L.G.Balakrishnan & Bros reports 19.8% CAPEX decline in 2016 while 2.8% Revenue growth
30-04-2016 • About L.G.Balakrishnan & Bros (
$LGBBROSLTD) • By InTwits
L.G.Balakrishnan & Bros reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- L.G.Balakrishnan & Bros has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.4%. At the same time it's in pair with industry average of 5.8%
- CAPEX is quite volatile: ₹841m in FY2016, ₹1,048m in FY2015, ₹669m in FY2014, ₹617m in FY2013, ₹322m in FY2012
- The company has highly profitable business model: ROIC is 15.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.3x while industry average is 1.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 2.8%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.7 pp from 20.2% to 9.5% in FY2016.
Net Income margin decreased slightly on 0.80 pp from 6.1% to 5.3% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 L.G.Balakrishnan & Bros had CAPEX/Revenue of 7.0%. The company's CAPEX/Revenue increased slightly on 0.52 pp from 6.5% in FY2013 to 7.0% in FY2016. Average CAPEX/Revenue for the last three years was 7.3%. L.G.Balakrishnan & Bros maintained rich investment policy and has spent a big chunk of EBITDA (60.7%) to CAPEX.
Return on investment
The company operates at good ROIC (15.4%) and ROE (16.3%). ROIC decreased on 5.6 pp from 21.0% to 15.4% in FY2016. ROE decreased on 4.9 pp from 21.2% to 16.3% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 1.3x. Net Debt / EBITDA jumped on 0.1x from 1.1x to 1.3x in FY2016. Debt showed almost no change in FY2016 while cash dropped on 39.3%.
L.G.Balakrishnan & Bros has short term refinancing risk: cash is only 5.0% of short term debt.
Financial and operational results
L.G.Balakrishnan & Bros ($LGBBROSLTD) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 9,127 | 9,562 | 11,086 | 11,730 | 12,053 | 2.8% |
| EBITDA | 1,078 | 900 | 1,261 | 1,484 | 1,385 | -6.7% |
| Net Income | 442 | 327 | 628 | 712 | 635 | -10.8% |
Balance Sheet
|
|---|
| Cash | 52 | 98 | 60 | 68 | 41 | -39.3% |
| Short Term Debt | 573 | 567 | 635 | 780 | 831 | 6.5% |
| Long Term Debt | 571 | 861 | 660 | 993 | 949 | -4.5% |
Cash flow
|
|---|
| Capex | 322 | 617 | 669 | 1,048 | 841 | -19.8% |
Ratios
|
|---|
| Revenue growth | 27.7% | 4.8% | 15.9% | 5.8% | 2.8% | |
| EBITDA growth | 19.9% | -16.5% | 40.2% | 17.7% | -6.7% | |
|
|---|
| EBITDA Margin | 11.8% | 9.4% | 11.4% | 12.7% | 11.5% | -1.2% |
| Net Income Margin | 4.8% | 3.4% | 5.7% | 6.1% | 5.3% | -0.8% |
| CAPEX, % of revenue | 3.5% | 6.5% | 6.0% | 8.9% | 7.0% | -2.0% |
|
|---|
| ROIC | 22.6% | 15.2% | 21.0% | 21.0% | 15.4% | -5.6% |
| ROE | 20.6% | 13.3% | 22.2% | 21.2% | 16.3% | -4.9% |
| Net Debt/EBITDA | 1.0x | 1.5x | 1.0x | 1.1x | 1.3x | 0.1x |
Peers in Auto Parts & Equipment
Below we provide L.G.Balakrishnan & Bros benchmarking against other companies in Auto Parts & Equipment 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 |
|---|
| Spectra Industries ($SPECTRA) | 16.4% | 40.2% | -10.1% | 57.1% | - |
| India Nippon Electricals ($INDNIPPON) | 13.6% | 3.2% | -2.4% | 24.8% | - |
| Amara Raja Batteries ($AMARAJABAT) | 34.3% | 25.1% | 16.1% | 22.6% | - |
| Enkei Wheels (India) ($ENKEIWHEL) | 16.9% | 1.3% | 11.7% | 21.6% | - |
| Ip Rings ($IPRINGLTD) | 4.0% | 2.4% | -0.1% | 19.5% | - |
| |
|---|
| Median (36 companies) | 17.2% | 2.4% | 4.9% | 8.7% | 1.0% |
|---|
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | - | 4.8% | 15.9% | 5.8% | 2.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ist ($ISTLTD) | - | - | - | 71.6% | - |
| Tube Investments Of India ($TUBEINVEST) | 18.4% | 24.4% | 28.3% | 30.0% | - |
| Shivam Autotech ($SHIVAMAUTO) | 24.1% | 24.1% | 20.6% | 18.7% | - |
| Amara Raja Batteries ($AMARAJABAT) | 14.9% | 15.7% | 14.2% | 17.0% | - |
| Suprajit Engineering ($SUPRAJIT) | 16.2% | 17.0% | 17.2% | 16.2% | - |
| |
|---|
| Median (42 companies) | 10.8% | 9.9% | 10.1% | 10.1% | 12.9% |
|---|
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | 11.8% | 9.4% | 11.4% | 12.7% | 11.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Amtek Auto ($AMTEKAUTO) | 18.9% | - | 27.1% | 30.3% | - |
| Jbm Auto ($JBMA) | 9.8% | 8.4% | - | 14.4% | - |
| Rico Auto Industries ($RICOAUTO) | 5.8% | 10.9% | 5.7% | 14.2% | - |
| Shivam Autotech ($SHIVAMAUTO) | 11.6% | 4.1% | 4.9% | 12.5% | - |
| Amara Raja Batteries ($AMARAJABAT) | 3.7% | 2.5% | 10.9% | 9.6% | - |
| |
|---|
| Median (25 companies) | 5.8% | 4.5% | 4.8% | 4.5% | 6.6% |
|---|
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | 3.5% | 6.5% | 6.0% | 8.9% | 7.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 32.1% | 34.5% | 30.3% | 35.4% | - |
| Exide Industries ($EXIDEIND) | 24.2% | 24.3% | 29.5% | 26.9% | 20.5% |
| Munjal Showa ($MUNJALSHOW) | 29.9% | 23.8% | 22.5% | 24.9% | - |
| Motherson Sumi Systems ($MOTHERSUMI) | 13.5% | 16.5% | 25.0% | 24.9% | - |
| Gabriel India ($GABRIEL) | 19.9% | 15.5% | 18.0% | 24.0% | - |
| |
|---|
| Median (48 companies) | 15.7% | 11.8% | 12.7% | 14.3% | 10.0% |
|---|
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | 22.6% | 15.2% | 21.0% | 21.0% | 15.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tube Investments Of India ($TUBEINVEST) | 17.6x | 17.8x | 17.3x | 16.4x | - |
| Amtek Auto ($AMTEKAUTO) | 4.8x | - | 5.3x | 5.8x | - |
| Remsons Industries ($REMSONSIND) | 2.8x | 4.3x | 3.6x | 5.7x | - |
| Steel Strips Wheels ($SSWL) | 5.4x | 6.3x | 6.5x | 5.6x | 4.2x |
| Ucal Fuel Systems ($UCALFUEL) | 4.3x | 5.6x | 5.7x | 3.6x | - |
| |
|---|
| Median (40 companies) | 1.3x | 2.2x | 0.7x | 0.0x | -0.2x |
|---|
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | 1.0x | 1.5x | 1.0x | 1.1x | 1.3x |
