Onward Technologies EBITDA surged on 11.8% and Revenue increased on 4.5%
16-05-2016 • About Onward Technologies (
$ONWARDTEC) • By InTwits
Onward Technologies reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- The company has highly profitable business model: ROIC is 17.2%
- It operates with high leverage: Net Debt/EBITDA is 1.2x while industry average is 0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Onward Technologies's Revenue increased on 4.5%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.73 pp from 6.1% to 6.8% in FY2016.
Net Income margin showed almost no change in FY2016. During the last 5 years Net Income margin bottomed in FY2014 at 0.045% and was growing since that time.
Investments (CAPEX, working capital and M&A)
Onward Technologies's CAPEX/Revenue was 1.5% in FY2016. The company's CAPEX/Revenue showed almost no change from FY2013 to FY2016.
Return on investment
The company operates at good ROIC (17.2%) while ROE is low (9.4%). ROIC increased on 6.0 pp from 11.3% to 17.2% in FY2016. ROE decreased slightly on 0.58 pp from 10.0% to 9.4% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.2x and Debt / EBITDA is 1.4x. Net Debt / EBITDA dropped on 0.7x from 1.9x to 1.2x in FY2016. Debt dropped on 24.9% while cash increased on 8.1%.
Onward Technologies has short term refinancing risk: cash is only 14.7% of short term debt.
Financial and operational results
Onward Technologies ($ONWARDTEC) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,305 | 1,460 | 1,670 | 1,893 | 1,977 | 4.5% |
| EBITDA | 126 | 150 | 86 | 120 | 134 | 11.8% |
| Net Income | 65 | 53 | 1 | 29 | 32 | 9.7% |
Balance Sheet
|
|---|
| Cash | 17 | 25 | 18 | 23 | 24 | 8.1% |
| Short Term Debt | 148 | 177 | 243 | 147 | 166 | 12.7% |
| Long Term Debt | 169 | 177 | 125 | 107 | 25 | -76.5% |
Cash flow
|
|---|
| Capex | 29 | 25 | | 62 | 30 | -51.3% |
Ratios
|
|---|
| Revenue growth | 26.5% | 11.9% | 14.3% | 13.4% | 4.5% | |
| EBITDA growth | 21.5% | 19.0% | -42.9% | 40.4% | 11.8% | |
|
|---|
| EBITDA Margin | 9.6% | 10.3% | 5.1% | 6.3% | 6.8% | 0.4% |
| Net Income Margin | 5.0% | 3.7% | 0.0% | 1.5% | 1.6% | 0.1% |
| CAPEX, % of revenue | 2.2% | 1.7% | | 3.3% | 1.5% | -1.8% |
|
|---|
| ROIC | 18.8% | 20.7% | 8.3% | 11.3% | 17.2% | 6.0% |
| ROE | 46.1% | 25.8% | 0.3% | 10.0% | 9.4% | -0.6% |
| Net Debt/EBITDA | 2.4x | 2.2x | 4.1x | 1.9x | 1.2x | -0.7x |
Peers in IT Consulting & Software
Below we provide Onward Technologies benchmarking against other companies in IT Consulting & Software 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 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ramco Systems ($RAMCOSYS) | 9.3% | 7.3% | 9.9% | 37.0% | - |
| Cyient ($CYIENT) | - | 20.6% | 17.8% | 24.0% | 13.1% |
| Empower India ($EMPOWER) | -3.7% | -13.2% | -32.6% | 23.9% | - |
| Hexaware Technologies ($HEXAWARE) | 34.3% | 17.3% | 13.0% | 21.0% | - |
| Tech Mahindra ($TECHM) | 6.8% | 25.2% | 174.0% | 20.1% | - |
| |
|---|
| Median (22 companies) | 8.0% | 20.6% | 13.5% | 7.2% | 12.9% |
|---|
| Onward Technologies ($ONWARDTEC) | - | 11.9% | 14.3% | 13.4% | 4.5% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Consultancy Services ($TCS) | - | - | 47.4% | 42.4% | 43.9% |
| Infosys ($INFY) | 41.3% | 98.1% | 35.9% | 38.3% | 37.4% |
| Mindtree ($MINDTREE) | 31.5% | 36.2% | - | 34.8% | 32.4% |
| Wipro ($WIPRO) | 29.2% | 30.4% | 32.0% | 31.6% | 30.4% |
| |
|---|
| Median (4 companies) | 32.7% | 36.2% | 35.9% | 36.6% | 34.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oracle Financial Services Software ($OFSS) | 35.3% | 35.2% | 37.4% | 39.7% | 41.1% |
| Infosys ($INFY) | 31.6% | 27.9% | 26.3% | 27.1% | 27.1% |
| Tata Consultancy Services ($TCS) | 29.5% | 28.6% | 30.7% | 26.1% | 28.2% |
| Wipro ($WIPRO) | 19.1% | 20.9% | 22.4% | 22.3% | 21.1% |
| Mindtree ($MINDTREE) | 15.1% | 19.8% | 20.6% | 20.3% | 17.7% |
| |
|---|
| Median (25 companies) | 15.1% | 17.8% | 18.5% | 14.2% | 16.0% |
|---|
| Onward Technologies ($ONWARDTEC) | 9.6% | 10.3% | 5.1% | 6.3% | 6.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ramco Systems ($RAMCOSYS) | - | 22.1% | 15.3% | 12.4% | - |
| Niit Technologies ($NIITTECH) | 5.9% | 4.6% | 6.1% | 7.9% | 6.0% |
| Financial Technologies (India) ($FINANTECH) | 8.9% | 11.4% | - | 6.5% | 5.4% |
| Mindtree ($MINDTREE) | 2.5% | 4.5% | 5.0% | 5.6% | 3.4% |
| Tech Mahindra ($TECHM) | 5.4% | 2.6% | 5.0% | 5.0% | - |
| |
|---|
| Median (20 companies) | 3.9% | 3.5% | 3.0% | 3.1% | 3.1% |
|---|
| Onward Technologies ($ONWARDTEC) | 2.2% | 1.7% | - | 3.3% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Consultancy Services ($TCS) | 48.6% | 48.4% | 50.2% | 40.5% | 44.4% |
| Hexaware Technologies ($HEXAWARE) | 33.5% | 39.2% | 34.7% | 35.7% | - |
| Mindtree ($MINDTREE) | 24.9% | 34.6% | 36.2% | 32.0% | 28.9% |
| Sqs India Bfsi ($SQSBFSI) | 12.1% | 27.0% | 29.4% | 30.6% | 39.9% |
| Tech Mahindra ($TECHM) | 15.4% | 20.1% | 43.0% | 29.7% | - |
| |
|---|
| Median (30 companies) | 19.6% | 21.1% | 23.2% | 20.8% | 25.2% |
|---|
| Onward Technologies ($ONWARDTEC) | 18.8% | 20.7% | 8.3% | 11.3% | 17.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 3I Infotech ($3IINFOTECH) | 8.5x | 20.3x | 27.7x | 14.7x | - |
| Ramco Systems ($RAMCOSYS) | 8.8x | - | 27.6x | 4.2x | - |
| Kpit Technologies ($KPIT) | 0.3x | 0.5x | 0.7x | 0.4x | -0.3x |
| Mphasis ($MPHASIS) | -0.1x | 0.2x | - | 0.2x | - |
| Geometric ($GEOMETRIC) | 0.1x | -0.0x | -0.2x | 0.0x | -0.0x |
| |
|---|
| Median (23 companies) | -0.1x | -0.2x | -0.3x | -0.4x | -0.3x |
|---|
| Onward Technologies ($ONWARDTEC) | 2.4x | 2.2x | 4.1x | 1.9x | 1.2x |
