Tvs Motor Company EBITDA jumped on 26.9% and EBITDA Margin increased slightly on 0.77 pp from 5.9% to 6.7%
03-05-2016 • About Tvs Motor Company (
$TVSMOTOR) • By InTwits
Tvs Motor Company reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tvs Motor Company is a growth stock: FY2016 revenue growth was 12.3%, 5 year revenue CAGR was 12.0% at FY2016 ROIC 20.2%
- EBITDA Margin is relatively stable: 6.7% in FY2016 vs. 5.9% in FY2015 vs. 6.6% in FY2012
- Tvs Motor Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 2.2%.
- CAPEX is quite volatile: ₹5,520m in FY2016, ₹3,757m in FY2015, ₹2,844m in FY2014, ₹1,624m in FY2013, ₹4,671m in FY2012
- The company has highly profitable business model: ROIC is 20.2%
- It operates with high leverage: Net Debt/EBITDA is 1.4x while industry average is 0.4x
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 jumped on 12.3%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 15.2% to 16.8% in FY2016.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income margin showed almost no change in FY2016. Net Income margin followed a growing trend at 0.34 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
Tvs Motor Company's CAPEX/Revenue was 4.8% in FY2016. The company's CAPEX/Revenue increased on 2.6 pp from 2.2% in FY2013 to 4.8% in FY2016. Average CAPEX/Revenue for the last three years was 3.9%. To fuel its fast growth the company invested a large share of EBITDA (71.8%) to CAPEX. During FY2012-FY2016 CAPEX as a % of Revenue bottomed in FY2013 at 2.2% and was growing since that time.
Return on investment
The company operates at high and attractive ROIC (20.2%) and ROE (25.4%). ROIC increased slightly on 1.7 pp from 18.4% to 20.2% in FY2016. ROE decreased slightly on 1.0 pp from 26.4% to 25.4% in FY2016.
Leverage (Debt)
Debt level is 1.4x Net Debt / EBITDA and 1.4x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 1.8x to 1.4x in FY2016. Debt decreased on 2.5% while cash surged on 94.7%.
Tvs Motor Company has short term refinancing risk: cash is only 8.4% of short term debt.
Financial and operational results
Tvs Motor Company ($TVSMOTOR) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 74,352 | 75,105 | 83,836 | 102,558 | 115,163 | 12.3% |
| SG&A | | | | 2,693 | 3,270 | 21.4% |
| EBITDA | 4,888 | 5,316 | 4,920 | 6,058 | 7,685 | 26.9% |
| Net Income | 1,323 | 1,975 | 1,863 | 3,283 | 3,693 | 12.5% |
Balance Sheet
|
|---|
| Cash | 771 | 770 | 964 | 253 | 492 | 94.7% |
| Short Term Debt | 2,224 | 2,224 | 2,099 | 5,588 | 5,828 | 4.3% |
| Long Term Debt | 8,457 | 8,457 | 5,178 | 5,603 | 5,087 | -9.2% |
Cash flow
|
|---|
| Capex | 4,671 | 1,624 | 2,844 | 3,757 | 5,520 | 46.9% |
Ratios
|
|---|
| Revenue growth | 13.6% | 1.0% | 11.6% | 22.3% | 12.3% | |
| EBITDA growth | 41.3% | 8.8% | -7.4% | 23.1% | 26.9% | |
|
|---|
| EBITDA Margin | 6.6% | 7.1% | 5.9% | 5.9% | 6.7% | 0.8% |
| SG&A, % of revenue | | | | 2.6% | 2.8% | 0.2% |
| Net Income Margin | 1.8% | 2.6% | 2.2% | 3.2% | 3.2% | 0.0% |
| CAPEX, % of revenue | 6.3% | 2.2% | 3.4% | 3.7% | 4.8% | 1.1% |
|
|---|
| ROIC | 17.2% | 17.4% | 16.8% | 18.4% | 20.2% | 1.7% |
| ROE | 16.7% | 22.0% | 18.1% | 26.4% | 25.4% | -1.0% |
| Net Debt/EBITDA | 2.0x | 1.9x | 1.3x | 1.8x | 1.4x | -0.4x |
Peers in 2/3 Wheelers
Below we provide Tvs Motor Company benchmarking against other companies in 2/3 Wheelers 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 |
|---|
| Bajaj Auto ($BAJAJ-AUTO) | 18.9% | 3.1% | 1.0% | 7.0% | - |
| Scooters India ($SCOOTER) | 30.0% | -8.8% | -7.8% | -13.1% | - |
| |
|---|
| Median (2 companies) | 24.5% | -2.8% | -3.4% | -3.1% | - |
|---|
| Tvs Motor Company ($TVSMOTOR) | - | 1.0% | 11.6% | 22.3% | 12.3% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bajaj Auto ($BAJAJ-AUTO) | 19.6% | 18.7% | 21.1% | 19.5% | - |
| Scooters India ($SCOOTER) | -1.6% | -3.4% | 1.0% | 4.7% | - |
| Kinetic Engineering ($KINETICENG) | - | - | - | -28.9% | - |
| |
|---|
| Median (3 companies) | 9.0% | 7.6% | 11.1% | 4.7% | - |
|---|
| Tvs Motor Company ($TVSMOTOR) | 6.6% | 7.1% | 5.9% | 5.9% | 6.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bajaj Auto ($BAJAJ-AUTO) | 1.9% | 2.6% | 1.1% | 1.3% | - |
| Scooters India ($SCOOTER) | 0.3% | 0.2% | - | 0.6% | - |
| |
|---|
| Median (2 companies) | 1.1% | 1.4% | 1.1% | 1.0% | - |
|---|
| Tvs Motor Company ($TVSMOTOR) | 6.3% | 2.2% | 3.4% | 3.7% | 4.8% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bajaj Auto ($BAJAJ-AUTO) | 64.1% | 48.7% | 42.8% | 35.5% | - |
| Kinetic Engineering ($KINETICENG) | -8.1% | -14.9% | - | - | - |
| Scooters India ($SCOOTER) | - | -654.7% | 0.9% | - | - |
| |
|---|
| Median (3 companies) | 28.0% | -14.9% | 21.8% | 35.5% | - |
|---|
| Tvs Motor Company ($TVSMOTOR) | 17.2% | 17.4% | 16.8% | 18.4% | 20.2% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Scooters India ($SCOOTER) | - | - | -26.5x | 0.0x | - |
| Bajaj Auto ($BAJAJ-AUTO) | -0.3x | -0.1x | -0.1x | -0.1x | - |
| |
|---|
| Median (2 companies) | -0.3x | -0.1x | -13.3x | -0.1x | - |
|---|
| Tvs Motor Company ($TVSMOTOR) | 2.0x | 1.9x | 1.3x | 1.8x | 1.4x |
