Visa Steel reports 147% EBITDA decline in 2016 and 2.1 pp EBITDA Margin decline from 1.4% to -0.65%
27-05-2016 • About Visa Steel (
$VISASTEEL) • By InTwits
Visa Steel reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -0.6%
- EBITDA Margin is quite volatile: -0.6% in FY2016, 1.4% in FY2015, 7.6% in FY2014, -2.6% in FY2013, 5.9% in FY2012
- Visa Steel has high CAPEX intensity: 5 year average CAPEX/Revenue was 18.1%. At the same time it's a lot of higher than industry average of 7.7%.
- CAPEX is quite volatile: ₹50m in FY2016, ₹568m in FY2015, ₹1,488m in FY2014, ₹2,766m in FY2013, ₹6,510m in FY2012
- The company has unprofitable business model: ROIC is -4.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Visa Steel's Revenue increased slightly on 1.8%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.8 pp from 0.23% to 9.1% in FY2016.
Net Income margin dropped on 25.9 pp from -21.3% to -47.2% in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.38% in FY2016. Visa Steel's CAPEX/Revenue dropped on 26.6 pp from 27.0% in FY2013 to 0.38% in FY2016. For the last three years the average CAPEX/Revenue was 5.0%. CAPEX as a % of Revenue declined at -11.8 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 1.2x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 187.1x from 187.1x to in FY2016. Debt jumped on 13.2% while cash jumped on 349%.
Visa Steel has short term refinancing risk: cash is only 0.3% of short term debt.
Financial and operational results
Visa Steel ($VISASTEEL) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 13,496 | 10,249 | 14,549 | 12,803 | 13,031 | 1.8% |
| EBITDA | 798 | -262 | 1,111 | 179 | -85 | -147.2% |
| Net Income | -1,189 | -1,076 | -1,478 | -2,729 | -6,155 | |
Balance Sheet
|
|---|
| Cash | 210 | 247 | 860 | 9 | 39 | 348.9% |
| Short Term Debt | 6,394 | 1,098 | 4,308 | 8,696 | 14,439 | 66.0% |
| Long Term Debt | 9,839 | 22,471 | 23,686 | 24,880 | 23,571 | -5.3% |
Cash flow
|
|---|
| Capex | 6,510 | 2,766 | 1,488 | 568 | 50 | -91.2% |
Ratios
|
|---|
| Revenue growth | 3.3% | -24.1% | 42.0% | -12.0% | 1.8% | |
| EBITDA growth | -62.7% | -132.8% | -524.4% | -83.9% | -147.2% | |
|
|---|
| EBITDA Margin | 5.9% | -2.6% | 7.6% | 1.4% | -0.6% | -2.1% |
| Net Income Margin | -8.8% | -10.5% | -10.2% | -21.3% | -47.2% | -25.9% |
| CAPEX, % of revenue | 48.2% | 27.0% | 10.2% | 4.4% | 0.4% | -4.1% |
|
|---|
| ROIC | 1.5% | -4.0% | 1.3% | -1.9% | -4.8% | -2.9% |
| ROE | -40.0% | -46.9% | -100.6% | | | |
| Net Debt/EBITDA | 20.1x | | 24.4x | 187.1x | |
Peers in Iron & Steel/Interm.Products
Below we provide Visa Steel 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 ($PENIND) | - | -8.5% | 0.5% | 12.7% | 3.4% |
| |
|---|
| Median (34 companies) | 11.9% | 8.8% | 3.4% | -0.4% | -15.4% |
|---|
| Visa Steel ($VISASTEEL) | - | -24.1% | 42.0% | -12.0% | 1.8% |
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 ($TATAMETALI) | -9.6% | 0.9% | 6.8% | 14.6% | 16.8% |
| |
|---|
| Median (31 companies) | 9.4% | 9.2% | 7.0% | 7.3% | 10.0% |
|---|
| Visa Steel ($VISASTEEL) | 5.9% | -2.6% | 7.6% | 1.4% | -0.6% |
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% |
| Jayaswal Neco Industries ($JAYNECOIND) | 20.4% | 44.0% | 31.1% | 17.3% | 5.7% |
| Steel Authority Of India ($SAIL) | 20.9% | 20.7% | 19.3% | 16.9% | 17.3% |
| Bhushan Steel ($BHUSANSTL) | 47.2% | 44.0% | 50.4% | 16.2% | - |
| |
|---|
| Median (18 companies) | 9.7% | 11.6% | 7.7% | 5.4% | 8.8% |
|---|
| Visa Steel ($VISASTEEL) | 48.2% | 27.0% | 10.2% | 4.4% | 0.4% |
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 ($GALLANTT) | 8.7% | 11.7% | 8.5% | 11.7% | - |
| |
|---|
| Median (42 companies) | 7.2% | 5.5% | 6.0% | 5.0% | 3.8% |
|---|
| Visa Steel ($VISASTEEL) | 1.5% | -4.0% | 1.3% | -1.9% | -4.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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 | - |
| Prakash Industries ($PRAKASH) | 2.5x | 2.8x | 2.5x | 11.9x | 3.4x |
| |
|---|
| Median (28 companies) | 4.6x | 4.4x | 3.4x | 1.7x | 0.9x |
|---|
| Visa Steel ($VISASTEEL) | 20.1x | - | 24.4x | 187.1x | - |
