Can Fin Homes reports 82.2% Net Income growth in 2016 and almost no change in EBITDA Margin of 92.4%
28-04-2016 • About Can Fin Homes (
$CANFINHOME) • By InTwits
Can Fin Homes reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Can Fin Homes is a fast growth stock: FY2016 revenue growth was 32.5%, 5 year revenue CAGR was 36.2% at FY2016 ROIC 2.8%
- EBITDA Margin is relatively stable: 92.4% in FY2016 vs. 92.0% in FY2015 vs. 92.2% in FY2012
- Can Fin Homes has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has potentially unprofitable business model: ROIC is 2.8%
- It operates with high leverage: Net Debt/EBITDA is 9.5x while industry average is 8.4x
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 surged on 32.5%. During the last 5 years Revenue growth topped in FY2014 at 47.2% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.79 pp from 12.9% to 12.1% in FY2016.
Net Income margin increased on 4.0 pp from 10.6% to 14.5% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2015 at 10.6%.
Investments (CAPEX, working capital and M&A)
Can Fin Homes's CAPEX/Revenue was 0.29% in FY2016. Can Fin Homes's CAPEX/Revenue decreased slightly on 0.94 pp from 1.2% in FY2013 to 0.29% in FY2016. Average CAPEX/Revenue for the last three years was 0.51%.
Return on investment
The company operates at good ROE (19.0%) while ROIC is low (2.8%). ROIC increased slightly on 0.80 pp from 2.0% to 2.8% in FY2016. ROE increased on 4.9 pp from 14.1% to 19.0% in FY2016. During the last 5 years ROIC bottomed in FY2015 at 2.0%.
Leverage (Debt)
Company's Net Debt / EBITDA is 9.5x and Debt / EBITDA is 9.5x. Net Debt / EBITDA dropped on 0.3x from 9.8x to 9.5x in FY2016. Debt surged on 28.5% while cash decreased on 9.6%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2014 at 9.9x and was declining since that time.
Can Fin Homes has short term refinancing risk: cash is only 0.1% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 12.6x and P/E 19.6x while industy averages are 17.8x and 21.9x.
Financial and operational results
Can Fin Homes ($CANFINHOME) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,868 | 3,926 | 5,780 | 8,174 | 10,830 | 32.5% |
| EBITDA | 2,644 | 3,592 | 5,316 | 7,518 | 10,003 | 33.1% |
| Net Income | 438 | 541 | 757 | 862 | 1,571 | 82.2% |
Balance Sheet
|
|---|
| Cash | 6 | 48 | 32 | 26 | 23 | -9.6% |
| Short Term Debt | 4,410 | 6,396 | 9,397 | 19,173 | 25,122 | 31.0% |
| Long Term Debt | 18,592 | 28,993 | 43,288 | 54,573 | 69,654 | 27.6% |
Cash flow
|
|---|
| Capex | 14 | 48 | 34 | 54 | 32 | -40.8% |
Ratios
|
|---|
| Revenue growth | 24.0% | 36.9% | 47.2% | 41.4% | 32.5% | |
| EBITDA growth | 23.3% | 35.8% | 48.0% | 41.4% | 33.1% | |
|
|---|
| EBITDA Margin | 92.2% | 91.5% | 92.0% | 92.0% | 92.4% | 0.4% |
| Net Income Margin | 15.3% | 13.8% | 13.1% | 10.6% | 14.5% | 4.0% |
| CAPEX, % of revenue | 0.5% | 1.2% | 0.6% | 0.7% | 0.3% | -0.4% |
|
|---|
| ROIC | 2.8% | 2.3% | 2.2% | 2.0% | 2.8% | 0.8% |
| ROE | 13.3% | 14.6% | 17.9% | 14.1% | 19.0% | 4.9% |
| Net Debt/EBITDA | 8.7x | 9.8x | 9.9x | 9.8x | 9.5x | -0.3x |
Peers in Housing Finance
Below we provide Can Fin Homes benchmarking against other companies in Housing Finance 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Housing Development Finance Corp ($HDFC) | 17.5% | 18.8% | 13.4% | 18.6% | - |
| Gic Housing Finance ($GICHSGFIN) | 2.6% | 26.1% | 12.8% | 17.2% | - |
| Lic Housing Finance ($LICHSGFIN) | - | 23.9% | 20.7% | 15.8% | 15.5% |
| |
|---|
| Median (3 companies) | 10.0% | 23.9% | 13.4% | 17.2% | 15.5% |
|---|
| Can Fin Homes ($CANFINHOME) | - | 36.9% | 47.2% | 41.4% | 32.5% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lic Housing Finance ($LICHSGFIN) | 93.4% | 94.9% | 96.2% | 96.4% | 95.0% |
| Gic Housing Finance ($GICHSGFIN) | 89.0% | 88.2% | 88.7% | 90.9% | - |
| Housing Development Finance Corp ($HDFC) | 57.7% | 59.9% | 61.9% | 59.4% | - |
| |
|---|
| Median (3 companies) | 89.0% | 88.2% | 88.7% | 90.9% | 95.0% |
|---|
| Can Fin Homes ($CANFINHOME) | 92.2% | 91.5% | 92.0% | 92.0% | 92.4% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Housing Development Finance Corp ($HDFC) | 0.5% | 0.5% | 0.6% | 1.3% | - |
| Lic Housing Finance ($LICHSGFIN) | 0.6% | 0.1% | 0.1% | 0.2% | 0.2% |
| Gic Housing Finance ($GICHSGFIN) | 0.4% | 0.3% | 0.1% | 0.1% | - |
| |
|---|
| Median (3 companies) | 0.5% | 0.3% | 0.1% | 0.2% | 0.2% |
|---|
| Can Fin Homes ($CANFINHOME) | 0.5% | 1.2% | 0.6% | 0.7% | 0.3% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Housing Development Finance Corp ($HDFC) | 4.6% | 4.8% | 4.8% | 4.6% | - |
| Gic Housing Finance ($GICHSGFIN) | - | - | - | - | - |
| Lic Housing Finance ($LICHSGFIN) | - | - | - | - | - |
| |
|---|
| Median (3 companies) | 4.6% | 4.8% | 4.8% | 4.6% | - |
|---|
| Can Fin Homes ($CANFINHOME) | 2.8% | 2.3% | 2.2% | 2.0% | 2.8% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lic Housing Finance ($LICHSGFIN) | 9.6x | 9.4x | 9.0x | 9.3x | 9.3x |
| Gic Housing Finance ($GICHSGFIN) | 9.1x | 8.0x | 8.3x | 8.6x | - |
| Housing Development Finance Corp ($HDFC) | 6.5x | 5.9x | 6.2x | 6.3x | - |
| |
|---|
| Median (3 companies) | 9.1x | 8.0x | 8.3x | 8.6x | 9.3x |
|---|
| Can Fin Homes ($CANFINHOME) | 8.7x | 9.8x | 9.9x | 9.8x | 9.5x |
