IDFC Limited Net Income dropped on 155% and Revenue decreased on 6.8%
29-04-2016 • About IDFC Limited (
$IDFC) • By InTwits
IDFC Limited reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- IDFC Limited has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's in pair with industry average of 3.4%
- CAPEX is quite volatile: ₹4,378m in FY2016, ₹441m in FY2015, ₹165m in FY2014, ₹90m in FY2013, ₹90m in FY2012
- The company has potentially unprofitable business model: ROIC is 2.5%
- It operates with high leverage: Net Debt/EBITDA is 5.3x 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
The company's Revenue decreased on 6.8%. Revenue decline was accelerating on average at -9.0 pp per annum in FY2012-FY2016. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.8 pp from 81.7% to 83.5% in FY2016.
Net Income margin dropped on 27.9 pp from 17.6% to -10.3% in FY2016. Net Income margin followed a declining trend in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
IDFC Limited's CAPEX/Revenue was 4.8% in FY2016. IDFC Limited's CAPEX/Revenue increased on 4.7 pp from 0.11% in FY2013 to 4.8% in FY2016. Average CAPEX/Revenue for the last three years was 1.8%. During FY2012-FY2016 CAPEX as a % of Revenue bottomed in FY2013 at 0.11% and was growing since that time.
Return on investment
The company operates at low but positive ROIC (2.5%) and negative ROE (-6.8%). ROIC decreased slightly on 0.95 pp from 3.4% to 2.5% in FY2016. ROE dropped on 17.4 pp from 10.6% to -6.8% in FY2016. ROIC followed a declining trend at -0.62 pp per annum in FY2012-FY2016. During FY2012-FY2016 ROE topped in FY2013 at 14.1% and was declining since that time.
Leverage (Debt)
Debt level is 5.3x Net Debt / EBITDA and 5.7x Debt / EBITDA. Net Debt / EBITDA dropped on 1.6x from 6.9x to 5.3x in FY2016. Debt dropped on 22.1% while cash jumped on 911%.
IDFC Limited has no short term refinancing risk: cash is higher than short term debt (30,524.5%).
Management team
Bipin Gemani is a IDFC Limited's CFO. Bipin Gemani has spent 5 years at the company.
Financial and operational results
IDFC Limited ($IDFC) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 64,350 | 81,484 | 87,900 | 97,225 | 90,638 | -6.8% |
| EBITDA | 56,673 | 73,038 | 76,489 | 79,426 | 75,708 | -4.7% |
| Net Income | 15,540 | 18,362 | 18,027 | 17,070 | -9,348 | -154.8% |
Balance Sheet
|
|---|
| Cash | 6,981 | 2,627 | 3,904 | 3,001 | 30,341 | 911.1% |
| Short Term Debt | 73,510 | 38,694 | 64,643 | 120,858 | 99 | -99.9% |
| Long Term Debt | 298,372 | 368,033 | 393,201 | 429,187 | 428,135 | -0.2% |
Cash flow
|
|---|
| Capex | 90 | 90 | 165 | 441 | 4,378 | 893.1% |
Ratios
|
|---|
| Revenue growth | 30.4% | 26.6% | 7.9% | 10.6% | -6.8% | |
| EBITDA growth | 34.7% | 28.9% | 4.7% | 3.8% | -4.7% | |
|
|---|
| EBITDA Margin | 88.1% | 89.6% | 87.0% | 81.7% | 83.5% | 1.8% |
| Net Income Margin | 24.1% | 22.5% | 20.5% | 17.6% | -10.3% | -27.9% |
| CAPEX, % of revenue | 0.1% | 0.1% | 0.2% | 0.5% | 4.8% | 4.4% |
|
|---|
| ROIC | 4.8% | 5.0% | 4.3% | 3.4% | 2.5% | -1.0% |
| ROE | 13.3% | 14.1% | 12.6% | 10.6% | -6.8% | -17.4% |
| Net Debt/EBITDA | 6.4x | 5.5x | 5.9x | 6.9x | 5.3x | -1.6x |
Peers in Finance (including NBFCs)
Below you can find IDFC Limited 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 ($BAJAJFINSV) | 59.7% | 28.1% | 18.8% | 26.8% | - |
| |
|---|
| Median (23 companies) | 20.4% | 25.1% | 20.8% | 14.3% | 11.6% |
|---|
| IDFC Limited ($IDFC) | - | 26.6% | 7.9% | 10.6% | -6.8% |
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 ($BAJAJHLDNG) | 96.1% | 95.4% | 92.3% | 92.7% | 91.4% |
| |
|---|
| Median (48 companies) | 64.8% | 65.4% | 65.5% | 49.0% | 64.8% |
|---|
| IDFC Limited ($IDFC) | 88.1% | 89.6% | 87.0% | 81.7% | 83.5% |
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 ($BENGALASM) | 15.9% | 4.5% | 1.2% | 2.1% | - |
| |
|---|
| Median (21 companies) | 1.0% | 0.8% | 1.1% | 0.7% | 0.6% |
|---|
| IDFC Limited ($IDFC) | 0.1% | 0.1% | 0.2% | 0.5% | 4.8% |
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 ($M&MFIN) | 6.4% | 6.3% | 5.3% | 4.2% | 3.2% |
| |
|---|
| Median (52 companies) | 3.6% | 4.4% | 3.8% | 4.2% | 3.8% |
|---|
| IDFC Limited ($IDFC) | 4.8% | 5.0% | 4.3% | 3.4% | 2.5% |
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 ($MAGMA) | 7.7x | 8.5x | 7.0x | 7.7x | - |
| |
|---|
| Median (44 companies) | 4.4x | 3.6x | 2.9x | 0.0x | 6.5x |
|---|
| IDFC Limited ($IDFC) | 6.4x | 5.5x | 5.9x | 6.9x | 5.3x |
