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Wendt (India) Net Income dropped on 25.4% and EBITDA Margin decreased on 2.5 pp from 19.0% to 16.5%

28-04-2016 • About Wendt (India) ($WENDT) • By InTwits

Wendt (India) reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
  • Wendt (India) has medium CAPEX intensity: 5 year average CAPEX/Revenue was 10.0%. At the same time it's a lot of higher than industry average of 4.5%.
  • CAPEX is quite volatile: ₹6m in FY2016, ₹45m in FY2015, ₹96m in FY2014, ₹142m in FY2013, ₹140m in FY2012
  • The company has highly profitable business model: ROIC is 12.6%
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 increased on 8.7%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.5 pp from 19.0% to 16.5% in FY2016. EBITDA Margin followed a declining trend at -2.6 pp per annum in FY2012-FY2016.

Net Income margin decreased on 3.4 pp from 10.9% to 7.5% in FY2016. Net Income margin declined at -2.2 pp per annum in FY2012-FY2016.

Investments (CAPEX, working capital and M&A)


The company's CAPEX/Revenue was 9.3% in FY2016. The company showed almost no change in CAPEX/Revenue from FY2013 to FY2016. For the last three years the average CAPEX/Revenue was 9.1%. Wendt (India) invested a large share of EBITDA (55.9%) to CAPEX.

Return on investment


The company operates at good ROIC (12.6%) while ROE is low (10.0%). ROIC decreased on 2.4 pp from 15.1% to 12.6% in FY2016. ROE decreased on 4.2 pp from 14.1% to 10.0% in FY2016. ROIC followed a declining trend in the last 5 years.

Leverage (Debt)


Company's Net Debt / EBITDA is -0.2x and Debt / EBITDA is 0.0x. Debt surged while cash surged on 10.1%.

Wendt (India) has no short term refinancing risk: cash is higher than short term debt (919.2%).

Financial and operational results


Wendt (India) ($WENDT) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue1,1111,0121,1011,2411,3488.7%
EBITDA315219205236223-5.6%
Net Income195129117135101-25.4%
Balance Sheet
Cash888056414510.1%
Short Term Debt02005
Long Term Debt00000
Cash flow
Capex15091971171256.9%
Ratios
Revenue growth21.1%-8.9%8.8%12.7%8.7%
EBITDA growth11.4%-30.4%-6.3%15.2%-5.6%
EBITDA Margin28.3%21.6%18.6%19.0%16.5%-2.5%
Net Income Margin17.5%12.7%10.6%10.9%7.5%-3.4%
CAPEX, % of revenue13.5%9.0%8.8%9.4%9.3%-0.2%
ROIC38.2%20.2%16.2%15.1%12.6%-2.4%
ROE28.5%15.9%13.1%14.1%10.0%-4.2%
Net Debt/EBITDA-0.3x-0.4x-0.3x-0.2x-0.2x-0.0x

Peers in Industrial Machinery


Below we provide Wendt (India) benchmarking against other companies in Industrial Machinery 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 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)11.3%2.2%-1.2%3.3%12.0%
Wendt (India) ($WENDT)--8.9%8.8%12.7%8.7%


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 ($SOLIMAC)---19.4%-
Goldstone Infratech ($GOLDINFRA)---18.1%-
Greaves Cotton ($GREAVESCOT)13.3%12.6%10.8%16.8%-
 
Median (42 companies)11.2%9.2%10.0%9.7%11.4%
Wendt (India) ($WENDT)28.3%21.6%18.6%19.0%16.5%


Top companies by CAPEX/Revenue, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Texmaco Infrastructure & Holdings ($TEXINFRA)---14.0%-
Ingersoll-Rand (India) ($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%-
Lakshmi Machine Works ($LAXMIMACH)8.3%2.3%3.4%4.9%-
 
Median (21 companies)5.6%3.8%2.7%3.1%1.9%
Wendt (India) ($WENDT)13.5%9.0%8.8%9.4%9.3%


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%-
Dynamatic Technologies ($DYNAMATECH)13.8%11.0%13.2%13.9%-
 
Median (51 companies)12.8%9.7%9.2%12.1%7.0%
Wendt (India) ($WENDT)38.2%20.2%16.2%15.1%12.6%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Forbes & Company ($FORBESCO)2.2x3.3x4.7x6.3x-
Nitin Fire Protection Industries ($NITINFIRE)3.6x3.5x3.0x3.7x-
Elgi Equipments ($ELGIEQUIP)-1.2x2.3x2.7x3.3x-
Lloyd Electric & Engineering ($LLOYDELENG)--3.7x3.2x2.7x
Elecon Engineering Co ($ELECON)3.0x3.2x4.0x3.1x3.9x
 
Median (33 companies)0.8x1.6x0.0x0.0x3.3x
Wendt (India) ($WENDT)-0.3x-0.4x-0.3x-0.2x-0.2x


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