Rane Brake Lining reports 59.9% Net Income growth in 2016 and 1.5 pp EBITDA Margin growth from 11.0% to 12.5%
23-05-2016 • About Rane Brake Lining (
$RANEBRAKE) • By InTwits
Rane Brake Lining reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Rane Brake Lining has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.7%. At the same time it's a lot of higher than industry average of 5.3%.
- CAPEX is quite volatile: ₹78m in FY2016, ₹53m in FY2015, ₹103m in FY2014, ₹352m in FY2013, ₹309m in FY2012
- The company has highly profitable business model: ROIC is 21.2%
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 on 7.7%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin jumped on 40.4 pp from -39.3% to 1.1% in FY2016. During the last 5 years EBITDA Margin bottomed in FY2013 at 8.8% and was growing since that time.
Net Income margin increased slightly on 1.9 pp from 3.9% to 5.7% in FY2016.
Investments (CAPEX, working capital and M&A)
Rane Brake Lining's CAPEX/Revenue was 1.7% in FY2016. The company's CAPEX/Revenue decreased on 7.6 pp from 9.4% in FY2013 to 1.7% in FY2016. For the last three years the average CAPEX/Revenue was 1.9%. CAPEX as a % of Revenue stuck to a declining trend at -2.2 pp per annum in FY2012-FY2016.
Return on investment
The company operates at high and attractive ROIC (21.2%) while ROE is a bit lower (19.8%). ROIC increased on 8.4 pp from 12.8% to 21.2% in FY2016. ROE increased on 6.1 pp from 13.8% to 19.8% in FY2016. During the last 5 years ROIC bottomed in FY2013 at 7.9% and was growing since that time.
Leverage (Debt)
Debt level is 0.3x Net Debt / EBITDA and 0.4x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 1.1x to 0.3x in FY2016. Debt dropped on 58.3% while cash surged on 32.2%. Net Debt/EBITDA followed a declining trend at -0.5x per annum in the last 5 years.
Rane Brake Lining has short term refinancing risk: cash is only 11.5% of short term debt.
Valuation and dividends
Rane Brake Lining's trades at EV/EBITDA 5.2x and P/E 10.6x while industy averages are 17.8x and 21.9x. Rane Brake Lining's EV/(EBITDA-CAPEX) is 6.0x with the industry average at 22.8x.
Financial and operational results
Rane Brake Lining ($RANEBRAKE) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,592 | 3,764 | 3,841 | 4,164 | 4,484 | 7.7% |
| EBITDA | 397 | 333 | 407 | 458 | 561 | 22.5% |
| Net Income | 162 | 91 | 172 | 161 | 258 | 59.9% |
Balance Sheet
|
|---|
| Cash | 11 | 23 | 33 | 15 | 19 | 32.2% |
| Short Term Debt | 364 | 446 | 531 | 410 | 168 | -59.0% |
| Long Term Debt | 477 | 453 | 275 | 105 | 47 | -55.7% |
Cash flow
|
|---|
| Capex | 309 | 352 | 103 | 53 | 78 | 46.8% |
Ratios
|
|---|
| Revenue growth | 17.4% | 4.8% | 2.0% | 8.4% | 7.7% | |
| EBITDA growth | 15.3% | -16.3% | 22.2% | 12.7% | 22.5% | |
|
|---|
| EBITDA Margin | 11.1% | 8.8% | 10.6% | 11.0% | 12.5% | 1.5% |
| Net Income Margin | 4.5% | 2.4% | 4.5% | 3.9% | 5.7% | 1.9% |
| CAPEX, % of revenue | 8.6% | 9.4% | 2.7% | 1.3% | 1.7% | 0.5% |
|
|---|
| ROIC | 14.1% | 7.9% | 11.1% | 12.8% | 21.2% | 8.4% |
| ROE | 17.7% | 9.2% | 16.1% | 13.8% | 19.8% | 6.1% |
| Net Debt/EBITDA | 2.1x | 2.6x | 1.9x | 1.1x | 0.3x | -0.7x |
Peers in
Below we provide Rane Brake Lining benchmarking against other companies in 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 |
|---|
| Rane Engine Valve ($RANENGIN) | - | -14.4% | -1.2% | 49.3% | -9.8% |
| Indbulbbph ($INDBULBBPH) | - | -6.5% | 33.5% | 49.2% | 0.9% |
| Monetbbph ($MONETBBPH) | 22.3% | 3.7% | 11.6% | 40.8% | - |
| Asleyf ($ASLEYF) | 15.5% | -3.3% | -8.0% | 33.6% | - |
| Bharat Rasayan ($BHARATRA) | 51.3% | 32.1% | 92.7% | 21.4% | - |
| |
|---|
| Median (17 companies) | 17.7% | 11.0% | 3.9% | 9.1% | 0.9% |
|---|
| Rane Brake Lining ($RANEBRAKE) | - | 4.8% | 2.0% | 8.4% | 7.7% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jenson & Nicholson Financial Services ($JNFSL) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Bombay Drugs & Pharmas ($BOMDRDM) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Southern Herbals ($SOUTHNHE) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Tafnccpeq ($TAFNCCPEQ) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (4 companies) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oswal Chemicals & Fertilizers ($OSWALCHEM) | - | - | - | 53.4% | - |
| Kaleconbbph ($KALECONBBPH) | 27.7% | 44.3% | 43.5% | 37.9% | - |
| Paushak ($PAUSHAK) | - | - | - | 25.6% | - |
| The United Nilgiri Tea Estates Company ($UNITEDTEA) | - | - | - | 24.7% | - |
| Indbulbbph ($INDBULBBPH) | 36.7% | 34.6% | 29.5% | 23.5% | 28.7% |
| |
|---|
| Median (20 companies) | 15.7% | 14.9% | 15.8% | 10.3% | 9.8% |
|---|
| Rane Brake Lining ($RANEBRAKE) | 11.1% | 8.8% | 10.6% | 11.0% | 12.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Monetbbph ($MONETBBPH) | 131.4% | 5.2% | 139.2% | 89.2% | - |
| Jklakbbph ($JKLAKBBPH) | 28.5% | 28.8% | 24.6% | 23.6% | 17.5% |
| Rilbbph ($RILBBPH) | 4.6% | 7.7% | 13.8% | 16.9% | 18.0% |
| Gkw ($GKW) | - | - | - | 15.5% | - |
| Paushak ($PAUSHAK) | - | - | - | 12.3% | - |
| |
|---|
| Median (17 companies) | 8.9% | 5.2% | 4.9% | 5.0% | 3.6% |
|---|
| Rane Brake Lining ($RANEBRAKE) | 8.6% | 9.4% | 2.7% | 1.3% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kaleconbbph ($KALECONBBPH) | - | 89.0% | 103.8% | 81.0% | - |
| Bharat Rasayan ($BHARATRA) | 22.1% | 13.7% | 21.9% | 26.1% | - |
| Uplbbph ($UPLBBPH) | 17.1% | 15.9% | 18.2% | 22.1% | 22.2% |
| Merckbbph ($MERCKBBPH) | 21.3% | 13.1% | 8.6% | 10.6% | - |
| Asleyf ($ASLEYF) | 12.2% | 5.8% | -0.5% | 7.6% | - |
| |
|---|
| Median (28 companies) | 8.4% | 6.7% | 5.6% | 3.9% | 1.5% |
|---|
| Rane Brake Lining ($RANEBRAKE) | 14.1% | 7.9% | 11.1% | 12.8% | 21.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Monetbbph ($MONETBBPH) | 9.8x | 16.3x | 27.4x | 140.3x | - |
| Indbulbbph ($INDBULBBPH) | 4.3x | 4.8x | 5.5x | 9.6x | 6.5x |
| Jklakbbph ($JKLAKBBPH) | 2.1x | 2.3x | 5.3x | 5.5x | 8.3x |
| Asleyf ($ASLEYF) | 2.5x | 5.0x | 17.8x | 5.0x | - |
| Rane Engine Valve ($RANENGIN) | 2.1x | 11.3x | 4.5x | 4.8x | 25.4x |
| |
|---|
| Median (16 companies) | 1.7x | 1.8x | 2.5x | 1.2x | 3.4x |
|---|
| Rane Brake Lining ($RANEBRAKE) | 2.1x | 2.6x | 1.9x | 1.1x | 0.3x |
