Jm Financial Debt jumped on 48.8% and Net Debt / EBITDA jumped on 0.9x from 4.8x to 5.8x

13-05-2016 • About Jm Financial ($JMFINANCIL) • By InTwits

Jm Financial reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:

Jm Financial is a growth stock: FY2016 revenue growth was 17.6%, 5 year revenue CAGR was 13.0% at FY2016 ROIC
Jm Financial has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.2%. At the same time it's a lot of higher than industry average of 3.0%.
CAPEX is quite volatile: ₹198m in FY2016, ₹2,378m in FY2015, ₹1,131m in FY2014, ₹96m in FY2013, ₹75m in FY2012
It operates with high leverage: Net Debt/EBITDA is 5.8x 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 jumped on 17.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.2 pp from 14.6% to 16.8% in FY2016. EBITDA Margin followed a growing trend at 4.0 pp per annum in the last 5 years.

Net Income margin increased slightly on 0.71 pp from 23.6% to 24.3% in FY2016. Net Income margin stuck to a growing trend at 2.7 pp per annum in the last 5 years.

Investments (CAPEX, working capital and M&A)

In FY2016 Jm Financial had CAPEX/Revenue of 1.2%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 9.8%. During FY2012-FY2016 CAPEX as a % of Revenue topped in FY2015 at 16.9%.

Leverage (Debt)

Company's Net Debt / EBITDA is 5.8x and Debt / EBITDA is 5.8x. Net Debt / EBITDA surged on 0.9x from 4.8x to 5.8x in FY2016. Debt surged on 48.8% while cash surged on 10.2%. During FY2012-FY2016 Net Debt/EBITDA bottomed in FY2014 at 4.8x and was growing since that time.

Jm Financial has short term refinancing risk: cash is only 1.5% of short term debt.

Financial and operational results

Jm Financial ($JMFINANCIL) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	8,740	10,422	10,067	14,030	16,501	17.6%
EBITDA	4,922	6,454	6,069	9,622	12,012	24.8%
Net Income	1,212	1,829	2,095	3,305	4,005	21.2%
Balance Sheet
Cash	429	547	980	609	672	10.2%
Short Term Debt	29,311	37,708	25,727	44,600	45,515	2.1%
Long Term Debt	2,713	4,254	4,144	2,614	24,724	845.9%
Cash flow
Capex	75	96	1,131	2,378	198	-91.7%
Ratios
Revenue growth	-2.4%	19.3%	-3.4%	39.4%	17.6%
EBITDA growth	-2.5%	31.1%	-6.0%	58.6%	24.8%

EBITDA Margin	56.3%	61.9%	60.3%	68.6%	72.8%	4.2%
Net Income Margin	13.9%	17.6%	20.8%	23.6%	24.3%	0.7%
CAPEX, % of revenue	0.9%	0.9%	11.2%	16.9%	1.2%	-15.7%

ROE	6.2%	9.2%	9.9%	13.9%	14.7%	0.7%
Net Debt/EBITDA	6.4x	6.4x	4.8x	4.8x	5.8x	0.9x

Peers in Other Financial Services

Below you can find Jm Financial 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 ($GEOJITBNPP)	-8.6%	2.0%	-12.6%	42.3%	-
Capital First ($CAPF)	-	9.9%	31.5%	35.8%	31.0%
Indiabulls Securities ($IBSEC)	-	0.1%	58.0%	31.6%	-0.5%
Median (10 companies)	10.3%	9.0%	5.9%	26.5%	5.6%
Jm Financial ($JMFINANCIL)	-	19.3%	-3.4%	39.4%	17.6%

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 ($WALLFORT)	-	-	-	82.5%	-
Median (31 companies)	34.9%	38.5%	38.6%	31.2%	61.4%
Jm Financial ($JMFINANCIL)	56.3%	61.9%	60.3%	68.6%	72.8%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
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%	-
Lkp Finance ($LKPFIN)	3.6%	1.6%	3.9%	1.1%	-
Median (9 companies)	4.1%	1.6%	1.7%	1.1%	8.3%
Jm Financial ($JMFINANCIL)	0.9%	0.9%	11.2%	16.9%	1.2%

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 ($SHARDUL)	-	-	-	-	-
Median (33 companies)	5.4%	10.2%	9.9%	12.9%	6.3%
Jm Financial ($JMFINANCIL)	-	-	-	-	-

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Capital First ($CAPF)	7.5x	9.2x	9.1x	7.7x	9.4x
Religare Enterprises ($RELIGARE)	9.2x	6.1x	7.0x	7.2x	-
Intec Capital ($INTECCAP)	5.1x	4.9x	4.6x	4.5x	-
Indiabulls Securities ($IBSEC)	1.6x	2.5x	1.9x	4.0x	4.0x
Lkp Finance ($LKPFIN)	6.9x	5.8x	4.5x	3.5x	0.0x
Median (29 companies)	-0.2x	0.3x	0.0x	0.0x	0.0x
Jm Financial ($JMFINANCIL)	6.4x	6.4x	4.8x	4.8x	5.8x

Jm Financial stock price chart

Jm Financial financials

mln.	FY2010	FY2011	FY2012

Revenue	16,541	8,959	8,740
EBITDA	2,740	5,045	4,922
Net income	1,517	1,746	1,212
CAPEX	107.8	90.300	74.500
Debt	18,420	33,472	32,024
Cash	373.1	339.5	428.6

About Jm Financial

JM Financial Limited provides a range of financial products and services to public and private sector corporations, multinational corporations, financial institutions, institutional investors, high net-worth individuals, retail investors, and market intermediaries in India. It operates through four segments: Investment Banking and Securities Business, Fund Based Activities, Alternative Asset Management, and Asset Management. The Investment Banking and Securities Business segment offers advisory services for capital market transactions, including fund raising in public markets and from private equity investors, as well as mergers, acquisitions, restructuring, and financial advisory services; and distributes financial products through a network of franchisees and independent financial distributors. The Fund Based Activities segment provides finance against securities/commercial real estate to a range of corporate and non-corporate clients. This segment also trades in corporate bonds and government securities, as well as identifies, acquires, and sells down debt assets through a range of structured products. The Alternative Asset Management segment manages funds of institutional and large non-institutional investors raised under various schemes for investments under mandated charter, such as private equity and real estate fund management. The Asset management segment manages mutual fund assets through various schemes; and offers a range of investment options to various investors. The company also provides research, private and corporate wealth management, fixed income products structuring, investments, portfolio management, commodity broking, non banking financial activities, and asset reconstruction services. JM Financial Limited was founded in 1973 and is based in Mumbai, India.