Allsec Technologies reports 320% Net Income growth in 2016 and 20.6 pp EBITDA Margin growth from -6.1% to 14.5%

20-05-2016 • About Allsec Technologies ($ALLSEC) • By InTwits

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

EBITDA Margin is quite volatile: 14.5% in FY2016, -6.1% in FY2015, -13.5% in FY2014, 11.4% in FY2013, -0.2% in FY2012
The company has highly profitable business model: ROIC is 31.8%

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 jumped on 54.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 37.0 pp from 19.5% to 56.5% in FY2016.

Net Income margin surged on 22.6 pp from -9.3% to 13.3% in FY2016.

Return on investment

The company operates at high and attractive ROIC (31.8%) and ROE (40.5%). ROIC jumped on 58.2 pp from -26.5% to 31.8% in FY2016. ROE surged on 60.4 pp from -19.9% to 40.5% in FY2016.

Leverage (Debt)

Company's Net Debt / EBITDA is -0.4x and Debt / EBITDA is 0.1x. Debt dropped on 80.0% while cash jumped on 125%.

The company has no short term refinancing risk: short term debt is zero.

Financial and operational results

Allsec Technologies ($ALLSEC) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	1,831	3,201	1,996	1,509	2,334	54.7%
EBITDA	-4	366	-269	-91	339
Net Income	-170	20	-250	-141	309
Balance Sheet
Cash	39	125	41	67	151	125.0%
Short Term Debt	18	15	142	120	0	-100.0%
Long Term Debt	2	33	26	8	26	212.2%
Cash flow
Capex	120	185	118
Ratios
Revenue growth	15.5%	74.8%	-37.6%	-24.4%	54.7%
EBITDA growth	-114.2%	-8,616.3%	-173.5%	-66.0%	-470.8%

EBITDA Margin	-0.2%	11.4%	-13.5%	-6.1%	14.5%	20.6%
Net Income Margin	-9.3%	0.6%	-12.5%	-9.3%	13.3%	22.6%
CAPEX, % of revenue	6.6%	5.8%	5.9%

ROIC	-13.0%	19.9%	-40.1%	-26.5%	31.8%	58.2%
ROE	-15.7%	1.9%	-27.7%	-19.9%	40.5%	60.4%
Net Debt/EBITDA		-0.2x			-0.4x

Peers in BPO/KPO

Below you can find Allsec Technologies benchmarking vs. other companies in BPO/KPO 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
Vakrangee ($VAKRANGEE)	-	14.3%	26.2%	42.4%	14.8%
Hinduja Global Solutions ($HGS)	44.8%	27.6%	26.3%	12.1%	-
Eclerx Services ($ECLERX)	-	39.7%	27.3%	12.0%	39.5%
Firstsource Solutions ($FSL)	-	25.0%	10.2%	-2.3%	6.4%
Xchanging Solutions ($XCHANGING)	-62.2%	16.4%	18.0%	-2.6%	-
Median (5 companies)	-8.7%	25.0%	26.2%	12.0%	14.8%
Allsec Technologies ($ALLSEC)	-	74.8%	-37.6%	-24.4%	54.7%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Eclerx Services ($ECLERX)	40.4%	38.7%	42.0%	33.5%	37.0%
Vakrangee ($VAKRANGEE)	17.8%	24.7%	27.4%	26.0%	25.8%
Firstsource Solutions ($FSL)	8.7%	9.9%	11.7%	12.5%	12.5%
Hinduja Global Solutions ($HGS)	11.9%	11.3%	13.0%	11.3%	-
Xchanging Solutions ($XCHANGING)	13.1%	10.1%	4.1%	10.0%	-
Median (6 companies)	13.1%	11.3%	13.0%	11.9%	25.8%
Allsec Technologies ($ALLSEC)	-0.2%	11.4%	-13.5%	-6.1%	14.5%

Top companies by CAPEX/Revenue, %


Top	FY2012	FY2013	FY2014	FY2015	FY2016
Eclerx Services ($ECLERX)	5.3%	4.0%	2.5%	6.5%	4.0%
Hinduja Global Solutions ($HGS)	31.5%	7.2%	6.1%	5.8%	-
Firstsource Solutions ($FSL)	2.3%	1.4%	1.2%	1.5%	2.7%
Vakrangee ($VAKRANGEE)	27.7%	6.0%	11.7%	0.2%	0.4%
Median (4 companies)	5.3%	4.0%	2.5%	3.7%	2.7%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Eclerx Services ($ECLERX)	61.1%	58.7%	62.4%	41.0%	48.4%
Vakrangee ($VAKRANGEE)	20.2%	21.3%	28.3%	36.4%	36.8%
Hinduja Global Solutions ($HGS)	8.1%	8.2%	12.4%	11.0%	-
Firstsource Solutions ($FSL)	4.0%	7.0%	9.0%	9.5%	10.3%
Xchanging Solutions ($XCHANGING)	8.3%	6.6%	2.2%	7.2%	-
Median (7 companies)	8.3%	7.0%	12.4%	11.0%	36.8%
Allsec Technologies ($ALLSEC)	-13.0%	19.9%	-40.1%	-26.5%	31.8%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Firstsource Solutions ($FSL)	4.2x	4.2x	2.8x	2.5x	2.1x
Hinduja Global Solutions ($HGS)	0.8x	1.7x	1.5x	1.4x	-
Vakrangee ($VAKRANGEE)	1.9x	1.4x	0.9x	0.6x	0.2x
Tricom India ($TRICOM)	2.1x	4.6x	-	0.0x	-
Eclerx Services ($ECLERX)	-0.7x	-0.5x	-0.7x	-0.6x	-0.7x
Median (6 companies)	0.8x	1.4x	0.9x	0.3x	0.2x

Allsec Technologies stock price chart

Allsec Technologies financials

mln.	FY2010	FY2011	FY2012

Revenue	1,700	1,585	1,831
EBITDA	-28.886	30.200	-4.300
Net income	-101.047	-75.800	-169.800
CAPEX	187.2	83.100	120.3
Debt	25.604	33.600	20.000
Cash	35.436	72.500	38.500

About Allsec Technologies

Allsec Technologies Limited provides information technology (IT) enabled services in India, the United States, the United Kingdom, and internationally. The company operates through two segments, IT Enabled Services and Mortgage Services. It is engaged in data verification, processing of orders received through telephone calls, telemarketing, monitoring of calls, customer services, and HR and payroll processing services. The company offers Web development, Web design, search engine optimization, strategic tele services, customer care, and quality management services. It also provides loss mitigation, portfolio management, and management consulting services, including advisory, component, and subservicing services for mortgage lenders, servicers, asset managers, and investors; and management consultancy services in health care and business analytics. The company provides outsourced solutions in customer engagement, sales and retention, and quality assurance for businesses, such as BFSI, insurance, telecommunication, retail, healthcare, energy and utilities, and technology. Allsec Technologies Limited also exports its services. The company was founded in 1998 and is headquartered in Chennai, India.