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Jaiprakash Associates reports 30.5% CAPEX decline and 1.0% Revenue decline

31-05-2015 • About Jaiprakash Associates ($JPASSOCIAT) • By InTwits

Jaiprakash Associates reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Jaiprakash Associates has high CAPEX intensity: 5 year average CAPEX/Revenue was 70.8%. At the same time it's a lot of higher than industry average of 11.5%.
  • CAPEX is quite volatile: 2,697 in FY2015, 2,201 in FY2014, 5,083 in FY2013, 3,614 in FY2012, 2,017 in FY2011
  • The company has potentially unprofitable business model: ROIC is at 4.8%
  • It operates with high leverage: Net Debt/EBITDA is 11.9x while industry average is 4.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Jaiprakash Associates ($JPASSOCIAT) key annual financial indicators

mln. INR201120122013201420152015/2014
P&L
Revenue112,593147,732188,164196,960194,935-1.0%
EBITDA49,58854,57867,49363,82061,430-3.7%
Net Income17,9286,3294,618-8,248-17,351
Balance Sheet
Cash66,38027,63328,06021,89720,846-4.8%
Short Term Debt50,36692,61598,732156,532192,31722.9%
Long Term Debt392,270439,127532,378569,457560,424-1.6%
Cash flow
Capex129,092143,343123,20288,61261,613-30.5%
Ratios
Revenue growth-58.7%31.2%27.4%4.7%-1.0%
EBITDA growth98.8%10.1%23.7%-5.4%-3.7%
EBITDA Margin44.0%36.9%35.9%32.4%31.5%-0.9%
Net Income Margin15.9%4.3%2.5%-4.2%-8.9%-4.7%
CAPEX, % of revenue114.7%97.0%65.5%45.0%31.6%-13.4%
ROIC8.2%7.0%7.1%5.5%4.8%-0.7%
ROE18.6%5.7%3.8%-7.2%-13.8%-6.5%
Net Debt/EBITDA7.6x9.2x8.9x11.0x11.9x0.9x

Revenue and profitability


Jaiprakash Associates's Revenue decreased slightly on 1.0% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.89 pp from 32.4% to 31.5% in FY2015.

Net Income marign decreased on 4.7 pp from -4.2% to -8.9% in FY2015.

Capital expenditures (CAPEX) and working capital investments


The company's CAPEX/Revenue was 31.6% in FY2015. Jaiprakash Associates showed big decline in CAPEX/Revenue of 65.4 pp from 97.0% in FY2012 to 31.6% in FY2015. For the last three years the average CAPEX/Revenue was 47.4%.Jaiprakash Associates has spent a lot to CAPEX (100% of EBITDA) which didn't stop revenue from falling.

Return on investment


The company operates at low but positive ROIC (4.82%) and negative ROE (-13.76%). ROIC decreased slightly on 0.69 pp from 5.5% to 4.8% in FY2015. ROE decreased on 6.5 pp from -7.2% to -13.8% in FY2015.

Leverage (Debt)


Company's Net Debt / EBITDA is 11.9x and Debt / EBITDA is 12.3x. Net Debt / EBITDA surged on 0.9x from 11.0x to 11.9x in FY2015. Debt increased on 3.7% in FY2015 while cash decreased on 4.8% in FY2015.

Appendix 1: Peers in Construction & Engineering


Below we provide Jaiprakash Associates benchmarking against other companies in Construction & Engineering 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
Thirthankar Infra ($THIRINFRA)258.2%
Welspun Projects ($WELPROJ)41.2%-8.9%-20.7%239.1%
Mukand Engineers ($MUKANDENGG)-14.3%16.7%12.4%63.0%
Atlanta ($ATLANTA)-47.6%115.1%28.1%50.2%
Spml Infra ($SPMLINFRA)-17.1%19.3%6.6%35.0%
 
Median (29 companies)-22.3%8.7%6.6%7.1%1.0%
Jaiprakash Associates ($JPASSOCIAT)31.2%27.4%4.7%-1.0%


Top companies by EBITDA margin, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Madhucon Projects ($MADHUCON)11.6%8.4%31.9%22.1%32.1%
Arss Infrastructure Projects ($ARSSINFRA)21.8%14.0%13.9%22.0%31.3%
Reliance Industrial Infrastructure ($RIIL)30.8%
Shristi Infrastructure Development Corporation ($SHRISTI)28.0%27.2%30.0%30.0%29.8%
Atlanta ($ATLANTA)44.1%28.5%34.6%30.8%21.4%
 
Median (32 companies)12.0%11.9%11.2%10.2%10.3%
Jaiprakash Associates ($JPASSOCIAT)44.0%36.9%35.9%32.4%31.5%


Top companies by CAPEX/Revenue, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Madhucon Projects ($MADHUCON)149.8%234.5%155.1%76.0%67.4%
Shristi Infrastructure Development Corporation ($SHRISTI)6.8%0.0%11.2%14.1%40.8%
Man Infraconstruction ($MANINFRA)11.5%7.8%1.6%25.0%18.6%
Welspun Projects ($WELPROJ)1.5%0.4%0.6%17.3%
Mbl Infrastructures ($MBLINFRA)3.1%7.0%12.7%11.7%9.6%
 
Median (21 companies)5.5%7.3%6.6%4.0%3.1%
Jaiprakash Associates ($JPASSOCIAT)114.7%97.0%65.5%45.0%31.6%


Top companies by ROIC, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Skipper ($SKIPPER)10.6%10.4%13.5%14.7%27.4%
Voltas ($VOLTAS)32.9%19.6%11.7%11.8%19.3%
Coromandel Engineering Company ($COROENGG)10.4%-21.9%3.4%-0.3%15.0%
Mbl Infrastructures ($MBLINFRA)24.3%21.3%13.4%14.0%13.6%
Simplex Infrastructures ($SIMPLEXINF)12.3%10.7%8.7%8.9%10.7%
 
Median (38 companies)10.7%8.6%7.5%6.3%6.8%
Jaiprakash Associates ($JPASSOCIAT)8.2%7.0%7.1%5.5%4.8%


Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Mcnally Bharat Engineering Company ($MBECL)2.4x4.3x7.0x7.6x28.3x
Madhucon Projects ($MADHUCON)40.1x96.8x19.0x16.4x9.8x
Shristi Infrastructure Development Corporation ($SHRISTI)7.8x11.8x8.6x7.9x9.4x
Hindustan Construction Co ($HCC)10.0x18.8x20.3x12.3x9.3x
Jmc Projects (India) ($JMCPROJECT)1.0x3.0x7.5x9.2x8.7x
 
Median (27 companies)3.7x4.5x5.3x5.9x3.0x
Jaiprakash Associates ($JPASSOCIAT)7.6x9.2x8.9x11.0x11.9x


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