Bharat Electronics reports 189% CAPEX growth in 2016 and 7.1% Revenue growth
27-05-2016 • About Bharat Electronics (
$BEL) • By InTwits
Bharat Electronics reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is expanding: 19.1% in FY2016 vs. 17.0% in FY2015 vs. 11.0% in FY2012
- Bharat Electronics has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.7%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: ₹6,571m in FY2016, ₹2,272m in FY2015, ₹3,747m in FY2014, ₹3,885m in FY2013, ₹2,452m in FY2012
- The company has highly profitable business model: ROIC is 14.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Bharat Electronics's Revenue increased on 7.1%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 10.6 pp from -6.8% to -17.4% in FY2016. EBITDA Margin stuck to a growing trend at 2.3 pp per annum in the last 5 years.
Net Income margin increased slightly on 1.4 pp from 17.4% to 18.8% in FY2016. Net Income margin stuck to a growing trend at 1.1 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
Bharat Electronics's CAPEX/Revenue was 8.9% in FY2016. Bharat Electronics showed CAPEX/Revenue growth of 2.6 pp from 6.3% in FY2013 to 8.9% in FY2016. For the last three years the average CAPEX/Revenue was 6.0%.
Return on investment
The company operates at good ROIC (14.3%) and ROE (15.9%). ROIC increased slightly on 0.84 pp from 13.5% to 14.3% in FY2016. ROE showed almost no change in FY2016. ROIC followed a growing trend at 1.4 pp per annum in FY2012-FY2016. During the last 5 years ROE bottomed in FY2014 at 13.9% and was growing since that time.
Leverage (Debt)
Debt level is -5.3x Net Debt / EBITDA and 0.0x Debt / EBITDA. Debt surged on 14.2% while cash surged on 1,238%.
Bharat Electronics has no short term refinancing risk: cash is higher than short term debt (26,392.5%).
Financial and operational results
Bharat Electronics ($BEL) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 57,920 | 61,509 | 63,359 | 68,953 | 73,827 | 7.1% |
| SG&A | | | | | 229 | |
| EBITDA | 6,357 | 6,629 | 9,356 | 11,746 | 14,118 | 20.2% |
| Net Income | 8,467 | 9,108 | 9,513 | 11,972 | 13,871 | 15.9% |
Balance Sheet
|
|---|
| Cash | 4,166 | 4,145 | 4,199 | 5,643 | 75,527 | 1,238.3% |
| Short Term Debt | 0 | 4 | 2 | 249 | 286 | 14.8% |
| Long Term Debt | 3 | 2 | 3 | 3 | 3 | -26.3% |
Cash flow
|
|---|
| Capex | 2,452 | 3,885 | 3,747 | 2,272 | 6,571 | 189.2% |
Ratios
|
|---|
| Revenue growth | 2.9% | 6.2% | 3.0% | 8.8% | 7.1% | |
| EBITDA growth | -37.3% | 4.3% | 41.1% | 25.6% | 20.2% | |
|
|---|
| EBITDA Margin | 11.0% | 10.8% | 14.8% | 17.0% | 19.1% | 2.1% |
| SG&A, % of revenue | | | | | 0.3% | |
| Net Income Margin | 14.6% | 14.8% | 15.0% | 17.4% | 18.8% | 1.4% |
| CAPEX, % of revenue | 4.2% | 6.3% | 5.9% | 3.3% | 8.9% | 5.6% |
|
|---|
| ROIC | 9.7% | 8.9% | 12.0% | 13.5% | 14.3% | 0.8% |
| ROE | 15.5% | 14.8% | 13.9% | 15.4% | 15.9% | 0.5% |
| Net Debt/EBITDA | -0.7x | -0.6x | -0.4x | -0.5x | -5.3x | -4.9x |
Peers in Defence
Below we provide Bharat Electronics benchmarking against other companies in Defence 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pipavav Defence And Offshore Eng ($PIPAVAVDOC) | - | 38.5% | -2.0% | -64.0% | -65.8% |
| |
|---|
| Median (1 company) | - | 38.5% | -2.0% | -64.0% | -65.8% |
|---|
| Bharat Electronics ($BEL) | - | 6.2% | 3.0% | 8.8% | 7.1% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pipavav Defence And Offshore Eng ($PIPAVAVDOC) | 23.9% | 23.2% | 30.7% | 9.5% | -41.0% |
| |
|---|
| Median (1 company) | 23.9% | 23.2% | 30.7% | 9.5% | -41.0% |
|---|
| Bharat Electronics ($BEL) | 11.0% | 10.8% | 14.8% | 17.0% | 19.1% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pipavav Defence And Offshore Eng ($PIPAVAVDOC) | 28.3% | 76.4% | 32.7% | 106.5% | 8.5% |
| |
|---|
| Median (1 company) | 28.3% | 76.4% | 32.7% | 106.5% | 8.5% |
|---|
| Bharat Electronics ($BEL) | 4.2% | 6.3% | 5.9% | 3.3% | 8.9% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pipavav Defence And Offshore Eng ($PIPAVAVDOC) | 7.6% | 7.7% | 8.1% | -1.3% | -3.3% |
| |
|---|
| Median (1 company) | 7.6% | 7.7% | 8.1% | -1.3% | -3.3% |
|---|
| Bharat Electronics ($BEL) | 9.7% | 8.9% | 12.0% | 13.5% | 14.3% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pipavav Defence And Offshore Eng ($PIPAVAVDOC) | 6.1x | 8.2x | 7.0x | 75.5x | - |
| |
|---|
| Median (1 company) | 6.1x | 8.2x | 7.0x | 75.5x | - |
|---|
| Bharat Electronics ($BEL) | -0.7x | -0.6x | -0.4x | -0.5x | -5.3x |
