Ingersoll-Rand (India) reports 26.2% CAPEX decline in 2016 and 0.50% Revenue growth
26-05-2016 • About Ingersoll-Rand (India) (
$INGERRAND) • By InTwits
Ingersoll-Rand (India) reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Ingersoll-Rand (India) has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.9%. At the same time it's a lot of higher than industry average of 5.0%.
- CAPEX is quite volatile: ₹444m in FY2016, ₹602m in FY2015, ₹208m in FY2014, ₹638m in FY2013, ₹253m in FY2012
- The company has potentially unprofitable business model: ROIC is 3.8%
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 increased slightly on 0.50%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 16.9% to 18.8% in FY2016. EBITDA Margin declined at -1.2 pp per annum in FY2012-FY2016.
Net Income margin decreased slightly on 0.64 pp from 10.1% to 9.4% in FY2016. Net Income margin stuck to a declining trend at -1.2 pp per annum in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 6.7%. CAPEX/Revenue decreased on 4.2 pp from 10.9% in FY2013 to 6.7% in FY2016. It's average level of CAPEX/Revenue for the last three years was 6.5%. The company invested a large share of EBITDA (89.7%) to CAPEX.
Return on investment
The company operates at low ROIC (3.8%) and ROE (6.4%). ROIC showed almost no change in FY2016. ROE decreased slightly on 0.70 pp from 7.1% to 6.4% in FY2016. ROIC stuck to a declining trend at -1.1 pp per annum in FY2012-FY2016. ROE declined at -0.97 pp per annum in the last 5 years.
Leverage (Debt)
The company has no debt. Cash jumped on 110%.
Valuation and dividends
Ingersoll-Rand (India)'s trades at EV/EBITDA 33.5x and P/E 34.2x while industy averages are 17.8x and 21.9x. Ingersoll-Rand (India)'s EV/(EBITDA-CAPEX) is 324.9x with the industry average at 22.8x.
Financial and operational results
Ingersoll-Rand (India) ($INGERRAND) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 5,920 | 5,856 | 5,787 | 6,555 | 6,588 | 0.5% |
| EBITDA | 705 | 563 | 455 | 445 | 495 | 11.1% |
| Net Income | 828 | 779 | 670 | 661 | 622 | -5.9% |
Balance Sheet
|
|---|
| Cash | 172 | 2,819 | 2,259 | 2,271 | 4,759 | 109.6% |
| Short Term Debt | 205 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 253 | 638 | 208 | 602 | 444 | -26.2% |
Ratios
|
|---|
| Revenue growth | 20.1% | -1.1% | -1.2% | 13.3% | 0.5% | |
| EBITDA growth | 14.7% | -20.2% | -19.1% | -2.2% | 11.1% | |
|
|---|
| EBITDA Margin | 11.9% | 9.6% | 7.9% | 6.8% | 7.5% | 0.7% |
| Net Income Margin | 14.0% | 13.3% | 11.6% | 10.1% | 9.4% | -0.6% |
| CAPEX, % of revenue | 4.3% | 10.9% | 3.6% | 9.2% | 6.7% | -2.4% |
|
|---|
| ROIC | 7.9% | 6.0% | 4.2% | 3.5% | 3.8% | 0.3% |
| ROE | 10.1% | 9.3% | 7.5% | 7.1% | 6.4% | -0.7% |
| Net Debt/EBITDA | 0.0x | -5.0x | -5.0x | -5.1x | -9.6x | -4.5x |
Peers in Industrial Machinery
Below you can find Ingersoll-Rand (India) benchmarking vs. other companies in Industrial Machinery 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 |
|---|
| Lloyd Electric & Engineering ($LLOYDELENG) | - | - | - | 22.3% | 27.3% |
| Kabra Extrusiontechnik ($KABRAEXTRU) | - | -8.7% | 28.4% | 21.6% | 10.2% |
| Akar Tools ($AKARTOOL) | 21.1% | 2.1% | -2.3% | 16.7% | - |
| Honda Siel Power Products ($HONDAPOWER) | - | 2.4% | 5.0% | 16.5% | 4.7% |
| Mazda ($MAZDALTD) | 22.1% | 14.7% | -15.6% | 16.2% | - |
| |
|---|
| Median (28 companies) | 11.3% | 2.3% | 1.6% | 3.1% | 8.6% |
|---|
| Ingersoll-Rand (India) ($INGERRAND) | - | -1.1% | -1.2% | 13.3% | 0.5% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bell Agromachina ($BELAGRO) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (1 company) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Texmaco Infrastructure & Holdings ($TEXINFRA) | - | - | - | 40.5% | - |
| Dhp India ($DHPIND) | - | - | - | 26.3% | - |
| Shilp Gravures ($SHILGRAVQ) | - | - | - | 19.4% | - |
| Solitaire Machine Tools ($SOLIMAC) | - | - | - | 19.4% | - |
| Wendt (India) ($WENDT) | 28.3% | 21.6% | 18.6% | 19.0% | 16.5% |
| |
|---|
| Median (44 companies) | 11.2% | 9.4% | 10.6% | 10.5% | 11.4% |
|---|
| Ingersoll-Rand (India) ($INGERRAND) | 11.9% | 9.6% | 7.9% | 6.8% | 7.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Texmaco Infrastructure & Holdings ($TEXINFRA) | - | - | - | 14.0% | - |
| Wendt (India) ($WENDT) | 13.5% | 9.0% | 8.8% | 9.4% | 9.3% |
| Kabra Extrusiontechnik ($KABRAEXTRU) | 6.5% | 1.8% | 0.5% | 8.8% | 16.2% |
| Forbes & Company ($FORBESCO) | 1.8% | 2.6% | 3.0% | 5.1% | - |
| Lakshmi Machine Works ($LAXMIMACH) | 8.3% | 2.3% | 3.4% | 4.9% | 4.6% |
| |
|---|
| Median (22 companies) | 5.8% | 4.1% | 2.8% | 3.1% | 3.0% |
|---|
| Ingersoll-Rand (India) ($INGERRAND) | 4.3% | 10.9% | 3.6% | 9.2% | 6.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Greaves Cotton ($GREAVESCOT) | - | 24.8% | 16.3% | 26.7% | 25.7% |
| Gmm Pfaudler ($GMM) | -76.2% | 6.8% | 17.4% | 18.2% | 16.1% |
| Lakshmi Machine Works ($LAXMIMACH) | 18.0% | 11.7% | 16.2% | 17.6% | 18.2% |
| Wpil ($WPIL) | - | 25.3% | 21.4% | 15.7% | 4.8% |
| Honda Siel Power Products ($HONDAPOWER) | 16.9% | 8.8% | 11.5% | 15.3% | 18.3% |
| |
|---|
| Median (53 companies) | 13.5% | 11.0% | 10.8% | 13.0% | 15.9% |
|---|
| Ingersoll-Rand (India) ($INGERRAND) | 7.9% | 6.0% | 4.2% | 3.5% | 3.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Forbes & Company ($FORBESCO) | 2.2x | 3.3x | 4.7x | 6.3x | - |
| Nitin Fire Protection Industries ($NITINFIRE) | 3.6x | 3.5x | 3.0x | 3.7x | - |
| Elgi Equipments ($ELGIEQUIP) | -1.2x | 2.3x | 2.7x | 3.3x | - |
| Lloyd Electric & Engineering ($LLOYDELENG) | - | - | 3.7x | 3.2x | 2.7x |
| Elecon Engineering Co ($ELECON) | 3.0x | 3.2x | 4.0x | 3.1x | 3.9x |
| |
|---|
| Median (35 companies) | 1.0x | 1.6x | 0.0x | 0.0x | 0.0x |
|---|
| Ingersoll-Rand (India) ($INGERRAND) | 0.0x | -5.0x | -5.0x | -5.1x | -9.6x |
