Jayaswal Neco Industries CAPEX dropped on 71.0% and Revenue dropped on 13.0%
27-05-2016 • About Jayaswal Neco Industries (
$JAYNECOIND) • By InTwits
Jayaswal Neco Industries reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Jayaswal Neco Industries has high CAPEX intensity: 5 year average CAPEX/Revenue was 23.7%. At the same time it's a lot of higher than industry average of 7.7%.
- CAPEX is quite volatile: ₹1,513m in FY2016, ₹5,222m in FY2015, ₹9,824m in FY2014, ₹11,215m in FY2013, ₹5,286m in FY2012
- The company has potentially unprofitable business model: ROIC is 2.9%
- It operates with high leverage: Net Debt/EBITDA is 14.8x while industry average is 4.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Jayaswal Neco Industries's Revenue dropped on 13.0%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.9 pp from 11.9% to 10.0% in FY2016. EBITDA Margin followed a declining trend at -0.76 pp per annum in FY2012-FY2016.
Net Income margin decreased on 3.6 pp from 0.0094% to -3.6% in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 5.7% in FY2016. Jayaswal Neco Industries's CAPEX/Revenue dropped on 38.2 pp from 44.0% in FY2013 to 5.7% in FY2016. For the last three years the average CAPEX/Revenue was 18.0%. Battling declining revenue the company invested a large share of EBITDA (57.6%) to CAPEX but that didn't help at least in this year. During the last 5 years CAPEX as a % of Revenue topped in FY2013 at 44.0% and was declining since that time.
Return on investment
The company operates at low but positive ROIC (2.9%) and negative ROE (-4.3%). ROIC decreased slightly on 1.6 pp from 4.4% to 2.9% in FY2016. ROE decreased on 4.3 pp from 0.013% to -4.3% in FY2016. ROIC stuck to a declining trend at -1.6 pp per annum in FY2012-FY2016. ROE stuck to a declining trend at -2.1 pp per annum in FY2012-FY2016.
Leverage (Debt)
Debt level is 14.8x Net Debt / EBITDA and 15.0x Debt / EBITDA. Net Debt / EBITDA surged on 3.6x from 11.2x to 14.8x in FY2016. Debt decreased on 2.7% while cash surged on 117%. Net Debt/EBITDA stuck to a growing trend at 2.4x per annum in the last 5 years.
Jayaswal Neco Industries has short term refinancing risk: cash is only 5.4% of short term debt.
Management team
Jayaswal Neco Industries's CEO is Arbind Jayaswal. Arbind Jayaswal has 21 years tenure with the company.
Financial and operational results
Jayaswal Neco Industries ($JAYNECOIND) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 25,905 | 25,492 | 31,608 | 30,243 | 26,326 | -13.0% |
| SG&A | | | | | 4 | |
| EBITDA | 3,497 | 3,186 | 4,031 | 3,593 | 2,628 | -26.9% |
| Net Income | 538 | 278 | 621 | 3 | -936 | -33,019.4% |
Balance Sheet
|
|---|
| Cash | 888 | 1,165 | 2,137 | 222 | 481 | 117.0% |
| Short Term Debt | 5,714 | 9,574 | 11,931 | 10,697 | 8,959 | -16.2% |
| Long Term Debt | 11,450 | 14,646 | 24,797 | 29,825 | 30,459 | 2.1% |
Cash flow
|
|---|
| Capex | 5,286 | 11,215 | 9,824 | 5,222 | 1,513 | -71.0% |
Ratios
|
|---|
| Revenue growth | 14.6% | -1.6% | 24.0% | -4.3% | -13.0% | |
| EBITDA growth | -1.9% | -8.9% | 26.5% | -10.9% | -26.9% | |
|
|---|
| EBITDA Margin | 13.5% | 12.5% | 12.8% | 11.9% | 10.0% | -1.9% |
| SG&A, % of revenue | | | | | 0.0% | |
| Net Income Margin | 2.1% | 1.1% | 2.0% | 0.0% | -3.6% | -3.6% |
| CAPEX, % of revenue | 20.4% | 44.0% | 31.1% | 17.3% | 5.7% | -11.5% |
|
|---|
| ROIC | 10.1% | 5.9% | 5.5% | 4.4% | 2.9% | -1.6% |
| ROE | 5.5% | 1.8% | 3.2% | 0.0% | -4.3% | -4.3% |
| Net Debt/EBITDA | 4.7x | 7.2x | 8.6x | 11.2x | 14.8x | 3.6x |
Peers in Iron & Steel/Interm.Products
Below we provide Jayaswal Neco Industries benchmarking against other companies in Iron & Steel/Interm.Products 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 |
|---|
| Ocl Iron And Steel ($OISL) | - | 5.5% | 86.6% | 69.1% | -65.1% |
| Uttam Galva Steels ($UTTAMSTL) | 12.0% | 11.0% | -13.2% | 55.0% | - |
| Modern Steels ($MDRNSTL) | -2.6% | -22.7% | 0.7% | 20.3% | - |
| Maithan Alloys ($MAITHANALL) | - | 59.1% | 1.1% | 15.0% | 4.0% |
| Pennar Industries ($PENIND) | - | -8.5% | 0.5% | 12.7% | 3.4% |
| |
|---|
| Median (34 companies) | 11.9% | 8.8% | 3.4% | -0.4% | -15.4% |
|---|
| Jayaswal Neco Industries ($JAYNECOIND) | - | -1.6% | 24.0% | -4.3% | -13.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jindal Steel & Power ($JINDALSTEL) | 37.5% | 30.5% | 28.1% | 29.8% | 17.2% |
| Sarda Energy & Minerals ($SARDAEN) | 16.3% | 21.5% | 21.3% | 21.5% | 13.5% |
| Bhushan Steel ($BHUSANSTL) | 31.2% | 32.3% | 28.1% | 20.4% | - |
| Jsw Steel ($JSWSTEEL) | 17.8% | 17.1% | 17.9% | 17.7% | 14.6% |
| Tata Metaliks ($TATAMETALI) | -9.6% | 0.9% | 6.8% | 14.6% | 16.8% |
| |
|---|
| Median (31 companies) | 9.3% | 9.0% | 7.0% | 7.2% | 9.2% |
|---|
| Jayaswal Neco Industries ($JAYNECOIND) | 13.5% | 12.5% | 12.8% | 11.9% | 10.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ocl Iron And Steel ($OISL) | 191.2% | 247.2% | 163.7% | 42.4% | - |
| Jindal Steel & Power ($JINDALSTEL) | 34.2% | 47.6% | 69.6% | 26.4% | 21.8% |
| Steel Authority Of India ($SAIL) | 20.9% | 20.7% | 19.3% | 16.9% | 17.3% |
| Bhushan Steel ($BHUSANSTL) | 47.2% | 44.0% | 50.4% | 16.2% | - |
| Jsw Steel ($JSWSTEEL) | 11.9% | 14.7% | 11.3% | 12.7% | 12.4% |
| |
|---|
| Median (18 companies) | 9.7% | 11.6% | 7.7% | 4.9% | 8.8% |
|---|
| Jayaswal Neco Industries ($JAYNECOIND) | 20.4% | 44.0% | 31.1% | 17.3% | 5.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Metaliks ($TATAMETALI) | -23.5% | -3.7% | 19.9% | 57.4% | 42.6% |
| Pennar Industries ($PENIND) | 26.8% | 18.4% | 12.3% | 15.7% | 16.6% |
| Maithan Alloys ($MAITHANALL) | 16.3% | 15.1% | 5.5% | 15.3% | 19.0% |
| Kirloskar Ferrous Industries ($KIRLFER) | 19.1% | 16.8% | 12.4% | 14.7% | 15.9% |
| Gallantt Metal ($GALLANTT) | 8.7% | 11.7% | 8.5% | 11.7% | - |
| |
|---|
| Median (42 companies) | 6.8% | 5.4% | 6.0% | 5.0% | 3.8% |
|---|
| Jayaswal Neco Industries ($JAYNECOIND) | 10.1% | 5.9% | 5.5% | 4.4% | 2.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Visa Steel ($VISASTEEL) | 20.1x | - | 24.4x | 187.1x | - |
| Ismt ($ISMTLTD) | 5.3x | 9.8x | 19.9x | 48.3x | 0.0x |
| Kic Metaliks ($KAJARIR) | 9.2x | 3.0x | 18.2x | 19.8x | - |
| Ocl Iron And Steel ($OISL) | 164.7x | 1,935.8x | 41.6x | 19.4x | - |
| Bhushan Steel ($BHUSANSTL) | 6.3x | 8.6x | 12.9x | 17.7x | - |
| |
|---|
| Median (28 companies) | 4.7x | 4.4x | 3.4x | 1.7x | 0.8x |
|---|
| Jayaswal Neco Industries ($JAYNECOIND) | 4.7x | 7.2x | 8.6x | 11.2x | 14.8x |
