Godrej Properties reports 36.2% EBITDA growth in 2016 and 35.9% Revenue growth
05-05-2016 • About Godrej Properties (
$GODREJPROP) • By InTwits
Godrej Properties reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Godrej Properties is a fast growth stock: FY2016 revenue growth was 35.9%, 5 year revenue CAGR was 40.9% at FY2016 ROIC 6.0%
- Godrej Properties has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's in pair with industry average of 6.4%
- CAPEX is quite volatile: ₹244m in FY2016, ₹121m in FY2015, ₹609m in FY2014, ₹210m in FY2013, ₹217m in FY2012
- The company has potentially unprofitable business model: ROIC is 6.0%
- It operates with high leverage: Net Debt/EBITDA is 7.5x while industry average is 6.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Godrej Properties's Revenue jumped on 35.9%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.1 pp from 4.3% to 2.3% in FY2016.
Gross Margin decreased on 4.6 pp from 19.4% to 14.7% in FY2016. During the last 5 years Gross Margin topped in FY2013 at 33.3% and was declining since that time.
Net Income margin decreased slightly on 1.1 pp from 10.4% to 9.2% in FY2016. During the last 5 years Net Income margin topped in FY2014 at 13.5% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 Godrej Properties had CAPEX/Revenue of 0.97%. The company's CAPEX/Revenue decreased slightly on 1.1 pp from 2.0% in FY2013 to 0.97% in FY2016. Average CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at low ROIC (6.0%) and ROE (11.5%). ROIC increased slightly on 1.1 pp from 4.9% to 6.0% in FY2016. ROE increased slightly on 1.0 pp from 10.5% to 11.5% in FY2016. ROE stuck to a growing trend at 0.72 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.5x and Debt / EBITDA is 9.3x. Net Debt / EBITDA dropped on 3.3x from 10.9x to 7.5x in FY2016. Debt decreased on 6.2% while cash decreased on 7.9%.
Godrej Properties has short term refinancing risk: cash is only 23.8% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 27.4x and P/E 30.2x while industy averages are 17.8x and 21.9x. Godrej Properties's EV/(EBITDA-CAPEX) is 29.4x with the industry average at 22.8x.
Management team
Pirojsha Adi Godrej is a the company's CEO. Pirojsha Adi Godrej has spent 8 years with the company.
Financial and operational results
Godrej Properties ($GODREJPROP) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 7,701 | 10,371 | 11,792 | 18,431 | 25,045 | 35.9% |
| Gross Profit | 1,917 | 3,456 | 3,411 | 3,567 | 3,690 | 3.5% |
| SG&A | | | | | 113 | |
| EBITDA | 1,580 | 2,858 | 2,827 | 2,572 | 3,504 | 36.2% |
| Net Income | 979 | 1,384 | 1,594 | 1,909 | 2,311 | 21.1% |
Balance Sheet
|
|---|
| Cash | 721 | 573 | 8,710 | 6,954 | 6,404 | -7.9% |
| Short Term Debt | 9,587 | 13,023 | 22,878 | 29,194 | 26,853 | -8.0% |
| Long Term Debt | 9,746 | 3,757 | 2,861 | 5,671 | 5,839 | 3.0% |
Cash flow
|
|---|
| Capex | 217 | 210 | 609 | 121 | 244 | 101.0% |
Ratios
|
|---|
| Revenue growth | 70.6% | 34.7% | 13.7% | 56.3% | 35.9% | |
| EBITDA growth | 50.3% | 80.9% | -1.1% | -9.0% | 36.2% | |
|
|---|
| Gross Margin | 24.9% | 33.3% | 28.9% | 19.4% | 14.7% | -4.6% |
| EBITDA Margin | 20.5% | 27.6% | 24.0% | 14.0% | 14.0% | 0.0% |
| SG&A, % of revenue | | | | | 0.5% | |
| Net Income Margin | 12.7% | 13.3% | 13.5% | 10.4% | 9.2% | -1.1% |
| CAPEX, % of revenue | 2.8% | 2.0% | 5.2% | 0.7% | 1.0% | 0.3% |
|
|---|
| ROIC | 5.9% | 8.5% | 7.1% | 4.9% | 6.0% | 1.1% |
| ROE | 8.3% | 9.6% | 9.9% | 10.5% | 11.5% | 1.0% |
| Net Debt/EBITDA | 11.8x | 5.7x | 6.0x | 10.9x | 7.5x | -3.3x |
Peers in Realty
Below you can find Godrej Properties benchmarking vs. other companies in Realty 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 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sspdl ($SSPDL) | 16.2% | -11.8% | -43.4% | 326.1% | - |
| Orbit Corporation ($ORBITCORP) | -4.2% | -21.9% | -88.0% | 275.1% | - |
| Ajmera Realty & Infra India ($AJMERA) | 21.3% | -61.7% | -1.8% | 109.9% | - |
| Prajay Engineers Syndicate ($PRAENG) | -21.1% | 42.0% | -30.1% | 62.8% | - |
| Poddar Developers ($PODDARDEV) | -18.4% | 63.9% | 152.9% | 56.0% | - |
| |
|---|
| Median (34 companies) | 0.3% | 3.4% | -4.5% | 11.4% | 33.5% |
|---|
| Godrej Properties ($GODREJPROP) | - | 34.7% | 13.7% | 56.3% | 35.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hubtown ($HUBTOWN) | 53.3% | 72.4% | 67.6% | 82.4% | - |
| Housing Development & Infrastructure ($HDIL) | 75.8% | 40.6% | 102.5% | 78.9% | - |
| Tci Developers ($TCIDEVELOP) | - | - | - | 75.9% | - |
| Orbit Corporation ($ORBITCORP) | 42.4% | 53.3% | -127.2% | 69.8% | - |
| Oberoi Realty ($OBEROIRLTY) | 59.3% | 58.9% | 54.5% | 56.4% | 47.7% |
| |
|---|
| Median (43 companies) | 19.4% | 13.4% | 19.8% | 22.6% | 25.8% |
|---|
| Godrej Properties ($GODREJPROP) | 20.5% | 27.6% | 24.0% | 14.0% | 14.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Prozone Intu Properties ($PROZONINTU) | - | - | - | 89.5% | - |
| Ashiana Housing ($ASHIANA) | - | - | - | 26.7% | - |
| Brigade Enterprises ($BRIGADE) | 45.7% | 10.7% | 17.0% | 18.5% | - |
| Prestige Estates Projects ($PRESTIGE) | 37.7% | 30.2% | 18.8% | 11.6% | - |
| Parsvnath Developers ($PARSVNATH) | 15.9% | - | 11.6% | 10.6% | - |
| |
|---|
| Median (30 companies) | 4.9% | 2.6% | 3.5% | 2.5% | 3.1% |
|---|
| Godrej Properties ($GODREJPROP) | 2.8% | 2.0% | 5.2% | 0.7% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ahluwalia Contracts (India) ($AHLUCONT) | -3.2% | -15.8% | 5.6% | 21.2% | - |
| Poddar Developers ($PODDARDEV) | 3.9% | 2.6% | 12.9% | 19.1% | - |
| Lancor Holdings ($LANCORHOL) | 18.0% | 11.6% | 19.5% | 17.7% | - |
| Mahindra Lifespace Developers ($MAHLIFE) | 10.4% | 11.7% | 6.6% | 14.9% | 4.6% |
| Sobha Developers ($SOBHA) | 18.8% | 16.7% | 14.6% | 12.7% | - |
| |
|---|
| Median (50 companies) | 5.7% | 4.6% | 5.6% | 6.8% | 7.6% |
|---|
| Godrej Properties ($GODREJPROP) | 5.9% | 8.5% | 7.1% | 4.9% | 6.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| D B Realty ($DBREALTY) | 13.2x | 135.4x | 14.0x | 54.8x | - |
| B.L.Kashyap And Sons ($BLKASHYAP) | 8.2x | 5.8x | 12.7x | 40.1x | - |
| Vipul ($VIPUL) | 0.7x | 3.0x | 10.8x | 26.0x | - |
| Ansal Properties & Infrastructure ($ANSALAPI) | 12.8x | 11.9x | 11.4x | 16.6x | - |
| Srs Real Infrastructure ($SRSREAL) | 11.7x | 10.0x | 12.9x | 14.7x | - |
| |
|---|
| Median (37 companies) | 5.1x | 4.8x | 4.9x | 4.0x | 0.3x |
|---|
| Godrej Properties ($GODREJPROP) | 11.8x | 5.7x | 6.0x | 10.9x | 7.5x |
