Vakrangee demonstrates profitable growth
06-06-2015 • About Vakrangee (
$VAKRANGEE) • By InTwits
Vakrangee is a fast-growing stock in BPO/KPO industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Vakrangee showed growth in the last financial year. Vakrangee's revenue surged on 42.4% in FY2015. EBITDA also increased considerably: 35.3% for the same period.
In the last 3 years Vakrangee showed fast revenue growth of 27.1% from FY2012 to FY2015 annually. EBITDA surged on 44.2% from FY2012 to FY2015 annually.
Vakrangee ($VAKRANGEE) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 8,897 | 13,532 | 15,472 | 19,519 | 27,805 |
|---|
| Revenue growth, % | | 52.1% | 14.3% | 26.2% | 42.4% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 1,388 | 2,415 | 3,815 | 5,346 | 7,235 |
|---|
| EBITDA growth, % | | 74.0% | 58.0% | 40.1% | 35.3% |
|---|
| EBITDA margin, % | 15.6% | 17.8% | 24.7% | 27.4% | 26.0% |
|---|
| Net Income | 481 | 709 | 1,043 | 1,750 | 3,218 |
|---|
| Net Income margin, % | 5.41% | 5.24% | 6.74% | 8.97% | 11.6% |
|---|
| |
| CAPEX | 605 | 3,745 | 930 | 2,284 | 44 |
|---|
| CAPEX/Revenue, % | 6.80% | 27.7% | 6.01% | 11.7% | 0.157% |
|---|
| Debt | 1,634 | 4,590 | 5,419 | 4,923 | 4,160 |
|---|
| Cash | 90 | 58 | 25 | 26 | 68 |
|---|
| Net Debt/EBITDA | 1.1x | 1.9x | 1.4x | 0.9x | 0.6x |
|---|
| |
| ROIC, % | 17.1% | 20.2% | 21.3% | 28.3% | 36.4% |
|---|
| ROE, % | 14.7% | 18.3% | 22.4% | 27.1% | 32.4% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. In the last 3 years EBITDA margin surged on 8.20 pp from 17.8% in FY2012 to 26% in FY2015.
We call Vakrangee an attractive growth stock as together with the growth it delivers high ROIC at 36.4%. Three years ago it was considerably lower at 20.2%. It's average level of ROIC for the last three years was 28.7%.
The company showed fast Net Income margin growth of 2.60 pp from 9% to 11.6% in FY2015. In the last 3 years Net Income margin surged on 6.40 pp from 5.20% in FY2012 to 11.6% in FY2015.
Vakrangee operates at ROE of 32.4%. Average ROE for the last three years was 27.3%.
Capital expenditures (CAPEX)
In FY2015 Vakrangee had CAPEX/Revenue of 0.157%. CAPEX/Revenue dropped on 27.5 pp from 27.7% in FY2012 to 0.157% in FY2015. Average CAPEX/Revenue for the last three years was 5.96%.
Leverage (Debt)
The company has low debt level at 0.6x Net Debt/EBITDA - at the same time with high growth. If we look for the longer period Vakrangee's leverage dropped on 1.31x from 1.88x in FY2012 to 0.57x in FY2015.
Peers in BPO/KPO
Below you can find Vakrangee benchmarking vs. other companies in BPO/KPO 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Hinduja Global Solutions ($HGS) | | 44.8% | 27.6% | 26.3% | 12.1% |
| Eclerx Services ($ECLERX) | | 38.2% | 39.7% | 27.3% | 12.0% |
| Firstsource Solutions ($FSL) | | 12.1% | 25.0% | 10.2% | -2.3% |
| Allsec Technologies ($ALLSEC) | | 15.5% | 74.8% | -37.6% | -24.4% |
| |
|---|
| Median (4 companies) | 65.8% | 15.5% | 27.6% | 18.0% | 4.9% |
|---|
| Vakrangee ($VAKRANGEE) | | 52.1% | 14.3% | 26.2% | 42.4% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Eclerx Services ($ECLERX) | 55.9% | 40.4% | 38.7% | 42.0% | 33.5% |
| Firstsource Solutions ($FSL) | 14.5% | 8.7% | 9.9% | 11.7% | 12.5% |
| Hinduja Global Solutions ($HGS) | 14.6% | 11.9% | 11.3% | 13.0% | 11.3% |
| Allsec Technologies ($ALLSEC) | 1.9% | -0.2% | 11.4% | -13.5% | -6.1% |
| |
|---|
| Median (4 companies) | 14.5% | 11.9% | 11.3% | 11.7% | 11.9% |
|---|
| Vakrangee ($VAKRANGEE) | 15.6% | 17.8% | 24.7% | 27.4% | 26.0% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Hinduja Global Solutions ($HGS) | 6.0% | 31.5% | 7.2% | 6.1% | 5.8% |
| Allsec Technologies ($ALLSEC) | 5.2% | 6.6% | 5.8% | 5.9% | |
| Eclerx Services ($ECLERX) | 7.0% | 5.3% | 4.0% | 2.5% | 6.5% |
| Xchanging Solutions ($XCHANGING) | 2.5% | 3.4% | 2.0% | 1.8% | |
| Firstsource Solutions ($FSL) | 2.1% | 2.3% | 1.4% | 1.2% | 1.5% |
| |
|---|
| Median (5 companies) | 5.2% | 5.3% | 4.0% | 2.5% | 5.8% |
|---|
| Vakrangee ($VAKRANGEE) | 6.8% | 27.7% | 6.0% | 11.7% | 0.2% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Eclerx Services ($ECLERX) | 83.3% | 61.1% | 58.7% | 62.4% | 41.0% |
| Hinduja Global Solutions ($HGS) | 9.9% | 8.1% | 8.2% | 12.4% | 11.0% |
| Firstsource Solutions ($FSL) | 7.0% | 4.0% | 7.0% | 9.0% | 9.5% |
| Xchanging Solutions ($XCHANGING) | 1.4% | 8.3% | 6.6% | 2.2% | |
| Allsec Technologies ($ALLSEC) | -8.7% | -13.0% | 19.9% | -40.1% | -26.5% |
| |
|---|
| Median (7 companies) | 9.9% | 8.1% | 7.0% | 9.0% | 10.3% |
|---|
| Vakrangee ($VAKRANGEE) | 17.1% | 20.2% | 21.3% | 28.3% | 36.4% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Firstsource Solutions ($FSL) | 4.3x | 4.2x | 4.2x | 2.8x | 2.5x |
| Hinduja Global Solutions ($HGS) | -3.0x | 0.8x | 1.7x | 1.5x | 1.4x |
| Eclerx Services ($ECLERX) | -0.1x | -0.7x | -0.5x | -0.7x | -0.6x |
| |
|---|
| Median (3 companies) | -0.1x | 0.3x | 1.3x | 0.4x | 1.4x |
|---|
| Vakrangee ($VAKRANGEE) | 1.1x | 1.9x | 1.4x | 0.9x | 0.6x |
