India Cements EBITDA jumped on 13.6% while Revenue decreased on 3.9%
26-05-2016 • About India Cements (
$INDIACEM) • By InTwits
India Cements reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- India Cements has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.7%. At the same time it's in pair with industry average of 7.1%
- CAPEX is quite volatile: ₹1,680m in FY2016, ₹2,576m in FY2015, ₹2,427m in FY2014, ₹5,645m in FY2013, ₹6,631m in FY2012
- The company has business model with low profitability: ROIC is 8.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
India Cements's Revenue decreased on 3.9%. Revenue decline was accelerating on average at -7.5 pp per annum in the last 5 years. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.7 pp from 15.1% to 17.8% in FY2016. During the last 5 years EBITDA Margin bottomed in FY2014 at 12.4% and was growing since that time.
SG&A as a % of Revenue increased slightly on 0.68 pp from 27.7% to 28.4% in FY2016.
Net Income margin increased on 2.8 pp from -0.065% to 2.8% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2014 at -4.8% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 3.5%. The company showed decline in CAPEX/Revenue of 7.5 pp from 10.9% in FY2013 to 3.5% in FY2016. It's average level of CAPEX/Revenue for the last three years was 4.4%. CAPEX as a % of Revenue declined at -2.8 pp per annum in FY2012-FY2016.
Return on investment
The company operates at low ROIC (8.4%) and ROE (3.9%). ROIC increased on 2.2 pp from 6.2% to 8.4% in FY2016. ROE increased on 4.0 pp from -0.094% to 3.9% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2014 at 4.1% and was growing since that time. During FY2012-FY2016 ROE bottomed in FY2014 at -6.4% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.7x and Debt / EBITDA is 3.7x. Net Debt / EBITDA dropped on 0.9x from 4.6x to 3.7x in FY2016. Debt decreased on 7.3% while cash jumped on 403%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2014 at 5.5x and was declining since that time.
India Cements has short term refinancing risk: cash is only 3.1% of short term debt.
Management team
India Cements's CEO Narayanaswami Srinivasan has spent 31 years with the company.
Financial and operational results
India Cements ($INDIACEM) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 46,310 | 51,595 | 50,848 | 50,604 | 48,654 | -3.9% |
| SG&A | 2,135 | 16,121 | 17,379 | 14,018 | 13,808 | -1.5% |
| EBITDA | 9,527 | 9,475 | 6,311 | 7,632 | 8,673 | 13.6% |
| Net Income | 2,715 | 1,880 | -2,434 | -33 | 1,344 | |
Balance Sheet
|
|---|
| Cash | 122 | 92 | 60 | 72 | 361 | 403.1% |
| Short Term Debt | 12,827 | 11,836 | 12,577 | 10,565 | 11,692 | 10.7% |
| Long Term Debt | 17,519 | 21,321 | 22,407 | 24,454 | 20,755 | -15.1% |
Cash flow
|
|---|
| Capex | 6,631 | 5,645 | 2,427 | 2,576 | 1,680 | -34.8% |
Ratios
|
|---|
| Revenue growth | 27.8% | 11.4% | -1.4% | -0.5% | -3.9% | |
| EBITDA growth | 97.8% | -0.5% | -33.4% | 20.9% | 13.6% | |
|
|---|
| EBITDA Margin | 20.6% | 18.4% | 12.4% | 15.1% | 17.8% | 2.7% |
| SG&A, % of revenue | 4.6% | 31.2% | 34.2% | 27.7% | 28.4% | 0.7% |
| Net Income Margin | 5.9% | 3.6% | -4.8% | -0.1% | 2.8% | 2.8% |
| CAPEX, % of revenue | 14.3% | 10.9% | 4.8% | 5.1% | 3.5% | -1.6% |
|
|---|
| ROIC | 9.5% | 8.3% | 4.1% | 6.2% | 8.4% | 2.2% |
| ROE | 6.8% | 4.7% | -6.4% | -0.1% | 3.9% | 4.0% |
| Net Debt/EBITDA | 3.2x | 3.5x | 5.5x | 4.6x | 3.7x | -0.9x |
Peers in Cement & Cement Products
Below you can find India Cements 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 ($PRISMCEM) | - | 4.9% | 5.3% | 12.5% | -0.6% |
| |
|---|
| Median (16 companies) | 14.9% | 11.7% | 1.7% | 7.3% | -0.6% |
|---|
| India Cements ($INDIACEM) | - | 11.4% | -1.4% | -0.5% | -3.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Orient Cement ($ORIENTCEM) | - | 21.5% | 15.0% | 19.8% | 12.2% |
| Saurashtra Cement ($SAURASHCEM) | 11.4% | 21.6% | 11.9% | 16.8% | 13.8% |
| Ambuja Cements ($AMBUJACEM) | 25.6% | 18.2% | 19.4% | 16.4% | - |
| Deccan Cements ($DECCANCE) | 22.8% | 13.2% | 14.7% | 14.9% | 19.9% |
| Acc ($ACC) | 19.3% | 14.6% | 12.9% | 14.4% | - |
| |
|---|
| Median (15 companies) | 16.2% | 13.4% | 11.7% | 11.0% | 12.2% |
|---|
| India Cements ($INDIACEM) | 20.6% | 18.4% | 12.4% | 15.1% | 17.8% |
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 ($BIRLACORPN) | 19.1% | 7.1% | 5.5% | 6.9% | 5.1% |
| |
|---|
| Median (12 companies) | 5.5% | 7.1% | 8.3% | 5.9% | 4.2% |
|---|
| India Cements ($INDIACEM) | 14.3% | 10.9% | 4.8% | 5.1% | 3.5% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Saurashtra Cement ($SAURASHCEM) | 38.6% | 42.7% | 13.9% | 26.9% | 23.6% |
| Indian Hume Pipe Co ($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 ($KCP) | 17.6% | 6.7% | 7.1% | 9.3% | - |
| |
|---|
| Median (17 companies) | 15.8% | 11.2% | 6.7% | 8.7% | 8.0% |
|---|
| India Cements ($INDIACEM) | 9.5% | 8.3% | 4.1% | 6.2% | 8.4% |
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 | 3.0x |
| Prism Cement ($PRISMCEM) | 4.8x | 6.0x | 10.0x | 6.0x | 5.3x |
| J.K.Cement ($JKCEMENT) | 2.3x | 2.3x | 6.9x | 5.8x | - |
| Orient Cement ($ORIENTCEM) | - | -0.1x | 1.1x | 3.5x | 6.8x |
| |
|---|
| Median (14 companies) | 1.8x | 2.4x | 2.6x | 2.6x | 3.1x |
|---|
| India Cements ($INDIACEM) | 3.2x | 3.5x | 5.5x | 4.6x | 3.7x |
