3.0%
Lanco Infratech has high CAPEX intensity: 5 year average CAPEX/Revenue was 38.1%. At the same time it's in pair with industry average of 39.4%.
CAPEX is quite volatile: 1,572 in FY2015, 1,561 in FY2014, 18,645 in FY2013, 66,963 in FY2012, 83,096 in FY2011
The company has potentially unprofitable business model: ROIC is at 2.7%
It operates with high leverage: Net Debt/EBITDA is 17.5x while industry average is 9.4x

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

Lanco Infratech ($LITL) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	77,020	101,690	137,388	104,300	93,719	-10.1%
EBITDA	16,894	18,555	26,082	18,936	22,070	16.6%
Net Income	4,461	-1,120	-10,733	-22,739	-20,367
Balance Sheet
Cash	9,714	9,491	2,319	3,866	6,172	59.7%
Short Term Debt	52,459	72,262	79,762	65,852	60,461	-8.2%
Long Term Debt	114,071	240,037	260,043	301,202	331,450	10.0%
Cash flow
Capex	83,096	66,963	18,645	1,561	1,572	0.7%
Ratios
Revenue growth	-29.5%	32.0%	35.1%	-24.1%	-10.1%
EBITDA growth	-1.3%	9.8%	40.6%	-27.4%	16.6%
EBITDA Margin	21.9%	18.2%	19.0%	18.2%	23.5%	5.4%
Net Income Margin	5.8%	-1.1%	-7.8%	-21.8%	-21.7%	0.1%
CAPEX, % of revenue	107.9%	65.9%	13.6%	1.5%	1.7%	0.2%
ROIC	8.4%	4.3%	3.8%	1.8%	2.7%	0.9%
ROE	11.2%	-2.4%	-25.6%	-88.7%		88.7%
Net Debt/EBITDA	9.3x	16.3x	12.9x	19.2x	17.5x	-1.7x

Revenue and profitability

The company's Revenue dropped on 10.1% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.4 pp from 18.2% to 23.5% in FY2015.

Net Income marign showed almost no change in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 1.7%. The company's CAPEX/Revenue dropped on 64.2 pp from 65.9% in FY2012 to 1.7% in FY2015. For the last three years the average CAPEX/Revenue was 5.6%.

Leverage (Debt)

Company's Net Debt / EBITDA is 17.5x and Debt / EBITDA is 17.8x. Net Debt / EBITDA dropped on 1.7x from 19.2x to 17.5x in FY2015. Debt increased on 6.8% in FY2015 while cash surged on 59.7% in FY2015.

Appendix 1: Peers in Electric Utilities

Below you can find Lanco Infratech benchmarking vs. other companies in Electric Utilities 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
Jaiprakash Power Ventures ($JPPOWER)		119.2%	52.2%	9.0%	38.1%
Adani Power ($ADANIPOWER)		91.5%	65.7%	128.0%	21.7%
Torrent Power ($TORNTPOWER)		14.6%	9.9%	5.6%	19.8%
Ptc India ($PTC)		-12.1%	14.2%	31.5%	14.9%
Power Grid Corporation Of India ($POWERGRID)		19.7%	27.2%	18.9%	12.8%
Median (15 companies)	-68.2%	30.1%	14.2%	8.8%	8.1%
Lanco Infratech ($LITL)		32.0%	35.1%	-24.1%	-10.1%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Power Grid Corporation Of India ($POWERGRID)	85.4%	83.7%	85.6%	84.9%	85.8%
Orient Green Power Company ($GREENPOWER)	42.7%	24.4%	53.3%	57.8%	82.8%
Nhpc ($NHPC)	69.6%	71.4%	66.5%	59.3%	63.4%
Jaiprakash Power Ventures ($JPPOWER)	88.6%	91.7%	70.6%	60.1%	63.3%
Energy Development Company ($ENERGYDEV)					44.3%
Median (16 companies)	31.9%	28.3%	25.5%	26.2%	20.9%
Lanco Infratech ($LITL)	21.9%	18.2%	19.0%	18.2%	23.5%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Power Grid Corporation Of India ($POWERGRID)	160.8%	184.3%	172.4%	173.4%	169.8%
Jaiprakash Power Ventures ($JPPOWER)	590.3%	378.9%	341.9%	229.9%	113.6%
Ksk Energy Ventures ($KSK)	132.8%	161.9%	80.3%	57.0%	57.4%
Nava Bharat Ventures ($NBVENTURES)	39.1%	69.0%	30.5%	70.6%	55.3%
Gvk Power & Infrastructure ($GVKPIL)	76.3%	139.1%	136.7%	109.1%	52.7%
Median (13 companies)	67.4%	104.0%	46.8%	39.9%	20.9%
Lanco Infratech ($LITL)	107.9%	65.9%	13.6%	1.5%	1.7%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Alstom T&D India ($ALSTOMT&D)	11.2%	0.0%	15.7%	14.6%	16.1%
Ptc India ($PTC)	8.1%	11.2%	10.4%	13.6%	12.3%
Torrent Power ($TORNTPOWER)	20.5%	19.0%	7.3%	4.9%	8.1%
Power Grid Corporation Of India ($POWERGRID)		8.3%	8.8%	8.4%	7.7%
Tata Power Co ($TATAPOWER)	10.1%	8.9%	8.8%	9.0%	7.1%
Median (17 companies)	4.2%	5.6%	5.8%	5.5%	6.2%
Lanco Infratech ($LITL)	8.4%	4.3%	3.8%	1.8%	2.7%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Ksk Energy Ventures ($KSK)	13.1x	16.3x	16.2x	27.0x	35.7x
Gvk Power & Infrastructure ($GVKPIL)	9.6x	19.1x	23.9x	20.1x	20.2x
Jaiprakash Power Ventures ($JPPOWER)	18.9x	11.6x	13.1x	16.7x	13.4x
Reliance Infrastructure ($RELINFRA)	6.1x	6.2x	7.3x	8.4x	10.9x
Orient Green Power Company ($GREENPOWER)	8.4x	21.5x	10.0x	10.6x	8.7x
Median (16 companies)	6.1x	8.6x	6.6x	6.2x	6.1x
Lanco Infratech ($LITL)	9.3x	16.3x	12.9x	19.2x	17.5x

Lanco Infratech stock price chart

Lanco Infratech financials

mln.	FY2010	FY2011	FY2012

Revenue	109,268	77,020	101,690
EBITDA	17,110	16,894	18,555
Net income	4,585	4,461	-1,120.350
CAPEX	15,383	83,096	66,963
Debt	83,614	166,530	312,299
Cash	9,628	9,714	9,491

About Lanco Infratech

Lanco Infratech Limited is engaged in engineering, procurement, and construction (EPC); and power, natural resources, infrastructure, and property development businesses. The company operates through five segments: EPC and Construction, Power, Property Development, Infrastructure, and Resources. The EPC and Construction segment provides EPC services for various projects, such as thermal and hydro power projects, chimneys, cooling towers and balance of plant, and transmission and distribution projects, as well as for roads, highways and bridges, metros and railways, buildings and airports, sea ports and marine structures, and water and pipeline facilities. The Power segment is engaged in generation and trading of power from thermal, hydro, wind, and solar sources. The Property Development segment develops integrated properties comprising commercial and residential buildings. The Infrastructure segment is involved in the development of civil and urban projects, such as roads, highways, ports, airports, railway lines, etc. on build, operate, and transfer basis. The Resources segment is engaged in the exploration, mining, and marketing of coal. The company is also involved in the construction of water supply and irrigation projects, including dam, tunnels, etc. It has operations in India, Australia, Singapore, and other countries. The company was founded in 1960 and is based in Gurgaon, India. Lanco Infratech Limited is a subsidiary of Lanco Group Limited.