Spml Infra reports 26.1% EBITDA growth in 2016 and 1.3 pp EBITDA Margin growth from 9.9% to 11.2%

27-05-2016 • About Spml Infra ($SPMLINFRA) • By InTwits

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

Spml Infra has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.7%. At the same time it's in pair with industry average of 10.6%
CAPEX is quite volatile: ₹304m in FY2016, ₹200m in FY2015, ₹1,775m in FY2014, ₹1,748m in FY2013, ₹974m in FY2012
The company has highly profitable business model: ROIC is 13.1%
It operates with high leverage: Net Debt/EBITDA is 4.4x while industry average is 6.7x

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 jumped on 11.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.3 pp from 3.4% to 6.7% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2014 at 9.9% and was growing since that time.

Net Income margin showed almost no change in FY2016.

Investments (CAPEX, working capital and M&A)

In FY2016 Spml Infra had CAPEX/Revenue of 1.5%. CAPEX/Revenue dropped on 12.3 pp from 13.8% in FY2013 to 1.5% in FY2016. It's average level of CAPEX/Revenue for the last three years was 5.2%.

Return on investment

The company operates at low but positive ROIC (13.1%) and negative ROE (-1.3%). ROIC increased on 2.5 pp from 10.6% to 13.1% in FY2016. ROE decreased slightly on 1.5 pp from 0.20% to -1.3% in FY2016.

Leverage (Debt)

Debt level is 4.4x Net Debt / EBITDA and 5.0x Debt / EBITDA. Net Debt / EBITDA decreased on 0.046x from 4.4x to 4.4x in FY2016. Debt surged on 34.8% while cash jumped on 216%.

Spml Infra has short term refinancing risk: cash is only 22.2% of short term debt.

Financial and operational results

Spml Infra ($SPMLINFRA) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	10,625	12,673	13,512	18,238	20,354	11.6%
EBITDA	1,389	1,611	1,339	1,813	2,285	26.1%
Net Income	79	54	-125	9	-60	-733.0%
Balance Sheet
Cash	557	511	372	443	1,401	216.3%
Short Term Debt	5,088	4,431	6,257	6,528	6,321	-3.2%
Long Term Debt	2,606	3,912	3,929	1,887	5,023	166.2%
Cash flow
Capex	974	1,748	1,775	200	304	51.6%
Ratios
Revenue growth	-17.1%	19.3%	6.6%	35.0%	11.6%
EBITDA growth	30.2%	16.0%	-16.9%	35.4%	26.1%

EBITDA Margin	13.1%	12.7%	9.9%	9.9%	11.2%	1.3%
Net Income Margin	0.7%	0.4%	-0.9%	0.1%	-0.3%	-0.3%
CAPEX, % of revenue	9.2%	13.8%	13.1%	1.1%	1.5%	0.4%

ROIC	8.6%	9.7%	7.1%	10.6%	13.1%	2.5%
ROE	1.7%	1.2%	-2.7%	0.2%	-1.3%	-1.5%
Net Debt/EBITDA	5.1x	4.9x	7.3x	4.4x	4.4x	-0.0x

Peers in Construction & Engineering

Below we provide Spml Infra benchmarking against other companies in Construction & Engineering 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
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 ($ATLANTA)	-	115.1%	28.1%	50.2%	-70.5%
Median (32 companies)	4.2%	6.7%	7.1%	-0.0%	-6.6%
Spml Infra ($SPMLINFRA)	-	19.3%	6.6%	35.0%	11.6%

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 ($SHRISTI)	27.2%	30.0%	30.0%	29.8%	29.6%
Median (36 companies)	11.9%	11.2%	10.7%	10.3%	10.0%
Spml Infra ($SPMLINFRA)	13.1%	12.7%	9.9%	9.9%	11.2%

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 ($MANINFRA)	7.8%	1.6%	25.0%	18.6%	4.5%
Median (23 companies)	7.3%	6.6%	4.0%	3.2%	3.5%
Spml Infra ($SPMLINFRA)	9.2%	13.8%	13.1%	1.1%	1.5%

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 ($ITDCEM)	13.1%	11.3%	3.8%	12.6%	-
Median (42 companies)	8.6%	7.1%	5.6%	6.6%	6.3%
Spml Infra ($SPMLINFRA)	8.6%	9.7%	7.1%	10.6%	13.1%

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 ($SHRISTI)	11.8x	8.6x	7.9x	9.4x	8.8x
Median (30 companies)	4.5x	5.7x	5.9x	2.9x	3.0x
Spml Infra ($SPMLINFRA)	5.1x	4.9x	7.3x	4.4x	4.4x

Spml Infra stock price chart

Spml Infra financials

mln.	FY2010	FY2011	FY2012

Revenue	22,843	12,821	10,625
EBITDA	1,942	1,067	1,389
Net income	462.4	194.6	78.719
CAPEX	770.3	680.9	973.5
Debt	6,423	7,299	7,694
Cash	272.8	595.6	557.0

About Spml Infra

SPML Infra Limited operates as an infrastructure development company in India and internationally. It operates through Construction, Trading, Hydro Power Generation, Waste Management, Toll Road, and Others segments. The company provides engineering and infrastructure services, such as conceptualization, construction, management, operation, and maintenance services for water, power, environment, and infrastructure projects on engineering, procurement, and construction basis, as well as on build-own-operate-transfer/public-private partnership basis. It offers integrated water management and water sourcing solutions; undertakes power transmission and distribution, and rural electrification projects; constructs, operates, and maintains hydro/thermal power plants; and provides rural load management and integrated energy management solutions. The company also develops roads, bridges, flyovers, highways, industrial infrastructure, tunnels, special economic zones, industrial/business/technology parks, airports, seaports, bus terminals, automated car parking facilities, express roads/highways, terminal markets, and tourism and leisure facilities. In addition, it provides integrated end-to-end waste management solutions, including solid waste management solutions, such as collection, segregation, transportation, treatment, and disposal; waste water management solutions comprising collection, treatment, processing, scientific disposal, and reusability solutions; and sewer rehabilitation solutions. Further, the company manufactures pre-stressed concrete, mild steel and hume steel pipes, and RCC and PCC poles, as well as cement mortar lining of steel pipes and fittings; sells steel items and coal; and generates electricity from hydel projects. The company was formerly known as Subhash Projects and Marketing Limited and changed its name to SPML Infra Limited in April 2010. SPML Infra Limited was founded in 1981 and is headquartered in Gurgaon, India.