Balkrishna Industries CAPEX dropped on 34.6% and Revenue dropped on 14.6%
18-05-2016 • About Balkrishna Industries (
$BALKRISIND) • By InTwits
Balkrishna Industries reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Balkrishna Industries has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.8%. At the same time it's a lot of higher than industry average of 9.1%.
- CAPEX is quite volatile: ₹2,424m in FY2016, ₹3,708m in FY2015, ₹8,866m in FY2014, ₹10,143m in FY2013, ₹7,049m in FY2012
- The company has highly profitable business model: ROIC is 12.4%
- It operates with high leverage: Net Debt/EBITDA is 1.8x while industry average is 0.1x
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 14.6%. Revenue decline was accelerating on average at -12.4 pp per annum in FY2012-FY2016. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 8.1 pp from 19.1% to 27.2% in FY2016.
Net Income margin increased on 5.3 pp from 12.4% to 17.7% in FY2016. Net Income margin stuck to a growing trend at 2.0 pp per annum in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 7.4% in FY2016. The company's CAPEX/Revenue dropped on 22.4 pp from 29.9% in FY2013 to 7.4% in FY2016. It's average CAPEX/Revenue for the last three years was 13.6%. During the last 5 years CAPEX as a % of Revenue topped in FY2013 at 29.9% and was declining since that time.
Return on investment
The company operates at high and attractive ROE (22.7%) while ROIC is a bit lower (12.4%). ROIC increased on 2.0 pp from 10.4% to 12.4% in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Debt level is 1.8x Net Debt / EBITDA and 2.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.9x from 2.6x to 1.8x in FY2016. Debt dropped on 18.8% while cash dropped on 24.3%. Net Debt/EBITDA stuck to a declining trend at -0.3x per annum in FY2012-FY2016.
Balkrishna Industries has short term refinancing risk: cash is only 30.3% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 9.1x and P/E 11.2x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 12.5x with the industry average at 22.8x.
Financial and operational results
Balkrishna Industries ($BALKRISIND) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 30,166 | 33,939 | 37,719 | 38,168 | 32,587 | -14.6% |
| SG&A | | | | | 1,023 | |
| EBITDA | 5,120 | 6,835 | 9,820 | 7,286 | 8,861 | 21.6% |
| Net Income | 2,689 | 3,499 | 4,746 | 4,726 | 5,759 | 21.9% |
Balance Sheet
|
|---|
| Cash | 577 | 101 | 143 | 4,334 | 3,282 | -24.3% |
| Short Term Debt | 7,694 | 5,973 | 7,321 | 9,986 | 10,821 | 8.4% |
| Long Term Debt | 9,398 | 15,666 | 17,064 | 13,593 | 8,323 | -38.8% |
Cash flow
|
|---|
| Capex | 7,049 | 10,143 | 8,866 | 3,708 | 2,424 | -34.6% |
Ratios
|
|---|
| Revenue growth | 41.5% | 12.5% | 11.1% | 1.2% | -14.6% | |
| EBITDA growth | 36.2% | 33.5% | 43.7% | -25.8% | 21.6% | |
|
|---|
| EBITDA Margin | 17.0% | 20.1% | 26.0% | 19.1% | 27.2% | 8.1% |
| SG&A, % of revenue | | | | | 3.1% | |
| Net Income Margin | 8.9% | 10.3% | 12.6% | 12.4% | 17.7% | 5.3% |
| CAPEX, % of revenue | 23.4% | 29.9% | 23.5% | 9.7% | 7.4% | -2.3% |
|
|---|
| ROIC | 17.7% | 17.3% | 19.7% | 10.4% | 12.4% | 2.0% |
| ROE | 27.3% | 27.4% | 28.4% | 22.7% | 22.7% | 0.1% |
| Net Debt/EBITDA | 3.2x | 3.2x | 2.5x | 2.6x | 1.8x | -0.9x |
Peers in Auto Tyres & Rubber Products
Below you can find Balkrishna Industries benchmarking vs. other companies in Auto Tyres & Rubber Products 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 |
|---|
| Rubfila International ($RUBFILA) | - | 4.7% | 25.1% | 28.7% | 1.0% |
| Ceat ($CEATLTD) | - | 8.7% | 9.9% | 3.6% | -0.7% |
| Pix Transmissions ($PIXTRANS) | -5.8% | 12.3% | -14.1% | -3.6% | - |
| Apollo Tyres ($APOLLOTYRE) | - | 5.3% | 4.0% | -4.4% | -8.0% |
| Goodyear India ($GOODYEAR) | -2.1% | 5.9% | 0.7% | -8.0% | - |
| |
|---|
| Median (5 companies) | -4.0% | 5.9% | 4.0% | -3.6% | -0.7% |
|---|
| Balkrishna Industries ($BALKRISIND) | - | 12.5% | 11.1% | 1.2% | -14.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pix Transmissions ($PIXTRANS) | 20.4% | 21.7% | 16.9% | 18.1% | - |
| Multibase India ($MULTIBASE) | - | - | - | 17.0% | - |
| Apollo Tyres ($APOLLOTYRE) | 9.7% | 11.4% | 14.2% | 15.2% | 16.8% |
| Ceat ($CEATLTD) | 6.1% | 9.0% | 11.9% | 13.7% | 16.0% |
| Rubfila International ($RUBFILA) | 12.3% | 14.9% | 12.6% | 13.5% | 8.8% |
| |
|---|
| Median (7 companies) | 11.0% | 11.4% | 12.6% | 13.7% | 16.0% |
|---|
| Balkrishna Industries ($BALKRISIND) | 17.0% | 20.1% | 26.0% | 19.1% | 27.2% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ceat ($CEATLTD) | 3.1% | 1.7% | 2.7% | 5.3% | 12.3% |
| Apollo Tyres ($APOLLOTYRE) | 6.5% | 4.9% | 3.7% | 5.0% | 14.7% |
| Rubfila International ($RUBFILA) | 0.3% | 9.1% | 5.0% | 2.2% | - |
| Multibase India ($MULTIBASE) | - | - | - | 1.8% | - |
| |
|---|
| Median (4 companies) | 1.7% | 4.0% | 3.4% | 3.6% | 13.5% |
|---|
| Balkrishna Industries ($BALKRISIND) | 23.4% | 29.9% | 23.5% | 9.7% | 7.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Rubfila International ($RUBFILA) | 35.1% | 26.2% | 22.7% | 29.4% | 15.9% |
| Ceat ($CEATLTD) | 11.4% | 19.1% | 27.6% | 28.8% | 29.0% |
| Multibase India ($MULTIBASE) | 12.3% | 22.8% | 22.0% | 25.8% | - |
| Apollo Tyres ($APOLLOTYRE) | 14.7% | 16.8% | 23.6% | 23.9% | 20.5% |
| Falcon Tyres ($FALCONTQ) | 6.2% | - | - | - | - |
| |
|---|
| Median (8 companies) | 11.8% | 19.1% | 23.6% | 27.3% | 20.5% |
|---|
| Balkrishna Industries ($BALKRISIND) | 17.7% | 17.3% | 19.7% | 10.4% | 12.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ceat ($CEATLTD) | 4.5x | 2.1x | 1.3x | 0.8x | 0.6x |
| Apollo Tyres ($APOLLOTYRE) | 2.4x | 1.3x | 0.3x | 0.3x | 0.4x |
| Tirupati Foam ($TIRFOAM) | 6.4x | 5.4x | 0.0x | 0.0x | - |
| Goodyear India ($GOODYEAR) | - | -0.3x | -1.5x | 0.0x | - |
| Pix Transmissions ($PIXTRANS) | 4.8x | -0.6x | 0.0x | 0.0x | - |
| |
|---|
| Median (7 companies) | 4.5x | -0.1x | 0.0x | 0.0x | 0.4x |
|---|
| Balkrishna Industries ($BALKRISIND) | 3.2x | 3.2x | 2.5x | 2.6x | 1.8x |
