Cholamandalam Investment And Finance Company Debt dropped on 23.4% and Net Debt / EBITDA dropped on 2.3x from 7.2x to 4.9x
29-04-2016 • About Cholamandalam Investment And Finance Company (
$CHOLAFIN) • By InTwits
Cholamandalam Investment And Finance Company reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Cholamandalam Investment And Finance Company is a fast growth stock: FY2016 revenue growth was 13.4%, 5 year revenue CAGR was 28.5% at FY2016 ROIC 4.3%
- Cholamandalam Investment And Finance Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 1.8%
- CAPEX is quite volatile: ₹771m in FY2016, ₹311m in FY2015, ₹269m in FY2014, ₹360m in FY2013, ₹317m in FY2012
- The company has potentially unprofitable business model: ROIC is 4.3%
- It operates with high leverage: Net Debt/EBITDA is 4.9x while industry average is 2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Cholamandalam Investment And Finance Company's Revenue jumped on 13.4%. Revenue decline was accelerating on average at -10.0 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.1 pp from 19.1% to 27.2% in FY2016. During the last 5 years EBITDA Margin topped in FY2013 at 73.5% and was declining since that time.
Net Income margin increased slightly on 1.7 pp from 12.0% to 13.6% in FY2016. Net Income margin grew at 0.83 pp per annum in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 1.8%. Cholamandalam Investment And Finance Company's CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 1.2%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2014 at 0.82% and was growing since that time.
Return on investment
The company operates at good ROE (18.1%) while ROIC is low (4.3%). ROIC increased slightly on 1.0 pp from 3.3% to 4.3% in FY2016. ROE showed almost no change in FY2016. ROIC stuck to a growing trend at 0.31 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 4.9x Net Debt / EBITDA and 5.1x Debt / EBITDA. Net Debt / EBITDA dropped on 2.3x from 7.2x to 4.9x in FY2016. Debt dropped on 23.4% while cash jumped on 52.8%. Net Debt/EBITDA declined at -0.9x per annum in the last 5 years.
Cholamandalam Investment And Finance Company has short term refinancing risk: cash is only 12.8% of short term debt.
Management team
The company's CFO D Arulselvan has spent 14 years with the company.
Financial and operational results
Cholamandalam Investment And Finance Company ($CHOLAFIN) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 17,839 | 25,702 | 32,794 | 37,149 | 42,140 | 13.4% |
| EBITDA | 12,490 | 18,884 | 23,537 | 26,546 | 29,472 | 11.0% |
| Net Income | 1,690 | 3,079 | 3,683 | 4,441 | 5,747 | 29.4% |
Balance Sheet
|
|---|
| Cash | 2,086 | 2,908 | 6,266 | 3,335 | 5,095 | 52.8% |
| Short Term Debt | 42,896 | 69,699 | 82,422 | 70,257 | 39,712 | -43.5% |
| Long Term Debt | 71,546 | 82,987 | 98,330 | 124,245 | 109,312 | -12.0% |
Cash flow
|
|---|
| Capex | 317 | 360 | 269 | 311 | 771 | 148.1% |
Ratios
|
|---|
| Revenue growth | 48.1% | 44.1% | 27.6% | 13.3% | 13.4% | |
| EBITDA growth | 76.7% | 51.2% | 24.6% | 12.8% | 11.0% | |
|
|---|
| EBITDA Margin | 70.0% | 73.5% | 71.8% | 71.5% | 69.9% | -1.5% |
| Net Income Margin | 9.5% | 12.0% | 11.2% | 12.0% | 13.6% | 1.7% |
| CAPEX, % of revenue | 1.8% | 1.4% | 0.8% | 0.8% | 1.8% | 1.0% |
|
|---|
| ROIC | 2.8% | 3.2% | 3.2% | 3.3% | 4.3% | 1.0% |
| ROE | 13.7% | 18.3% | 17.4% | 17.8% | 18.1% | 0.3% |
| Net Debt/EBITDA | 9.0x | 7.9x | 7.4x | 7.2x | 4.9x | -2.3x |
Peers in Finance (including NBFCs)
Below you can find Cholamandalam Investment And Finance Company benchmarking vs. other companies in Finance (including NBFCs) 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 |
|---|
| Fortune Financial Services (India) ($FORTUNEF) | -11.7% | -24.9% | -7.1% | 188.4% | - |
| Motilal Oswal Financial Services ($MOTILALOFS) | -21.6% | 0.4% | -0.9% | 64.7% | - |
| Sks Microfinance ($SKSMICRO) | -62.8% | -25.6% | 55.0% | 47.3% | - |
| Bajaj Holdings & Investment ($BAJAJHLDNG) | - | 12.8% | 25.9% | 27.0% | -12.2% |
| Bajaj Finserv ($BAJAJFINSV) | 59.7% | 28.1% | 18.8% | 26.8% | - |
| |
|---|
| Median (23 companies) | 20.4% | 24.4% | 19.8% | 14.3% | 9.9% |
|---|
| Cholamandalam Investment And Finance Company ($CHOLAFIN) | - | 44.1% | 27.6% | 13.3% | 13.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Microse India ($MICROSE) | - | - | - | 101.1% | - |
| Pnb Gilts ($PNBGILTS) | 94.0% | 96.4% | 96.4% | 96.1% | - |
| Jsw Holdings ($JSWHL) | - | - | - | 93.8% | - |
| Rural Electrification Corporation ($RECLTD) | 97.2% | 97.3% | 96.7% | 93.3% | - |
| Bajaj Holdings & Investment ($BAJAJHLDNG) | 96.1% | 95.4% | 92.3% | 92.7% | 91.4% |
| |
|---|
| Median (48 companies) | 64.8% | 65.4% | 65.5% | 49.0% | 64.8% |
|---|
| Cholamandalam Investment And Finance Company ($CHOLAFIN) | 70.0% | 73.5% | 71.8% | 71.5% | 69.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Fortune Financial Services (India) ($FORTUNEF) | 1.0% | 1.3% | 4.5% | 7.3% | - |
| Clarus Finance & Securities ($CLARUS) | - | - | 6.9% | 5.8% | - |
| Srei Infrastructure Finance ($SREINFRA) | 30.2% | 8.5% | 12.3% | 5.4% | - |
| Motilal Oswal Financial Services ($MOTILALOFS) | 15.5% | 5.3% | 1.7% | 3.4% | - |
| Bengal & Assam Company ($BENGALASM) | 15.9% | 4.5% | 1.2% | 2.1% | - |
| |
|---|
| Median (21 companies) | 0.6% | 0.7% | 1.1% | 0.7% | 0.6% |
|---|
| Cholamandalam Investment And Finance Company ($CHOLAFIN) | 1.8% | 1.4% | 0.8% | 0.8% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Motilal Oswal Financial Services ($MOTILALOFS) | - | 12.0% | 9.7% | 11.9% | - |
| Sks Microfinance ($SKSMICRO) | - | - | 4.1% | 6.6% | - |
| Shriram City Union Finance ($SHRIRAMCIT) | 6.1% | 5.8% | 5.8% | 5.7% | 4.6% |
| Rural Electrification Corporation ($RECLTD) | - | 4.7% | 5.2% | 4.7% | - |
| Mahindra & Mahindra Financial Services ($M&MFIN) | 6.4% | 6.3% | 5.3% | 4.2% | 3.2% |
| |
|---|
| Median (52 companies) | 4.6% | 4.7% | 4.2% | 4.2% | 3.1% |
|---|
| Cholamandalam Investment And Finance Company ($CHOLAFIN) | 2.8% | 3.2% | 3.2% | 3.3% | 4.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Fortune Financial Services (India) ($FORTUNEF) | 9.0x | - | 10.8x | 8.9x | - |
| Pnb Gilts ($PNBGILTS) | 14.2x | 11.2x | 11.3x | 8.8x | - |
| Srei Infrastructure Finance ($SREINFRA) | 7.0x | 6.2x | 7.5x | 8.0x | - |
| Rural Electrification Corporation ($RECLTD) | 8.3x | 8.0x | 7.5x | 8.0x | - |
| Magma Fincorp ($MAGMA) | 7.7x | 8.5x | 7.0x | 7.7x | - |
| |
|---|
| Median (44 companies) | 4.4x | 3.6x | 2.9x | 0.0x | 6.5x |
|---|
| Cholamandalam Investment And Finance Company ($CHOLAFIN) | 9.0x | 7.9x | 7.4x | 7.2x | 4.9x |
