Kirloskar Electric Company revenue dropped on 48.5% in 2015 and EBITDA Margin decreased on 9.5 pp from -5.7% to -15.2%

31-05-2015 • About Kirloskar Electric Company ($KECL) • By InTwits

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

• Kirloskar Electric Company is a company in decline: FY2015 revenue growth was -48.5%, 5 years revenue CAGR was -2.9%
• The company operates at negative EBITDA Margin: -15.2%
• Kirloskar Electric Company spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 is 0.0%. Average EBITDA Margin for the same period was -0.0%0
• Kirloskar Electric Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's a lot of higher than industry average of 0.6%.
• CAPEX is quite volatile: 118 in FY2015, 179 in FY2014, 71.8 in FY2013, 193 in FY2012, 147 in FY2011
• The company has unprofitable business model: ROIC is at -30.9%

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

Kirloskar Electric Company ($KECL) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	10,871	10,912	10,730	9,910	5,103	-48.5%
EBITDA	502	674	152	-560	-774
Net Income	69	34	-487	-942	-2,403
Balance Sheet
Cash	273	257	227	481	117	-75.6%
Short Term Debt	1,764	2,243	2,573	2,421	1,760	-27.3%
Long Term Debt	858	524	357	853	908	6.4%
Cash flow
Capex	147	193	72	179	118	-33.9%
Ratios
Revenue growth	83.7%	0.4%	-1.7%	-7.6%	-48.5%
EBITDA growth	-59.9%	34.2%	-77.5%	-469.1%	38.1%
EBITDA Margin	4.6%	6.2%	1.4%	-5.7%	-15.2%	-9.5%
Net Income Margin	0.6%	0.3%	-4.5%	-9.5%	-47.1%	-37.6%
CAPEX, % of revenue	1.4%	1.8%	0.7%	1.8%	2.3%	0.5%
ROIC	8.2%	9.0%	-3.6%	-16.5%	-30.9%	-14.4%
ROE	3.5%	1.5%	-23.3%	-61.4%		61.4%
Net Debt/EBITDA	4.7x	3.7x	17.8x			0.0x

Revenue and profitability

The company's Revenue dropped on 48.5% in FY2015. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 9.5 pp from -5.7% to -15.2% in FY2015.

Net Income marign dropped on 37.6 pp from -9.5% to -47.1% in FY2015.

Capital expenditures (CAPEX) and working capital investments

Kirloskar Electric Company's CAPEX/Revenue was 2.3% in FY2015. The company showed small growth in CAPEX/Revenue of 0.55 pp from 1.8% in FY2012 to 2.3% in FY2015. It's average level of CAPEX/Revenue for the last three years was 1.6%.

Leverage (Debt)

Debt level is -0.3x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2015. Debt dropped on 18.5% in FY2015 while cash dropped on 75.6% in FY2015.

Appendix 1: Peers in Other Elect.Equip./ Prod.

Below you can find Kirloskar Electric Company benchmarking vs. other companies in Other Elect.Equip./ Prod. 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
Indosolar ($INDOSOLAR)		-85.0%	-34.7%	-71.0%	1,797.0%
B.C. Power Controls ($BCP)		129.0%	-2.2%	2.2%	115.3%
Ece Industries ($ECEIND)		2.8%	-30.9%	-14.8%	58.1%
Pitti Laminations ($PITTILAM)		60.4%	-23.9%	-19.4%	35.9%
Genus Power Infrastructures ($GENUSPOWER)		-1.2%	-7.5%	17.4%	19.5%
Median (13 companies)	-0.4%	18.2%	-2.6%	-5.3%	10.6%
Kirloskar Electric Company ($KECL)		0.4%	-1.7%	-7.6%	-48.5%

Top companies by Gross margin, %

Top	FY2011	FY2012	FY2013	FY2014	FY2015
Malvica Engineering ($MALVICAE)		0.0%	0.0%	0.0%	0.0%
Median (1 company)		0.0%	0.0%	0.0%	0.0%

Top companies by EBITDA margin, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Fluidomat ($FLUIDOM)					28.0%
Indosolar ($INDOSOLAR)	5.8%	-114.4%	-52.7%	-140.0%	16.3%
Genus Power Infrastructures ($GENUSPOWER)	14.4%	14.1%	11.0%	13.8%	13.8%
Salzer Electronics ($SALZER)	14.3%	12.9%	12.5%	12.4%	12.6%
Pitti Laminations ($PITTILAM)	12.9%	15.6%	13.6%	13.2%	12.0%
Median (16 companies)	8.1%	9.9%	9.0%	9.3%	10.3%
Kirloskar Electric Company ($KECL)	4.6%	6.2%	1.4%	-5.7%	-15.2%

Top companies by CAPEX/Revenue, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Indosolar ($INDOSOLAR)	24.2%	311.2%	148.3%	42.3%	26.9%
Easun Reyrolle ($EASUNREYRL)	19.3%	26.5%	30.7%	19.4%
Diamond Power Infrastructure ($DIAPOWER)			6.8%	8.4%	8.7%
Salzer Electronics ($SALZER)	5.7%	6.8%	5.6%	4.1%	8.2%
Birla Ericsson Optical ($BIRLAERIC)	9.4%	1.3%	4.4%	4.0%	3.5%
Median (8 companies)	5.7%	3.4%	4.4%	4.1%	5.8%
Kirloskar Electric Company ($KECL)	1.4%	1.8%	0.7%	1.8%	2.3%

Top companies by ROIC, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Birla Ericsson Optical ($BIRLAERIC)	-6.6%	-2.2%	8.2%	27.3%	16.6%
Salzer Electronics ($SALZER)	14.6%	14.6%	12.7%	13.0%	14.6%
Genus Power Infrastructures ($GENUSPOWER)	15.2%	12.4%	8.0%	12.2%	13.5%
Hbl Power Systems ($HBLPOWER)	3.8%	10.6%	10.1%	4.3%	6.7%
Indosolar ($INDOSOLAR)	-2.7%	-14.0%	-6.8%	-5.2%	2.2%
Median (21 companies)	13.1%	8.9%	9.2%	10.5%	6.7%
Kirloskar Electric Company ($KECL)	8.2%	9.0%	-3.6%	-16.5%	-30.9%

Top companies by Net Debt / EBITDA

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Diamond Power Infrastructure ($DIAPOWER)	2.5x	3.3x	5.2x	4.8x	46.8x
Indosolar ($INDOSOLAR)	13.8x				20.3x
Hbl Power Systems ($HBLPOWER)	8.6x	4.1x	4.4x	6.8x	4.7x
Salzer Electronics ($SALZER)	2.1x	1.9x	2.2x	2.6x	2.7x
Genus Power Infrastructures ($GENUSPOWER)	2.8x	3.2x	3.9x	2.9x	2.7x
Median (14 companies)	2.9x	3.3x	4.1x	2.8x	0.0x

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