Saurashtra Cement Net Income dropped on 35.2% and EBITDA Margin decreased on 3.0 pp from 16.8% to 13.8%
23-05-2016 • About Saurashtra Cement (
$SAURASHCEM) • By InTwits
Saurashtra Cement reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Saurashtra Cement has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.5%. At the same time it's in pair with industry average of 5.5%
- CAPEX is quite volatile: ₹252m in FY2016, ₹161m in FY2015, ₹82m in FY2014, ₹107m in FY2013, ₹60m in FY2012
- The company has highly profitable business model: ROIC is 23.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 5.9%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 3.0 pp from 16.8% to 13.8% in FY2016.
Net Income margin decreased on 3.7 pp from 12.0% to 8.3% in FY2016.
Investments (CAPEX, working capital and M&A)
Saurashtra Cement's CAPEX/Revenue was 4.8% in FY2016. Saurashtra Cement showed CAPEX/Revenue growth of 2.8 pp from 2.0% in FY2013 to 4.8% in FY2016. Average CAPEX/Revenue for the last three years was 3.0%. CAPEX as a % of Revenue followed a growing trend at 0.76 pp per annum in the last 5 years.
Return on investment
The company operates at high and attractive ROIC (23.6%) while ROE is a bit lower (16.6%). ROIC decreased on 3.2 pp from 26.9% to 23.6% in FY2016. ROE dropped on 17.5 pp from 34.1% to 16.6% in FY2016.
Leverage (Debt)
Debt level is -0.6x Net Debt / EBITDA and 0.3x Debt / EBITDA. Debt jumped on 332% while cash surged on 222%.
Saurashtra Cement has no short term refinancing risk: cash is higher than short term debt (354.3%).
Valuation and dividends
The company's trades at EV/EBITDA 4.1x and P/E 7.9x while industy averages are 17.8x and 21.9x. Saurashtra Cement's EV/(EBITDA-CAPEX) is 6.2x with the industry average at 22.8x.
Financial and operational results
Saurashtra Cement ($SAURASHCEM) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,400 | 5,403 | 5,314 | 5,627 | 5,297 | -5.9% |
| EBITDA | 500 | 1,168 | 632 | 945 | 733 | -22.4% |
| Net Income | -205 | 1,837 | 209 | 676 | 438 | -35.2% |
Balance Sheet
|
|---|
| Cash | 44 | 208 | 391 | 197 | 635 | 222.0% |
| Short Term Debt | 250 | 627 | 57 | 44 | 179 | 305.1% |
| Long Term Debt | 1,027 | 1,145 | 378 | 0 | 12 | |
Cash flow
|
|---|
| Capex | 60 | 107 | 82 | 161 | 252 | 56.9% |
Ratios
|
|---|
| Revenue growth | 12.0% | 22.8% | -1.7% | 5.9% | -5.9% | |
| EBITDA growth | 31.6% | 133.5% | -45.9% | 49.5% | -22.4% | |
|
|---|
| EBITDA Margin | 11.4% | 21.6% | 11.9% | 16.8% | 13.8% | -3.0% |
| Net Income Margin | -4.7% | 34.0% | 3.9% | 12.0% | 8.3% | -3.7% |
| CAPEX, % of revenue | 1.4% | 2.0% | 1.5% | 2.9% | 4.8% | 1.9% |
|
|---|
| ROIC | 38.6% | 42.7% | 13.9% | 26.9% | 23.6% | -3.2% |
| ROE | | | 13.2% | 34.1% | 16.6% | -17.5% |
| Net Debt/EBITDA | 2.5x | 1.3x | 0.1x | -0.2x | -0.6x | -0.4x |
Peers in Cement & Cement Products
Below you can find Saurashtra Cement benchmarking vs. other companies in Cement & Cement Products 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 |
|---|
| Ncl Industries ($NCLIND) | 38.2% | -15.8% | -3.0% | 30.8% | - |
| Indian Hume Pipe Co ($INDIANHUME) | - | 34.5% | 18.3% | 22.7% | -7.2% |
| J.K.Cement ($JKCEMENT) | 21.8% | 14.7% | -4.0% | 21.2% | - |
| Visaka Industries ($VIKASAS) | - | 22.0% | -2.6% | 13.6% | -0.8% |
| Prism Cement ($PRISMCEM) | 33.2% | 4.9% | 5.3% | 12.5% | - |
| |
|---|
| Median (16 companies) | 21.8% | 11.4% | 1.8% | 7.3% | -0.8% |
|---|
| Saurashtra Cement ($SAURASHCEM) | - | 22.8% | -1.7% | 5.9% | -5.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Orient Cement ($ORIENTCEM) | - | 21.5% | 15.0% | 19.8% | 12.2% |
| Ambuja Cements ($AMBUJACEM) | 25.6% | 18.2% | 19.4% | 16.4% | - |
| India Cements ($INDIACEM) | 20.6% | 18.4% | 12.4% | 15.1% | - |
| Deccan Cements ($DECCANCE) | 22.8% | 13.2% | 14.7% | 14.9% | 19.9% |
| Acc ($ACC) | 19.3% | 14.6% | 12.9% | 14.4% | - |
| |
|---|
| Median (15 companies) | 19.2% | 13.4% | 11.7% | 11.0% | 10.5% |
|---|
| Saurashtra Cement ($SAURASHCEM) | 11.4% | 21.6% | 11.9% | 16.8% | 13.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Udaipur Cement Works ($UDAICEMENT) | - | - | - | 91.1% | - |
| Orient Cement ($ORIENTCEM) | - | 2.9% | - | 59.7% | 24.5% |
| J.K.Cement ($JKCEMENT) | 6.5% | 18.8% | 55.8% | 16.2% | - |
| Acc ($ACC) | 5.0% | 8.6% | 13.7% | 9.5% | - |
| Birla Corporation ($BIRLACORPN) | 19.1% | 7.1% | 5.5% | 6.9% | 5.1% |
| |
|---|
| Median (12 companies) | 6.5% | 7.2% | 8.3% | 5.9% | 2.9% |
|---|
| Saurashtra Cement ($SAURASHCEM) | 1.4% | 2.0% | 1.5% | 2.9% | 4.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Indian Hume Pipe Co ($INDIANHUME) | 7.6% | 13.8% | 15.0% | 18.0% | 14.5% |
| Orient Cement ($ORIENTCEM) | - | 57.3% | 15.2% | 15.4% | 4.6% |
| Acc ($ACC) | 20.2% | 12.7% | 11.0% | 9.9% | - |
| K.C.P ($KCP) | 17.6% | 6.7% | 7.1% | 9.3% | - |
| Deccan Cements ($DECCANCE) | 17.4% | 8.0% | 6.4% | 9.1% | 20.8% |
| |
|---|
| Median (17 companies) | 13.7% | 8.3% | 6.4% | 8.1% | 6.7% |
|---|
| Saurashtra Cement ($SAURASHCEM) | 38.6% | 42.7% | 13.9% | 26.9% | 23.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Udaipur Cement Works ($UDAICEMENT) | - | - | - | 17.1x | 358.6x |
| Heidelbergcement India ($HEIDELBERG) | 14.0x | 12.2x | 0.0x | 10.4x | - |
| Prism Cement ($PRISMCEM) | 4.8x | 6.0x | 10.0x | 6.0x | - |
| J.K.Cement ($JKCEMENT) | 2.3x | 2.3x | 6.9x | 5.8x | - |
| India Cements ($INDIACEM) | 3.2x | 3.5x | 5.5x | 4.6x | - |
| |
|---|
| Median (14 companies) | 1.8x | 2.8x | 3.1x | 2.7x | 3.2x |
|---|
| Saurashtra Cement ($SAURASHCEM) | 2.5x | 1.3x | 0.1x | -0.2x | -0.6x |
