Punj Lloyd revenue dropped on 39.9% and EBITDA Margin dropped on 10.6 pp from -6.8% to -17.4%

27-05-2016 • About Punj Lloyd ($PUNJLLOYD) • By InTwits

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

Punj Lloyd is a company in decline: FY2016 revenue growth was -39.9%, 5 years revenue CAGR was -11.6%
The company operates at negative EBITDA Margin: -17.4%
Punj Lloyd has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's a lot of higher than industry average of 6.1%.
CAPEX is quite volatile: ₹1,493m in FY2016, ₹2,165m in FY2015, ₹3,866m in FY2014, ₹7,457m in FY2013, ₹9,089m in FY2012
The company has unprofitable business model: ROIC is -16.4%

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

Revenue and profitability

Punj Lloyd's Revenue dropped on 39.9%. Revenue decline was accelerating on average at -18.5 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.3 pp from 8.8% to 14.1% in FY2016. EBITDA Margin declined at -6.3 pp per annum in the last 5 years.

Net Income margin dropped on 36.6 pp from -16.1% to -52.7% in FY2016. Net Income margin followed a declining trend at -12.3 pp per annum in the last 5 years.

Investments (CAPEX, working capital and M&A)

Punj Lloyd's CAPEX/Revenue was 3.5% in FY2016. The company showed decline in CAPEX/Revenue of 3.1 pp from 6.6% in FY2013 to 3.5% in FY2016. It's average CAPEX/Revenue for the last three years was 3.4%. CAPEX as a % of Revenue followed a declining trend at -1.4 pp per annum in FY2012-FY2016.

Leverage (Debt)

Company's Net Debt / EBITDA is 1.8x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2016. Debt decreased on 5.9% while cash increased on 3.4%.

Punj Lloyd has short term refinancing risk: cash is only 8.2% of short term debt.

Financial and operational results

Punj Lloyd ($PUNJLLOYD) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	103,129	112,484	108,263	70,903	42,609	-39.9%
EBITDA	7,031	8,730	3,918	-4,789	-7,397
Net Income	919	-72	-5,482	-11,411	-22,453
Balance Sheet
Cash	8,799	7,548	3,771	3,327	3,441	3.4%
Short Term Debt	35,259	48,285	45,205	53,160	41,843	-21.3%
Long Term Debt	20,769	18,937	23,414	18,248	25,387	39.1%
Cash flow
Capex	9,089	7,457	3,866	2,165	1,493	-31.0%
Ratios
Revenue growth	30.6%	9.1%	-3.8%	-34.5%	-39.9%
EBITDA growth	35.1%	24.2%	-55.1%	-222.2%	54.5%

EBITDA Margin	6.8%	7.8%	3.6%	-6.8%	-17.4%	-10.6%
Net Income Margin	0.9%	-0.1%	-5.1%	-16.1%	-52.7%	-36.6%
CAPEX, % of revenue	8.8%	6.6%	3.6%	3.1%	3.5%	0.5%

ROIC	4.8%	5.5%	-0.0%	-10.9%	-16.4%	-5.5%
ROE	3.1%	-0.3%	-21.6%	-71.4%
Net Debt/EBITDA	6.7x	6.8x	16.5x

Peers in Construction & Engineering

Below you can find Punj Lloyd benchmarking vs. other companies in Construction & Engineering 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
Thirthankar Infra ($THIRINFRA)	-	-	-	258.2%	-
Welspun Projects ($WELPROJ)	-	-8.9%	-20.7%	239.1%	-73.2%
Itd Cementation India ($ITDCEM)	-3.7%	-4.0%	8.5%	79.2%	-
Mukand Engineers ($MUKANDENGG)	-	16.7%	12.4%	63.0%	-20.2%
Atlanta ($ATLANTA)	-	115.1%	28.1%	50.2%	-70.5%
Median (32 companies)	4.2%	6.7%	7.1%	1.2%	-2.1%
Punj Lloyd ($PUNJLLOYD)	-	9.1%	-3.8%	-34.5%	-39.9%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Madhucon Projects ($MADHUCON)	8.4%	31.9%	22.1%	32.1%	-
Jaiprakash Associates ($JPASSOCIAT)	36.9%	35.9%	32.4%	31.5%	-
Arss Infrastructure Projects ($ARSSINFRA)	14.0%	13.9%	22.0%	31.3%	-
Reliance Industrial Infrastructure ($RIIL)	-	-	-	30.8%	-
Shristi Infrastructure Development Corporation ($SHRISTI)	27.2%	30.0%	30.0%	29.8%	29.6%
Median (36 companies)	12.4%	11.3%	10.7%	10.3%	10.5%
Punj Lloyd ($PUNJLLOYD)	6.8%	7.8%	3.6%	-6.8%	-17.4%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Madhucon Projects ($MADHUCON)	234.5%	155.1%	76.0%	67.4%	-
Supreme Infrastructure India ($SUPREMEINF)	46.6%	31.1%	43.1%	45.8%	-
Shristi Infrastructure Development Corporation ($SHRISTI)	0.0%	11.2%	14.1%	40.8%	25.2%
Jaiprakash Associates ($JPASSOCIAT)	97.0%	65.5%	45.0%	31.6%	-
Man Infraconstruction ($MANINFRA)	7.8%	1.6%	25.0%	18.6%	4.5%
Median (23 companies)	7.3%	8.6%	6.9%	3.2%	3.3%
Punj Lloyd ($PUNJLLOYD)	8.8%	6.6%	3.6%	3.1%	3.5%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Skipper ($SKIPPER)	10.4%	13.5%	14.7%	27.4%	24.4%
Voltas ($VOLTAS)	19.6%	11.7%	11.8%	19.3%	18.2%
Coromandel Engineering Company ($COROENGG)	-21.9%	3.4%	-0.3%	15.0%	7.9%
Mbl Infrastructures ($MBLINFRA)	21.3%	13.4%	14.0%	13.6%	-
Itd Cementation India ($ITDCEM)	13.1%	11.3%	3.8%	12.6%	-
Median (42 companies)	8.6%	7.5%	6.3%	6.8%	7.2%
Punj Lloyd ($PUNJLLOYD)	4.8%	5.5%	-0.0%	-10.9%	-16.4%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Mcnally Bharat Engineering Company ($MBECL)	4.3x	7.0x	7.6x	28.3x	-
Jaiprakash Associates ($JPASSOCIAT)	9.2x	8.9x	11.0x	11.9x	-
Supreme Infrastructure India ($SUPREMEINF)	6.0x	6.1x	6.8x	11.3x	-
Madhucon Projects ($MADHUCON)	96.8x	19.0x	16.4x	9.8x	-
Shristi Infrastructure Development Corporation ($SHRISTI)	11.8x	8.6x	7.9x	9.4x	8.8x
Median (31 companies)	4.5x	5.3x	5.9x	3.0x	3.7x

Punj Lloyd stock price chart

Punj Lloyd financials

mln.	FY2010	FY2011	FY2012

Revenue	84,473	78,951	103,129
EBITDA	4,102	5,206	7,031
Net income	-1,084.050	-595.200	918.6
CAPEX	3,161	3,580	9,089
Debt	44,566	45,425	56,028
Cash	5,935	11,365	8,799

About Punj Lloyd

Punj Lloyd Limited provides design; engineering, procurement, and construction (EPC); and project management services for the energy, infrastructure, and defense sectors. The company offers engineering, procurement, fabrication, and installation services for offshore wellhead and process platforms, including topsides and jackets, risers, submarine pipelines, underwater cables, and single buoy mooring systems; gathering stations, flow and transfer lines, and gas and crude processing plants; onshore rigs; onshore and offshore oil and gas pipelines; cryogenic, LNG, LPG, ethylene, ammonia, and other storage tanks; refineries; and petrochemical plants for polymer treatment, handling, conveying, storage, packing, and shipping, as well as is engaged in various polymerization processes. It also provides EPC services for civil construction and balance of thermal power plant packages; develops design for coal and ash handling, HVAC, water systems, fire fighting systems, and electrical and C&I packages; design and construction support services for nuclear process facilities in the areas, such as enrichment, fuel fabrication, new build, and decommissioning. In addition, the company offers water treatment and distribution solutions, as well as processes municipal solid and biomass waste; and provides design and EPC services for buildings, airports and seaports, national highways, and medical institutes. Further, it manufactures defense equipment comprising guns, rockets, missile artillery systems and related equipment, electro optical systems, fire control systems, ICT and power packs, anti tank/anti material weapons, and small arms, as well as armoured fighting vehicles, other armoured combat vehicles, and unmanned ground vehicles comprising associated systems, such as turrets, turret mounts, and armaments. The company primarily operates in the Middle East, North Africa, South East Asia, and India. Punj Lloyd Limited was founded in 1988 and is headquartered in Gurgaon, India.