Adani Ports And Special Economic Zone CAPEX jumped on 40.3% and Revenue surged on 18.2%

03-05-2016 • About Adani Ports And Special Economic Zone ($ADANIPORTS) • By InTwits

Adani Ports And Special Economic Zone reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Adani Ports And Special Economic Zone is a fast growth stock: FY2016 revenue growth was 18.2%, 5 year revenue CAGR was 29.2% at FY2016 ROIC 11.3%
Adani Ports And Special Economic Zone has high CAPEX intensity: 5 year average CAPEX/Revenue was 75.4%. At the same time it's a lot of higher than industry average of 26.7%.
CAPEX is quite volatile: ₹25,268m in FY2016, ₹18,010m in FY2015, ₹12,460m in FY2014, ₹38,367m in FY2013, ₹45,600m in FY2012
The company has business model with average profitability: ROIC is 11.3%
It operates with high leverage: Net Debt/EBITDA is 4.6x while industry average is 4.7x

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 surged on 18.2%. Revenue decline was accelerating on average at -3.9 pp per annum in FY2012-FY2016. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.80 pp from 67.4% to 68.2% in FY2016.

Net Income margin increased slightly on 1.9 pp from 39.3% to 41.1% in FY2016.

Investments (CAPEX, working capital and M&A)

The company's CAPEX/Revenue was 36.3% in FY2016. Adani Ports And Special Economic Zone's CAPEX/Revenue dropped on 73.8 pp from 110% in FY2013 to 36.3% in FY2016. Average CAPEX/Revenue for the last three years was 31.3%. To fuel its fast growth the company invested a large share of EBITDA (53.1%) to CAPEX. CAPEX as a % of Revenue followed a declining trend at -35.3 pp per annum in FY2012-FY2016.

Return on investment

The company operates at good ROE (23.9%) while ROIC is low (11.3%). ROIC decreased slightly on 0.81 pp from 12.1% to 11.3% in FY2016. ROE showed almost no change in FY2016.

Leverage (Debt)

Company's Net Debt / EBITDA is 4.6x and Debt / EBITDA is 4.8x. Net Debt / EBITDA jumped on 0.3x from 4.3x to 4.6x in FY2016. Debt jumped on 28.8% while cash jumped on 71.0%. During FY2012-FY2016 Net Debt/EBITDA bottomed in FY2014 at 4.3x and was growing since that time.

Adani Ports And Special Economic Zone has short term refinancing risk: cash is only 12.7% of short term debt.

Valuation and dividends

Adani Ports And Special Economic Zone's trades at EV/EBITDA 14.9x and P/E 17.0x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 31.7x with the industry average at 22.8x.

Management team

The company's CEO is Karan Adani. Karan Adani has 4 years tenure with the company.

Financial and operational results

Adani Ports And Special Economic Zone ($ADANIPORTS) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	26,358	34,864	45,813	58,938	69,688	18.2%
EBITDA	17,931	23,835	29,767	39,746	47,555	19.6%
Net Income	11,021	16,232	17,396	23,143	28,674	23.9%
Balance Sheet
Cash	3,673	7,558	1,132	4,852	8,297	71.0%
Short Term Debt	21,187	13,283	16,456	38,815	65,273	68.2%
Long Term Debt	154,462	102,575	112,884	138,498	163,056	17.7%
Cash flow
Capex	45,600	38,367	12,460	18,010	25,268	40.3%
Ratios
Revenue growth	36.1%	32.3%	31.4%	28.6%	18.2%
EBITDA growth	38.0%	32.9%	24.9%	33.5%	19.6%

EBITDA Margin	68.0%	68.4%	65.0%	67.4%	68.2%	0.8%
Net Income Margin	41.8%	46.6%	38.0%	39.3%	41.1%	1.9%
CAPEX, % of revenue	173.0%	110.0%	27.2%	30.6%	36.3%	5.7%

ROIC	9.7%	9.7%	11.7%	12.1%	11.3%	-0.8%
ROE	24.5%	29.0%	23.0%	23.7%	23.9%	0.2%
Net Debt/EBITDA	9.6x	4.5x	4.3x	4.3x	4.6x	0.3x

Peers in Marine Port & Services

Below you can find Adani Ports And Special Economic Zone benchmarking vs. other companies in Marine Port & Services 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	FY2012	FY2013	FY2014	FY2015	FY2016
Essar Ports ($ESSARPORTS)	-42.0%	28.2%	49.4%	-22.1%	-
Median (1 company)	-42.0%	28.2%	49.4%	-22.1%	-
Adani Ports And Special Economic Zone ($ADANIPORTS)	-	32.3%	31.4%	28.6%	18.2%

Top companies by EBITDA margin, %


Top	FY2012	FY2013	FY2014	FY2015	FY2016
Essar Ports ($ESSARPORTS)	81.0%	80.3%	58.3%	78.8%	-
Median (1 company)	81.0%	80.3%	58.3%	78.8%	-
Adani Ports And Special Economic Zone ($ADANIPORTS)	68.0%	68.4%	65.0%	67.4%	68.2%

Top companies by CAPEX/Revenue, %


Top	FY2012	FY2013	FY2014	FY2015	FY2016
Essar Ports ($ESSARPORTS)	66.3%	34.2%	0.9%	17.2%	-
Median (1 company)	66.3%	34.2%	0.9%	17.2%	-
Adani Ports And Special Economic Zone ($ADANIPORTS)	173.0%	110.0%	27.2%	30.6%	36.3%

Top companies by ROIC, %


Top	FY2012	FY2013	FY2014	FY2015	FY2016
Essar Ports ($ESSARPORTS)	9.3%	10.9%	10.9%	11.1%	-
Median (1 company)	9.3%	10.9%	10.9%	11.1%	-
Adani Ports And Special Economic Zone ($ADANIPORTS)	9.7%	9.7%	11.7%	12.1%	11.3%

Top companies by Net Debt / EBITDA


Top	FY2012	FY2013	FY2014	FY2015	FY2016
Essar Ports ($ESSARPORTS)	6.1x	5.0x	4.8x	4.8x	-
Median (1 company)	6.1x	5.0x	4.8x	4.8x	-
Adani Ports And Special Economic Zone ($ADANIPORTS)	9.6x	4.5x	4.3x	4.3x	4.6x

Adani Ports And Special Economic Zone stock price chart

Adani Ports And Special Economic Zone financials

mln.	FY2010	FY2011	FY2012

Revenue	73,828	19,372	26,358
EBITDA	9,663	12,994	17,931
Net income	6,760	9,181	11,021
CAPEX	19,144	18,613	45,600
Debt	37,669	35,925	175,650
Cash	6,803	520.5	3,673

About Adani Ports And Special Economic Zone

Adani Ports and Special Economic Zone Limited, together with its subsidiaries, develops and operates ports and port based infrastructure in India. The company operates a port at Mundra, Gujarat; a dry bulk terminal located in Dahej, Gujarat; a bulk and container handling terminal at the port of Hazira, Gujarat; and coal handling terminals at the port of Mormugao, Goa and Visakhapatnam in Andhra Pradesh. It also operates 4 bulk terminals with 15 berths to handle dry and liquid bulk cargo, 3 container terminals with 6 berths, and 2 offshore single point mooring facilities for handling crude cargo at the port of Mundra; a dry bulk cargo terminal with 2 berths at the port of Dahej; and 1 bulk terminal with 3 berths to handle dry and liquid bulk cargo, and 1 container terminal with 2 berths to handle container cargo at the port of Hazira. In addition, the company is developing a bulk terminal located in Kandla, Gujarat; a rail corridor; and road and highway projects. Further, it offers port services, including marine, handling intra-port transport, storage, other value-added, and evacuation services for terminal operators, shipping lines and agents, exporters, importers, and other port users; and infrastructure leasing and logistics services at the Mundra Port through its surrounding infrastructure. Additionally, the company provides multi-modal cargo storage-cum-logistics services; and non scheduled (passenger) services through its aircrafts. The company was formerly known as Mundra Port and Special Economic Zone Limited and changed its name to Adani Ports and Special Economic Zone Limited in January 2012. The company was incorporated in 1998 and is based in Ahmedabad, India. Adani Ports and Special Economic Zone Limited is a subsidiary of Adani Enterprises Limited.