Tata Elxsi Net Income surged on 51.7% and EBITDA Margin increased on 2.1 pp from 20.9% to 23.0%
28-04-2016 • About Tata Elxsi (
$TATAELXSI) • By InTwits
Tata Elxsi reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Tata Elxsi is a fast growth stock: FY2016 revenue growth was 26.6%, 5 year revenue CAGR was 20.9% at FY2016 ROIC 65.9%
- EBITDA Margin is expanding: 23.0% in FY2016 vs. 20.9% in FY2015 vs. 13.8% in FY2012
- Tata Elxsi has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.3%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: ₹219m in FY2016, ₹1,898m in FY2015, ₹2,534m in FY2014, ₹1,210m in FY2013, ₹1,273m in FY2012
- The company has highly profitable business model: ROIC is 65.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Tata Elxsi's Revenue jumped on 26.6%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 16.4 pp from 21.1% to 4.7% in FY2016. EBITDA Margin stuck to a growing trend at 2.7 pp per annum in the last 5 years.
Net Income margin increased on 2.4 pp from 12.0% to 14.4% in FY2016. Net Income margin stuck to a growing trend at 2.5 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2016 Tata Elxsi had CAPEX/Revenue of 3.6%. The company's CAPEX/Revenue decreased slightly on 1.9 pp from 5.4% in FY2013 to 3.6% in FY2016. It's average CAPEX/Revenue for the last three years was 3.5%.
Return on investment
The company operates at high and attractive ROIC (65.9%) and ROE (46.3%). ROIC surged on 10.4 pp from 55.4% to 65.9% in FY2016. ROE increased on 7.0 pp from 39.3% to 46.3% in FY2016. ROIC grew at 12.3 pp per annum in the last 5 years. ROE grew at 8.4 pp per annum in the last 5 years.
Leverage (Debt)
The company has no debt. Cash jumped on 48.0%.
Management team
Madhukar Dev is a Tata Elxsi's CEO. Madhukar Dev has spent 21 years with the company. Tata Elxsi's CFO is K Ramaseshan. K Ramaseshan has 5 years tenure at the company.
Financial and operational results
Tata Elxsi ($TATAELXSI) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 5,387 | 6,217 | 7,748 | 8,494 | 10,752 | 26.6% |
| EBITDA | 743 | 738 | 1,365 | 1,773 | 2,471 | 39.3% |
| Net Income | 346 | 213 | 723 | 1,020 | 1,548 | 51.7% |
Balance Sheet
|
|---|
| Cash | 120 | 125 | 362 | 1,212 | 1,793 | 48.0% |
| Short Term Debt | 342 | 585 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 287 | 338 | 240 | 331 | 382 | 15.4% |
Ratios
|
|---|
| Revenue growth | 29.5% | 15.4% | 24.6% | 9.6% | 26.6% | |
| EBITDA growth | 57.5% | -0.7% | 84.9% | 29.9% | 39.3% | |
|
|---|
| EBITDA Margin | 13.8% | 11.9% | 17.6% | 20.9% | 23.0% | 2.1% |
| Net Income Margin | 6.4% | 3.4% | 9.3% | 12.0% | 14.4% | 2.4% |
| CAPEX, % of revenue | 5.3% | 5.4% | 3.1% | 3.9% | 3.6% | -0.3% |
|
|---|
| ROIC | 22.5% | 19.1% | 38.3% | 55.4% | 65.9% | 10.4% |
| ROE | 18.5% | 11.0% | 33.5% | 39.3% | 46.3% | 7.0% |
| Net Debt/EBITDA | 0.3x | 0.6x | -0.3x | -0.7x | -0.7x | -0.0x |
Peers in IT Software Products
Below you can find Tata Elxsi benchmarking vs. other companies in IT Software Products 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 |
|---|
| Twinstar Industries ($TWINSTAR) | 204.5% | 59.8% | 38.8% | 40.3% | - |
| Atishay Infotech ($ATISHAY) | -25.4% | 6.9% | 21.8% | 28.2% | - |
| Dion Global Solutions ($DION) | 40.4% | 40.8% | -9.5% | 27.8% | - |
| Avance Technologies ($AVANCE) | -11.7% | -17.9% | -30.8% | 20.3% | - |
| Softsol India ($SOFTSOL) | -10.4% | 9.3% | -20.4% | 14.1% | - |
| |
|---|
| Median (16 companies) | 15.1% | 17.7% | 14.2% | 9.4% | -29.2% |
|---|
| Tata Elxsi ($TATAELXSI) | - | 15.4% | 24.6% | 9.6% | 26.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Atishay Infotech ($ATISHAY) | 35.7% | 28.1% | 25.8% | 24.5% | - |
| Subex ($SUBEX) | 27.3% | 17.0% | 24.9% | 23.6% | 20.8% |
| Cambridge Technology Enterprises ($CTE) | - | - | - | 20.9% | - |
| Virinchi Technologies ($VIRNICHIQ) | - | - | - | 17.4% | - |
| Aurionpro Solutions ($AURIONPRO) | 15.9% | 14.5% | 12.0% | 16.9% | - |
| |
|---|
| Median (23 companies) | 7.5% | 8.5% | 9.9% | 9.2% | 12.4% |
|---|
| Tata Elxsi ($TATAELXSI) | 13.8% | 11.9% | 17.6% | 20.9% | 23.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Aurionpro Solutions ($AURIONPRO) | 17.5% | 12.3% | 12.6% | 13.4% | - |
| Mastek ($MASTKBBPH) | 2.2% | - | 0.0% | 4.9% | 2.4% |
| Dion Global Solutions ($DION) | 39.9% | 11.9% | 29.6% | 4.0% | - |
| Polaris Financial Technology ($POLARIS) | 7.2% | 2.5% | 1.5% | 3.9% | - |
| Datamatics Global Services ($DATAMATICS) | 20.2% | 3.1% | 12.9% | 2.2% | - |
| |
|---|
| Median (9 companies) | 3.1% | 5.7% | 1.9% | 2.2% | 1.7% |
|---|
| Tata Elxsi ($TATAELXSI) | 5.3% | 5.4% | 3.1% | 3.9% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mindteck (India) ($MINDTECK) | -2.6% | 1.2% | 20.0% | 17.5% | - |
| Blue Star Infotech ($BLUESTINFO) | - | 7.1% | 16.3% | 17.4% | - |
| Polaris Financial Technology ($POLARIS) | 19.5% | 15.1% | 12.6% | 16.2% | - |
| Aurionpro Solutions ($AURIONPRO) | 8.6% | 8.6% | 5.9% | 12.1% | - |
| Datamatics Global Services ($DATAMATICS) | 9.8% | 11.4% | 16.4% | 11.3% | - |
| |
|---|
| Median (31 companies) | 3.8% | 4.7% | 14.4% | 11.7% | 3.7% |
|---|
| Tata Elxsi ($TATAELXSI) | 22.5% | 19.1% | 38.3% | 55.4% | 65.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Subex ($SUBEX) | 4.6x | 13.1x | 8.5x | 8.0x | 0.9x |
| Dion Global Solutions ($DION) | 11.8x | 11.3x | - | 7.4x | - |
| Aurionpro Solutions ($AURIONPRO) | 1.7x | 1.7x | 1.9x | 1.2x | - |
| Saksoft ($SAKSOFT) | 2.8x | 2.3x | 0.0x | 1.2x | - |
| Datamatics Global Services ($DATAMATICS) | 0.5x | 0.3x | 0.5x | 0.3x | - |
| |
|---|
| Median (19 companies) | 0.7x | 0.0x | 0.0x | 0.0x | 0.0x |
|---|
| Tata Elxsi ($TATAELXSI) | 0.3x | 0.6x | -0.3x | -0.7x | -0.7x |
