Ramco Industries reports 100% Net Income growth in 2016 and 0.85% Revenue growth
20-05-2016 • About Ramco Industries (
$RAMCOIND) • By InTwits
Ramco Industries reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 9.1% in FY2016, 9.0% in FY2015, 7.7% in FY2014, 14.4% in FY2013, 17.0% in FY2012
- Ramco Industries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.6%. At the same time it's a lot of higher than industry average of 4.1%.
- CAPEX is quite volatile: ₹307m in FY2016, ₹249m in FY2015, ₹1,686m in FY2014, ₹333m in FY2013, ₹975m in FY2012
- The company has potentially unprofitable business model: ROIC is 5.5%
- It operates with high leverage: Net Debt/EBITDA is 3.0x while industry average is 1.3x
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 increased slightly on 0.85%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.0 pp from 6.7% to 9.6% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2014 at 7.7% and was growing since that time.
Net Income margin increased on 9.9 pp from 10.1% to 20.0% in FY2016. During the last 5 years Net Income margin bottomed in FY2014 at -0.38% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.4% in FY2016. Ramco Industries's CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 9.0%.
Return on investment
The company operates at good ROE (25.9%) while ROIC is low (5.5%). ROIC showed almost no change in FY2016. ROE increased on 10.0 pp from 15.9% to 25.9% in FY2016. During FY2012-FY2016 ROE bottomed in FY2014 at -0.59% and was growing since that time.
Leverage (Debt)
Debt level is 3.0x Net Debt / EBITDA and 3.8x Debt / EBITDA. Net Debt / EBITDA dropped on 1.7x from 4.7x to 3.0x in FY2016. Debt dropped on 24.8% while cash jumped on 76.3%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2014 at 6.2x and was declining since that time.
Ramco Industries has short term refinancing risk: cash is only 36.8% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 14.8x and P/E 5.4x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 23.6x with the industry average at 22.8x.
Management team
The company's CEO is Prem G Shanker. Prem G Shanker has 12 years tenure with the company.
Financial and operational results
Ramco Industries ($RAMCOIND) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 7,890 | 9,093 | 8,150 | 8,945 | 9,021 | 0.8% |
| EBITDA | 1,338 | 1,312 | 628 | 804 | 824 | 2.5% |
| Net Income | 769 | 675 | -31 | 901 | 1,805 | 100.5% |
Balance Sheet
|
|---|
| Cash | 263 | 189 | 195 | 364 | 642 | 76.3% |
| Short Term Debt | 587 | 1,084 | 2,254 | 3,001 | 1,745 | -41.8% |
| Long Term Debt | 1,187 | 1,842 | 1,830 | 1,130 | 1,360 | 20.4% |
Cash flow
|
|---|
| Capex | 975 | 333 | 1,686 | 249 | 307 | 23.2% |
Ratios
|
|---|
| Revenue growth | 17.3% | 15.3% | -10.4% | 9.8% | 0.8% | |
| EBITDA growth | 7.9% | -1.9% | -52.1% | 27.9% | 2.5% | |
|
|---|
| EBITDA Margin | 17.0% | 14.4% | 7.7% | 9.0% | 9.1% | 0.1% |
| Net Income Margin | 9.7% | 7.4% | -0.4% | 10.1% | 20.0% | 9.9% |
| CAPEX, % of revenue | 12.4% | 3.7% | 20.7% | 2.8% | 3.4% | 0.6% |
|
|---|
| ROIC | 14.4% | 12.0% | 1.6% | 5.6% | 5.5% | -0.1% |
| ROE | 17.6% | 13.5% | -0.6% | 15.9% | 25.9% | 10.0% |
| Net Debt/EBITDA | 1.1x | 2.1x | 6.2x | 4.7x | 3.0x | -1.7x |
Peers in Construction Materials
Below you can find Ramco Industries benchmarking vs. other companies in Construction Materials 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pokarna ($POKARNA) | 8.4% | 12.6% | 13.3% | 41.5% | - |
| |
|---|
| Median (1 company) | 8.4% | 12.6% | 13.3% | 41.5% | - |
|---|
| Ramco Industries ($RAMCOIND) | - | 15.3% | -10.4% | 9.8% | 0.8% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pokarna ($POKARNA) | 15.8% | 17.2% | 20.9% | 25.7% | - |
| Glittek Granites ($GLITTEKG) | - | - | - | 9.2% | - |
| Pacific Industries ($PACIFICI) | - | - | - | 4.5% | - |
| Milestone Global ($MILESTONE) | - | - | - | 3.9% | - |
| |
|---|
| Median (4 companies) | 15.8% | 17.2% | 20.9% | 6.9% | - |
|---|
| Ramco Industries ($RAMCOIND) | 17.0% | 14.4% | 7.7% | 9.0% | 9.1% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pokarna ($POKARNA) | 2.0% | 5.0% | 2.4% | 4.9% | - |
| |
|---|
| Median (1 company) | 2.0% | 5.0% | 2.4% | 4.9% | - |
|---|
| Ramco Industries ($RAMCOIND) | 12.4% | 3.7% | 20.7% | 2.8% | 3.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pokarna ($POKARNA) | 3.0% | 4.5% | 8.8% | 17.9% | - |
| Triveni Glass ($TRIVENIGQ) | - | - | - | - | - |
| Milestone Global ($MILESTONE) | - | - | - | - | - |
| Oriental Trimex ($ORIENTALTL) | 8.5% | -2.8% | - | - | - |
| Pg Industry ($PGINDST) | 12.3% | 16.1% | - | - | - |
| |
|---|
| Median (8 companies) | 7.1% | 6.7% | 8.8% | 17.9% | - |
|---|
| Ramco Industries ($RAMCOIND) | 14.4% | 12.0% | 1.6% | 5.6% | 5.5% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pokarna ($POKARNA) | 8.2x | 7.6x | 6.4x | 3.3x | - |
| Milestone Global ($MILESTONE) | 2.3x | 0.0x | 0.0x | 0.0x | - |
| Pacific Industries ($PACIFICI) | 2.0x | 0.1x | - | 0.0x | 0.0x |
| Glittek Granites ($GLITTEKG) | 3.4x | 4.0x | 0.0x | 0.0x | - |
| |
|---|
| Median (4 companies) | 2.8x | 3.5x | 0.0x | 0.0x | 0.0x |
|---|
| Ramco Industries ($RAMCOIND) | 1.1x | 2.1x | 6.2x | 4.7x | 3.0x |
