Dynamatic Technologies reports 13.4% EBITDA decline in 2016 and 7.4% Revenue decline
27-05-2016 • About Dynamatic Technologies (
$DYNAMATECH) • By InTwits
Dynamatic Technologies reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 9.5% in FY2016 vs. 10.2% in FY2015 vs. 9.8% in FY2012
- Dynamatic Technologies has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.5%. At the same time it's in pair with industry average of 5.0%
- CAPEX is quite volatile: ₹554m in FY2016, ₹247m in FY2015, ₹380m in FY2014, ₹625m in FY2013, ₹1,505m in FY2012
- The company has business model with average profitability: ROIC is 10.4%
- It operates with high leverage: Net Debt/EBITDA is 3.8x while industry average is 0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Dynamatic Technologies's Revenue decreased on 7.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.2 pp from 6.6% to 11.8% in FY2016. During the last 5 years EBITDA Margin topped in FY2014 at 10.6% and was declining since that time.
Net Income margin decreased slightly on 0.96 pp from 1.8% to 0.83% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Dynamatic Technologies had CAPEX/Revenue of 3.7%. The company's CAPEX/Revenue decreased slightly on 0.66 pp from 4.4% in FY2013 to 3.7% in FY2016. It's average CAPEX/Revenue for the last three years was 2.6%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2015 at 1.5%.
Return on investment
The company operates at low ROIC (10.4%) and ROE (4.8%). ROIC decreased on 3.5 pp from 13.9% to 10.4% in FY2016. ROE decreased on 9.3 pp from 14.2% to 4.8% in FY2016.
Leverage (Debt)
Debt level is 3.8x Net Debt / EBITDA and 4.2x Debt / EBITDA. Net Debt / EBITDA surged on 1.1x from 2.7x to 3.8x in FY2016. Debt surged on 15.4% while cash dropped on 22.1%. During FY2012-FY2016 Net Debt/EBITDA bottomed in FY2015 at 2.7x.
Dynamatic Technologies has short term refinancing risk: cash is only 28.9% of short term debt.
Valuation and dividends
Dynamatic Technologies's trades at EV/EBITDA 13.4x and P/E 110.5x while industy averages are 17.8x and 21.9x. Dynamatic Technologies's EV/(EBITDA-CAPEX) is 22.1x with the industry average at 22.8x.
Management team
The company's CEO is Udayant Malhoutra. Udayant Malhoutra has 6 years tenure with the company. Dynamatic Technologies's CFO is Hanuman Kumar Sharma. Hanuman Kumar Sharma has 8 years tenure at the company.
Financial and operational results
Dynamatic Technologies ($DYNAMATECH) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14,875 | 14,196 | 15,425 | 15,992 | 14,806 | -7.4% |
| EBITDA | 1,450 | 1,484 | 1,629 | 1,630 | 1,412 | -13.4% |
| Net Income | 246 | -119 | 138 | 287 | 123 | -57.1% |
Balance Sheet
|
|---|
| Cash | 192 | 541 | 376 | 726 | 566 | -22.1% |
| Short Term Debt | 2,715 | 3,244 | 2,297 | 2,505 | 1,959 | -21.8% |
| Long Term Debt | 4,663 | 3,442 | 3,619 | 2,658 | 3,999 | 50.4% |
Cash flow
|
|---|
| Capex | 1,505 | 625 | 380 | 247 | 554 | 124.5% |
Ratios
|
|---|
| Revenue growth | 229.6% | -4.6% | 8.7% | 3.7% | -7.4% | |
| EBITDA growth | 78.5% | 2.3% | 9.8% | 0.1% | -13.4% | |
|
|---|
| EBITDA Margin | 9.8% | 10.5% | 10.6% | 10.2% | 9.5% | -0.7% |
| Net Income Margin | 1.7% | -0.8% | 0.9% | 1.8% | 0.8% | -1.0% |
| CAPEX, % of revenue | 10.1% | 4.4% | 2.5% | 1.5% | 3.7% | 2.2% |
|
|---|
| ROIC | 13.8% | 11.0% | 13.2% | 13.9% | 10.4% | -3.5% |
| ROE | 16.7% | -8.7% | 9.6% | 14.2% | 4.8% | -9.3% |
| Net Debt/EBITDA | 5.0x | 4.1x | 3.4x | 2.7x | 3.8x | 1.1x |
Peers in Industrial Machinery
Below we provide Dynamatic Technologies benchmarking against other companies in Industrial Machinery 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 |
|---|
| 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 ($MAZDALTD) | 22.1% | 14.7% | -15.6% | 16.2% | - |
| |
|---|
| Median (28 companies) | 11.3% | 2.3% | -0.4% | 3.1% | 7.8% |
|---|
| Dynamatic Technologies ($DYNAMATECH) | - | -4.6% | 8.7% | 3.7% | -7.4% |
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) | 11.4% | 9.4% | 10.5% | 10.5% | 10.4% |
|---|
| Dynamatic Technologies ($DYNAMATECH) | 9.8% | 10.5% | 10.6% | 10.2% | 9.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Texmaco Infrastructure & Holdings ($TEXINFRA) | - | - | - | 14.0% | - |
| Wendt (India) ($WENDT) | 13.5% | 9.0% | 8.8% | 9.4% | 9.3% |
| Ingersoll-Rand (India) ($INGERRAND) | 4.3% | 10.9% | 3.6% | 9.2% | 6.7% |
| Kabra Extrusiontechnik ($KABRAEXTRU) | 6.5% | 1.8% | 0.5% | 8.8% | 16.2% |
| Forbes & Company ($FORBESCO) | 1.8% | 2.6% | 3.0% | 5.1% | - |
| |
|---|
| Median (22 companies) | 5.5% | 4.2% | 3.0% | 3.2% | 3.0% |
|---|
| Dynamatic Technologies ($DYNAMATECH) | 10.1% | 4.4% | 2.5% | 1.5% | 3.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Greaves Cotton ($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) | 12.8% | 10.7% | 9.7% | 12.5% | 14.2% |
|---|
| Dynamatic Technologies ($DYNAMATECH) | 13.8% | 11.0% | 13.2% | 13.9% | 10.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Forbes & Company ($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 | 1.6x |
| 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) | 0.7x | 1.4x | 0.0x | 0.0x | 0.0x |
|---|
| Dynamatic Technologies ($DYNAMATECH) | 5.0x | 4.1x | 3.4x | 2.7x | 3.8x |
