Bajaj Finserv Debt surged on 38.0% and EBITDA jumped on 21.4%
24-05-2016 • About Bajaj Finserv (
$BAJAJFINSV) • By InTwits
Bajaj Finserv reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Bajaj Finserv is a fast growth stock: FY2016 revenue growth was 23.9%, 5 year revenue CAGR was 30.8% at FY2016 ROIC
- It operates with high leverage: Net Debt/EBITDA is 6.2x while industry average is 2.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 23.9%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.4 pp from 72.5% to 71.0% in FY2016.
Net Income margin decreased on 2.5 pp from 22.4% to 19.9% in FY2016. Net Income margin declined at -3.8 pp per annum in FY2012-FY2016.
Leverage (Debt)
Debt level is 6.2x Net Debt / EBITDA and 6.3x Debt / EBITDA. Net Debt / EBITDA jumped on 0.8x from 5.4x to 6.2x in FY2016. Debt jumped on 38.0% while cash decreased on 4.7%.
Bajaj Finserv has short term refinancing risk: cash is only 5.3% of short term debt.
Valuation and dividends
Bajaj Finserv's trades at EV/EBITDA 10.4x and P/E 15.0x while industy averages are 17.8x and 21.9x.
Management team
The company's CFO S Sreenivasan has spent 6 years with the company.
Financial and operational results
Bajaj Finserv ($BAJAJFINSV) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 39,048 | 50,029 | 59,453 | 75,410 | 93,444 | 23.9% |
| EBITDA | | 38,632 | 44,141 | 54,647 | 66,366 | 21.4% |
| Net Income | 13,378 | 15,736 | 15,441 | 16,898 | 18,633 | 10.3% |
Balance Sheet
|
|---|
| Cash | 7,035 | 10,840 | 12,591 | 9,756 | 9,298 | -4.7% |
| Short Term Debt | 40,310 | 61,944 | 92,083 | 125,378 | 175,024 | 39.6% |
| Long Term Debt | 63,829 | 73,606 | 103,003 | 179,310 | 245,494 | 36.9% |
Cash flow
|
|---|
| Capex | 0 | 0 | 0 | 0 | 0 | |
Ratios
|
|---|
| Revenue growth | 59.7% | 28.1% | 18.8% | 26.8% | 23.9% | |
| EBITDA growth | | | 14.3% | 23.8% | 21.4% | |
|
|---|
| EBITDA Margin | | 77.2% | 74.2% | 72.5% | 71.0% | -1.4% |
| Net Income Margin | 34.3% | 31.5% | 26.0% | 22.4% | 19.9% | -2.5% |
|
|---|
| ROE | 30.3% | 24.4% | 17.9% | 16.4% | 15.1% | -1.3% |
| Net Debt/EBITDA | | 3.2x | 4.1x | 5.4x | 6.2x | 0.8x |
Peers in Finance (including NBFCs)
Below you can find Bajaj Finserv benchmarking vs. other companies in Finance (including NBFCs) 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 |
|---|
| Fortune Financial Services (India) ($FORTUNEF) | -11.7% | -24.9% | -7.1% | 188.4% | - |
| Motilal Oswal Financial Services ($MOTILALOFS) | - | 0.4% | -0.9% | 64.7% | 39.8% |
| Sks Microfinance ($SKSMICRO) | - | -25.6% | 55.0% | 47.3% | 64.5% |
| Bajaj Holdings & Investment ($BAJAJHLDNG) | - | 12.8% | 25.9% | 27.0% | -12.2% |
| Master Trust ($MASTERTR) | 10.2% | -0.0% | -5.3% | 26.0% | - |
| |
|---|
| Median (23 companies) | 23.2% | 24.4% | 20.8% | 13.3% | 8.8% |
|---|
| Bajaj Finserv ($BAJAJFINSV) | - | 28.1% | 18.8% | 26.8% | 23.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Microse India ($MICROSE) | - | - | - | 101.1% | - |
| Pnb Gilts ($PNBGILTS) | 94.0% | 96.4% | 96.4% | 96.1% | 95.4% |
| Jsw Holdings ($JSWHL) | - | - | - | 93.8% | - |
| Rural Electrification Corporation ($RECLTD) | 97.2% | 97.3% | 96.7% | 93.3% | - |
| Bajaj Holdings & Investment ($BAJAJHLDNG) | 96.1% | 95.4% | 92.3% | 92.7% | 91.4% |
| |
|---|
| Median (48 companies) | 67.4% | 65.4% | 65.5% | 49.0% | 64.8% |
|---|
| Bajaj Finserv ($BAJAJFINSV) | - | 77.2% | 74.2% | 72.5% | 71.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Fortune Financial Services (India) ($FORTUNEF) | 1.0% | 1.3% | 4.5% | 7.3% | - |
| Clarus Finance & Securities ($CLARUS) | - | - | 6.9% | 5.8% | - |
| Srei Infrastructure Finance ($SREINFRA) | 30.2% | 8.5% | 12.3% | 5.4% | - |
| Motilal Oswal Financial Services ($MOTILALOFS) | 15.5% | 5.3% | 1.7% | 3.4% | 2.5% |
| Bengal & Assam Company ($BENGALASM) | 15.9% | 4.5% | 1.2% | 2.1% | - |
| |
|---|
| Median (21 companies) | 1.0% | 0.8% | 1.1% | 0.7% | 0.8% |
|---|
| Bajaj Finserv ($BAJAJFINSV) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Motilal Oswal Financial Services ($MOTILALOFS) | - | 12.0% | 9.7% | 11.9% | 7.8% |
| Sks Microfinance ($SKSMICRO) | - | - | 4.1% | 6.6% | 7.6% |
| Shriram City Union Finance ($SHRIRAMCIT) | 6.1% | 5.8% | 5.8% | 5.7% | 4.6% |
| Rural Electrification Corporation ($RECLTD) | - | 4.7% | 5.2% | 4.7% | - |
| Mahindra & Mahindra Financial Services ($M&MFIN) | 6.4% | 6.3% | 5.3% | 4.2% | 3.2% |
| |
|---|
| Median (52 companies) | 4.1% | 4.6% | 4.1% | 4.1% | 3.7% |
|---|
| Bajaj Finserv ($BAJAJFINSV) | - | - | - | - | - |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Fortune Financial Services (India) ($FORTUNEF) | 9.0x | - | 10.8x | 8.9x | - |
| Pnb Gilts ($PNBGILTS) | 14.2x | 11.2x | 11.3x | 8.8x | 15.0x |
| Srei Infrastructure Finance ($SREINFRA) | 7.0x | 6.2x | 7.5x | 8.0x | - |
| Rural Electrification Corporation ($RECLTD) | 8.3x | 8.0x | 7.5x | 8.0x | - |
| Magma Fincorp ($MAGMA) | 7.7x | 8.5x | 7.0x | 7.7x | 7.5x |
| |
|---|
| Median (44 companies) | 4.7x | 3.6x | 2.9x | 0.0x | 4.9x |
|---|
| Bajaj Finserv ($BAJAJFINSV) | - | 3.2x | 4.1x | 5.4x | 6.2x |
