Amara Raja Batteries demonstrates fast growth
05-06-2015 • About Amara Raja Batteries (
$AMARAJABAT) • By InTwits
Amara Raja Batteries is a growth stock in Auto Parts & Equipment industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Amara Raja Batteries showed fast growth in the last financial year. Amara Raja Batteries's revenue surged on 22.6% in FY2015. EBITDA also increased considerably: 47.1% for the same period.
In the last 3 years Amara Raja Batteries showed fast revenue growth of 21.2% from FY2012 to FY2015 annually. EBITDA surged on 26.8% from FY2012 to FY2015 annually.
Amara Raja Batteries ($AMARAJABAT) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 17,599 | 23,633 | 29,574 | 34,345 | 42,113 |
|---|
| Revenue growth, % | | 34.3% | 25.1% | 16.1% | 22.6% |
|---|
| SG&A, % | | | | | 0.602% |
|---|
| EBITDA | 2,641 | 3,522 | 4,638 | 4,877 | 7,175 |
|---|
| EBITDA growth, % | | 33.3% | 31.7% | 5.2% | 47.1% |
|---|
| EBITDA margin, % | 15.0% | 14.9% | 15.7% | 14.2% | 17.0% |
|---|
| Net Income | 1,481 | 2,151 | 2,867 | 2,752 | 4,109 |
|---|
| Net Income margin, % | 8.41% | 9.10% | 9.69% | 8.01% | 9.76% |
|---|
| |
| CAPEX | 519 | 873 | 746 | 3,727 | 4,063 |
|---|
| CAPEX/Revenue, % | 2.95% | 3.70% | 2.52% | 10.9% | 9.65% |
|---|
| Debt | 901 | 855 | 881 | 857 | 759 |
|---|
| Cash | 123 | 533 | 443 | 2,929 | 2,155 |
|---|
| Net Debt/EBITDA | 0.3x | 0.1x | 0.1x | -0.4x | -0.2x |
|---|
| |
| ROIC, % | 30.5% | 32.1% | 34.5% | 30.3% | 35.4% |
|---|
| ROE, % | 24.9% | 29.3% | 30.4% | 22.7% | 26.8% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. Amara Raja Batteries showed fast EBITDA margin growth of 2.80 pp from 14.2% to 17% in FY2015. In the last 3 years Amara Raja Batteries's EBITDA margin surged on 2.10 pp from 14.9% in FY2012 to 17% in FY2015.
Amara Raja Batteries shows attractive ROIC at 35.4% for the last 12 months which assumes stable development model. During the last three years it surged - it was 32.1% in FY2012. It's average ROIC for the last three years was 33.4%.
Net Income margin surged on 1.80 pp from 8% to 9.80% in FY2015. If we look for the longer period Net Income margin increased on 0.700 pp from 9.10% in FY2012 to 9.80% in FY2015.
Amara Raja Batteries operates at ROE of 26.8%. It's average level of ROE for the last three years was 26.7%.
Capital expenditures (CAPEX)
To fuel this fast growth Amara Raja Batteries had to invest in CAPEX.The company's CAPEX/Revenue was 9.65% in FY2015. Amara Raja Batteries's CAPEX/Revenue surged on 5.95 pp from 3.70% in FY2012 to 9.65% in FY2015. It's average level of CAPEX/Revenue for the last three years was 7.67%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -0.2x Net Debt/EBITDA. If we look for the longer period leverage dropped on 0.29x from 0.09x in FY2012 to -0.19x in FY2015.
Valuation vs. comparable companies
The company trades at 20.7x EV/EBITDA which is not surprisingly 48.5% higher than 13.9x Auto Parts & Equipment industry avearge calculated based on 122 companies. The market closed today at 36.4x P/E for Amara Raja Batteries which is 66.9% higher than 21.8x Auto Parts & Equipment peer group avearge calculated on the basis of 16 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 47.6x EV/(EBITDA-CAPEX) which is not surprisingly 2,030% higher than 2.2x Auto Parts & Equipment industry avearge calculated based on 13 companies.
Peers in Auto Parts & Equipment
Below we provide Amara Raja Batteries benchmarking against other companies in Auto Parts & Equipment 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 |
|---|
| India Nippon Electricals ($INDNIPPON) | | 13.6% | 3.2% | -2.4% | 24.8% |
| Enkei Wheels (India) ($ENKEIWHEL) | | 16.9% | 1.3% | 11.7% | 21.6% |
| Ip Rings ($IPRINGLTD) | | 4.0% | 2.4% | -0.1% | 19.5% |
| Exide Industries ($EXIDEIND) | | 11.5% | 19.7% | 30.6% | 14.8% |
| Shivam Autotech ($SHIVAMAUTO) | | 33.8% | 2.9% | 7.1% | 14.7% |
| |
|---|
| Median (31 companies) | -15.5% | 16.9% | 2.4% | 4.9% | 8.6% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | | 34.3% | 25.1% | 16.1% | 22.6% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Tube Investments Of India ($TUBEINVEST) | 33.7% | 18.4% | 24.4% | 28.3% | 30.0% |
| Shivam Autotech ($SHIVAMAUTO) | 23.2% | 24.1% | 24.1% | 20.6% | 18.7% |
| Suprajit Engineering ($SUPRAJIT) | 16.5% | 16.2% | 17.0% | 17.2% | 16.2% |
| Amtek Auto ($AMTEKAUTO) | | 25.1% | | 20.7% | 14.8% |
| Triton Valves ($TRITONV) | 12.3% | 9.8% | 11.3% | 11.3% | 14.2% |
| |
|---|
| Median (35 companies) | 10.8% | 10.8% | 9.8% | 10.1% | 10.3% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 15.0% | 14.9% | 15.7% | 14.2% | 17.0% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Amtek Auto ($AMTEKAUTO) | | 18.9% | | 27.1% | 30.3% |
| Jbm Auto ($JBMA) | 18.1% | 9.8% | 8.4% | | 14.4% |
| Rico Auto Industries ($RICOAUTO) | 9.5% | 5.8% | 10.9% | 5.7% | 14.2% |
| Shivam Autotech ($SHIVAMAUTO) | 11.6% | 11.6% | 4.1% | 4.9% | 12.5% |
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | 9.8% | 3.5% | 6.5% | 6.0% | 8.9% |
| |
|---|
| Median (24 companies) | 8.0% | 5.8% | 4.7% | 4.8% | 4.6% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 2.9% | 3.7% | 2.5% | 10.9% | 9.6% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Exide Industries ($EXIDEIND) | 34.2% | 24.2% | 24.3% | 29.5% | 26.9% |
| Suprajit Engineering ($SUPRAJIT) | 32.4% | 31.8% | 28.0% | 26.1% | 22.9% |
| Motherson Sumi Systems ($MOTHERSUMI) | 23.7% | 13.5% | 16.5% | 25.0% | 24.9% |
| Munjal Showa ($MUNJALSHOW) | 18.8% | 29.9% | 23.8% | 22.5% | 24.9% |
| Munjal Auto Industries ($MUNJALAU) | 26.3% | 30.6% | 21.5% | 21.1% | 19.0% |
| |
|---|
| Median (48 companies) | 15.2% | 15.7% | 11.8% | 12.7% | 13.4% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 30.5% | 32.1% | 34.5% | 30.3% | 35.4% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Tube Investments Of India ($TUBEINVEST) | 8.1x | 17.6x | 17.8x | 17.3x | 16.4x |
| Autoline Industries ($AUTOIND) | 3.1x | 3.2x | 4.0x | 12.0x | |
| Reil Electricals India ($REILELEC) | -0.1x | -0.0x | 1.5x | 9.1x | 0.0x |
| Steel Strips Wheels ($SSWL) | 4.6x | 5.4x | 6.3x | 6.5x | 5.6x |
| Automotive Stampings & Assemblies ($ASAL) | 1.8x | 1.1x | 3.9x | 6.3x | |
| |
|---|
| Median (44 companies) | 2.2x | 1.3x | 2.2x | 0.8x | 1.1x |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 0.3x | 0.1x | 0.1x | -0.4x | -0.2x |
