Indiabulls Securities CAPEX surged on 683% and Revenue showed almost no change
06-05-2016 • About Indiabulls Securities (
$IBSEC) • By InTwits
Indiabulls Securities reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is expanding: 80.8% in FY2016 vs. 64.4% in FY2015 vs. 16.2% in FY2012
- EBITDA Margin is quite volatile: 80.8% in FY2016, 64.4% in FY2015, 60.8% in FY2014, 36.2% in FY2013, 16.2% in FY2012
- Indiabulls Securities has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's in pair with industry average of 4.5%
- CAPEX is quite volatile: ₹329m in FY2016, ₹42m in FY2015, ₹54m in FY2014, ₹34m in FY2013, ₹155m in FY2012
- The company has potentially unprofitable business model: ROIC is 2.8%
- It operates with high leverage: Net Debt/EBITDA is 4.0x while industry average is 1.0x
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 showed almost no change in FY2016. During the last 5 years Revenue growth topped in FY2014 at 58.0% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 16.4 pp from 64.4% to 80.8% in FY2016. EBITDA Margin grew at 15.7 pp per annum in the last 5 years.
Net Income margin dropped on 19.2 pp from 37.8% to 18.6% in FY2016. During FY2012-FY2016 Net Income margin topped in FY2015 at 37.8%.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 8.3%. Indiabulls Securities's CAPEX/Revenue increased on 6.5 pp from 1.8% in FY2013 to 8.3% in FY2016. It's average CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at good ROE (22.3%) while ROIC is low (2.8%). ROE dropped on 30.9 pp from 53.2% to 22.3% in FY2016. During FY2012-FY2016 ROE topped in FY2015 at 53.2%.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.0x and Debt / EBITDA is 6.6x. Net Debt / EBITDA decreased on 0.032x from 4.0x to 4.0x in FY2016. Debt surged on 22.6% while cash surged on 20.9%. Net Debt/EBITDA stuck to a growing trend at 0.6x per annum in the last 5 years.
Indiabulls Securities has short term refinancing risk: cash is only 48.7% of short term debt.
Valuation and dividends
Indiabulls Securities's trades at EV/EBITDA 5.5x and P/E 6.5x while industy averages are 17.8x and 21.9x. Indiabulls Securities's EV/(EBITDA-CAPEX) is 6.1x with the industry average at 22.8x.
Financial and operational results
Indiabulls Securities ($IBSEC) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,913 | 1,915 | 3,024 | 3,982 | 3,963 | -0.5% |
| EBITDA | 310 | 692 | 1,838 | 2,565 | 3,201 | 24.8% |
| Net Income | -103 | 633 | 1,016 | 1,506 | 738 | -51.0% |
Balance Sheet
|
|---|
| Cash | 399 | 509 | 1,620 | 6,894 | 8,338 | 20.9% |
| Short Term Debt | 884 | 2,222 | 5,151 | 13,841 | 17,111 | 23.6% |
| Long Term Debt | 5 | 8 | 9 | 3,305 | 3,919 | 18.6% |
Cash flow
|
|---|
| Capex | 155 | 34 | 54 | 42 | 329 | 683.0% |
Ratios
|
|---|
| Revenue growth | -48.1% | 0.1% | 58.0% | 31.6% | -0.5% | |
| EBITDA growth | -74.2% | 123.0% | 165.5% | 39.6% | 24.8% | |
|
|---|
| EBITDA Margin | 16.2% | 36.2% | 60.8% | 64.4% | 80.8% | 16.4% |
| Net Income Margin | -5.4% | 33.1% | 33.6% | 37.8% | 18.6% | -19.2% |
| CAPEX, % of revenue | 8.1% | 1.8% | 1.8% | 1.1% | 8.3% | 7.2% |
|
|---|
| ROIC | | | | | 2.8% | |
| ROE | -4.3% | 28.0% | 44.8% | 53.2% | 22.3% | -30.9% |
| Net Debt/EBITDA | 1.6x | 2.5x | 1.9x | 4.0x | 4.0x | -0.0x |
Peers in Other Financial Services
Below you can find Indiabulls Securities benchmarking vs. other companies in Other Financial 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 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Lkp Finance ($LKPFIN) | - | 20.8% | -4.3% | 89.8% | -28.6% |
| Aditya Birla Money ($BIRLAMONEY) | - | -13.3% | -10.6% | 49.0% | 6.8% |
| Geojit Bnp Paribas Financial Services ($GEOJITBNPP) | -8.6% | 2.0% | -12.6% | 42.3% | - |
| Jm Financial ($JMFINANCIL) | -2.4% | 19.3% | -3.4% | 39.4% | - |
| Capital First ($CAPF) | 90.7% | 9.9% | 31.5% | 35.8% | - |
| |
|---|
| Median (10 companies) | 10.3% | 11.8% | -2.0% | 28.6% | 5.6% |
|---|
| Indiabulls Securities ($IBSEC) | - | 0.1% | 58.0% | 31.6% | -0.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Twentyfirst Century Management Services ($21STCENMGM) | - | - | - | 91.9% | - |
| Tcfc Finance ($TCFCFINQ) | - | - | - | 88.4% | - |
| Frontline Securities ($FRONTSEC) | - | - | - | 87.0% | - |
| Shardul Securities ($SHARDUL) | - | - | - | 84.6% | - |
| Wallfort Financial Services ($WALLFORT) | - | - | - | 82.5% | - |
| |
|---|
| Median (31 companies) | 39.8% | 49.3% | 38.6% | 31.2% | 27.9% |
|---|
| Indiabulls Securities ($IBSEC) | 16.2% | 36.2% | 60.8% | 64.4% | 80.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jm Financial ($JMFINANCIL) | 0.9% | 0.9% | 11.2% | 16.9% | - |
| Geojit Bnp Paribas Financial Services ($GEOJITBNPP) | 5.7% | 7.8% | 3.7% | 4.8% | - |
| Multi Commodity Exchange Of India ($MCX) | 3.8% | 8.8% | 1.7% | 3.8% | 8.8% |
| Crisil ($CRISIL) | 4.4% | 1.6% | 1.7% | 1.9% | - |
| Icra ($ICRA) | 2.0% | 2.1% | 13.2% | 1.5% | - |
| |
|---|
| Median (9 companies) | 3.7% | 1.6% | 1.7% | 1.5% | 8.8% |
|---|
| Indiabulls Securities ($IBSEC) | 8.1% | 1.8% | 1.8% | 1.1% | 8.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Crisil ($CRISIL) | 62.5% | 53.7% | 46.4% | 43.1% | - |
| Icra ($ICRA) | 20.7% | 17.0% | 20.9% | 21.1% | - |
| Multi Commodity Exchange Of India ($MCX) | 35.4% | 27.2% | 9.9% | 4.8% | 9.7% |
| Religare Enterprises ($RELIGARE) | 2.0% | 3.4% | 2.7% | 4.1% | - |
| Shardul Securities ($SHARDUL) | - | - | - | - | - |
| |
|---|
| Median (33 companies) | 5.4% | 10.2% | 9.9% | 12.9% | 9.7% |
|---|
| Indiabulls Securities ($IBSEC) | - | - | - | - | 2.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Capital First ($CAPF) | 7.5x | 9.2x | 9.1x | 7.7x | - |
| Religare Enterprises ($RELIGARE) | 9.2x | 6.1x | 7.0x | 7.2x | - |
| Jm Financial ($JMFINANCIL) | 6.4x | 6.4x | 4.8x | 4.8x | - |
| Intec Capital ($INTECCAP) | 5.1x | 4.9x | 4.6x | 4.5x | - |
| Lkp Finance ($LKPFIN) | 6.9x | 5.8x | 4.5x | 3.5x | 0.0x |
| |
|---|
| Median (29 companies) | -0.2x | 0.3x | 0.0x | 0.0x | 0.0x |
|---|
| Indiabulls Securities ($IBSEC) | 1.6x | 2.5x | 1.9x | 4.0x | 4.0x |
