Mindteck (India) reports 35.1% Net Income growth in 2016 while 2.5 pp EBITDA Margin decline from 9.1% to 6.6%
20-05-2016 • About Mindteck (India) (
$MINDTECK) • By InTwits
Mindteck (India) reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 6.6% in FY2016, 9.1% in FY2015, 8.8% in FY2014, 1.0% in FY2013, -0.8% in FY2012
- Mindteck (India) has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has business model with average profitability: ROIC is 10.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Mindteck (India)'s Revenue decreased on 2.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.0 pp from 9.7% to 17.7% in FY2016. During the last 5 years EBITDA Margin topped in FY2015 at 9.1%.
Net Income margin increased on 2.3 pp from 6.0% to 8.3% in FY2016. Net Income margin stuck to a growing trend at 2.7 pp per annum in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 0.16%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 0.53%. During FY2012-FY2016 CAPEX as a % of Revenue topped in FY2014 at 0.83% and was declining since that time.
Return on investment
The company operates at good ROE (14.7%) while ROIC is low (10.6%). ROIC decreased on 6.9 pp from 17.5% to 10.6% in FY2016. ROE increased on 2.3 pp from 12.4% to 14.7% in FY2016. During the last 5 years ROIC topped in FY2014 at 20.0% and was declining since that time. ROE grew at 4.9 pp per annum in the last 5 years.
Leverage (Debt)
The company has no debt. Cash surged on 47.0%.
Valuation and dividends
The company's trades at EV/EBITDA 9.4x and P/E 9.5x while industy averages are 17.8x and 21.9x.
Financial and operational results
Mindteck (India) ($MINDTECK) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,226 | 2,643 | 3,288 | 3,191 | 3,116 | -2.4% |
| EBITDA | -17 | 26 | 290 | 292 | 207 | -29.1% |
| Net Income | -51 | 11 | 186 | 192 | 259 | 35.1% |
Balance Sheet
|
|---|
| Cash | 106 | 77 | 154 | 344 | 505 | 47.0% |
| Short Term Debt | 0 | 37 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 5 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 8 | 10 | 27 | 19 | 5 | -74.6% |
Ratios
|
|---|
| Revenue growth | -7.6% | 18.7% | 24.4% | -2.9% | -2.4% | |
| EBITDA growth | -115.7% | -254.8% | 995.1% | 0.7% | -29.1% | |
|
|---|
| EBITDA Margin | -0.8% | 1.0% | 8.8% | 9.1% | 6.6% | -2.5% |
| Net Income Margin | -2.3% | 0.4% | 5.7% | 6.0% | 8.3% | 2.3% |
| CAPEX, % of revenue | 0.3% | 0.4% | 0.8% | 0.6% | 0.2% | -0.4% |
|
|---|
| ROIC | -2.6% | 1.2% | 20.0% | 17.5% | 10.6% | -6.9% |
| ROE | -4.0% | 0.8% | 13.5% | 12.4% | 14.7% | 2.3% |
| Net Debt/EBITDA | | -1.3x | -0.5x | -1.2x | -2.4x | -1.3x |
Peers in IT Software Products
Below we provide Mindteck (India) benchmarking against other companies in IT Software Products 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 |
|---|
| Twinstar Industries ($TWINSTAR) | 204.5% | 59.8% | 38.8% | 40.3% | - |
| Atishay Infotech ($ATISHAY) | -25.4% | 6.9% | 21.8% | 28.2% | - |
| Dion Global Solutions ($DION) | 40.4% | 40.8% | -9.5% | 27.8% | - |
| Avance Technologies ($AVANCE) | -11.7% | -17.9% | -30.8% | 20.3% | - |
| Softsol India ($SOFTSOL) | -10.4% | 9.3% | -20.4% | 14.1% | - |
| |
|---|
| Median (16 companies) | 13.9% | 15.4% | 14.2% | 9.7% | 7.6% |
|---|
| Mindteck (India) ($MINDTECK) | - | 18.7% | 24.4% | -2.9% | -2.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Atishay Infotech ($ATISHAY) | 35.7% | 28.1% | 25.8% | 24.5% | - |
| Subex ($SUBEX) | 27.3% | 17.0% | 24.9% | 23.6% | 20.8% |
| Tata Elxsi ($TATAELXSI) | 13.8% | 11.9% | 17.6% | 20.9% | 23.0% |
| Cambridge Technology Enterprises ($CTE) | - | - | - | 20.9% | - |
| Virinchi Technologies ($VIRNICHIQ) | - | - | - | 17.4% | - |
| |
|---|
| Median (23 companies) | 9.6% | 9.4% | 10.2% | 9.4% | 12.4% |
|---|
| Mindteck (India) ($MINDTECK) | -0.8% | 1.0% | 8.8% | 9.1% | 6.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Aurionpro Solutions ($AURIONPRO) | 17.5% | 12.3% | 12.6% | 13.4% | - |
| Mastek ($MASTKBBPH) | 2.2% | - | 0.0% | 4.9% | 2.4% |
| Dion Global Solutions ($DION) | 39.9% | 11.9% | 29.6% | 4.0% | - |
| Tata Elxsi ($TATAELXSI) | 5.3% | 5.4% | 3.1% | 3.9% | 3.6% |
| Polaris Financial Technology ($POLARIS) | 7.2% | 2.5% | 1.5% | 3.9% | 1.6% |
| |
|---|
| Median (9 companies) | 4.5% | 6.9% | 2.7% | 3.9% | 2.0% |
|---|
| Mindteck (India) ($MINDTECK) | 0.3% | 0.4% | 0.8% | 0.6% | 0.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Elxsi ($TATAELXSI) | 22.5% | 19.1% | 38.3% | 55.4% | 65.9% |
| Blue Star Infotech ($BLUESTINFO) | - | 7.1% | 16.3% | 17.4% | - |
| Polaris Financial Technology ($POLARIS) | 19.5% | 15.1% | 12.6% | 16.2% | 24.8% |
| Aurionpro Solutions ($AURIONPRO) | 8.6% | 8.6% | 5.9% | 12.1% | - |
| Datamatics Global Services ($DATAMATICS) | 9.8% | 11.4% | 16.4% | 11.3% | - |
| |
|---|
| Median (31 companies) | 4.6% | 5.8% | 14.4% | 11.7% | 15.9% |
|---|
| Mindteck (India) ($MINDTECK) | -2.6% | 1.2% | 20.0% | 17.5% | 10.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Subex ($SUBEX) | 4.6x | 13.1x | 8.5x | 8.0x | 0.9x |
| Dion Global Solutions ($DION) | 11.8x | 11.3x | - | 7.4x | - |
| Aurionpro Solutions ($AURIONPRO) | 1.7x | 1.7x | 1.9x | 1.2x | - |
| Saksoft ($SAKSOFT) | 2.8x | 2.3x | 0.0x | 1.2x | - |
| Datamatics Global Services ($DATAMATICS) | 0.5x | 0.3x | 0.5x | 0.3x | - |
| |
|---|
| Median (19 companies) | 0.5x | 0.0x | 0.0x | 0.0x | -0.9x |
|---|
| Mindteck (India) ($MINDTECK) | - | -1.3x | -0.5x | -1.2x | -2.4x |
