Jaiprakash Associates CAPEX dropped on 47.2% and Revenue dropped on 11.9%
28-05-2016 • About Jaiprakash Associates (
$JPASSOCIAT) • By InTwits
Jaiprakash Associates reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 27.6% in FY2016 vs. 31.5% in FY2015 vs. 36.9% in FY2012
- Jaiprakash Associates has high CAPEX intensity: 5 year average CAPEX/Revenue was 51.6%. At the same time it's a lot of higher than industry average of 10.0%.
- CAPEX is quite volatile: ₹32,523m in FY2016, ₹61,613m in FY2015, ₹88,612m in FY2014, ₹123,202m in FY2013, ₹143,343m in FY2012
- The company has potentially unprofitable business model: ROIC is 3.3%
- It operates with high leverage: Net Debt/EBITDA is 14.1x while industry average is 6.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Jaiprakash Associates's Revenue dropped on 11.9%. Revenue decline was accelerating on average at -11.5 pp per annum in the last 5 years. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 3.9 pp from 31.5% to 27.6% in FY2016. EBITDA Margin followed a declining trend at -2.3 pp per annum in the last 5 years.
Net Income margin dropped on 10.6 pp from -8.9% to -19.5% in FY2016. Net Income margin followed a declining trend at -5.9 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 18.9%. CAPEX/Revenue dropped on 46.5 pp from 65.5% in FY2013 to 18.9% in FY2016. Average CAPEX/Revenue for the last three years was 31.8%. The company invested a big chunk of EBITDA (68.5%) to CAPEX which didn't stop revenue from falling. CAPEX as a % of Revenue declined at -19.0 pp per annum in FY2012-FY2016.
Return on investment
The company operates at low but positive ROIC (3.3%) and negative ROE (-23.9%). ROIC decreased slightly on 1.5 pp from 4.8% to 3.3% in FY2016. ROE dropped on 10.1 pp from -13.8% to -23.9% in FY2016. ROIC followed a declining trend at -0.98 pp per annum in the last 5 years. ROE stuck to a declining trend at -7.7 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 14.1x Net Debt / EBITDA and 14.2x Debt / EBITDA. Net Debt / EBITDA jumped on 2.2x from 11.9x to 14.1x in FY2016. Debt dropped on 10.3% while cash dropped on 68.5%. Net Debt/EBITDA grew at 1.3x per annum in FY2012-FY2016.
Jaiprakash Associates has short term refinancing risk: cash is only 4.6% of short term debt.
Management team
Jaiprakash Associates's CFO Rahul Kumar has spent 10 years with the company.
Financial and operational results
Jaiprakash Associates ($JPASSOCIAT) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 147,732 | 188,164 | 196,960 | 194,935 | 171,811 | -11.9% |
| EBITDA | 54,578 | 67,493 | 63,820 | 61,430 | 47,503 | -22.7% |
| Net Income | 6,329 | 4,618 | -8,248 | -17,351 | -33,450 | |
Balance Sheet
|
|---|
| Cash | 27,633 | 28,060 | 21,897 | 20,846 | 6,574 | -68.5% |
| Short Term Debt | 92,615 | 98,732 | 156,532 | 192,317 | 141,495 | -26.4% |
| Long Term Debt | 439,127 | 532,378 | 569,457 | 560,424 | 533,787 | -4.8% |
Cash flow
|
|---|
| Capex | 143,343 | 123,202 | 88,612 | 61,613 | 32,523 | -47.2% |
Ratios
|
|---|
| Revenue growth | 31.2% | 27.4% | 4.7% | -1.0% | -11.9% | |
| EBITDA growth | 10.1% | 23.7% | -5.4% | -3.7% | -22.7% | |
|
|---|
| EBITDA Margin | 36.9% | 35.9% | 32.4% | 31.5% | 27.6% | -3.9% |
| Net Income Margin | 4.3% | 2.5% | -4.2% | -8.9% | -19.5% | -10.6% |
| CAPEX, % of revenue | 97.0% | 65.5% | 45.0% | 31.6% | 18.9% | -12.7% |
|
|---|
| ROIC | 7.0% | 7.1% | 5.5% | 4.8% | 3.3% | -1.5% |
| ROE | 5.7% | 3.8% | -7.2% | -13.8% | -23.9% | -10.1% |
| Net Debt/EBITDA | 9.2x | 8.9x | 11.0x | 11.9x | 14.1x | 2.2x |
Peers in Construction & Engineering
Below we provide Jaiprakash Associates 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 ($ATLANTA) | - | 115.1% | 28.1% | 50.2% | -70.5% |
| |
|---|
| Median (32 companies) | -2.1% | 6.7% | 7.1% | 1.2% | -4.9% |
|---|
| Jaiprakash Associates ($JPASSOCIAT) | - | 27.4% | 4.7% | -1.0% | -11.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Madhucon Projects ($MADHUCON) | 8.4% | 31.9% | 22.1% | 32.1% | - |
| Arss Infrastructure Projects ($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% |
| Atlanta ($ATLANTA) | 28.5% | 34.6% | 30.8% | 21.4% | 8.2% |
| |
|---|
| Median (37 companies) | 11.9% | 11.2% | 10.2% | 9.9% | 10.2% |
|---|
| Jaiprakash Associates ($JPASSOCIAT) | 36.9% | 35.9% | 32.4% | 31.5% | 27.6% |
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 ($SHRISTI) | 0.0% | 11.2% | 14.1% | 40.8% | 25.2% |
| Man Infraconstruction ($MANINFRA) | 7.8% | 1.6% | 25.0% | 18.6% | 4.5% |
| Welspun Projects ($WELPROJ) | 0.4% | - | 0.6% | 17.3% | - |
| |
|---|
| Median (23 companies) | 7.3% | 6.6% | 4.0% | 3.1% | 3.5% |
|---|
| Jaiprakash Associates ($JPASSOCIAT) | 97.0% | 65.5% | 45.0% | 31.6% | 18.9% |
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 ($ITDCEM) | 13.1% | 11.3% | 3.8% | 12.6% | - |
| |
|---|
| Median (43 companies) | 8.6% | 7.5% | 6.3% | 6.8% | 6.8% |
|---|
| Jaiprakash Associates ($JPASSOCIAT) | 7.0% | 7.1% | 5.5% | 4.8% | 3.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mcnally Bharat Engineering Company ($MBECL) | 4.3x | 7.0x | 7.6x | 28.3x | - |
| Supreme Infrastructure India ($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 |
| Hindustan Construction Co ($HCC) | 18.8x | 20.3x | 12.3x | 9.3x | 6.4x |
| |
|---|
| Median (31 companies) | 4.5x | 5.2x | 5.4x | 2.7x | 3.0x |
|---|
| Jaiprakash Associates ($JPASSOCIAT) | 9.2x | 8.9x | 11.0x | 11.9x | 14.1x |
