Vascon Engineers Debt dropped on 19.1%
17-05-2016 • About Vascon Engineers (
$VASCONEQ) • By InTwits
Vascon Engineers reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 7.7% in FY2016, -15.2% in FY2015, 2.0% in FY2014, 3.4% in FY2013, 4.4% in FY2012
- Vascon Engineers has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: ₹130m in FY2016, ₹133m in FY2015, ₹232m in FY2014, ₹156m in FY2013, ₹87m in FY2012
- The company has potentially unprofitable business model: ROIC is 2.8%
- It operates with high leverage: Net Debt/EBITDA is 4.1x while industry average is 6.7x
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 increased slightly on 1.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 16.9% to 18.8% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2015 at -15.2%.
Net Income margin surged on 24.1 pp from -23.1% to 0.96% in FY2016. During the last 5 years Net Income margin bottomed in FY2015 at -23.1%.
Investments (CAPEX, working capital and M&A)
Vascon Engineers's CAPEX/Revenue was 2.1% in FY2016. Vascon Engineers showed almost no change in CAPEX/Revenue from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 2.6%. During FY2012-FY2016 CAPEX as a % of Revenue topped in FY2014 at 3.7% and was declining since that time.
Return on investment
The company operates at low ROIC (2.8%) and ROE (1.1%). ROIC surged on 14.3 pp from -11.5% to 2.8% in FY2016. ROE jumped on 25.5 pp from -24.5% to 1.1% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2015 at -11.5%. During the last 5 years ROE bottomed in FY2015 at -24.5%.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.1x and Debt / EBITDA is 5.6x. Net Debt / EBITDA surged4.1x from to 4.1x in FY2016. Debt dropped on 19.1% while cash surged on 30.7%.
Vascon Engineers has short term refinancing risk: cash is only 42.6% of short term debt.
Valuation and dividends
Vascon Engineers's trades at EV/EBITDA 14.1x and P/E 79.5x while industy averages are 17.8x and 21.9x. Vascon Engineers's EV/(EBITDA-CAPEX) is 19.2x with the industry average at 22.8x.
Financial and operational results
Vascon Engineers ($VASCONEQ) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 7,121 | 7,076 | 6,239 | 6,227 | 6,316 | 1.4% |
| EBITDA | 315 | 244 | 128 | -949 | 484 | |
| Net Income | 134 | -167 | -439 | -1,440 | 61 | |
Balance Sheet
|
|---|
| Cash | 301 | 308 | 296 | 555 | 725 | 30.7% |
| Short Term Debt | 2,349 | 2,576 | 2,833 | 3,044 | 1,702 | -44.1% |
| Long Term Debt | 582 | 460 | 770 | 301 | 1,004 | 233.7% |
Cash flow
|
|---|
| Capex | 87 | 156 | 232 | 133 | 130 | -2.5% |
Ratios
|
|---|
| Revenue growth | -30.4% | -0.6% | -11.8% | -0.2% | 1.4% | |
| EBITDA growth | -69.4% | -22.5% | -47.6% | -842.2% | -151.0% | |
|
|---|
| EBITDA Margin | 4.4% | 3.4% | 2.0% | -15.2% | 7.7% | 22.9% |
| Net Income Margin | 1.9% | -2.4% | -7.0% | -23.1% | 1.0% | 24.1% |
| CAPEX, % of revenue | 1.2% | 2.2% | 3.7% | 2.1% | 2.1% | -0.1% |
|
|---|
| ROIC | 1.2% | 0.4% | -0.5% | -11.5% | 2.8% | 14.3% |
| ROE | 1.9% | -2.3% | -6.4% | -24.5% | 1.1% | 25.5% |
| Net Debt/EBITDA | 8.4x | 11.2x | 25.9x | | 4.1x |
Peers in Realty
Below we provide Vascon Engineers benchmarking against other companies in Realty 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 |
|---|
| 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 ($GODREJPROP) | - | 34.7% | 13.7% | 56.3% | 35.9% |
| |
|---|
| Median (34 companies) | -1.6% | 5.6% | -1.8% | 13.2% | 35.7% |
|---|
| Vascon Engineers ($VASCONEQ) | - | -0.6% | -11.8% | -0.2% | 1.4% |
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) | 20.1% | 18.1% | 20.1% | 22.6% | 23.8% |
|---|
| Vascon Engineers ($VASCONEQ) | 4.4% | 3.4% | 2.0% | -15.2% | 7.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Prozone Intu Properties ($PROZONINTU) | - | - | - | 89.5% | - |
| Ashiana Housing ($ASHIANA) | - | - | - | 26.7% | - |
| Brigade Enterprises ($BRIGADE) | 45.7% | 10.7% | 17.0% | 18.5% | 56.3% |
| Prestige Estates Projects ($PRESTIGE) | 37.7% | 30.2% | 18.8% | 11.6% | - |
| Parsvnath Developers ($PARSVNATH) | 15.9% | - | 11.6% | 10.6% | - |
| |
|---|
| Median (30 companies) | 4.9% | 2.6% | 3.5% | 2.5% | 2.9% |
|---|
| Vascon Engineers ($VASCONEQ) | 1.2% | 2.2% | 3.7% | 2.1% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ahluwalia Contracts (India) ($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% | 5.1% | 5.7% | 6.8% | 7.5% |
|---|
| Vascon Engineers ($VASCONEQ) | 1.2% | 0.4% | -0.5% | -11.5% | 2.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| D B Realty ($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 (38 companies) | 5.1x | 4.8x | 4.9x | 4.0x | 2.6x |
|---|
