Icra Net Income surged on 16.5% and Revenue increased on 5.9%

19-05-2016 • About Icra ($ICRA) • By InTwits

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

Icra is a growth stock: FY2016 revenue growth was 5.9%, 5 year revenue CAGR was 12.0% at FY2016 ROIC 20.5%
Icra has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's a lot of higher than industry average of 3.2%.
CAPEX is quite volatile: ₹104m in FY2016, ₹47m in FY2015, ₹372m in FY2014, ₹53m in FY2013, ₹41m in FY2012
The company has highly profitable business model: ROIC is 20.5%

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

Revenue and profitability

Icra's Revenue increased on 5.9%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.0 pp from 9.7% to 17.7% in FY2016.

Net Income margin increased on 2.0 pp from 20.4% to 22.4% in FY2016.

Investments (CAPEX, working capital and M&A)

In FY2016 the company had CAPEX/Revenue of 3.1%. Icra's CAPEX/Revenue increased slightly on 0.94 pp from 2.1% in FY2013 to 3.1% in FY2016. It's average CAPEX/Revenue for the last three years was 5.9%.

Return on investment

The company operates at high and attractive ROIC (20.5%) while ROE is a bit lower (16.8%). ROIC decreased slightly on 0.53 pp from 21.1% to 20.5% in FY2016. ROE increased slightly on 0.82 pp from 16.0% to 16.8% in FY2016.

Leverage (Debt)

The company paid down all the debt in FY2016. Cash jumped on 89.9%.

Management team

Icra's CEO is Naresh Takkar. Naresh Takkar has 14 years tenure with the company. The company's CFO Vipul Agarwal has spent 5 years with the company.

Financial and operational results

Icra ($ICRA) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	2,075	2,514	2,822	3,209	3,398	5.9%
EBITDA	755	647	870	996	1,037	4.1%
Net Income	540	592	689	654	762	16.5%
Balance Sheet
Cash	227	456	265	1,180	2,242	89.9%
Short Term Debt	0	0	7	5	0	-100.0%
Long Term Debt	0	0	158	96	0	-100.0%
Cash flow
Capex	41	53	372	47	104	118.5%
Ratios
Revenue growth	7.5%	21.2%	12.2%	13.7%	5.9%
EBITDA growth	1.9%	-14.3%	34.6%	14.5%	4.1%

EBITDA Margin	36.4%	25.7%	30.8%	31.1%	30.5%	-0.5%
Net Income Margin	26.0%	23.5%	24.4%	20.4%	22.4%	2.0%
CAPEX, % of revenue	2.0%	2.1%	13.2%	1.5%	3.1%	1.6%

ROIC	20.7%	17.0%	20.9%	21.1%	20.5%	-0.5%
ROE	19.3%	18.5%	19.0%	16.0%	16.8%	0.8%
Net Debt/EBITDA	-0.3x	-0.7x	-0.1x	-1.1x	-2.2x	-1.1x

Peers in Other Financial Services

Below you can find Icra benchmarking vs. other companies in Other Financial Services 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
Lkp Finance ($LKPFIN)	-	20.8%	-4.3%	89.8%	-28.6%
Aditya Birla Money ($BIRLAMONEY)	-	-13.3%	-10.6%	49.0%	6.8%
Geojit Bnp Paribas Financial Services ($GEOJITBNPP)	-8.6%	2.0%	-12.6%	42.3%	-
Jm Financial ($JMFINANCIL)	-	19.3%	-3.4%	39.4%	17.6%
Capital First ($CAPF)	-	9.9%	31.5%	35.8%	31.0%
Median (10 companies)	13.1%	9.0%	-2.0%	33.7%	6.2%
Icra ($ICRA)	-	21.2%	12.2%	13.7%	5.9%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Twentyfirst Century Management Services ($21STCENMGM)	-	-	-	91.9%	-
Tcfc Finance ($TCFCFINQ)	-	-	-	88.4%	-
Frontline Securities ($FRONTSEC)	-	-	-	87.0%	-
Shardul Securities ($SHARDUL)	-	-	-	84.6%	-
Axis Capital Markets (India) ($AXISCAP)	-	-	-	84.2%	-
Median (32 companies)	38.3%	49.3%	48.8%	36.6%	65.1%
Icra ($ICRA)	36.4%	25.7%	30.8%	31.1%	30.5%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Jm Financial ($JMFINANCIL)	0.9%	0.9%	11.2%	16.9%	1.2%
Geojit Bnp Paribas Financial Services ($GEOJITBNPP)	5.7%	7.8%	3.7%	4.8%	-
Multi Commodity Exchange Of India ($MCX)	3.8%	8.8%	1.7%	3.8%	8.8%
Crisil ($CRISIL)	4.4%	1.6%	1.7%	1.9%	-
Lkp Finance ($LKPFIN)	3.6%	1.6%	3.9%	1.1%	-
Median (9 companies)	4.1%	1.6%	1.7%	1.1%	4.9%
Icra ($ICRA)	2.0%	2.1%	13.2%	1.5%	3.1%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Crisil ($CRISIL)	62.5%	53.7%	46.4%	43.1%	-
Multi Commodity Exchange Of India ($MCX)	35.4%	27.2%	9.9%	4.8%	9.7%
Religare Enterprises ($RELIGARE)	2.0%	3.4%	2.7%	4.1%	-
Axis Capital Markets (India) ($AXISCAP)	-	-	-	-	-
Indbank Merchant Banking Services ($INDBANK)	-	-	-	-	-
Median (34 companies)	3.7%	3.4%	6.3%	4.8%	6.3%
Icra ($ICRA)	20.7%	17.0%	20.9%	21.1%	20.5%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Capital First ($CAPF)	7.5x	9.2x	9.1x	7.7x	9.4x
Religare Enterprises ($RELIGARE)	9.2x	6.1x	7.0x	7.2x	-
Jm Financial ($JMFINANCIL)	6.4x	6.4x	4.8x	4.8x	5.8x
Intec Capital ($INTECCAP)	5.1x	4.9x	4.6x	4.5x	-
Indiabulls Securities ($IBSEC)	1.6x	2.5x	1.9x	4.0x	4.0x
Median (30 companies)	-0.1x	0.7x	0.0x	0.0x	0.0x
Icra ($ICRA)	-0.3x	-0.7x	-0.1x	-1.1x	-2.2x

Icra stock price chart

Icra financials

mln.	FY2010	FY2011	FY2012

Revenue	3,814	1,930	2,075
EBITDA	704.9	740.6	754.6
Net income	534.8	481.1	540.1
CAPEX	65.530	47.248	40.877
Debt	0.000	0.000	0.000
Cash	108.7	242.9	226.6

About Icra

ICRA Limited operates as an independent and professional investment information and credit rating agency in India. The company provides rating services, including credit, bank loan, corporate governance, stakeholder value and governance, project finance, structured finance, mutual fund, and issuer rating services; rating of claims paying ability of insurance companies; and performance and credit rating of small-scale enterprises. It also offers grading services to initial public offers, microfinance institutions, construction entities, real estate developers and projects, education institutes, and maritime training institutes; industry research and equity research services; and consulting services comprising policy advisory, strategy, risk management, capacity building, process re-engineering, transaction advisory, policy and regulation, and development consulting services. In addition, the company provides information technology (IT) solutions, such as client-server, Web-centric, and mobile applications; software services in disaster response initiative; and customization/implementation services on Oracle e-business suite. Further, it offers business intelligence/analytics consisting of predictive modeling, data mining, and business intelligence and analytics solutions; and multidisciplinary computer aided engineering design and resourcing services. Additionally, it provides financial information products and services, which include mutual fund and ULIP data and content, investment research and analytics services, wealth and transaction management software products, IT tools for financial planning and analytics, and software services; and knowledge process outsourcing services in data services, accounting services, electronic conversion of financial statements, research, analytics, and structured finance areas. The company, formerly known as Investment Information and Credit Rating Agency of India Limited, was founded in 1991 and is based in Gurgaon, India.