Madhucon Projects EBITDA surged on 82.9% in 2015 and Revenue surged on 26.0%

31-05-2015 • About Madhucon Projects ($MADHUCON) • By InTwits

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

• EBITDA Margin is quite volatile: 32.1% in FY2015, 22.1% in FY2014, 31.9% in FY2013, 8.4% in FY2012, 11.6% in FY2011
• Madhucon Projects has high CAPEX intensity: 5 year average CAPEX/Revenue was 136.6%. At the same time it's a lot of higher than industry average of 11.5%.
• CAPEX is quite volatile: 777 in FY2015, 775 in FY2014, 2,143 in FY2013, 1,695 in FY2012, 798 in FY2011
• The company has business model with low profitability: ROIC is at 7.5%
• It operates with high leverage: Net Debt/EBITDA is 9.8x 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.

Madhucon Projects ($MADHUCON) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	6,860	5,523	8,929	16,181	20,381	26.0%
EBITDA	793	464	2,847	3,578	6,546	82.9%
Net Income	-1,572	-3,045	-2,767	-2,238	-35
Balance Sheet
Cash	1,291	1,183	375	946	617	-34.8%
Short Term Debt	6,941	7,701	11,629	9,640	13,496	40.0%
Long Term Debt	26,155	38,415	42,764	49,901	51,033	2.3%
Cash flow
Capex	10,280	12,954	13,849	12,290	13,743	11.8%
Ratios
Revenue growth	-72.3%	-19.5%	61.7%	81.2%	26.0%
EBITDA growth	-53.4%	-41.5%	513.2%	25.7%	82.9%
EBITDA Margin	11.6%	8.4%	31.9%	22.1%	32.1%	10.0%
Net Income Margin	-22.9%	-55.1%	-31.0%	-13.8%	-0.2%	13.7%
CAPEX, % of revenue	149.8%	234.5%	155.1%	76.0%	67.4%	-8.5%
ROIC	-0.2%	-2.4%	0.7%	3.8%	7.5%	3.7%
ROE	-20.9%	-71.4%				0.0%
Net Debt/EBITDA	40.1x	96.8x	19.0x	16.4x	9.8x	-6.6x

Revenue and profitability

The company's Revenue surged on 26.0% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.1 pp from 12.2% to 13.2% in FY2015.

Net Income marign jumped on 13.7 pp from -13.8% to -0.17% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 Madhucon Projects had CAPEX/Revenue of 67.4%. CAPEX/Revenue dropped on 167 pp from 235% in FY2012 to 67.4% in FY2015. It's average CAPEX/Revenue for the last three years was 99.5%.To fuel this fast growth Madhucon Projects made large investments to CAPEX (210% of EBITDA).

Leverage (Debt)

Company's Net Debt / EBITDA is 9.8x and Debt / EBITDA is 9.9x. Net Debt / EBITDA dropped on 6.6x from 16.4x to 9.8x in FY2015. Debt increased on 8.4% in FY2015 while cash dropped on 34.8% in FY2015.

Appendix 1: Peers in Construction & Engineering

Below you can find Madhucon Projects benchmarking vs. other companies in Construction & Engineering 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
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 ($SPMLINFRA)		-17.1%	19.3%	6.6%	35.0%
Median (29 companies)	-22.3%	11.4%	6.6%	6.6%	-1.0%
Madhucon Projects ($MADHUCON)		-19.5%	61.7%	81.2%	26.0%

Top companies by EBITDA margin, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Jaiprakash Associates ($JPASSOCIAT)	44.0%	36.9%	35.9%	32.4%	31.5%
Arss Infrastructure Projects ($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 ($ATLANTA)	44.1%	28.5%	34.6%	30.8%	21.4%
Median (32 companies)	12.4%	12.4%	11.2%	10.2%	10.3%
Madhucon Projects ($MADHUCON)	11.6%	8.4%	31.9%	22.1%	32.1%

Top companies by CAPEX/Revenue, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Shristi Infrastructure Development Corporation ($SHRISTI)	6.8%	0.0%	11.2%	14.1%	40.8%
Jaiprakash Associates ($JPASSOCIAT)	114.7%	97.0%	65.5%	45.0%	31.6%
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 ($MBLINFRA)	3.1%	7.0%	12.7%	11.7%	9.6%
Median (21 companies)	5.5%	7.3%	6.6%	4.0%	3.1%
Madhucon Projects ($MADHUCON)	149.8%	234.5%	155.1%	76.0%	67.4%

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 ($SIMPLEXINF)	12.3%	10.7%	8.7%	8.9%	10.7%
Median (38 companies)	10.7%	8.6%	7.5%	6.3%	6.6%
Madhucon Projects ($MADHUCON)	-0.2%	-2.4%	0.7%	3.8%	7.5%

Top companies by Net Debt / EBITDA

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Mcnally Bharat Engineering Company ($MBECL)	2.4x	4.3x	7.0x	7.6x	28.3x
Jaiprakash Associates ($JPASSOCIAT)	7.6x	9.2x	8.9x	11.0x	11.9x
Shristi Infrastructure Development Corporation ($SHRISTI)	7.8x	11.8x	8.6x	7.9x	9.4x
Hindustan Construction Co ($HCC)	10.0x	18.8x	20.3x	12.3x	9.3x
Jmc Projects (India) ($JMCPROJECT)	1.0x	3.0x	7.5x	9.2x	8.7x
Median (27 companies)	3.7x	4.5x	5.3x	5.9x	3.0x
Madhucon Projects ($MADHUCON)	40.1x	96.8x	19.0x	16.4x	9.8x

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