Elecon Engineering Co EBITDA dropped on 11.8% and EBITDA Margin decreased slightly on 1.1 pp from 12.8% to 11.7%
27-04-2016 • About Elecon Engineering Co (
$ELECON) • By InTwits
Elecon Engineering Co reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is relatively stable: 11.7% in FY2016 vs. 12.8% in FY2015 vs. 13.1% in FY2012
- Elecon Engineering Co has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.6%. At the same time it's in pair with industry average of 4.5%
- CAPEX is quite volatile: ₹241m in FY2016, ₹166m in FY2015, ₹351m in FY2014, ₹1,367m in FY2013, ₹1,337m in FY2012
- The company has business model with low profitability: ROIC is 7.0%
- It operates with high leverage: Net Debt/EBITDA is 3.9x while industry average is 0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 3.3%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.1 pp from 12.8% to 11.7% in FY2016.
Net Income margin increased slightly on 1.7 pp from 1.2% to 3.0% in FY2016. During the last 5 years Net Income margin bottomed in FY2014 at 1.1% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.9% in FY2016. Elecon Engineering Co's CAPEX/Revenue decreased on 7.1 pp from 9.0% in FY2013 to 1.9% in FY2016. Average CAPEX/Revenue for the last three years was 1.9%. CAPEX as a % of Revenue declined at -2.1 pp per annum in FY2012-FY2016.
Return on investment
The company operates at low ROIC (7.0%) and ROE (7.0%). ROIC decreased slightly on 1.2 pp from 8.2% to 7.0% in FY2016. ROE increased on 3.9 pp from 3.1% to 7.0% in FY2016. ROIC followed a declining trend at -1.9 pp per annum in FY2012-FY2016. During FY2012-FY2016 ROE bottomed in FY2014 at 2.6% and was growing since that time.
Leverage (Debt)
Debt level is 3.9x Net Debt / EBITDA and 4.1x Debt / EBITDA. Net Debt / EBITDA jumped on 0.8x from 3.1x to 3.9x in FY2016. Debt surged on 12.5% while cash jumped on 11.4%.
Elecon Engineering Co has short term refinancing risk: cash is only 7.7% of short term debt.
Financial and operational results
Elecon Engineering Co ($ELECON) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 16,013 | 15,268 | 12,929 | 13,289 | 12,853 | -3.3% |
| EBITDA | 2,098 | 2,086 | 1,518 | 1,701 | 1,500 | -11.8% |
| Net Income | 611 | 179 | 137 | 163 | 382 | 133.8% |
Balance Sheet
|
|---|
| Cash | 180 | 305 | 211 | 302 | 336 | 11.4% |
| Short Term Debt | 4,395 | 5,101 | 4,956 | 3,885 | 4,393 | 13.1% |
| Long Term Debt | 1,991 | 1,840 | 1,378 | 1,632 | 1,814 | 11.2% |
Cash flow
|
|---|
| Capex | 1,337 | 1,367 | 351 | 166 | 241 | 44.7% |
Ratios
|
|---|
| Revenue growth | 24.7% | -4.6% | -15.3% | 2.8% | -3.3% | |
| EBITDA growth | 5.2% | -0.5% | -27.2% | 12.1% | -11.8% | |
|
|---|
| EBITDA Margin | 13.1% | 13.7% | 11.7% | 12.8% | 11.7% | -1.1% |
| Net Income Margin | 3.8% | 1.2% | 1.1% | 1.2% | 3.0% | 1.7% |
| CAPEX, % of revenue | 8.3% | 9.0% | 2.7% | 1.3% | 1.9% | 0.6% |
|
|---|
| ROIC | 14.3% | 12.4% | 7.1% | 8.2% | 7.0% | -1.2% |
| ROE | 13.9% | 3.6% | 2.6% | 3.1% | 7.0% | 3.9% |
| Net Debt/EBITDA | 3.0x | 3.2x | 4.0x | 3.1x | 3.9x | 0.8x |
Peers in Industrial Machinery
Below you can find Elecon Engineering Co benchmarking vs. other companies in Industrial Machinery 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, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lloyd Electric & Engineering ($LLOYDELENG) | - | - | - | 22.3% | 27.3% |
| Kabra Extrusiontechnik ($KABRAEXTRU) | -13.3% | -8.7% | 28.4% | 21.6% | - |
| Akar Tools ($AKARTOOL) | 21.1% | 2.1% | -2.3% | 16.7% | - |
| Honda Siel Power Products ($HONDAPOWER) | 28.1% | 2.4% | 5.0% | 16.5% | - |
| Mazda ($MAZDALTD) | 22.1% | 14.7% | -15.6% | 16.2% | - |
| |
|---|
| Median (27 companies) | 12.7% | 2.2% | 3.0% | 3.7% | 27.3% |
|---|
| Elecon Engineering Co ($ELECON) | - | -4.6% | -15.3% | 2.8% | -3.3% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bell Agromachina ($BELAGRO) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (1 company) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Texmaco Infrastructure & Holdings ($TEXINFRA) | - | - | - | 40.5% | - |
| Dhp India ($DHPIND) | - | - | - | 26.3% | - |
| Solitaire Machine Tools ($SOLIMAC) | - | - | - | 19.4% | - |
| Wendt (India) ($WENDT) | 28.3% | 21.6% | 18.6% | 19.0% | - |
| Goldstone Infratech ($GOLDINFRA) | - | - | - | 18.1% | - |
| |
|---|
| Median (42 companies) | 11.2% | 9.2% | 10.0% | 9.7% | 11.0% |
|---|
| Elecon Engineering Co ($ELECON) | 13.1% | 13.7% | 11.7% | 12.8% | 11.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Texmaco Infrastructure & Holdings ($TEXINFRA) | - | - | - | 14.0% | - |
| Wendt (India) ($WENDT) | 13.5% | 9.0% | 8.8% | 9.4% | - |
| Ingersoll-Rand (India) ($INGERRAND) | 4.3% | 10.9% | 3.6% | 9.2% | - |
| Kabra Extrusiontechnik ($KABRAEXTRU) | 6.5% | 1.8% | 0.5% | 8.8% | - |
| Forbes & Company ($FORBESCO) | 1.8% | 2.6% | 3.0% | 5.1% | - |
| |
|---|
| Median (21 companies) | 5.6% | 3.8% | 3.0% | 3.3% | 2.0% |
|---|
| Elecon Engineering Co ($ELECON) | 8.3% | 9.0% | 2.7% | 1.3% | 1.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Greaves Cotton ($GREAVESCOT) | - | 24.8% | 16.3% | 26.7% | - |
| Gmm Pfaudler ($GMM) | -76.2% | 6.8% | 17.4% | 18.2% | - |
| Lakshmi Machine Works ($LAXMIMACH) | 18.0% | 11.7% | 16.2% | 17.6% | - |
| Honda Siel Power Products ($HONDAPOWER) | 16.9% | 8.8% | 11.5% | 15.3% | - |
| Wendt (India) ($WENDT) | 38.2% | 20.2% | 16.2% | 15.1% | - |
| |
|---|
| Median (51 companies) | 12.8% | 9.7% | 9.7% | 13.0% | 7.9% |
|---|
| Elecon Engineering Co ($ELECON) | 14.3% | 12.4% | 7.1% | 8.2% | 7.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Forbes & Company ($FORBESCO) | 2.2x | 3.3x | 4.7x | 6.3x | - |
| Nitin Fire Protection Industries ($NITINFIRE) | 3.6x | 3.5x | 3.0x | 3.7x | - |
| Elgi Equipments ($ELGIEQUIP) | -1.2x | 2.3x | 2.7x | 3.3x | - |
| Lloyd Electric & Engineering ($LLOYDELENG) | - | - | 3.7x | 3.2x | 2.7x |
| Dynamatic Technologies ($DYNAMATECH) | 5.0x | 4.1x | 3.4x | 2.7x | - |
| |
|---|
| Median (33 companies) | 0.5x | 1.4x | 0.0x | 0.0x | 2.7x |
|---|
| Elecon Engineering Co ($ELECON) | 3.0x | 3.2x | 4.0x | 3.1x | 3.9x |
