3M India reports 85.5% Net Income growth in 2016 and 5.2 pp EBITDA Margin growth from 11.1% to 16.3%
27-05-2016 • About 3M India (
$3MINDIA) • By InTwits
3M India reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- 3M India is a growth stock: FY2016 revenue growth was 14.3%, 5 year revenue CAGR was 12.0% at FY2016 ROIC 30.9%
- EBITDA Margin is quite volatile: 16.3% in FY2016, 11.1% in FY2015, 7.2% in FY2014, 7.3% in FY2013, 8.7% in FY2012
- The company has highly profitable business model: ROIC is 30.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
3M India's Revenue jumped on 14.3%. During FY2012-FY2016 Revenue growth bottomed in FY2015 at 7.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 10.2% to 11.1% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2014 at 7.2% and was growing since that time.
Net Income margin increased on 3.7 pp from 5.9% to 9.6% in FY2016. During the last 5 years Net Income margin bottomed in FY2014 at 2.5% and was growing since that time.
Return on investment
The company operates at high and attractive ROIC (30.9%) and ROE (22.1%). ROIC surged on 12.8 pp from 18.1% to 30.9% in FY2016. ROE increased on 7.7 pp from 14.4% to 22.1% in FY2016. During the last 5 years ROIC bottomed in FY2014 at 8.9% and was growing since that time. During FY2012-FY2016 ROE bottomed in FY2014 at 6.3% and was growing since that time.
Leverage (Debt)
Debt level is -1.1x Net Debt / EBITDA and 0.0x Debt / EBITDA. Debt dropped on 22.0% while cash surged on 226%.
3M India has no short term refinancing risk: cash is higher than short term debt (6,824.1%).
Valuation and dividends
The company's trades at EV/EBITDA 39.8x and P/E 69.5x while industy averages are 17.8x and 21.9x.
Management team
Panos Gaulakos is a 3M India's CFO. Panos Gaulakos has spent 4 years at the company.
Financial and operational results
3M India ($3MINDIA) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14,051 | 15,741 | 17,084 | 18,403 | 21,030 | 14.3% |
| SG&A | | | | | 633 | |
| EBITDA | 1,229 | 1,156 | 1,222 | 2,035 | 3,421 | 68.1% |
| Net Income | 648 | 523 | 430 | 1,083 | 2,009 | 85.5% |
Balance Sheet
|
|---|
| Cash | 539 | 596 | 597 | 1,139 | 3,709 | 225.6% |
| Short Term Debt | 667 | 1,660 | 1,142 | 68 | 54 | -19.7% |
| Long Term Debt | 92 | 77 | 67 | 75 | 57 | -24.1% |
Cash flow
|
|---|
| Capex | 0 | 0 | 0 | 0 | 0 | |
Ratios
|
|---|
| Revenue growth | 17.9% | 12.0% | 8.5% | 7.7% | 14.3% | |
| EBITDA growth | -21.4% | -6.0% | 5.7% | 66.5% | 68.1% | |
|
|---|
| EBITDA Margin | 8.7% | 7.3% | 7.2% | 11.1% | 16.3% | 5.2% |
| SG&A, % of revenue | | | | | 3.0% | |
| Net Income Margin | 4.6% | 3.3% | 2.5% | 5.9% | 9.6% | 3.7% |
|
|---|
| ROIC | 15.5% | 10.4% | 8.9% | 18.1% | 30.9% | 12.8% |
| ROE | 11.3% | 8.3% | 6.3% | 14.4% | 22.1% | 7.7% |
| Net Debt/EBITDA | 0.2x | 1.0x | 0.5x | -0.5x | -1.1x | -0.6x |
Peers in Diversified
Below you can find 3M India benchmarking vs. other companies in Diversified industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dcm Shriram ($DCMSHRIRAM) | - | 10.2% | 11.6% | -9.0% | 3.4% |
| Mercator ($MERCATOR) | - | 0.9% | -7.4% | -10.6% | -12.5% |
| Aditya Birla Nuvo ($ABIRLANUVO) | - | 16.7% | 1.6% | 2.4% | -12.8% |
| Empire Industries ($EMPIND) | - | 15.3% | 12.1% | 12.9% | -25.2% |
| |
|---|
| Median (4 companies) | - | 12.8% | 6.6% | -3.3% | -12.6% |
|---|
| 3M India ($3MINDIA) | - | 12.0% | 8.5% | 7.7% | 14.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Swasti Vinayaka Art And Heritage Corporation ($SVARTCORP) | - | - | - | 38.3% | - |
| Aditya Birla Nuvo ($ABIRLANUVO) | 13.5% | 14.9% | 17.7% | 20.4% | 26.5% |
| Empire Industries ($EMPIND) | 25.2% | 19.8% | 19.1% | 19.6% | 23.0% |
| Mercator ($MERCATOR) | 15.8% | 13.6% | 18.6% | 17.1% | 13.8% |
| Raja Bahadur International ($RAJABAH) | - | - | - | 9.0% | - |
| |
|---|
| Median (6 companies) | 14.6% | 14.2% | 18.2% | 18.3% | 18.4% |
|---|
| 3M India ($3MINDIA) | 8.7% | 7.3% | 7.2% | 11.1% | 16.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Aditya Birla Nuvo ($ABIRLANUVO) | 7.6% | 6.5% | 17.1% | 7.2% | 14.3% |
| Dcm Shriram ($DCMSHRIRAM) | 1.3% | 1.4% | 1.5% | 1.9% | 8.0% |
| Empire Industries ($EMPIND) | 19.4% | 9.5% | 15.2% | 5.6% | 2.5% |
| Mercator ($MERCATOR) | 7.4% | 2.0% | 11.4% | 26.4% | 0.0% |
| |
|---|
| Median (4 companies) | 7.5% | 4.3% | 13.3% | 6.4% | 5.3% |
|---|
| 3M India ($3MINDIA) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Empire Industries ($EMPIND) | - | 27.3% | 26.6% | 24.8% | 19.4% |
| Dcm Shriram ($DCMSHRIRAM) | 5.9% | 12.3% | 12.1% | 10.3% | 12.9% |
| Aditya Birla Nuvo ($ABIRLANUVO) | 10.3% | 10.8% | 10.3% | 10.3% | 9.3% |
| Mercator ($MERCATOR) | 3.4% | 1.0% | 3.5% | 0.9% | -1.0% |
| Advanced Micronic Devices ($ADVNCMIC) | 9.1% | -2.8% | - | - | - |
| |
|---|
| Median (8 companies) | 9.1% | 10.8% | 11.2% | 10.3% | 11.1% |
|---|
| 3M India ($3MINDIA) | 15.5% | 10.4% | 8.9% | 18.1% | 30.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mercator ($MERCATOR) | 4.9x | 5.4x | 4.7x | 6.9x | 6.9x |
| Aditya Birla Nuvo ($ABIRLANUVO) | 3.3x | 4.0x | 3.9x | 4.6x | 5.9x |
| Dcm Shriram ($DCMSHRIRAM) | 4.7x | 2.6x | 1.7x | 1.6x | 2.1x |
| Empire Industries ($EMPIND) | 0.9x | 1.0x | 1.5x | 1.2x | 1.0x |
| Raja Bahadur International ($RAJABAH) | - | - | - | 0.0x | - |
| |
|---|
| Median (6 companies) | 3.3x | 3.3x | 1.7x | 1.4x | 4.0x |
|---|
| 3M India ($3MINDIA) | 0.2x | 1.0x | 0.5x | -0.5x | -1.1x |
