Indian Metals & Ferro Alloys EBITDA dropped on 53.3% and EBITDA Margin decreased on 8.2 pp from 17.9% to 9.7%
17-05-2016 • About Indian Metals & Ferro Alloys (
$INDMETA-B) • By InTwits
Indian Metals & Ferro Alloys reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Indian Metals & Ferro Alloys has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.3%. At the same time it's a lot of higher than industry average of 10.0%.
- CAPEX is quite volatile: ₹1,034m in FY2016, ₹722m in FY2015, ₹1,336m in FY2014, ₹2,380m in FY2013, ₹3,848m in FY2012
- The company has unprofitable business model: ROIC is -0.1%
- It operates with high leverage: Net Debt/EBITDA is 9.1x while industry average is 10.0x
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 dropped on 13.4%. Revenue decline was accelerating on average at -5.6 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.0 pp from 8.8% to 10.8% in FY2016. During the last 5 years EBITDA Margin topped in FY2014 at 23.2% and was declining since that time.
Net Income margin decreased on 4.9 pp from 0.27% to -4.7% in FY2016. Net Income margin stuck to a declining trend at -2.4 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 8.9% in FY2016. Indian Metals & Ferro Alloys showed decline in CAPEX/Revenue of 9.8 pp from 18.7% in FY2013 to 8.9% in FY2016. For the last three years the average CAPEX/Revenue was 8.1%. Indian Metals & Ferro Alloys invested a big chunk of EBITDA (91.9%) to CAPEX which didn't stop revenue from falling. CAPEX as a % of Revenue declined at -6.3 pp per annum in the last 5 years.
Return on investment
The company operates at negative ROIC (-0.1%) and ROE (-6.3%). ROIC decreased on 5.7 pp from 5.6% to -0.085% in FY2016. ROE decreased on 6.8 pp from 0.42% to -6.3% in FY2016. ROIC declined at -2.6 pp per annum in FY2012-FY2016. ROE stuck to a declining trend at -3.5 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 9.1x and Debt / EBITDA is 9.6x. Net Debt / EBITDA jumped on 4.7x from 4.3x to 9.1x in FY2016. Debt decreased on 4.3% while cash dropped on 31.1%. During FY2012-FY2016 Net Debt/EBITDA bottomed in FY2014 at 3.5x and was growing since that time.
Indian Metals & Ferro Alloys has short term refinancing risk: cash is only 16.4% of short term debt.
Financial and operational results
Indian Metals & Ferro Alloys ($INDMETA-B) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 11,456 | 12,733 | 13,179 | 13,448 | 11,642 | -13.4% |
| EBITDA | 2,340 | 2,723 | 3,062 | 2,408 | 1,124 | -53.3% |
| Net Income | 616 | 528 | 349 | 37 | -543 | -1,574.7% |
Balance Sheet
|
|---|
| Cash | 285 | 740 | 313 | 855 | 589 | -31.1% |
| Short Term Debt | 2,443 | 3,233 | 2,978 | 3,456 | 3,601 | 4.2% |
| Long Term Debt | 7,254 | 7,764 | 7,901 | 7,824 | 7,190 | -8.1% |
Cash flow
|
|---|
| Capex | 3,848 | 2,380 | 1,336 | 722 | 1,034 | 43.3% |
Ratios
|
|---|
| Revenue growth | 10.1% | 11.1% | 3.5% | 2.0% | -13.4% | |
| EBITDA growth | -31.9% | 16.4% | 12.4% | -21.4% | -53.3% | |
|
|---|
| EBITDA Margin | 20.4% | 21.4% | 23.2% | 17.9% | 9.7% | -8.2% |
| Net Income Margin | 5.4% | 4.1% | 2.6% | 0.3% | -4.7% | -4.9% |
| CAPEX, % of revenue | 33.6% | 18.7% | 10.1% | 5.4% | 8.9% | 3.5% |
|
|---|
| ROIC | 10.6% | 9.9% | 7.8% | 5.6% | -0.1% | -5.7% |
| ROE | 8.1% | 6.5% | 4.0% | 0.4% | -6.3% | -6.8% |
| Net Debt/EBITDA | 4.0x | 3.8x | 3.5x | 4.3x | 9.1x | 4.7x |
Peers in
Below we provide Indian Metals & Ferro Alloys benchmarking against other companies in 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 |
|---|
| Rane Engine Valve ($RANENGIN) | 6.5% | -14.4% | -1.2% | 49.3% | - |
| Indbulbbph ($INDBULBBPH) | - | -6.5% | 33.5% | 49.2% | 0.9% |
| Monetbbph ($MONETBBPH) | 22.3% | 3.7% | 11.6% | 40.8% | - |
| Asleyf ($ASLEYF) | 15.5% | -3.3% | -8.0% | 33.6% | - |
| Bharat Rasayan ($BHARATRA) | 51.3% | 32.1% | 92.7% | 21.4% | - |
| |
|---|
| Median (17 companies) | 17.4% | 9.7% | 3.8% | 9.1% | 5.3% |
|---|
| Indian Metals & Ferro Alloys ($INDMETA-B) | - | 11.1% | 3.5% | 2.0% | -13.4% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jenson & Nicholson Financial Services ($JNFSL) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Bombay Drugs & Pharmas ($BOMDRDM) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Southern Herbals ($SOUTHNHE) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Tafnccpeq ($TAFNCCPEQ) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (4 companies) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oswal Chemicals & Fertilizers ($OSWALCHEM) | - | - | - | 53.4% | - |
| Kaleconbbph ($KALECONBBPH) | 27.7% | 44.3% | 43.5% | 37.9% | - |
| Paushak ($PAUSHAK) | - | - | - | 25.6% | - |
| The United Nilgiri Tea Estates Company ($UNITEDTEA) | - | - | - | 24.7% | - |
| Indbulbbph ($INDBULBBPH) | 36.7% | 34.6% | 29.5% | 23.5% | 28.7% |
| |
|---|
| Median (20 companies) | 15.1% | 13.4% | 13.4% | 10.3% | 9.8% |
|---|
| Indian Metals & Ferro Alloys ($INDMETA-B) | 20.4% | 21.4% | 23.2% | 17.9% | 9.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Monetbbph ($MONETBBPH) | 131.4% | 5.2% | 139.2% | 89.2% | - |
| Jklakbbph ($JKLAKBBPH) | 28.5% | 28.8% | 24.6% | 23.6% | - |
| Rilbbph ($RILBBPH) | 4.6% | 7.7% | 13.8% | 16.9% | 18.0% |
| Gkw ($GKW) | - | - | - | 15.5% | - |
| Paushak ($PAUSHAK) | - | - | - | 12.3% | - |
| |
|---|
| Median (17 companies) | 8.6% | 5.2% | 4.1% | 5.0% | 0.9% |
|---|
| Indian Metals & Ferro Alloys ($INDMETA-B) | 33.6% | 18.7% | 10.1% | 5.4% | 8.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kaleconbbph ($KALECONBBPH) | - | 89.0% | 103.8% | 81.0% | - |
| Bharat Rasayan ($BHARATRA) | 22.1% | 13.7% | 21.9% | 26.1% | - |
| Uplbbph ($UPLBBPH) | 17.1% | 15.9% | 18.2% | 22.1% | 22.2% |
| Rane Brake Lining ($RANEBRAKE) | 14.1% | 7.9% | 11.1% | 12.8% | - |
| Merckbbph ($MERCKBBPH) | 21.3% | 13.1% | 8.6% | 10.6% | - |
| |
|---|
| Median (28 companies) | 8.4% | 6.7% | 5.6% | 3.9% | 2.7% |
|---|
| Indian Metals & Ferro Alloys ($INDMETA-B) | 10.6% | 9.9% | 7.8% | 5.6% | -0.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Monetbbph ($MONETBBPH) | 9.8x | 16.3x | 27.4x | 140.3x | - |
| Indbulbbph ($INDBULBBPH) | 4.3x | 4.8x | 5.5x | 9.6x | 6.5x |
| Jklakbbph ($JKLAKBBPH) | 2.1x | 2.3x | 5.3x | 5.5x | - |
| Asleyf ($ASLEYF) | 2.5x | 5.0x | 17.8x | 5.0x | - |
| Rane Engine Valve ($RANENGIN) | 2.1x | 11.3x | 4.5x | 4.8x | - |
| |
|---|
| Median (16 companies) | 1.7x | 1.8x | 2.0x | 0.9x | 1.0x |
|---|
| Indian Metals & Ferro Alloys ($INDMETA-B) | 4.0x | 3.8x | 3.5x | 4.3x | 9.1x |
