Amara Raja Batteries reports 27.3% CAPEX growth in 2016 and 11.4% Revenue growth
25-05-2016 • About Amara Raja Batteries (
$AMARAJABAT) • By InTwits
Amara Raja Batteries reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Amara Raja Batteries is a fast growth stock: FY2016 revenue growth was 11.4%, 5 year revenue CAGR was 21.7% at FY2016 ROIC 33.7%
- Amara Raja Batteries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.5%. At the same time it's a lot of higher than industry average of 5.6%.
- CAPEX is quite volatile: ₹5,172m in FY2016, ₹4,063m in FY2015, ₹3,727m in FY2014, ₹746m in FY2013, ₹873m in FY2012
- The company has highly profitable business model: ROIC is 33.7%
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 surged on 11.4%. Revenue decline was accelerating on average at -4.8 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.5 pp from 3.6% to 9.1% in FY2016.
SG&A as a % of Revenue increased slightly on 0.64 pp from 0.60% to 1.2% in FY2016.
Net Income margin increased slightly on 0.68 pp from 9.8% to 10.4% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 11.0%. The company's CAPEX/Revenue increased on 8.5 pp from 2.5% in FY2013 to 11.0% in FY2016. It's average level of CAPEX/Revenue for the last three years was 10.5%. To deliver its fast growth the company invested a large share of EBITDA (62.8%) to CAPEX.
Return on investment
The company operates at high and attractive ROIC (33.7%) and ROE (25.8%). ROIC decreased slightly on 1.6 pp from 35.4% to 33.7% in FY2016. ROE decreased slightly on 1.1 pp from 26.8% to 25.8% in FY2016.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 0.1x Debt / EBITDA. Debt decreased on 2.4% while cash dropped on 40.4%.
Amara Raja Batteries has no short term refinancing risk: cash is higher than short term debt (7,706.7%).
Valuation and dividends
Amara Raja Batteries's trades at EV/EBITDA 17.5x and P/E 29.5x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 47.0x with the industry average at 22.8x.
Management team
The company's CFO is S V Raghavendra. S V Raghavendra has 6 years tenure at the company.
Financial and operational results
Amara Raja Batteries ($AMARAJABAT) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 23,633 | 29,574 | 34,345 | 42,113 | 46,907 | 11.4% |
| SG&A | | | | 253 | 584 | 130.3% |
| EBITDA | 3,522 | 4,638 | 4,877 | 7,175 | 8,239 | 14.8% |
| Net Income | 2,151 | 2,867 | 2,752 | 4,109 | 4,894 | 19.1% |
Balance Sheet
|
|---|
| Cash | 533 | 443 | 2,929 | 2,155 | 1,284 | -40.4% |
| Short Term Debt | 71 | 108 | 97 | 18 | 17 | -7.9% |
| Long Term Debt | 785 | 773 | 759 | 741 | 725 | -2.2% |
Cash flow
|
|---|
| Capex | 873 | 746 | 3,727 | 4,063 | 5,172 | 27.3% |
Ratios
|
|---|
| Revenue growth | 34.3% | 25.1% | 16.1% | 22.6% | 11.4% | |
| EBITDA growth | 33.3% | 31.7% | 5.2% | 47.1% | 14.8% | |
|
|---|
| EBITDA Margin | 14.9% | 15.7% | 14.2% | 17.0% | 17.6% | 0.5% |
| SG&A, % of revenue | | | | 0.6% | 1.2% | 0.6% |
| Net Income Margin | 9.1% | 9.7% | 8.0% | 9.8% | 10.4% | 0.7% |
| CAPEX, % of revenue | 3.7% | 2.5% | 10.9% | 9.6% | 11.0% | 1.4% |
|
|---|
| ROIC | 32.1% | 34.5% | 30.3% | 35.4% | 33.7% | -1.6% |
| ROE | 29.3% | 30.4% | 22.7% | 26.8% | 25.8% | -1.1% |
| Net Debt/EBITDA | 0.1x | 0.1x | -0.4x | -0.2x | -0.1x | 0.1x |
Peers in Auto Parts & Equipment
Below you can find Amara Raja Batteries benchmarking vs. other companies in Auto Parts & Equipment 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 |
|---|
| Spectra Industries ($SPECTRA) | 16.4% | 40.2% | -10.1% | 57.1% | - |
| Simmonds Marshall ($SIMMOND) | - | 4.6% | 13.4% | 28.5% | 0.1% |
| India Nippon Electricals ($INDNIPPON) | 13.6% | 3.2% | -2.4% | 24.8% | - |
| Enkei Wheels (India) ($ENKEIWHEL) | 16.9% | 1.3% | 11.7% | 21.6% | - |
| Ip Rings ($IPRINGLTD) | 4.0% | 2.4% | -0.1% | 19.5% | - |
| |
|---|
| Median (38 companies) | 16.9% | 2.4% | 4.9% | 8.7% | 0.5% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | - | 25.1% | 16.1% | 22.6% | 11.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ist ($ISTLTD) | - | - | - | 71.6% | - |
| Tube Investments Of India ($TUBEINVEST) | 18.4% | 24.4% | 28.3% | 30.0% | 21.4% |
| Shivam Autotech ($SHIVAMAUTO) | 24.1% | 24.1% | 20.6% | 18.7% | - |
| Suprajit Engineering ($SUPRAJIT) | 16.2% | 17.0% | 17.2% | 16.2% | - |
| Raunaq Automotive Components ($RAUNAQAU) | 10.2% | 10.5% | 12.0% | 15.1% | - |
| |
|---|
| Median (44 companies) | 10.8% | 9.8% | 10.1% | 10.1% | 10.4% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 14.9% | 15.7% | 14.2% | 17.0% | 17.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Amtek Auto ($AMTEKAUTO) | 18.9% | - | 27.1% | 30.3% | - |
| Jbm Auto ($JBMA) | 9.8% | 8.4% | - | 14.4% | - |
| Rico Auto Industries ($RICOAUTO) | 5.8% | 10.9% | 5.7% | 14.2% | 7.4% |
| Shivam Autotech ($SHIVAMAUTO) | 11.6% | 4.1% | 4.9% | 12.5% | - |
| L.G.Balakrishnan & Bros ($LGBBROSLTD) | 3.5% | 6.5% | 6.0% | 8.9% | 7.0% |
| |
|---|
| Median (25 companies) | 5.8% | 4.6% | 4.6% | 4.5% | 4.5% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 3.7% | 2.5% | 10.9% | 9.6% | 11.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Exide Industries ($EXIDEIND) | 24.2% | 24.3% | 29.5% | 26.9% | 20.5% |
| Munjal Showa ($MUNJALSHOW) | 29.9% | 23.8% | 22.5% | 24.9% | 19.8% |
| Motherson Sumi Systems ($MOTHERSUMI) | 13.5% | 16.5% | 25.0% | 24.9% | 25.1% |
| Gabriel India ($GABRIEL) | 19.9% | 15.5% | 18.0% | 24.0% | 25.0% |
| Suprajit Engineering ($SUPRAJIT) | 31.8% | 28.0% | 26.1% | 22.9% | - |
| |
|---|
| Median (50 companies) | 15.7% | 11.9% | 13.6% | 14.3% | 15.4% |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 32.1% | 34.5% | 30.3% | 35.4% | 33.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tube Investments Of India ($TUBEINVEST) | 17.6x | 17.8x | 17.3x | 16.4x | 0.1x |
| Amtek Auto ($AMTEKAUTO) | 4.8x | - | 5.3x | 5.8x | - |
| Remsons Industries ($REMSONSIND) | 2.8x | 4.3x | 3.6x | 5.7x | - |
| Steel Strips Wheels ($SSWL) | 5.4x | 6.3x | 6.5x | 5.6x | 4.2x |
| Ucal Fuel Systems ($UCALFUEL) | 4.3x | 5.6x | 5.7x | 3.6x | - |
| |
|---|
| Median (42 companies) | 1.3x | 2.2x | 0.8x | 0.0x | 0.0x |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 0.1x | 0.1x | -0.4x | -0.2x | -0.1x |
