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Il&Fs Investment Managers reports 23.2% Net Income decline in 2016 and 5.6 pp EBITDA Margin decline from 55.5% to 49.9%

03-05-2016 • About Il&Fs Investment Managers ($IVC) • By InTwits

Il&Fs Investment Managers reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
  • Il&Fs Investment Managers has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
  • The company has highly profitable business model: ROIC is 19.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


Il&Fs Investment Managers's Revenue decreased on 8.6%. Revenue decline was accelerating on average at -4.4 pp per annum in FY2012-FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.9 pp from -3.8% to 2.1% in FY2016.

Net Income margin decreased on 5.6 pp from 35.0% to 29.4% in FY2016.

Investments (CAPEX, working capital and M&A)


In FY2016 Il&Fs Investment Managers had CAPEX/Revenue of 0.86%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 0.55%.

Return on investment


The company operates at good ROIC (19.6%) and ROE (14.7%). ROE decreased on 6.4 pp from 21.1% to 14.7% in FY2016. ROE followed a declining trend at -5.1 pp per annum in FY2012-FY2016.

Leverage (Debt)


The company has no debt. Cash jumped on 179%.

Valuation and dividends


The company's trades at EV/EBITDA 4.7x and P/E 9.9x while industy averages are 17.8x and 21.9x.

Financial and operational results


Il&Fs Investment Managers ($IVC) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue2,2062,2332,2252,0861,908-8.6%
EBITDA1,1841,2351,2001,157952-17.7%
Net Income735766725730561-23.2%
Balance Sheet
Cash173111673841,073179.3%
Short Term Debt358272000
Long Term Debt2560000
Cash flow
Capex796111643.4%
Ratios
Revenue growth9.6%1.2%-0.4%-6.2%-8.6%
EBITDA growth-9.8%4.4%-2.8%-3.6%-17.7%

EBITDA Margin53.7%55.3%54.0%55.5%49.9%-5.6%
Net Income Margin33.3%34.3%32.6%35.0%29.4%-5.6%
CAPEX, % of revenue0.3%0.4%0.3%0.5%0.9%0.3%

ROIC19.6%
ROE35.8%29.6%23.8%21.1%14.7%-6.4%
Net Debt/EBITDA0.5x-0.0x-0.1x-0.3x-1.1x-0.8x

Peers in Asset Management Cos.


Below we provide Il&Fs Investment Managers benchmarking against other companies in Asset Management Cos. 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.