Alicon Castalloy CAPEX dropped on 31.1% while Revenue increased on 5.0%
02-05-2016 • About Alicon Castalloy (
$ALICON) • By InTwits
Alicon Castalloy reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is relatively stable: 10.4% in FY2016 vs. 9.9% in FY2015 vs. 9.8% in FY2012
- Alicon Castalloy has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.4%. At the same time it's in pair with industry average of 6.8%
- CAPEX is quite volatile: ₹587m in FY2016, ₹853m in FY2015, ₹277m in FY2014, ₹195m in FY2013, ₹395m in FY2012
- The company has highly profitable business model: ROIC is 16.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.0x while industry average is 2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Alicon Castalloy's Revenue increased on 5.0%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.8 pp from 16.0% to 19.8% in FY2016.
Net Income margin showed almost no change in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 7.8% in FY2016. CAPEX/Revenue increased on 4.1 pp from 3.7% in FY2013 to 7.8% in FY2016. It's average CAPEX/Revenue for the last three years was 8.3%. Alicon Castalloy maintained rich investment policy and has spent a big chunk of EBITDA (75.5%) to CAPEX.
Return on investment
The company operates at good ROIC (16.3%) and ROE (16.4%). ROIC showed almost no change in FY2016. ROE decreased slightly on 0.57 pp from 16.9% to 16.4% in FY2016. ROE followed a declining trend at -1.1 pp per annum in FY2012-FY2016.
Leverage (Debt)
Debt level is 2.0x Net Debt / EBITDA and 2.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 2.3x to 2.0x in FY2016. Debt showed almost no change in FY2016 while cash jumped on 75.9%.
Alicon Castalloy has short term refinancing risk: cash is only 13.8% of short term debt.
Valuation and dividends
Alicon Castalloy's trades at EV/EBITDA 6.7x and P/E 16.3x while industy averages are 17.8x and 21.9x. Alicon Castalloy's EV/(EBITDA-CAPEX) is 27.1x with the industry average at 22.8x.
Financial and operational results
Alicon Castalloy ($ALICON) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,687 | 5,246 | 5,325 | 7,136 | 7,489 | 5.0% |
| EBITDA | 457 | 463 | 534 | 709 | 778 | 9.7% |
| Net Income | 144 | 169 | 192 | 198 | 222 | 11.9% |
Balance Sheet
|
|---|
| Cash | 89 | 69 | 60 | 96 | 169 | 75.9% |
| Short Term Debt | 890 | 997 | 1,026 | 1,350 | 1,226 | -9.2% |
| Long Term Debt | 236 | 53 | 117 | 373 | 495 | 32.6% |
Cash flow
|
|---|
| Capex | 395 | 195 | 277 | 853 | 587 | -31.1% |
Ratios
|
|---|
| Revenue growth | 47.1% | 11.9% | 1.5% | 34.0% | 5.0% | |
| EBITDA growth | 13.7% | 1.2% | 15.3% | 32.9% | 9.7% | |
|
|---|
| EBITDA Margin | 9.8% | 8.8% | 10.0% | 9.9% | 10.4% | 0.4% |
| Net Income Margin | 3.1% | 3.2% | 3.6% | 2.8% | 3.0% | 0.2% |
| CAPEX, % of revenue | 8.4% | 3.7% | 5.2% | 12.0% | 7.8% | -4.1% |
|
|---|
| ROIC | 16.4% | 13.0% | 14.8% | 16.7% | 16.3% | -0.4% |
| ROE | 20.2% | 20.0% | 19.4% | 16.9% | 16.4% | -0.6% |
| Net Debt/EBITDA | 2.3x | 2.1x | 2.0x | 2.3x | 2.0x | -0.3x |
Peers in Aluminium
Below we provide Alicon Castalloy benchmarking against other companies in Aluminium 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pg Foils ($PGFOILQ) | 36.1% | -4.3% | 2.6% | 21.9% | - |
| Hindalco Industries ($HINDALCO) | 12.7% | -1.0% | 9.0% | 18.4% | - |
| Bothra Metals & Alloys ($BMAL) | 12.1% | 57.0% | 27.3% | 15.3% | - |
| Gujarat Foils ($GUJFOIL) | - | 31.4% | 25.2% | 13.2% | -7.3% |
| |
|---|
| Median (4 companies) | 12.7% | 15.2% | 17.1% | 16.8% | -7.3% |
|---|
| Alicon Castalloy ($ALICON) | - | 11.9% | 1.5% | 34.0% | 5.0% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tentiwal Wire Products ($TWPL) | - | - | - | 9.7% | - |
| Hindalco Industries ($HINDALCO) | 10.9% | 10.3% | 9.3% | 8.7% | - |
| Bothra Metals & Alloys ($BMAL) | 6.5% | 5.1% | 3.6% | 4.3% | - |
| |
|---|
| Median (3 companies) | 6.5% | 7.7% | 6.5% | 8.7% | - |
|---|
| Alicon Castalloy ($ALICON) | 9.8% | 8.8% | 10.0% | 9.9% | 10.4% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hindalco Industries ($HINDALCO) | 15.5% | 14.8% | 10.8% | 5.8% | - |
| |
|---|
| Median (1 company) | 5.2% | 14.8% | 10.8% | 5.8% | - |
|---|
| Alicon Castalloy ($ALICON) | 8.4% | 3.7% | 5.2% | 12.0% | 7.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hindalco Industries ($HINDALCO) | 8.6% | 6.2% | 4.6% | 4.9% | - |
| Tentiwal Wire Products ($TWPL) | 12.5% | 12.6% | - | - | - |
| Sacheta Metals ($SACHEMT) | -3.1% | - | - | - | - |
| Bothra Metals & Alloys ($BMAL) | 15.2% | 13.8% | - | - | - |
| Gujarat Foils ($GUJFOIL) | - | - | - | - | - |
| |
|---|
| Median (6 companies) | 8.6% | 9.4% | 4.6% | 4.9% | - |
|---|
| Alicon Castalloy ($ALICON) | 16.4% | 13.0% | 14.8% | 16.7% | 16.3% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hindalco Industries ($HINDALCO) | 4.3x | 6.6x | 7.5x | 7.2x | - |
| Tentiwal Wire Products ($TWPL) | 4.9x | 5.2x | 0.0x | 0.0x | - |
| Bothra Metals & Alloys ($BMAL) | 4.1x | 3.1x | 0.0x | 0.0x | - |
| |
|---|
| Median (3 companies) | 4.9x | 4.5x | 0.0x | 0.0x | - |
|---|
| Alicon Castalloy ($ALICON) | 2.3x | 2.1x | 2.0x | 2.3x | 2.0x |
