Deep Industries CAPEX jumped on 452% and Revenue jumped on 67.0%
19-05-2016 • About Deep Industries (
$DEEPIND) • By InTwits
Deep Industries reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Deep Industries is a fast growth stock: FY2016 revenue growth was 67.0%, 5 year revenue CAGR was 27.9% at FY2016 ROIC 16.5%
- Deep Industries has high CAPEX intensity: 5 year average CAPEX/Revenue was 82.6%. At the same time it's a lot of higher than industry average of 45.8%.
- CAPEX is quite volatile: ₹2,017m in FY2016, ₹365m in FY2015, ₹600m in FY2014, ₹181m in FY2013, ₹991m in FY2012
- The company has highly profitable business model: ROIC is 16.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Deep Industries's Revenue jumped on 67.0%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.6 pp from 8.6% to 14.1% in FY2016.
Net Income margin increased on 3.2 pp from 21.0% to 24.2% in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 119% in FY2016. CAPEX/Revenue surged on 91.5 pp from 27.8% in FY2013 to 119% in FY2016. It's average level of CAPEX/Revenue for the last three years was 73.8%. Deep Industries has spent a lot to CAPEX (207% of EBITDA) to fuel its growth.
Return on investment
The company operates at good ROIC (16.5%) and ROE (17.2%). ROIC increased on 4.2 pp from 12.3% to 16.5% in FY2016. ROE increased on 6.9 pp from 10.3% to 17.2% in FY2016. ROIC grew at 1.7 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.7x and Debt / EBITDA is 2.7x. Net Debt / EBITDA jumped on 0.6x from 2.1x to 2.7x in FY2016. Debt jumped on 132% while cash jumped on 462%. During the last 5 years Net Debt/EBITDA bottomed in FY2015 at 2.1x.
Deep Industries has short term refinancing risk: cash is only 4.7% of short term debt.
Valuation and dividends
Deep Industries's trades at EV/EBITDA 7.4x and P/E 11.4x while industy averages are 17.8x and 21.9x.
Financial and operational results
Deep Industries ($DEEPIND) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 605 | 653 | 908 | 1,013 | 1,691 | 67.0% |
| EBITDA | 288 | 362 | 525 | 552 | 976 | 76.9% |
| Net Income | 120 | 122 | 200 | 212 | 410 | 92.9% |
Balance Sheet
|
|---|
| Cash | 3 | 2 | 0 | 7 | 37 | 462.2% |
| Short Term Debt | 79 | 144 | 282 | 404 | 781 | 93.2% |
| Long Term Debt | 935 | 731 | 839 | 737 | 1,865 | 153.0% |
Cash flow
|
|---|
| Capex | 991 | 181 | 600 | 365 | 2,017 | 452.3% |
Ratios
|
|---|
| Revenue growth | 22.5% | 8.0% | 39.1% | 11.5% | 67.0% | |
| EBITDA growth | 10.8% | 25.8% | 45.0% | 5.1% | 76.9% | |
|
|---|
| EBITDA Margin | 47.6% | 55.5% | 57.8% | 54.5% | 57.7% | 3.2% |
| Net Income Margin | 19.8% | 18.6% | 22.0% | 21.0% | 24.2% | 3.2% |
| CAPEX, % of revenue | 164.0% | 27.8% | 66.1% | 36.1% | 119.3% | 83.2% |
|
|---|
| ROIC | 9.6% | 9.5% | 13.1% | 12.3% | 16.5% | 4.2% |
| ROE | 8.6% | 7.5% | 10.9% | 10.3% | 17.2% | 6.9% |
| Net Debt/EBITDA | 3.5x | 2.4x | 2.1x | 2.1x | 2.7x | 0.6x |
Peers in Integrated Oil & Gas
Below we provide Deep Industries benchmarking against other companies in Integrated Oil & Gas 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Reliance Industries ($RELIANCE) | - | 10.8% | 9.4% | -13.6% | -27.0% |
| Essar Oil ($ESSAROIL) | 24.0% | 51.8% | 11.3% | -15.8% | - |
| |
|---|
| Median (2 companies) | 24.0% | 31.3% | 10.4% | -14.7% | -27.0% |
|---|
| Deep Industries ($DEEPIND) | - | 8.0% | 39.1% | 11.5% | 67.0% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Reliance Industries ($RELIANCE) | 9.7% | 8.3% | 8.1% | 10.0% | 15.2% |
| Essar Oil ($ESSAROIL) | 4.0% | 4.2% | 5.1% | 5.7% | - |
| |
|---|
| Median (2 companies) | 6.8% | 6.2% | 6.6% | 7.9% | 15.2% |
|---|
| Deep Industries ($DEEPIND) | 47.6% | 55.5% | 57.8% | 54.5% | 57.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Reliance Industries ($RELIANCE) | 4.6% | 7.7% | 13.8% | 16.9% | 17.1% |
| Essar Oil ($ESSAROIL) | 4.8% | 2.5% | 1.4% | 0.9% | - |
| |
|---|
| Median (2 companies) | 4.7% | 5.1% | 7.6% | 8.9% | 17.1% |
|---|
| Deep Industries ($DEEPIND) | 164.0% | 27.8% | 66.1% | 36.1% | 119.3% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Essar Oil ($ESSAROIL) | 7.8% | 9.9% | 14.6% | 14.2% | - |
| Reliance Industries ($RELIANCE) | 8.5% | 7.6% | 7.3% | 7.0% | 7.2% |
| |
|---|
| Median (2 companies) | 8.2% | 8.7% | 11.0% | 10.6% | 7.2% |
|---|
| Deep Industries ($DEEPIND) | 9.6% | 9.5% | 13.1% | 12.3% | 16.5% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Essar Oil ($ESSAROIL) | 7.4x | 6.6x | 3.9x | 5.7x | - |
| Reliance Industries ($RELIANCE) | 1.7x | 2.1x | 2.9x | 3.9x | 4.1x |
| |
|---|
| Median (2 companies) | 4.5x | 4.4x | 3.4x | 4.8x | 4.1x |
|---|
| Deep Industries ($DEEPIND) | 3.5x | 2.4x | 2.1x | 2.1x | 2.7x |
