Mmtc revenue dropped on 21.5% and EBITDA Margin decreased slightly on 0.54 pp from -0% to -0.54%

27-05-2016 • About Mmtc ($MMTC) • By InTwits

Mmtc reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:

Mmtc is a company in decline: FY2016 revenue growth was -21.5%, 5 years revenue CAGR was -23.0%
The company operates at negative EBITDA Margin: -0.5%
EBITDA Margin is quite volatile: -0.5% in FY2016, -0.0% in FY2015, 1.1% in FY2014, 0.3% in FY2013, 0.1% in FY2012
Mmtc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.1%.
The company has unprofitable business model: ROIC is -7.2%
It operates with high leverage: Net Debt/EBITDA is 5.9x while industry average is 0.5x

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Mmtc's Revenue dropped on 21.5%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased slightly on 0.54 pp from -0% to -0.54% in FY2016. During FY2012-FY2016 EBITDA Margin topped in FY2014 at 1.1% and was declining since that time.

SG&A as a % of Revenue showed almost no change in FY2016.

Net Income margin showed almost no change in FY2016.

Investments (CAPEX, working capital and M&A)

In FY2016 Mmtc had CAPEX/Revenue of 0.16%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 0.11%. CAPEX as a % of Revenue was relatively stable in FY2012-FY2016.

Return on investment

The company operates at negative ROIC (-7.2%) and ROE (-8.1%). ROIC decreased on 6.0 pp from -1.2% to -7.2% in FY2016. ROE decreased on 5.1 pp from -3.0% to -8.1% in FY2016. During FY2012-FY2016 ROIC topped in FY2014 at 9.7% and was declining since that time.

Leverage (Debt)

Company's Net Debt / EBITDA is 5.9x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt increased on 6.9% while cash dropped on 54.8%.

Mmtc has short term refinancing risk: cash is only 41.7% of short term debt.

Financial and operational results

Mmtc ($MMTC) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	670,224	328,856	281,423	239,316	187,896	-21.5%
SG&A				29	61	108.6%
EBITDA	756	1,034	3,040	-2	-1,010
Net Income	573	-1,107	-182	-425	-1,045
Balance Sheet
Cash	5,155	5,642	4,106	4,181	1,889	-54.8%
Short Term Debt	41,166	19,465	4,649	3,863	4,530	17.3%
Long Term Debt	992	969	930	502	136	-73.0%
Cash flow
Capex	220	246	211	235	308	31.1%
Ratios
Revenue growth	-3.7%	-50.9%	-14.4%	-15.0%	-21.5%
EBITDA growth	-29.0%	36.8%	193.9%	-100.1%	55,398.4%

EBITDA Margin	0.1%	0.3%	1.1%	-0.0%	-0.5%	-0.5%
SG&A, % of revenue				0.0%	0.0%	0.0%
Net Income Margin	0.1%	-0.3%	-0.1%	-0.2%	-0.6%	-0.4%
CAPEX, % of revenue	0.0%	0.1%	0.1%	0.1%	0.2%	0.1%

ROIC	0.7%	1.6%	9.7%	-1.2%	-7.2%	-6.0%
ROE	3.5%	-6.9%	-1.2%	-3.0%	-8.1%	-5.1%
Net Debt/EBITDA	48.9x	14.3x	0.5x

Peers in Comm.Trading & Distribution

Below you can find Mmtc benchmarking vs. other companies in Comm.Trading & Distribution 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 5	FY2012	FY2013	FY2014	FY2015	FY2016
Shri Krishna Prasadam ($SKP)	-	57.3%	1,074.7%	148.2%	-54.1%
Sunil Industries ($SUNILTX)	-	57.2%	12.1%	59.6%	19.3%
Gagan Polycot India ($GAGANPO)	-59.4%	76.3%	18.2%	43.2%	-
Ptl Enterprises ($PTL)	-	12.6%	17.7%	35.1%	-2.4%
Parker Agrochem Exports ($PARKERAC)	-	1,542.3%	39.1%	33.1%	-63.4%
Median (19 companies)	-1.7%	13.6%	14.0%	12.6%	-2.4%
Mmtc ($MMTC)	-	-50.9%	-14.4%	-15.0%	-21.5%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Hexa Tradex ($HEXATRADEX)	-	-	-	48.1%	-
Indiabulls Wholesale Services ($IBWSL)	30.8%	25.9%	19.4%	21.4%	27.6%
Bombay Cycle & Motor Agency ($BOMBCYC)	-	-	-	19.5%	-
Ptl Enterprises ($PTL)	26.6%	22.7%	21.6%	18.5%	20.9%
Remi Elektrotechnik ($REMIELEK)	-	-	-	15.1%	-
Median (37 companies)	3.2%	2.8%	2.3%	2.4%	2.2%
Mmtc ($MMTC)	0.1%	0.3%	1.1%	-0.0%	-0.5%

Top companies by CAPEX/Revenue, %


Top	FY2012	FY2013	FY2014	FY2015	FY2016
Ptl Enterprises ($PTL)	5.0%	4.5%	2.4%	4.2%	5.8%
Redington (India) ($REDINGTON)	0.2%	0.7%	0.2%	0.2%	0.2%
Kothari Products ($KOTHARIPRO)	2.5%	0.1%	0.2%	0.0%	0.1%
Median (3 companies)	0.6%	0.4%	0.2%	1.0%	0.2%
Mmtc ($MMTC)	0.0%	0.1%	0.1%	0.1%	0.2%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Ptl Enterprises ($PTL)	18.5%	19.5%	21.1%	22.1%	12.8%
Redington (India) ($REDINGTON)	17.2%	16.0%	16.3%	15.3%	14.4%
Risa International ($RISAINTL)	-	-0.2%	14.8%	11.9%	-
Maxwell Industries ($MAXWELL)	9.0%	6.6%	9.6%	11.2%	-
Kothari Products ($KOTHARIPRO)	23.4%	20.0%	28.3%	10.6%	11.7%
Median (52 companies)	4.8%	5.0%	8.2%	11.5%	12.8%
Mmtc ($MMTC)	0.7%	1.6%	9.7%	-1.2%	-7.2%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Maxwell Industries ($MAXWELL)	3.7x	5.8x	3.5x	3.3x	-
Redington (India) ($REDINGTON)	2.6x	2.6x	1.7x	1.9x	2.3x
Kothari Products ($KOTHARIPRO)	1.2x	0.6x	0.4x	1.4x	1.5x
Ptl Enterprises ($PTL)	2.2x	2.0x	2.0x	1.2x	0.5x
Rama Vision ($RAMAVISION)	-1.8x	0.3x	0.0x	0.0x	-
Median (30 companies)	1.6x	1.7x	0.0x	0.0x	0.0x

Mmtc stock price chart

Mmtc financials

mln.	FY2010	FY2011	FY2012

Revenue	418,660	696,130	670,224
EBITDA	1,121	1,064	756.1
Net income	2,498	260.7	573.0
CAPEX	828.2	475.4	220.5
Debt	58,024	71,680	42,158
Cash	3,534	10,892	5,155

About Mmtc

MMTC Limited operates as a trading company in India and internationally. The company operates through Precious Metals, Metals, Minerals, Coal & Hydrocarbon, Agro Products, Fertilizer, and General Trade/Others segments. It exports mineral products comprising iron ore, manganese ore, chrome ore, mud chemicals, barytes, bentonite, bauxite, talc, gypsum, feldspar, quartz/silica sand, garnet sand, kaolin, and vermiculite. The company is also involved in the import, export, and retail trade of precious metals, such as gold, silver, platinum, palladium, rough diamonds, emeralds, rubies, and other semi-precious stones; operation of jewelry showrooms and sterling silverware showrooms under the Sanchi brand name; and manufacture of gold and silver medallions. In addition, it imports and exports non-ferrous metals comprising copper, aluminum, zinc and lead ingots, tin ingots, nickel, briquettes, ferro nickel, etc.; minor metals, including antimony, silicon, magnesium, and mercury; industrial raw materials, noble metals, and ferro alloys; and pig iron and slag products. Further, the company is engaged in the trade of various agro products, such as wheat, rice, maize, soya bean meal, sugar, edible oil, pulses, wheat flour, and processed foods; and plantation products comprising tea, coffee, jute, etc., as well as in the oilseed extraction, and production of edible oil. Additionally, it imports and sells finished fertilizers, including urea, di-ammonium phosphate, and muriate of potash; and fertilizer raw materials and intermediates comprising sulphur, rock phosphate, phosphoric acid, and ammonia. The company is trades coal and hydrocarbon products, such as non-coking, coking coal, naphtha, LAM coke, furnace oil, and bitumen; and various other products comprising chemicals, drugs, pharmaceuticals, paraffin wax, PVC resins, granules wool and cotton, cement, clinker, security equipment, and engineering products. MMTC Limited was founded in 1963 and is based in New Delhi, India.