Il&Fs Transportation Networks reports 39.8% CAPEX growth in 2016 and 27.1% Revenue growth
13-05-2016 • About Il&Fs Transportation Networks (
$IL&FSTRANS) • By InTwits
Il&Fs Transportation Networks reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Il&Fs Transportation Networks is a fast growth stock: FY2016 revenue growth was 27.1%, 5 year revenue CAGR was 15.3% at FY2016 ROIC 7.7%
- Il&Fs Transportation Networks has high CAPEX intensity: 5 year average CAPEX/Revenue was 44.3%. At the same time it's in pair with industry average of 39.4%
- CAPEX is quite volatile: ₹8,903m in FY2016, ₹5,443m in FY2015, ₹3,766m in FY2014, ₹4,710m in FY2013, ₹2,854m in FY2012
- The company has business model with low profitability: ROIC is 7.7%
- It operates with high leverage: Net Debt/EBITDA is 9.7x while industry average is 4.9x
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 27.1%. During the last 5 years Revenue growth bottomed in FY2015 at -1.3%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.6 pp from 16.5% to 20.1% in FY2016. EBITDA Margin stuck to a growing trend at 2.0 pp per annum in FY2012-FY2016.
SG&A as a % of Revenue decreased slightly on 1.9 pp from 8.0% to 6.1% in FY2016.
Net Income margin decreased on 3.1 pp from 6.8% to 3.8% in FY2016. Net Income margin followed a declining trend at -1.1 pp per annum in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Il&Fs Transportation Networks had CAPEX/Revenue of 48.3%. CAPEX/Revenue increased on 2.2 pp from 46.1% in FY2013 to 48.3% in FY2016. Average CAPEX/Revenue for the last three years was 46.9%. The company has spent a lot to CAPEX (143% of EBITDA) to fuel its growth.
Return on investment
The company operates at low ROIC (7.7%) and ROE (3.7%). ROIC showed almost no change in FY2016. ROE decreased on 3.3 pp from 7.0% to 3.7% in FY2016. ROIC followed a declining trend at -1.5 pp per annum in FY2012-FY2016. ROE stuck to a declining trend at -4.1 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 9.7x Net Debt / EBITDA and 9.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.9x from 10.6x to 9.7x in FY2016. Debt surged on 17.6% while cash dropped on 14.4%. Net Debt/EBITDA followed a growing trend at 0.9x per annum in the last 5 years.
Il&Fs Transportation Networks has short term refinancing risk: cash is only 11.4% of short term debt.
Valuation and dividends
Il&Fs Transportation Networks's trades at EV/EBITDA 10.6x and P/E 7.6x while industy averages are 17.8x and 21.9x.
Management team
Mittal S C is a the company's CEO. Mittal S C has spent 10 years with the company. Dilip Bhatia is a the company's CFO. Dilip Bhatia has spent 4 years at the company.
Financial and operational results
Il&Fs Transportation Networks ($IL&FSTRANS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 56,056 | 66,448 | 65,870 | 65,010 | 82,638 | 27.1% |
| SG&A | | | | 5,219 | 5,081 | -2.7% |
| EBITDA | 14,878 | 18,533 | 19,031 | 21,521 | 27,849 | 29.4% |
| Net Income | 4,970 | 5,202 | 4,630 | 4,436 | 3,115 | -29.8% |
Balance Sheet
|
|---|
| Cash | 1,388 | 3,578 | 6,112 | 6,892 | 5,898 | -14.4% |
| Short Term Debt | 32,522 | 21,742 | 25,498 | 49,218 | 51,546 | 4.7% |
| Long Term Debt | 69,738 | 121,849 | 162,668 | 185,917 | 224,885 | 21.0% |
Cash flow
|
|---|
| Capex | 19,354 | 30,621 | 31,979 | 28,526 | 39,884 | 39.8% |
Ratios
|
|---|
| Revenue growth | 38.5% | 18.5% | -0.9% | -1.3% | 27.1% | |
| EBITDA growth | 26.0% | 24.6% | 2.7% | 13.1% | 29.4% | |
|
|---|
| EBITDA Margin | 26.5% | 27.9% | 28.9% | 33.1% | 33.7% | 0.6% |
| SG&A, % of revenue | | | | 8.0% | 6.1% | -1.9% |
| Net Income Margin | 8.9% | 7.8% | 7.0% | 6.8% | 3.8% | -3.1% |
| CAPEX, % of revenue | 34.5% | 46.1% | 48.5% | 43.9% | 48.3% | 4.4% |
|
|---|
| ROIC | 13.6% | 10.9% | 8.1% | 7.3% | 7.7% | 0.4% |
| ROE | 19.8% | 16.2% | 10.2% | 7.0% | 3.7% | -3.3% |
| Net Debt/EBITDA | 6.8x | 7.6x | 9.6x | 10.6x | 9.7x | -0.9x |
Peers in Roads & Highways
Below we provide Il&Fs Transportation Networks benchmarking against other companies in Roads & Highways 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 |
|---|
| Irb Infrastructure Developers ($IRB) | 28.5% | 17.7% | 1.2% | 3.1% | - |
| Noida Toll Bridge Company ($NOIDATOLL) | - | 13.3% | 11.2% | 3.0% | 5.8% |
| |
|---|
| Median (2 companies) | 28.5% | 15.5% | 6.2% | 3.1% | 5.8% |
|---|
| Il&Fs Transportation Networks ($IL&FSTRANS) | - | 18.5% | -0.9% | -1.3% | 27.1% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Noida Toll Bridge Company ($NOIDATOLL) | 71.7% | 68.3% | 73.0% | 70.4% | 72.0% |
| Irb Infrastructure Developers ($IRB) | 44.6% | 44.4% | 47.3% | 57.5% | - |
| |
|---|
| Median (2 companies) | 58.1% | 56.3% | 60.2% | 63.9% | 72.0% |
|---|
| Il&Fs Transportation Networks ($IL&FSTRANS) | 26.5% | 27.9% | 28.9% | 33.1% | 33.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Irb Infrastructure Developers ($IRB) | 77.2% | 67.2% | 71.1% | 60.1% | - |
| Noida Toll Bridge Company ($NOIDATOLL) | 0.3% | 1.0% | 0.2% | 0.7% | 9.8% |
| |
|---|
| Median (2 companies) | 38.8% | 34.1% | 35.7% | 30.4% | 9.8% |
|---|
| Il&Fs Transportation Networks ($IL&FSTRANS) | 34.5% | 46.1% | 48.5% | 43.9% | 48.3% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Noida Toll Bridge Company ($NOIDATOLL) | 10.9% | 12.8% | 15.0% | 14.4% | 10.6% |
| Irb Infrastructure Developers ($IRB) | 12.8% | 10.7% | 9.6% | 9.5% | - |
| |
|---|
| Median (2 companies) | 11.8% | 11.8% | 12.3% | 11.9% | 10.6% |
|---|
| Il&Fs Transportation Networks ($IL&FSTRANS) | 13.6% | 10.9% | 8.1% | 7.3% | 7.7% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Irb Infrastructure Developers ($IRB) | 4.8x | 5.2x | 6.0x | 5.0x | - |
| Noida Toll Bridge Company ($NOIDATOLL) | 1.1x | 0.3x | 0.1x | 0.2x | 0.1x |
| |
|---|
| Median (2 companies) | 3.0x | 2.8x | 3.1x | 2.6x | 0.1x |
|---|
| Il&Fs Transportation Networks ($IL&FSTRANS) | 6.8x | 7.6x | 9.6x | 10.6x | 9.7x |
