Is Cmi a solid growth stock? - The numbers tells it is
07-06-2015 • About Cmi (
$CMI) • By InTwits
Pay attention to Cmi as a growth stock. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Cmi showed fast growth in the last financial year. Cmi's revenue surged on 29.1% in FY2015. In addition to revenue Cmi also keeps delivering EBITDA growth. It was 63.8% in FY2015
In the last 3 years Cmi showed fast revenue growth of 23.1% from FY2012 to FY2015 annually. EBITDA surged on 29.9% from FY2012 to FY2015 annually.
Cmi ($CMI) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 590 | 728 | 886 | 1,051 | 1,358 |
|---|
| Revenue growth, % | | 23.5% | 21.6% | 18.7% | 29.1% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 55 | 66 | 76 | 88 | 144 |
|---|
| EBITDA growth, % | | 19.3% | 16.2% | 15.0% | 63.8% |
|---|
| EBITDA margin, % | 9.35% | 9.02% | 8.62% | 8.36% | 10.6% |
|---|
| Net Income | 24 | 22 | 17 | 18 | 63 |
|---|
| Net Income margin, % | 4.10% | 2.96% | 1.88% | 1.68% | 4.64% |
|---|
| |
| CAPEX | 7 | 8 | 16 | 7 | 47 |
|---|
| CAPEX/Revenue, % | 1.13% | 1.10% | 1.83% | 0.644% | 3.48% |
|---|
| Debt | 182 | 275 | 312 | 376 | 333 |
|---|
| Cash | 24 | 3 | 2 | 2 | 5 |
|---|
| Net Debt/EBITDA | 2.9x | 4.1x | 4.1x | 4.3x | 2.3x |
|---|
| |
| ROIC, % | 17.3% | 16.7% | 16.1% | 16.6% | 22.2% |
|---|
| ROE, % | 30.1% | 21.4% | 14.1% | 13.3% | 24.6% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. EBITDA margin surged on 2.20 pp from 8.40% to 10.6% in FY2015. In the last 3 years Cmi's EBITDA margin surged on 1.60 pp from 9% in FY2012 to 10.6% in FY2015.
We call Cmi an attractive growth stock as together with the growth it delivers high ROIC at 22.2%. Three years ago it was lower at 16.7%. It's average ROIC for the last three years was 18.3%.
Net Income margin surged on 2.90 pp from 1.70% to 4.60% in FY2015. In the last 3 years Net Income margin surged on 1.60 pp from 3% in FY2012 to 4.60% in FY2015.
Cmi operates at ROE of 24.6%. It's average ROE for the last three years was 17.4%.
Capital expenditures (CAPEX)
The company's CAPEX/Revenue was 3.48% in FY2015. The company showed fast CAPEX/Revenue growth of 2.38 pp from 1.10% in FY2012 to 3.48% in FY2015. It's average CAPEX/Revenue for the last three years was 1.98%.
Leverage (Debt)
Cmi has medium debt level at 2.3x Net Debt/EBITDA to maintain high growth. In the longer period the company showed big decline in leverage of 1.86x from 4.14x in FY2012 to 2.28x in FY2015.
Peers in Telecom Cables
Below we provide Cmi benchmarking against other companies in Telecom Cables 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 |
|---|
| Vindhya Telelinks ($VINDHYATEL) | | 25.6% | 35.9% | 29.8% | 49.3% |
| Aksh Optifibre ($AKSHOPTFBR) | | 108.8% | -6.1% | -7.0% | 46.7% |
| Himachal Futuristic Communications ($HFCL) | | | 132.4% | 233.0% | 26.4% |
| |
|---|
| Median (3 companies) | | 67.2% | 35.9% | 29.8% | 46.7% |
|---|
| Cmi ($CMI) | | 23.5% | 21.6% | 18.7% | 29.1% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Vindhya Telelinks ($VINDHYATEL) | 3.2% | -0.4% | 6.8% | 11.3% | 15.0% |
| Aksh Optifibre ($AKSHOPTFBR) | -6.9% | 11.1% | 14.7% | 14.5% | 13.1% |
| Himachal Futuristic Communications ($HFCL) | | 8.7% | 11.4% | 12.9% | 11.1% |
| |
|---|
| Median (3 companies) | -1.8% | 8.7% | 11.4% | 12.9% | 13.1% |
|---|
| Cmi ($CMI) | 9.3% | 9.0% | 8.6% | 8.4% | 10.6% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Aksh Optifibre ($AKSHOPTFBR) | 1.9% | 0.6% | 1.4% | 7.8% | 7.9% |
| Vindhya Telelinks ($VINDHYATEL) | 3.4% | 0.6% | 1.1% | 5.0% | 3.1% |
| Himachal Futuristic Communications ($HFCL) | | 7.9% | 5.9% | 2.3% | 0.7% |
| |
|---|
| Median (3 companies) | 2.6% | 0.6% | 1.4% | 5.0% | 3.1% |
|---|
| Cmi ($CMI) | 1.1% | 1.1% | 1.8% | 0.6% | 3.5% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Himachal Futuristic Communications ($HFCL) | | | 9.0% | 30.9% | 22.2% |
| Vindhya Telelinks ($VINDHYATEL) | 0.5% | -1.8% | 4.7% | 9.9% | 15.0% |
| Aksh Optifibre ($AKSHOPTFBR) | -6.0% | 4.2% | 5.4% | 4.3% | 5.5% |
| |
|---|
| Median (3 companies) | -6.0% | 1.2% | 5.4% | 9.9% | 15.0% |
|---|
| Cmi ($CMI) | 17.3% | 16.7% | 16.1% | 16.6% | 22.2% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Vindhya Telelinks ($VINDHYATEL) | 6.7x | | 4.5x | 2.6x | 2.7x |
| Aksh Optifibre ($AKSHOPTFBR) | | 1.0x | 0.4x | 3.9x | 2.5x |
| Himachal Futuristic Communications ($HFCL) | | 17.8x | 5.3x | 1.1x | 1.0x |
| |
|---|
| Median (3 companies) | 6.7x | 9.4x | 4.5x | 2.6x | 2.5x |
|---|
| Cmi ($CMI) | 2.9x | 4.1x | 4.1x | 4.3x | 2.3x |
