Wheels India EBITDA jumped on 13.4% and EBITDA Margin increased slightly on 0.87 pp from 7.7% to 8.6%
25-05-2016 • About Wheels India (
$WHEELS) • By InTwits
Wheels India reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Wheels India has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's in pair with industry average of 5.6%
- CAPEX is quite volatile: ₹1,996m in FY2016, ₹726m in FY2015, ₹1,023m in FY2014, ₹567m in FY2013, ₹1,227m in FY2012
- The company has highly profitable business model: ROIC is 13.6%
- It operates with high leverage: Net Debt/EBITDA is 1.9x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Wheels India's Revenue increased slightly on 1.8%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.87 pp from 7.7% to 8.6% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2015 at 7.7%.
Net Income margin showed almost no change in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Wheels India had CAPEX/Revenue of 3.8%. The company's CAPEX/Revenue decreased on 2.4 pp from 6.2% in FY2013 to 3.8% in FY2016. It's average CAPEX/Revenue for the last three years was 3.9%.
Return on investment
The company operates at good ROIC (13.6%) while ROE is low (10.1%). ROIC increased slightly on 1.3 pp from 12.3% to 13.6% in FY2016. ROE increased on 2.1 pp from 8.0% to 10.1% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2015 at 12.3%. During the last 5 years ROE bottomed in FY2015 at 8.0%.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.9x and Debt / EBITDA is 1.9x. Net Debt / EBITDA dropped on 0.6x from 2.5x to 1.9x in FY2016. Debt dropped on 13.7% while cash dropped on 29.9%.
Wheels India has short term refinancing risk: cash is only 3.2% of short term debt.
Valuation and dividends
Wheels India's trades at EV/EBITDA 8.9x and P/E 30.3x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 16.1x with the industry average at 22.8x.
Financial and operational results
Wheels India ($WHEELS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 18,723 | 17,363 | 18,232 | 19,799 | 20,163 | 1.8% |
| EBITDA | 1,959 | 1,715 | 1,475 | 1,523 | 1,727 | 13.4% |
| Net Income | 343 | 319 | 284 | 297 | 400 | 34.5% |
Balance Sheet
|
|---|
| Cash | 6 | 14 | 26 | 68 | 47 | -29.9% |
| Short Term Debt | 2,112 | 2,148 | 2,095 | 2,261 | 1,475 | -34.8% |
| Long Term Debt | 1,765 | 2,047 | 1,222 | 1,631 | 1,886 | 15.6% |
Cash flow
|
|---|
| Capex | 614 | 1,074 | 784 | 694 | 772 | 11.2% |
Ratios
|
|---|
| Revenue growth | 10.1% | -7.3% | 5.0% | 8.6% | 1.8% | |
| EBITDA growth | 51.2% | -12.5% | -14.0% | 3.2% | 13.4% | |
|
|---|
| EBITDA Margin | 10.5% | 9.9% | 8.1% | 7.7% | 8.6% | 0.9% |
| Net Income Margin | 1.8% | 1.8% | 1.6% | 1.5% | 2.0% | 0.5% |
| CAPEX, % of revenue | 3.3% | 6.2% | 4.3% | 3.5% | 3.8% | 0.3% |
|
|---|
| ROIC | 22.9% | 16.7% | 12.4% | 12.3% | 13.6% | 1.3% |
| ROE | 15.0% | 12.8% | 9.1% | 8.0% | 10.1% | 2.1% |
| Net Debt/EBITDA | 2.0x | 2.4x | 2.2x | 2.5x | 1.9x | -0.6x |
Peers in Auto Parts & Equipment
Below we provide Wheels India benchmarking against other companies in Auto Parts & Equipment 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 |
|---|
| 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 ($INDNIPPON) | 13.6% | 3.2% | -2.4% | 24.8% | - |
| Amara Raja Batteries ($AMARAJABAT) | - | 25.1% | 16.1% | 22.6% | 11.4% |
| Enkei Wheels (India) ($ENKEIWHEL) | 16.9% | 1.3% | 11.7% | 21.6% | - |
| |
|---|
| Median (38 companies) | 16.9% | 2.7% | 4.9% | 9.3% | 0.5% |
|---|
| Wheels India ($WHEELS) | - | -7.3% | 5.0% | 8.6% | 1.8% |
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 ($SHIVAMAUTO) | 24.1% | 24.1% | 20.6% | 18.7% | - |
| Amara Raja Batteries ($AMARAJABAT) | 14.9% | 15.7% | 14.2% | 17.0% | 17.6% |
| Suprajit Engineering ($SUPRAJIT) | 16.2% | 17.0% | 17.2% | 16.2% | - |
| |
|---|
| Median (44 companies) | 11.1% | 9.8% | 10.8% | 10.3% | 10.9% |
|---|
| Wheels India ($WHEELS) | 10.5% | 9.9% | 8.1% | 7.7% | 8.6% |
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% | - |
| Amara Raja Batteries ($AMARAJABAT) | 3.7% | 2.5% | 10.9% | 9.6% | 11.0% |
| |
|---|
| Median (25 companies) | 5.8% | 4.5% | 4.9% | 4.7% | 5.8% |
|---|
| Wheels India ($WHEELS) | 3.3% | 6.2% | 4.3% | 3.5% | 3.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Amara Raja Batteries ($AMARAJABAT) | 32.1% | 34.5% | 30.3% | 35.4% | 33.7% |
| Exide Industries ($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 ($GABRIEL) | 19.9% | 15.5% | 18.0% | 24.0% | 25.0% |
| |
|---|
| Median (50 companies) | 15.7% | 11.9% | 15.1% | 14.6% | 15.6% |
|---|
| Wheels India ($WHEELS) | 22.9% | 16.7% | 12.4% | 12.3% | 13.6% |
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 ($UCALFUEL) | 4.3x | 5.6x | 5.7x | 3.6x | - |
| |
|---|
| Median (42 companies) | 1.2x | 1.8x | 0.7x | 0.0x | 0.0x |
|---|
| Wheels India ($WHEELS) | 2.0x | 2.4x | 2.2x | 2.5x | 1.9x |
