Mahanagar Telephone Nigam Net Income dropped on 137% in 2015 and Revenue increased slightly on 0.53%
31-05-2015 • About Mahanagar Telephone Nigam (
$MTNL) • By InTwits
Mahanagar Telephone Nigam reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mahanagar Telephone Nigam doesn't have a profitable business model yet: FY2015 ROIC is -9.3%
- The company operates at negative EBITDA Margin: -18.5%
- Mahanagar Telephone Nigam motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2011-FY2015 was 0.0%. On average EBITDA Margin was -41.8% for the sames years0
- Mahanagar Telephone Nigam has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.2%. At the same time it's a lot of higher than industry average of 12.6%.
- CAPEX is quite volatile: 2,987 in FY2015, 1,983 in FY2014, 7,367 in FY2013, 7,531 in FY2012, 12,663 in FY2011
- The company has unprofitable business model: ROIC is at -9.3%
- It operates with high leverage: Net Debt/EBITDA is 6.3x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Mahanagar Telephone Nigam ($MTNL) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 37,459 | 34,415 | 34,964 | 34,757 | 34,940 | 0.5% |
| SG&A | 9,470 | 8,467 | 7,953 | 11,187 | 9,186 | -17.9% |
| EBITDA | -11,817 | -17,881 | -28,921 | -8,720 | -6,477 | |
| Net Income | -27,969 | -41,039 | -53,223 | 78,207 | -29,012 | -137.1% |
Balance Sheet
|
|---|
| Cash | 1,277 | 904 | 1,141 | 2,504 | 990 | -60.5% |
| Short Term Debt | 49,081 | 26,484 | 48,449 | 61,064 | 65,991 | 8.1% |
| Long Term Debt | 25,568 | 70,000 | 69,374 | 81,100 | 100,090 | 23.4% |
Cash flow
|
|---|
| Capex | 12,663 | 7,531 | 7,367 | 1,983 | 2,987 | 50.6% |
Ratios
|
|---|
| Revenue growth | -11.1% | -8.1% | 1.6% | -0.6% | 0.5% | |
| EBITDA growth | -61.1% | 51.3% | 61.7% | -69.8% | -25.7% | |
| EBITDA Margin | -31.5% | -52.0% | -82.7% | -25.1% | -18.5% | 6.6% |
| Net Income Margin | -74.7% | -119.2% | -152.2% | 225.0% | -83.0% | -308.0% |
| SG&A, % of revenue | 25.3% | 24.6% | 22.7% | 32.2% | 26.3% | -5.9% |
| CAPEX, % of revenue | 33.8% | 21.9% | 21.1% | 5.7% | 8.5% | 2.8% |
| ROIC | -19.9% | -24.0% | -39.1% | -14.0% | -9.3% | 4.6% |
| ROE | -34.9% | -89.6% | | | -81.7% | -81.7% |
Revenue and profitability
The company's Revenue increased slightly on 0.53% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 6.6 pp from -25.1% to -18.5% in FY2015.
SG&A as a % of Revenue decreased on 5.9 pp from 32.2% to 26.3% in FY2015.
Net Income marign dropped on 308 pp from 225% to -83.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
Mahanagar Telephone Nigam's CAPEX/Revenue was 8.5% in FY2015. CAPEX/Revenue dropped on 13.3 pp from 21.9% in FY2012 to 8.5% in FY2015. Average CAPEX/Revenue for the last three years was 11.8%.
Return on investment
The company operates at negative ROIC (-9.32%) and ROE (-81.71%). ROIC increased on 4.6 pp from -14.0% to -9.3% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.3x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2015. Debt surged on 16.8% in FY2015 while cash dropped on 60.5% in FY2015.
Appendix 1: Peers in Telecom Services
Below we provide Mahanagar Telephone Nigam benchmarking against other companies in Telecom Services 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Idea Cellular ($IDEA) | | 26.2% | 15.0% | 18.0% | 19.3% |
| Bharti Airtel ($BHARTIARTL) | | 20.0% | 7.6% | 11.5% | 7.3% |
| |
|---|
| Median (2 companies) | | 23.1% | 11.3% | 14.7% | 13.3% |
|---|
| Mahanagar Telephone Nigam ($MTNL) | | -8.1% | 1.6% | -0.6% | 0.5% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Idea Cellular ($IDEA) | 24.6% | 26.1% | 26.8% | 31.5% | 34.4% |
| Bharti Airtel ($BHARTIARTL) | 33.7% | 33.2% | 30.2% | 32.4% | 34.1% |
| |
|---|
| Median (2 companies) | 29.1% | 29.7% | 28.5% | 32.0% | 34.2% |
|---|
| Mahanagar Telephone Nigam ($MTNL) | -31.5% | -52.0% | -82.7% | -25.1% | -18.5% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bharti Airtel ($BHARTIARTL) | 18.5% | 20.2% | 16.3% | 13.3% | 15.9% |
| Idea Cellular ($IDEA) | 55.4% | 24.3% | 15.6% | 14.0% | 13.4% |
| |
|---|
| Median (2 companies) | 36.9% | 22.2% | 16.0% | 13.7% | 14.7% |
|---|
| Mahanagar Telephone Nigam ($MTNL) | 33.8% | 21.9% | 21.1% | 5.7% | 8.5% |
Top companies by ROIC, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Idea Cellular ($IDEA) | 6.2% | 8.1% | 8.8% | 11.0% | 12.1% |
| Bharti Airtel ($BHARTIARTL) | 11.8% | 8.9% | 7.0% | 9.4% | 11.7% |
| |
|---|
| Median (2 companies) | 9.0% | 8.5% | 7.9% | 10.2% | 11.9% |
|---|
| Mahanagar Telephone Nigam ($MTNL) | -19.9% | -24.0% | -39.1% | -14.0% | -9.3% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Idea Cellular ($IDEA) | 3.1x | 2.6x | 2.3x | 2.5x | 2.3x |
| Bharti Airtel ($BHARTIARTL) | 3.0x | 2.8x | 2.8x | 2.6x | 2.1x |
| |
|---|
| Median (2 companies) | 3.0x | 2.7x | 2.6x | 2.5x | 2.2x |
|---|
