Brigade Enterprises CAPEX surged on 276% and Revenue jumped on 23.6%
16-05-2016 • About Brigade Enterprises (
$BRIGADE) • By InTwits
Brigade Enterprises reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Brigade Enterprises is a fast growth stock: FY2016 revenue growth was 23.6%, 5 year revenue CAGR was 27.4% at FY2016 ROIC 10.9%
- Brigade Enterprises has high CAPEX intensity: 5 year average CAPEX/Revenue was 29.6%. At the same time it's a lot of higher than industry average of 9.3%.
- CAPEX is quite volatile: ₹9,121m in FY2016, ₹2,428m in FY2015, ₹1,541m in FY2014, ₹877m in FY2013, ₹2,804m in FY2012
- The company has business model with average profitability: ROIC is 10.9%
- It operates with high leverage: Net Debt/EBITDA is 4.9x while industry average is 6.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Brigade Enterprises's Revenue jumped on 23.6%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.6 pp from 29.3% to 30.8% in FY2016.
Net Income margin increased slightly on 0.77 pp from 7.3% to 8.0% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 56.3%. Brigade Enterprises showed fast CAPEX/Revenue growth of 45.6 pp from 10.7% in FY2013 to 56.3% in FY2016. It's average level of CAPEX/Revenue for the last three years was 30.6%. The company has spent a lot to CAPEX (183% of EBITDA) to secure its growth. During FY2012-FY2016 CAPEX as a % of Revenue bottomed in FY2013 at 10.7% and was growing since that time.
Return on investment
The company operates at low ROIC (10.9%) and ROE (9.2%). ROIC showed almost no change in FY2016. ROE increased slightly on 2.0 pp from 7.2% to 9.2% in FY2016. ROIC grew at 1.7 pp per annum in the last 5 years. ROE stuck to a growing trend at 1.1 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 4.9x Net Debt / EBITDA and 5.1x Debt / EBITDA. Net Debt / EBITDA jumped on 0.7x from 4.2x to 4.9x in FY2016. Debt jumped on 53.5% while cash surged on 102%. During the last 5 years Net Debt/EBITDA bottomed in FY2014 at 3.3x and was growing since that time.
Brigade Enterprises has short term refinancing risk: cash is only 11.3% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 8.3x and P/E 13.2x while industy averages are 17.8x and 21.9x.
Management team
Suresh Kris is a the company's CFO. Suresh Kris has spent 8 years at the company.
Financial and operational results
Brigade Enterprises ($BRIGADE) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6,130 | 8,227 | 9,065 | 13,108 | 16,201 | 23.6% |
| EBITDA | 1,466 | 2,128 | 2,988 | 3,837 | 4,997 | 30.2% |
| Net Income | 569 | 612 | 920 | 952 | 1,301 | 36.6% |
Balance Sheet
|
|---|
| Cash | 87 | 287 | 382 | 539 | 1,087 | 101.8% |
| Short Term Debt | 1,676 | 2,121 | 4,888 | 7,707 | 9,583 | 24.4% |
| Long Term Debt | 6,835 | 8,427 | 5,327 | 8,926 | 15,951 | 78.7% |
Cash flow
|
|---|
| Capex | 2,804 | 877 | 1,541 | 2,428 | 9,121 | 275.6% |
Ratios
|
|---|
| Revenue growth | 27.2% | 34.2% | 10.2% | 44.6% | 23.6% | |
| EBITDA growth | -13.6% | 45.2% | 40.4% | 28.4% | 30.2% | |
|
|---|
| EBITDA Margin | 23.9% | 25.9% | 33.0% | 29.3% | 30.8% | 1.6% |
| Net Income Margin | 9.3% | 7.4% | 10.1% | 7.3% | 8.0% | 0.8% |
| CAPEX, % of revenue | 45.7% | 10.7% | 17.0% | 18.5% | 56.3% | 37.8% |
|
|---|
| ROIC | 4.5% | 6.2% | 9.3% | 10.5% | 10.9% | 0.4% |
| ROE | 5.0% | 5.1% | 7.4% | 7.2% | 9.2% | 2.0% |
| Net Debt/EBITDA | 5.7x | 4.8x | 3.3x | 4.2x | 4.9x | 0.7x |
Peers in Realty
Below you can find Brigade Enterprises benchmarking vs. other companies in Realty 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 |
|---|
| Sspdl ($SSPDL) | 16.2% | -11.8% | -43.4% | 326.1% | - |
| Orbit Corporation ($ORBITCORP) | -4.2% | -21.9% | -88.0% | 275.1% | - |
| Ajmera Realty & Infra India ($AJMERA) | 21.3% | -61.7% | -1.8% | 109.9% | - |
| Prajay Engineers Syndicate ($PRAENG) | -21.1% | 42.0% | -30.1% | 62.8% | - |
| Godrej Properties ($GODREJPROP) | - | 34.7% | 13.7% | 56.3% | 35.9% |
| |
|---|
| Median (34 companies) | -3.6% | 3.4% | -4.5% | 11.4% | 35.8% |
|---|
| Brigade Enterprises ($BRIGADE) | - | 34.2% | 10.2% | 44.6% | 23.6% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Godrej Properties ($GODREJPROP) | 24.9% | 33.3% | 28.9% | 19.4% | 14.7% |
| |
|---|
| Median (1 company) | 24.9% | 33.3% | 28.9% | 19.4% | 14.7% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hubtown ($HUBTOWN) | 53.3% | 72.4% | 67.6% | 82.4% | - |
| Housing Development & Infrastructure ($HDIL) | 75.8% | 40.6% | 102.5% | 78.9% | - |
| Tci Developers ($TCIDEVELOP) | - | - | - | 75.9% | - |
| Orbit Corporation ($ORBITCORP) | 42.4% | 53.3% | -127.2% | 69.8% | - |
| Oberoi Realty ($OBEROIRLTY) | 59.3% | 58.9% | 54.5% | 56.4% | 47.7% |
| |
|---|
| Median (43 companies) | 19.4% | 13.4% | 19.8% | 19.4% | 22.0% |
|---|
| Brigade Enterprises ($BRIGADE) | 23.9% | 25.9% | 33.0% | 29.3% | 30.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Prozone Intu Properties ($PROZONINTU) | - | - | - | 89.5% | - |
| Ashiana Housing ($ASHIANA) | - | - | - | 26.7% | - |
| Prestige Estates Projects ($PRESTIGE) | 37.7% | 30.2% | 18.8% | 11.6% | - |
| Parsvnath Developers ($PARSVNATH) | 15.9% | - | 11.6% | 10.6% | - |
| Vipul ($VIPUL) | 5.0% | 1.9% | 3.3% | 9.4% | - |
| |
|---|
| Median (30 companies) | 4.7% | 2.3% | 3.5% | 2.3% | 2.3% |
|---|
| Brigade Enterprises ($BRIGADE) | 45.7% | 10.7% | 17.0% | 18.5% | 56.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ahluwalia Contracts (India) ($AHLUCONT) | -3.2% | -15.8% | 5.6% | 21.2% | - |
| Poddar Developers ($PODDARDEV) | 3.9% | 2.6% | 12.9% | 19.1% | 7.5% |
| Lancor Holdings ($LANCORHOL) | 18.0% | 11.6% | 19.5% | 17.7% | - |
| Mahindra Lifespace Developers ($MAHLIFE) | 10.4% | 11.7% | 6.6% | 14.9% | 4.6% |
| Sobha Developers ($SOBHA) | 18.8% | 16.7% | 14.6% | 12.7% | - |
| |
|---|
| Median (50 companies) | 5.9% | 4.6% | 5.6% | 6.8% | 6.7% |
|---|
| Brigade Enterprises ($BRIGADE) | 4.5% | 6.2% | 9.3% | 10.5% | 10.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| D B Realty ($DBREALTY) | 13.2x | 135.4x | 14.0x | 54.8x | - |
| B.L.Kashyap And Sons ($BLKASHYAP) | 8.2x | 5.8x | 12.7x | 40.1x | - |
| Vipul ($VIPUL) | 0.7x | 3.0x | 10.8x | 26.0x | - |
| Ansal Properties & Infrastructure ($ANSALAPI) | 12.8x | 11.9x | 11.4x | 16.6x | - |
| Srs Real Infrastructure ($SRSREAL) | 11.7x | 10.0x | 12.9x | 14.7x | - |
| |
|---|
| Median (37 companies) | 5.1x | 5.1x | 5.0x | 4.0x | 0.5x |
|---|
| Brigade Enterprises ($BRIGADE) | 5.7x | 4.8x | 3.3x | 4.2x | 4.9x |
