Is Indian Hume Pipe Co a solid growth stock? - The numbers tells it is
04-06-2015 • About Indian Hume Pipe Co (
$INDIANHUME) • By InTwits
Indian Hume Pipe Co is an attractive growth stock in Cement & Cement Products industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Indian Hume Pipe Co showed fast growth in the last financial year. Indian Hume Pipe Co's revenue surged on 22.7% in FY2015. EBITDA also increased considerably: 44.7% for the same period.
In the longer period Indian Hume Pipe Co showed fast revenue growth of 25.0% from FY2012 to FY2015 annually. EBITDA surged on 45.6% from FY2012 to FY2015 annually.
Indian Hume Pipe Co ($INDIANHUME) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 6,485 | 5,172 | 6,958 | 8,230 | 10,099 |
|---|
| Revenue growth, % | | -20.3% | 34.5% | 18.3% | 22.7% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 682 | 359 | 615 | 767 | 1,110 |
|---|
| EBITDA growth, % | | -47.3% | 71.2% | 24.6% | 44.7% |
|---|
| EBITDA margin, % | 10.5% | 6.95% | 8.84% | 9.32% | 11.0% |
|---|
| Net Income | 280 | 159 | 228 | 241 | 416 |
|---|
| Net Income margin, % | 4.31% | 3.08% | 3.28% | 2.92% | 4.12% |
|---|
| |
| CAPEX | 145 | 98 | 142 | 130 | 75 |
|---|
| CAPEX/Revenue, % | 2.24% | 1.90% | 2.04% | 1.58% | 0.745% |
|---|
| Debt | 1,837 | 1,485 | 1,764 | 2,457 | 3,055 |
|---|
| Cash | 264 | 213 | 174 | 124 | 221 |
|---|
| Net Debt/EBITDA | 2.3x | 3.5x | 2.6x | 3.0x | 2.6x |
|---|
| |
| ROIC, % | 15.5% | 7.6% | 13.8% | 15.0% | 18.0% |
|---|
| ROE, % | 14.1% | 7.4% | 10.0% | 9.8% | 15.4% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. Indian Hume Pipe Co showed fast EBITDA margin growth of 1.70 pp from 9.30% to 11% in FY2015. In the longer period Indian Hume Pipe Co's EBITDA margin surged on 4 pp from 7% in FY2012 to 11% in FY2015.
Indian Hume Pipe Co shows attractive ROIC at 18.0% for the last 12 months which assumes stable development model. Three years ago it was considerably lower at 7.61%. It's average level of ROIC for the last three years was 15.6%.
Indian Hume Pipe Co's Net Income margin surged on 1.20 pp from 2.90% to 4.10% in FY2015. In the last 3 years Net Income margin surged on 1 pp from 3.10% in FY2012 to 4.10% in FY2015.
Indian Hume Pipe Co operates at ROE of 15.4%. It's average level of ROE for the last three years was 11.7%.
Capital expenditures (CAPEX)
In FY2015 Indian Hume Pipe Co had CAPEX/Revenue of 0.745%. Indian Hume Pipe Co's CAPEX/Revenue dropped on 1.15 pp from 1.90% in FY2012 to 0.745% in FY2015. For the last three years the average CAPEX/Revenue was 1.45%.
Leverage (Debt)
Having such a fast growth profile Indian Hume Pipe Co keeps medium debt level at 2.6x Net Debt/EBITDA. If we look for the longer period leverage dropped on 0.98x from 3.54x in FY2012 to 2.55x in FY2015.
Valuation vs. comparable companies
The market closed today at 8.9x EV/EBITDA for Indian Hume Pipe Co which is 36% lower than 13.9x Cement & Cement Products peer group avearge calculated on the basis of 70 companies. At the end of trading day today Indian Hume Pipe Co traded at 17.0x P/E which is 35.4% higher than 12.5x Cement & Cement Products peer group avearge calculated on the basis of 9 companies.
Peers in Cement & Cement Products
Below we provide Indian Hume Pipe Co benchmarking against other companies in Cement & Cement Products 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Heidelbergcement India ($HEIDELBERG) | | -13.1% | 37.5% | 36.3% | 2.5% |
| Shree Digvijay Cement Co ($SHREDIGCEM) | -23.4% | 14.9% | -13.5% | 24.7% | |
| Birla Corporation ($BIRLACORPN) | | 6.2% | 13.8% | 15.9% | 6.4% |
| Ambuja Cements ($AMBUJACEM) | -23.0% | 14.3% | -6.5% | 9.0% | |
| Kakatiya Cement Sugar & Industries ($KAKATCEM) | | 67.8% | 9.0% | 8.8% | -3.9% |
| |
|---|
| Median (15 companies) | -29.5% | 14.9% | 11.4% | -1.4% | 6.4% |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | | -20.3% | 34.5% | 18.3% | 22.7% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Ambuja Cements ($AMBUJACEM) | 23.4% | 25.6% | 18.2% | 19.4% | |
| Heidelbergcement India ($HEIDELBERG) | 6.9% | 8.3% | 9.3% | 15.9% | 7.4% |
| Deccan Cements ($DECCANCE) | 19.2% | 22.8% | 13.2% | 14.7% | |
| Acc ($ACC) | 19.2% | 19.3% | 14.6% | 12.9% | |
| J.K.Cement ($JKCEMENT) | 13.3% | 20.3% | 19.2% | 12.7% | 13.4% |
| |
|---|
| Median (14 companies) | 13.3% | 19.2% | 13.6% | 11.8% | 9.5% |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | 10.5% | 7.0% | 8.8% | 9.3% | 11.0% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| J.K.Cement ($JKCEMENT) | 14.1% | 6.5% | 18.8% | 55.8% | 16.2% |
| Acc ($ACC) | 4.8% | 5.0% | 8.6% | 13.7% | |
| K.C.P ($KCP) | 28.2% | 8.6% | 9.9% | 12.6% | 5.2% |
| Visaka Industries ($VIKASAS) | 4.6% | 5.5% | 6.5% | 10.2% | 2.2% |
| Shree Digvijay Cement Co ($SHREDIGCEM) | 13.6% | 4.1% | 8.5% | 8.5% | |
| |
|---|
| Median (11 companies) | 9.0% | 6.5% | 7.8% | 8.3% | 5.2% |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | 2.2% | 1.9% | 2.0% | 1.6% | 0.7% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Saurashtra Cement ($SAURASHCEM) | 4.3% | 38.6% | 42.7% | 13.9% | 26.9% |
| Ambuja Cements ($AMBUJACEM) | 17.0% | 19.4% | 11.2% | 13.0% | |
| Acc ($ACC) | 18.5% | 20.2% | 12.7% | 11.0% | |
| K.C.P ($KCP) | 14.9% | 17.6% | 6.7% | 7.1% | 9.3% |
| Deccan Cements ($DECCANCE) | 7.6% | 17.4% | 8.0% | 6.4% | |
| |
|---|
| Median (16 companies) | 7.6% | 15.8% | 8.2% | 6.4% | 7.3% |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | 15.5% | 7.6% | 13.8% | 15.0% | 18.0% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Prism Cement ($PRISMCEM) | 3.4x | 4.8x | 6.0x | 10.0x | 6.0x |
| J.K.Cement ($JKCEMENT) | 4.5x | 2.3x | 2.3x | 6.9x | 5.8x |
| India Cements ($INDIACEM) | 4.8x | 3.2x | 3.5x | 5.5x | |
| Visaka Industries ($VIKASAS) | 1.3x | 1.3x | 2.2x | 3.8x | 2.7x |
| K.C.P ($KCP) | 2.6x | 1.1x | 3.0x | 3.6x | 2.3x |
| |
|---|
| Median (13 companies) | 2.9x | 1.8x | 2.9x | 3.2x | 4.3x |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | 2.3x | 3.5x | 2.6x | 3.0x | 2.6x |
