Birla Corporation CAPEX dropped on 24.7% while Revenue increased on 2.0%
06-05-2016 • About Birla Corporation (
$BIRLACORPN) • By InTwits
Birla Corporation reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Birla Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.7%. At the same time it's a lot of higher than industry average of 5.2%.
- CAPEX is quite volatile: ₹1,660m in FY2016, ₹2,205m in FY2015, ₹1,648m in FY2014, ₹1,848m in FY2013, ₹4,359m in FY2012
- The company has potentially unprofitable business model: ROIC is 3.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 2.0%. During the last 5 years Revenue growth topped in FY2014 at 15.9% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.7 pp from 4.0% to 9.7% in FY2016. EBITDA Margin declined at -2.1 pp per annum in the last 5 years.
Net Income margin decreased slightly on 0.65 pp from 5.5% to 4.8% in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 5.1% in FY2016. CAPEX/Revenue decreased on 2.0 pp from 7.1% in FY2013 to 5.1% in FY2016. It's average level of CAPEX/Revenue for the last three years was 5.8%. The company invested a large share of EBITDA (58.1%) to CAPEX.
Return on investment
The company operates at low ROIC (3.2%) and ROE (5.9%). ROIC decreased slightly on 0.58 pp from 3.8% to 3.2% in FY2016. ROE decreased slightly on 0.90 pp from 6.8% to 5.9% in FY2016. ROIC declined at -1.5 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 3.3x Net Debt / EBITDA and 4.5x Debt / EBITDA. Net Debt / EBITDA jumped on 0.6x from 2.7x to 3.3x in FY2016. Debt decreased slightly on 1.2% while cash dropped on 26.3%.
Birla Corporation has short term refinancing risk: cash is only 69.4% of short term debt.
Financial and operational results
Birla Corporation ($BIRLACORPN) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 22,869 | 26,030 | 30,164 | 32,099 | 32,750 | 2.0% |
| SG&A | | | | | 209 | |
| EBITDA | 3,711 | 4,093 | 2,840 | 3,126 | 2,855 | -8.7% |
| Net Income | 2,394 | 2,703 | 1,298 | 1,752 | 1,574 | -10.2% |
Balance Sheet
|
|---|
| Cash | 21 | 203 | 4,827 | 4,631 | 3,413 | -26.3% |
| Short Term Debt | 3,832 | 3,287 | 4,850 | 2,004 | 4,916 | 145.3% |
| Long Term Debt | 7,522 | 8,974 | 9,163 | 11,018 | 7,949 | -27.9% |
Cash flow
|
|---|
| Capex | 4,359 | 1,848 | 1,648 | 2,205 | 1,660 | -24.7% |
Ratios
|
|---|
| Revenue growth | 6.2% | 13.8% | 15.9% | 6.4% | 2.0% | |
| EBITDA growth | -17.0% | 10.3% | -30.6% | 10.1% | -8.7% | |
|
|---|
| EBITDA Margin | 16.2% | 15.7% | 9.4% | 9.7% | 8.7% | -1.0% |
| SG&A, % of revenue | | | | | 0.6% | |
| Net Income Margin | 10.5% | 10.4% | 4.3% | 5.5% | 4.8% | -0.7% |
| CAPEX, % of revenue | 19.1% | 7.1% | 5.5% | 6.9% | 5.1% | -1.8% |
|
|---|
| ROIC | 8.7% | 8.2% | 3.7% | 3.8% | 3.2% | -0.6% |
| ROE | 11.1% | 11.5% | 5.2% | 6.8% | 5.9% | -0.9% |
| Net Debt/EBITDA | 3.1x | 2.9x | 3.2x | 2.7x | 3.3x | 0.6x |
Peers in Cement & Cement Products
Below we provide Birla Corporation benchmarking against other companies in Cement & Cement Products 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 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ncl Industries ($NCLIND) | 38.2% | -15.8% | -3.0% | 30.8% | - |
| Indian Hume Pipe Co ($INDIANHUME) | -20.3% | 34.5% | 18.3% | 22.7% | - |
| J.K.Cement ($JKCEMENT) | 21.8% | 14.7% | -4.0% | 21.2% | - |
| Visaka Industries ($VIKASAS) | 14.7% | 22.0% | -2.6% | 13.6% | - |
| Prism Cement ($PRISMCEM) | 33.2% | 4.9% | 5.3% | 12.5% | - |
| |
|---|
| Median (16 companies) | 14.9% | 11.4% | -1.6% | 7.0% | -2.4% |
|---|
| Birla Corporation ($BIRLACORPN) | - | 13.8% | 15.9% | 6.4% | 2.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Orient Cement ($ORIENTCEM) | - | 21.5% | 15.0% | 19.8% | 12.2% |
| Saurashtra Cement ($SAURASHCEM) | 11.4% | 21.6% | 11.9% | 16.8% | - |
| Ambuja Cements ($AMBUJACEM) | 25.6% | 18.2% | 19.4% | 16.4% | - |
| India Cements ($INDIACEM) | 20.6% | 18.4% | 12.4% | 15.1% | - |
| Deccan Cements ($DECCANCE) | 22.8% | 13.2% | 14.7% | 14.9% | - |
| |
|---|
| Median (15 companies) | 19.2% | 13.4% | 11.9% | 13.0% | 12.2% |
|---|
| Birla Corporation ($BIRLACORPN) | 16.2% | 15.7% | 9.4% | 9.7% | 8.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Udaipur Cement Works ($UDAICEMENT) | - | - | - | 91.1% | - |
| Orient Cement ($ORIENTCEM) | - | 2.9% | - | 59.7% | 24.5% |
| J.K.Cement ($JKCEMENT) | 6.5% | 18.8% | 55.8% | 16.2% | - |
| Acc ($ACC) | 5.0% | 8.6% | 13.7% | 9.5% | - |
| Ambuja Cements ($AMBUJACEM) | 7.2% | 8.5% | 8.3% | 6.6% | - |
| |
|---|
| Median (12 companies) | 5.5% | 7.2% | 8.3% | 5.1% | 24.5% |
|---|
| Birla Corporation ($BIRLACORPN) | 19.1% | 7.1% | 5.5% | 6.9% | 5.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Saurashtra Cement ($SAURASHCEM) | 38.6% | 42.7% | 13.9% | 26.9% | - |
| Indian Hume Pipe Co ($INDIANHUME) | 7.6% | 13.8% | 15.0% | 18.0% | - |
| Orient Cement ($ORIENTCEM) | - | 57.3% | 15.2% | 15.4% | 4.6% |
| Acc ($ACC) | 20.2% | 12.7% | 11.0% | 9.9% | - |
| K.C.P ($KCP) | 17.6% | 6.7% | 7.1% | 9.3% | - |
| |
|---|
| Median (17 companies) | 15.8% | 11.2% | 6.7% | 8.7% | 4.6% |
|---|
| Birla Corporation ($BIRLACORPN) | 8.7% | 8.2% | 3.7% | 3.8% | 3.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Udaipur Cement Works ($UDAICEMENT) | - | - | - | 17.1x | - |
| Heidelbergcement India ($HEIDELBERG) | 14.0x | 12.2x | 0.0x | 10.4x | - |
| Prism Cement ($PRISMCEM) | 4.8x | 6.0x | 10.0x | 6.0x | - |
| J.K.Cement ($JKCEMENT) | 2.3x | 2.3x | 6.9x | 5.8x | - |
| India Cements ($INDIACEM) | 3.2x | 3.5x | 5.5x | 4.6x | - |
| |
|---|
| Median (14 companies) | 1.8x | 2.4x | 2.6x | 2.6x | 6.8x |
|---|
| Birla Corporation ($BIRLACORPN) | 3.1x | 2.9x | 3.2x | 2.7x | 3.3x |
