K.C.P CAPEX surged on 319% and Revenue increased on 9.2%
27-05-2016 • About K.C.P (
$KCP) • By InTwits
K.C.P reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- K.C.P is a growth stock: FY2016 revenue growth was 9.2%, 5 year revenue CAGR was 14.2% at FY2016 ROIC 15.0%
- K.C.P has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.2%. At the same time it's a lot of higher than industry average of 8.2%.
- CAPEX is quite volatile: ₹2,539m in FY2016, ₹606m in FY2015, ₹1,311m in FY2014, ₹1,124m in FY2013, ₹875m in FY2012
- The company has highly profitable business model: ROIC is 15.0%
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 on 9.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.7 pp from 9.8% to 12.4% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2013 at 9.4% and was growing since that time.
Net Income margin increased on 3.0 pp from 4.3% to 7.3% in FY2016. During the last 5 years Net Income margin bottomed in FY2014 at 3.3% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 K.C.P had CAPEX/Revenue of 19.8%. CAPEX/Revenue increased on 9.9 pp from 9.9% in FY2013 to 19.8% in FY2016. It's average level of CAPEX/Revenue for the last three years was 12.5%. The company maintained rich investment policy and has spent a lot to CAPEX (109% of EBITDA).
Return on investment
The company operates at good ROIC (15.0%) and ROE (16.3%). ROIC increased on 5.7 pp from 9.3% to 15.0% in FY2016. ROE increased on 6.5 pp from 9.8% to 16.3% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2013 at 6.7% and was growing since that time. During the last 5 years ROE bottomed in FY2014 at 6.6% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.9x and Debt / EBITDA is 2.1x. Net Debt / EBITDA dropped on 0.4x from 2.3x to 1.9x in FY2016. Debt increased on 6.3% while cash dropped on 55.5%. During the last 5 years Net Debt/EBITDA topped in FY2014 at 3.6x and was declining since that time.
K.C.P has short term refinancing risk: cash is only 31.0% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 6.2x and P/E 10.6x while industy averages are 17.8x and 21.9x.
Management team
K.C.P's CFO is G Narasimha Murthy. G Narasimha Murthy has 5 years tenure at the company.
Financial and operational results
K.C.P ($KCP) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 10,163 | 11,354 | 10,424 | 11,716 | 12,791 | 9.2% |
| EBITDA | 1,951 | 1,072 | 1,219 | 1,526 | 2,320 | 52.0% |
| Net Income | 1,060 | 652 | 345 | 504 | 934 | 85.3% |
Balance Sheet
|
|---|
| Cash | 435 | 770 | 252 | 1,011 | 450 | -55.5% |
| Short Term Debt | 844 | 2,020 | 1,548 | 1,325 | 1,449 | 9.3% |
| Long Term Debt | 1,810 | 1,925 | 3,125 | 3,183 | 3,344 | 5.1% |
Cash flow
|
|---|
| Capex | 875 | 1,124 | 1,311 | 606 | 2,539 | 318.7% |
Ratios
|
|---|
| Revenue growth | 54.3% | 11.7% | -8.2% | 12.4% | 9.2% | |
| EBITDA growth | 40.3% | -45.0% | 13.7% | 25.1% | 52.0% | |
|
|---|
| EBITDA Margin | 19.2% | 9.4% | 11.7% | 13.0% | 18.1% | 5.1% |
| Net Income Margin | 10.4% | 5.7% | 3.3% | 4.3% | 7.3% | 3.0% |
| CAPEX, % of revenue | 8.6% | 9.9% | 12.6% | 5.2% | 19.8% | 14.7% |
|
|---|
| ROIC | 17.6% | 6.7% | 7.1% | 9.3% | 15.0% | 5.7% |
| ROE | 22.7% | 12.9% | 6.6% | 9.8% | 16.3% | 6.5% |
| Net Debt/EBITDA | 1.1x | 3.0x | 3.6x | 2.3x | 1.9x | -0.4x |
Peers in Cement & Cement Products
Below we provide K.C.P benchmarking against other companies in Cement & Cement 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 |
|---|
| Ncl Industries ($NCLIND) | 38.2% | -15.8% | -3.0% | 30.8% | - |
| Indian Hume Pipe Co ($INDIANHUME) | - | 34.5% | 18.3% | 22.7% | -7.2% |
| J.K.Cement ($JKCEMENT) | 21.8% | 14.7% | -4.0% | 21.2% | - |
| Visaka Industries ($VIKASAS) | - | 22.0% | -2.6% | 13.6% | -0.8% |
| Prism Cement ($PRISMCEM) | - | 4.9% | 5.3% | 12.5% | -0.6% |
| |
|---|
| Median (16 companies) | 14.6% | 11.4% | 1.8% | 6.2% | -0.7% |
|---|
| K.C.P ($KCP) | - | 11.7% | -8.2% | 12.4% | 9.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Orient Cement ($ORIENTCEM) | - | 21.5% | 15.0% | 19.8% | 12.2% |
| Saurashtra Cement ($SAURASHCEM) | 11.4% | 21.6% | 11.9% | 16.8% | 13.8% |
| Ambuja Cements ($AMBUJACEM) | 25.6% | 18.2% | 19.4% | 16.4% | - |
| India Cements ($INDIACEM) | 20.6% | 18.4% | 12.4% | 15.1% | 17.8% |
| Deccan Cements ($DECCANCE) | 22.8% | 13.2% | 14.7% | 14.9% | 19.9% |
| |
|---|
| Median (15 companies) | 16.2% | 14.1% | 11.9% | 11.0% | 12.7% |
|---|
| K.C.P ($KCP) | 19.2% | 9.4% | 11.7% | 13.0% | 18.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Udaipur Cement Works ($UDAICEMENT) | - | - | - | 91.1% | - |
| Orient Cement ($ORIENTCEM) | - | 2.9% | - | 59.7% | 24.5% |
| J.K.Cement ($JKCEMENT) | 6.5% | 18.8% | 55.8% | 16.2% | - |
| Acc ($ACC) | 5.0% | 8.6% | 13.7% | 9.5% | - |
| Birla Corporation ($BIRLACORPN) | 19.1% | 7.1% | 5.5% | 6.9% | 5.1% |
| |
|---|
| Median (12 companies) | 5.5% | 7.1% | 5.5% | 5.9% | 3.7% |
|---|
| K.C.P ($KCP) | 8.6% | 9.9% | 12.6% | 5.2% | 19.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Saurashtra Cement ($SAURASHCEM) | 38.6% | 42.7% | 13.9% | 26.9% | 23.6% |
| Indian Hume Pipe Co ($INDIANHUME) | 7.6% | 13.8% | 15.0% | 18.0% | 14.5% |
| Orient Cement ($ORIENTCEM) | - | 57.3% | 15.2% | 15.4% | 4.6% |
| Acc ($ACC) | 20.2% | 12.7% | 11.0% | 9.9% | - |
| Deccan Cements ($DECCANCE) | 17.4% | 8.0% | 6.4% | 9.1% | 20.8% |
| |
|---|
| Median (17 companies) | 13.7% | 11.2% | 6.4% | 8.1% | 8.2% |
|---|
| K.C.P ($KCP) | 17.6% | 6.7% | 7.1% | 9.3% | 15.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Udaipur Cement Works ($UDAICEMENT) | - | - | - | 17.1x | 358.6x |
| Orient Cement ($ORIENTCEM) | - | -0.1x | 1.1x | 3.5x | 6.8x |
| Prism Cement ($PRISMCEM) | 4.8x | 6.0x | 10.0x | 6.0x | 5.3x |
| India Cements ($INDIACEM) | 3.2x | 3.5x | 5.5x | 4.6x | 3.7x |
| Birla Corporation ($BIRLACORPN) | 3.1x | 2.9x | 3.2x | 2.7x | 3.3x |
| |
|---|
| Median (11 companies) | 2.1x | 2.4x | 2.6x | 2.7x | 3.2x |
|---|
| K.C.P ($KCP) | 1.1x | 3.0x | 3.6x | 2.3x | 1.9x |
