Voltas reports 13.0% revenue growth in FY2016 and almost no change in EBITDA Margin of 8.6%

17-05-2016 • About Voltas ($VOLTAS) • By InTwits

Voltas reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Voltas has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
The company has highly profitable business model: ROIC is 18.2%

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Voltas's Revenue jumped on 13.0%. EBITDA Margin showed almost no change in FY2016.

Net Income margin decreased slightly on 0.83 pp from 7.4% to 6.6% in FY2016. Net Income margin followed a growing trend at 1.1 pp per annum in FY2012-FY2016.

Investments (CAPEX, working capital and M&A)

The company's CAPEX/Revenue was 0.89% in FY2016. CAPEX/Revenue showed almost no change from FY2013 to FY2016. For the last three years the average CAPEX/Revenue was 0.67%.

Return on investment

The company operates at good ROIC (18.2%) and ROE (17.1%). ROIC decreased slightly on 1.1 pp from 19.3% to 18.2% in FY2016. ROE decreased on 2.5 pp from 19.6% to 17.1% in FY2016. During FY2012-FY2016 ROE topped in FY2015 at 19.6%.

Leverage (Debt)

Debt level is 0.1x Net Debt / EBITDA and 0.5x Debt / EBITDA. Net Debt / EBITDA surged on 0.4x from -0.3x to 0.1x in FY2016. Debt surged on 113% while cash dropped on 22.6%.

Voltas has short term refinancing risk: cash is only 72.4% of short term debt.

Financial and operational results

Voltas ($VOLTAS) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	51,857	55,310	52,437	51,831	58,574	13.0%
SG&A					479
EBITDA	3,597	2,473	2,693	4,641	5,021	8.2%
Net Income	1,621	2,078	2,454	3,843	3,856	0.3%
Balance Sheet
Cash	2,536	3,413	2,742	2,434	1,885	-22.6%
Short Term Debt	2,175	2,564	2,587	1,174	2,603	121.8%
Long Term Debt	76	60	54	47	0	-100.0%
Cash flow
Capex	314	438	245	344	521	51.6%
Ratios
Revenue growth	-0.1%	6.7%	-5.2%	-1.2%	13.0%
EBITDA growth	-25.0%	-31.3%	8.9%	72.4%	8.2%

EBITDA Margin	6.9%	4.5%	5.1%	9.0%	8.6%	-0.4%
SG&A, % of revenue					0.8%
Net Income Margin	3.1%	3.8%	4.7%	7.4%	6.6%	-0.8%
CAPEX, % of revenue	0.6%	0.8%	0.5%	0.7%	0.9%	0.2%

ROIC	19.6%	11.7%	11.8%	19.3%	18.2%	-1.1%
ROE	11.4%	13.4%	14.2%	19.6%	17.1%	-2.5%
Net Debt/EBITDA	-0.1x	-0.3x	-0.0x	-0.3x	0.1x	0.4x

Peers in Construction & Engineering

Below we provide Voltas benchmarking against other companies in Construction & Engineering 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
Thirthankar Infra ($THIRINFRA)	-	-	-	258.2%	-
Welspun Projects ($WELPROJ)	41.2%	-8.9%	-20.7%	239.1%	-
Itd Cementation India ($ITDCEM)	-3.7%	-4.0%	8.5%	79.2%	-
Mukand Engineers ($MUKANDENGG)	-14.3%	16.7%	12.4%	63.0%	-
Atlanta ($ATLANTA)	-47.6%	115.1%	28.1%	50.2%	-
Median (32 companies)	2.7%	6.9%	7.1%	1.2%	-12.9%
Voltas ($VOLTAS)	-	6.7%	-5.2%	-1.2%	13.0%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Madhucon Projects ($MADHUCON)	8.4%	31.9%	22.1%	32.1%	-
Jaiprakash Associates ($JPASSOCIAT)	36.9%	35.9%	32.4%	31.5%	-
Arss Infrastructure Projects ($ARSSINFRA)	14.0%	13.9%	22.0%	31.3%	-
Reliance Industrial Infrastructure ($RIIL)	-	-	-	30.8%	-
Shristi Infrastructure Development Corporation ($SHRISTI)	27.2%	30.0%	30.0%	29.8%	-
Median (36 companies)	12.4%	11.3%	10.7%	10.3%	11.4%
Voltas ($VOLTAS)	6.9%	4.5%	5.1%	9.0%	8.6%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Madhucon Projects ($MADHUCON)	234.5%	155.1%	76.0%	67.4%	-
Supreme Infrastructure India ($SUPREMEINF)	46.6%	31.1%	43.1%	45.8%	-
Shristi Infrastructure Development Corporation ($SHRISTI)	0.0%	11.2%	14.1%	40.8%	-
Jaiprakash Associates ($JPASSOCIAT)	97.0%	65.5%	45.0%	31.6%	-
Man Infraconstruction ($MANINFRA)	7.8%	1.6%	25.0%	18.6%	-
Median (23 companies)	7.7%	8.6%	6.9%	3.2%	1.7%
Voltas ($VOLTAS)	0.6%	0.8%	0.5%	0.7%	0.9%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Skipper ($SKIPPER)	10.4%	13.5%	14.7%	27.4%	-
Coromandel Engineering Company ($COROENGG)	-21.9%	3.4%	-0.3%	15.0%	7.9%
Mbl Infrastructures ($MBLINFRA)	21.3%	13.4%	14.0%	13.6%	-
Itd Cementation India ($ITDCEM)	13.1%	11.3%	3.8%	12.6%	-
Simplex Infrastructures ($SIMPLEXINF)	10.7%	8.7%	8.9%	10.7%	-
Median (42 companies)	8.6%	7.1%	5.6%	6.6%	6.3%
Voltas ($VOLTAS)	19.6%	11.7%	11.8%	19.3%	18.2%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Mcnally Bharat Engineering Company ($MBECL)	4.3x	7.0x	7.6x	28.3x	-
Jaiprakash Associates ($JPASSOCIAT)	9.2x	8.9x	11.0x	11.9x	-
Supreme Infrastructure India ($SUPREMEINF)	6.0x	6.1x	6.8x	11.3x	-
Madhucon Projects ($MADHUCON)	96.8x	19.0x	16.4x	9.8x	-
Shristi Infrastructure Development Corporation ($SHRISTI)	11.8x	8.6x	7.9x	9.4x	-
Median (30 companies)	4.7x	5.7x	6.6x	3.1x	4.3x
Voltas ($VOLTAS)	-0.1x	-0.3x	-0.0x	-0.3x	0.1x

Voltas stock price chart

Voltas financials

mln.	FY2010	FY2011	FY2012

Revenue	60,068	51,914	51,857
EBITDA	4,649	4,797	3,597
Net income	3,810	3,572	1,621
CAPEX	317.0	445.8	313.5
Debt	1,117	1,367	2,252
Cash	4,689	4,094	2,536

About Voltas

Voltas Limited provides engineering solutions and project services in India, the Middle East, Singapore, and internationally. It operates through Electro-Mechanical Projects and Services, Engineering Products and Services, Unitary Cooling Products for Comfort and Commercial Use, and Others segments. The company undertakes electro-mechanical and instrumentation projects; and offers engineering products and services for textile machinery and mining and construction equipment. It also provides mining and construction machinery, including mining excavators, dump trucks, track mounted crushers, screens, crawler and tower cranes, concrete batching plants, sand washing systems, conical thickener and automatic filter press, magnetic separators, and trailer mounted and stationary crushing and screening plants. In addition, the company offers textile machinery comprising spinning, weaving, and knitting machinery and accessories, as well as processing and finishing equipment; and heating, ventilation, air conditioning, and refrigeration (HVAC&R) equipment, such as packaged and ductable split AC units, variable refrigerant flow systems, chillers and condensing units, vapor absorption machines, indoor air quality systems, STP/kitchen exhaust systems, UVGI systems, and air handling units. Further, it provides HVAC&R solutions for services and industrial segments; split, window, cassette, and slimline air-conditioners; deep freezers; chest, visi, and water coolers; and water dispensers. Additionally, the company offers equipment for water and wastewater management/treatment, including fixed and floating surface aerators, oil separators, bridge/column mounted clarifiers, dissolved air flotation units, grit removal mechanisms, screens, reactor clarifiers, sludge thickeners, and screw pumps. It also manufactures and trades galvanized iron, aluminum, black mild steel, and stainless steel ducts and accessories. Voltas Limited was founded in 1954 and is headquartered in Mumbai, India.