Lloyd Electric & Engineering demonstrated healthy growth over the last few years

04-06-2015 • About Lloyd Electric & Engineering ($LLOYDELENG) • By InTwits

Lloyd Electric & Engineering is a fast-growing stock in Industrial Machinery industry. Its revenue performance, profitability and financial model stands it out vs. other public companies on the market.

Growth story

Lloyd Electric & Engineering showed fast growth in the last financial year. Lloyd Electric & Engineering's revenue surged on 22.3% in FY2015. EBITDA also increased considerably: 35.7% for the same period.

If we look for the longer period the company showed fast revenue growth of 17.4% from FY2012 to FY2015 annually. EBITDA surged on 24.3% from FY2012 to FY2015 annually.

Lloyd Electric & Engineering ($LLOYDELENG) financials for the last 5 years

mln. INR	FY2011	FY2012	FY2013	FY2014	FY2015
Revenue	10,149	13,412	14,743	17,760	21,727
Revenue growth, %		32.2%	9.9%	20.5%	22.3%
SG&A, %
EBITDA	911	1,208	1,592	1,711	2,322
EBITDA growth, %		32.6%	31.8%	7.5%	35.7%
EBITDA margin, %	8.98%	9.01%	10.8%	9.64%	10.7%
Net Income	376	351	528	891	884
Net Income margin, %	3.70%	2.62%	3.58%	5.02%	4.07%

CAPEX	446	374	371	615	277
CAPEX/Revenue, %	4.40%	2.79%	2.52%	3.46%	1.28%
Debt	3,844	4,188	4,999	6,940	7,983
Cash	154	294	209	543	637
Net Debt/EBITDA	4.0x	3.2x	3.0x	3.7x	3.2x

ROIC, %	9.2%	10.0%	12.4%	11.3%	13.1%
ROE, %	9.2%	7.5%	10.0%	15.0%	12.7%

Profitability and return on investment

EBITDA growth was partly attributed to margin expansion. Lloyd Electric & Engineering's EBITDA margin surged on 1.10 pp from 9.60% to 10.7% in FY2015. In the last 3 years the company showed fast EBITDA margin growth of 1.70 pp from 9% in FY2012 to 10.7% in FY2015.

Lloyd Electric & Engineering shows attractive ROIC at 13.1% for the last 12 months which assumes stable development model. During the last three years it surged - it was 10.0% in FY2012. It's average ROIC for the last three years was 12.3%.

Lloyd Electric & Engineering showed big decline in Net Income margin of 0.900 pp from 5% to 4.10% in FY2015. In the last 3 years Net Income margin surged on 1.50 pp from 2.60% in FY2012 to 4.10% in FY2015.

Lloyd Electric & Engineering operates at ROE of 12.7%. Average ROE for the last three years was 12.6%.

Capital expenditures (CAPEX)

In FY2015 Lloyd Electric & Engineering had CAPEX/Revenue of 1.28%. Lloyd Electric & Engineering's CAPEX/Revenue dropped on 1.51 pp from 2.79% in FY2012 to 1.28% in FY2015. It's average level of CAPEX/Revenue for the last three years was 2.42%.

Leverage (Debt)

Having such a fast growth profile the company keeps medium debt level at 3.2x Net Debt/EBITDA. In the longer period the company's leverage decreased slightly on 0.06x from 3.22x in FY2012 to 3.16x in FY2015.

Peers in Industrial Machinery

Below we provide Lloyd Electric & Engineering benchmarking against other companies in Industrial Machinery 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
Forbes & Company ($FORBESCO)		22.4%	13.0%	53.4%	15.6%
Nitin Fire Protection Industries ($NITINFIRE)		22.3%	31.5%	44.2%	12.2%
Gmm Pfaudler ($GMM)		-26.1%	47.8%	31.0%	10.3%
Kabra Extrusiontechnik ($KABRAEXTRU)		-13.3%	-8.7%	28.4%	21.6%
Veejay Lakshmi Engineering Works ($VJLAXMIE)	27.9%	-28.8%	5.7%	26.6%

Median (26 companies)	13.8%	14.1%	2.1%	0.9%	11.3%
Lloyd Electric & Engineering ($LLOYDELENG)		32.2%	9.9%	20.5%	22.3%

Top companies by Gross margin, %

Top
	FY2011	FY2012	FY2013	FY2014	FY2015
Bell Agromachina ($BELAGRO)		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
Texmaco Infrastructure & Holdings ($TEXINFRA)					40.5%
Dhp India ($DHPIND)					26.3%
Solitaire Machine Tools ($SOLIMAC)					19.4%
Wendt (India) ($WENDT)	30.8%	28.3%	21.6%	18.6%	19.0%
Goldstone Infratech ($GOLDINFRA)					18.1%

Median (29 companies)	14.0%	11.2%	9.4%	10.5%	10.4%
Lloyd Electric & Engineering ($LLOYDELENG)	9.0%	9.0%	10.8%	9.6%	10.7%

Top companies by CAPEX/Revenue, %

Top 5
	FY2011	FY2012	FY2013	FY2014	FY2015
Texmaco Infrastructure & Holdings ($TEXINFRA)					14.0%
Wendt (India) ($WENDT)	7.2%	13.5%	9.0%	8.8%	9.4%
Ingersoll-Rand (India) ($INGERRAND)	1.3%	4.3%	10.9%	3.6%	9.2%
Kabra Extrusiontechnik ($KABRAEXTRU)	5.4%	6.5%	1.8%	0.5%	8.8%
Forbes & Company ($FORBESCO)	2.8%	1.8%	2.6%	3.0%	5.1%

Median (16 companies)	3.4%	5.8%	4.1%	2.7%	3.8%
Lloyd Electric & Engineering ($LLOYDELENG)	4.4%	2.8%	2.5%	3.5%	1.3%

Top companies by ROIC, %

Top 5
	FY2011	FY2012	FY2013	FY2014	FY2015
Rexnord Electronics & Controls ($REXNORD)	10.4%			18.8%
Gmm Pfaudler ($GMM)	14.2%	-76.2%	6.8%	17.4%	18.2%
Greaves Cotton ($GREAVESCOT)			24.8%	16.3%	26.7%
Lakshmi Machine Works ($LAXMIMACH)	16.8%	18.0%	11.7%	16.2%	17.6%
Wendt (India) ($WENDT)		38.2%	20.2%	16.2%	15.1%

Median (51 companies)	15.2%	13.1%	10.2%	9.2%	13.0%
Lloyd Electric & Engineering ($LLOYDELENG)	9.2%	10.0%	12.4%	11.3%	13.1%

Top companies by Net Debt / EBITDA

Top 5
	FY2011	FY2012	FY2013	FY2014	FY2015
Chemtech Industrial Valves ($CHEMTECH)	7.7x	6.4x	5.3x	8.8x
Forbes & Company ($FORBESCO)	3.5x	2.2x	3.3x	4.7x	6.3x
Lokesh Machines ($LOKESHMACH)	4.0x	3.7x	3.3x	4.6x
Elecon Engineering Co ($ELECON)	3.1x	3.0x	3.2x	4.0x	3.1x
Abc Bearings ($ABCBEARS)	0.5x	1.7x	3.5x	3.4x	0.0x

Median (34 companies)	1.1x	0.6x	1.5x	0.0x	0.0x
Lloyd Electric & Engineering ($LLOYDELENG)	4.0x	3.2x	3.0x	3.7x	3.2x

Lloyd Electric & Engineering stock price chart

Lloyd Electric & Engineering financials

mln.	FY2010	FY2011	FY2012

Revenue	8,171	10,149	13,412
EBITDA	819.7	911.2	1,208
Net income	338.1	375.7	351.2
CAPEX	398.0	446.1	374.2
Debt	2,580	3,844	4,188
Cash	127.3	154.0	294.3

About Lloyd Electric & Engineering

Lloyd Electric & Engineering Limited manufactures and sells heat exchangers and evaporator coils for heating, ventilation, air-conditioning (AC), and refrigeration industry primarily in India. The company offers fin and tube type heat exchangers used in various applications, such as commercial refrigeration systems, automobile-buses/car AC, railway and marine AC, telecom/mainframe AC, and special application coils, as well as window, split, and package AC systems; packaged AC units, including the AC units for passenger coaches and locomotives in the railway industry; window/split air conditioners; oil coolers for railways; and heavy automobile and tube mill for MB radiators. It is also involved in the design, manufacture, supply, installation, and maintenance of dry coolers used in various segments, such as thermal power plants, nuclear power plants, industrial water cooling segments, oil cooling segments, cement industry, textile industry, etc. In addition, the company offers return bands, distributors, and suction/discharge lines of various sizes; and manufactures air conditioners for various brands on original equipment manufacturing and ODM basis, as well as under its own LLOYD brand. Further, it offers air conditioners, LED TVs, refrigerators, washing machines, chest freezers, water dispensers, induction cookers, room heaters, and other products; and trades in air conditioners, as well as consumer durable products, including LCD/LED products, chest freezers, etc. under the LLOYD brand. The company also exports its products primarily to the Middle East, Africa, Europe, and North America. Lloyd Electric & Engineering Limited was incorporated in 1987 and is headquartered in New Delhi, India.