Pipavav Defence And Offshore Eng reports 248% EBITDA decline in 2016 and 65.8% Revenue decline
14-05-2016 • About Pipavav Defence And Offshore Eng (
$PIPAVAVDOC) • By InTwits
Pipavav Defence And Offshore Eng reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Pipavav Defence And Offshore Eng is a company in decline: FY2016 revenue growth was -65.8%, 5 years revenue CAGR was -18.3%
- EBITDA Margin is quite volatile: -41.0% in FY2016, 9.5% in FY2015, 30.7% in FY2014, 23.2% in FY2013, 23.9% in FY2012
- Pipavav Defence And Offshore Eng has high CAPEX intensity: 5 year average CAPEX/Revenue was 50.5%. At the same time it's a lot of higher than industry average of 5.9%.
- CAPEX is quite volatile: ₹266m in FY2016, ₹9,706m in FY2015, ₹8,298m in FY2014, ₹19,756m in FY2013, ₹5,275m in FY2012
- The company has unprofitable business model: ROIC is -3.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.5x while industry average is -0.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Pipavav Defence And Offshore Eng's Revenue dropped on 65.8%. Revenue decline was accelerating on average at -46.8 pp per annum in the last 5 years. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 50.4 pp from 9.5% to -41.0% in FY2016.
Net Income margin dropped on 149 pp from -40.7% to -190% in FY2016. During the last 5 years Net Income margin topped in FY2013 at 1.2% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 Pipavav Defence And Offshore Eng had CAPEX/Revenue of 8.5%. CAPEX/Revenue dropped on 67.9 pp from 76.4% in FY2013 to 8.5% in FY2016. It's average level of CAPEX/Revenue for the last three years was 49.2%.
Return on investment
The company operates at negative ROIC (-3.3%) and ROE (-25.5%). ROIC decreased on 2.0 pp from -1.3% to -3.3% in FY2016. ROE dropped on 10.6 pp from -14.9% to -25.5% in FY2016. ROIC followed a declining trend at -3.1 pp per annum in the last 5 years. ROE stuck to a declining trend at -7.0 pp per annum in FY2012-FY2016.
Leverage (Debt)
Debt level is 1.5x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 75.5x from 75.5x to in FY2016. Debt surged on 17.1% while cash dropped on 23.5%.
Pipavav Defence And Offshore Eng has short term refinancing risk: cash is only 8.5% of short term debt.
Management team
Harisimran Singh Malhi is a Pipavav Defence And Offshore Eng's CEO. Harisimran Singh Malhi has spent 4 years with the company.
Financial and operational results
Pipavav Defence And Offshore Eng ($PIPAVAVDOC) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 18,671 | 25,865 | 25,337 | 9,115 | 3,122 | -65.8% |
| EBITDA | 4,461 | 5,995 | 7,787 | 862 | -1,279 | -248.3% |
| Net Income | 216 | 311 | 27 | -3,705 | -5,924 | |
Balance Sheet
|
|---|
| Cash | 2,783 | 459 | 463 | 2,084 | 1,595 | -23.5% |
| Short Term Debt | 20,083 | 27,701 | 34,306 | 12,259 | 18,781 | 53.2% |
| Long Term Debt | 10,018 | 22,038 | 20,966 | 54,895 | 59,839 | 9.0% |
Cash flow
|
|---|
| Capex | 5,275 | 19,756 | 8,298 | 9,706 | 266 | -97.3% |
Ratios
|
|---|
| Revenue growth | 117.1% | 38.5% | -2.0% | -64.0% | -65.8% | |
| EBITDA growth | 136.1% | 34.4% | 29.9% | -88.9% | -248.3% | |
|
|---|
| EBITDA Margin | 23.9% | 23.2% | 30.7% | 9.5% | -41.0% | -50.4% |
| Net Income Margin | 1.2% | 1.2% | 0.1% | -40.7% | -189.8% | -149.1% |
| CAPEX, % of revenue | 28.3% | 76.4% | 32.7% | 106.5% | 8.5% | -98.0% |
|
|---|
| ROIC | 7.6% | 7.7% | 8.1% | -1.3% | -3.3% | -2.0% |
| ROE | 1.2% | 1.5% | 0.1% | -14.9% | -25.5% | -10.6% |
| Net Debt/EBITDA | 6.1x | 8.2x | 7.0x | 75.5x | |
Peers in Defence
Below you can find Pipavav Defence And Offshore Eng benchmarking vs. other companies in Defence 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bharat Electronics ($BEL) | 2.9% | 6.2% | 3.0% | 8.8% | - |
| |
|---|
| Median (1 company) | 2.9% | 6.2% | 3.0% | 8.8% | - |
|---|
| Pipavav Defence And Offshore Eng ($PIPAVAVDOC) | - | 38.5% | -2.0% | -64.0% | -65.8% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bharat Electronics ($BEL) | 11.0% | 10.8% | 14.8% | 17.0% | - |
| |
|---|
| Median (1 company) | 11.0% | 10.8% | 14.8% | 17.0% | - |
|---|
| Pipavav Defence And Offshore Eng ($PIPAVAVDOC) | 23.9% | 23.2% | 30.7% | 9.5% | -41.0% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bharat Electronics ($BEL) | 4.2% | 6.3% | 5.9% | 3.3% | - |
| |
|---|
| Median (1 company) | 4.2% | 6.3% | 5.9% | 3.3% | - |
|---|
| Pipavav Defence And Offshore Eng ($PIPAVAVDOC) | 28.3% | 76.4% | 32.7% | 106.5% | 8.5% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bharat Electronics ($BEL) | 9.7% | 8.9% | 12.0% | 13.5% | - |
| |
|---|
| Median (1 company) | 9.7% | 8.9% | 12.0% | 13.5% | - |
|---|
| Pipavav Defence And Offshore Eng ($PIPAVAVDOC) | 7.6% | 7.7% | 8.1% | -1.3% | -3.3% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bharat Electronics ($BEL) | -0.7x | -0.6x | -0.4x | -0.5x | - |
| |
|---|
| Median (1 company) | -0.7x | -0.6x | -0.4x | -0.5x | - |
|---|
| Pipavav Defence And Offshore Eng ($PIPAVAVDOC) | 6.1x | 8.2x | 7.0x | 75.5x | - |
