Lanco Infratech revenue decline accelerated to 15.6% in FY2016 vs. 10.1% a year earliner

28-05-2016 • About Lanco Infratech ($LITL) • By InTwits

Lanco Infratech reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

The company has potentially unprofitable business model: ROIC is 3.5%
It operates with high leverage: Net Debt/EBITDA is 18.1x while industry average is 7.8x

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

Revenue and profitability

Lanco Infratech's Revenue dropped on 15.6%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.6 pp from 23.5% to 29.1% in FY2016. EBITDA Margin followed a growing trend at 2.6 pp per annum in the last 5 years.

Net Income margin jumped on 18.4 pp from -21.7% to -3.4% in FY2016. During the last 5 years Net Income margin bottomed in FY2014 at -21.8% and was growing since that time.

Leverage (Debt)

Debt level is 18.1x Net Debt / EBITDA and 18.4x Debt / EBITDA. Net Debt / EBITDA jumped on 0.6x from 17.5x to 18.1x in FY2016. Debt increased on 8.0% while cash increased on 2.8%.

Lanco Infratech has short term refinancing risk: cash is only 21.4% of short term debt.

Financial and operational results

Lanco Infratech ($LITL) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	101,690	137,388	104,300	93,719	79,138	-15.6%
EBITDA	18,555	26,082	18,936	22,070	23,055	4.5%
Net Income	-1,120	-10,733	-22,739	-20,367	-2,656
Balance Sheet
Cash	9,491	2,319	3,866	6,172	6,343	2.8%
Short Term Debt	72,262	79,762	65,852	60,461	29,707	-50.9%
Long Term Debt	240,037	260,043	301,202	331,450	393,605	18.8%
Cash flow
Capex	66,963	18,645	1,561	1,572
Ratios
Revenue growth	32.0%	35.1%	-24.1%	-10.1%	-15.6%
EBITDA growth	9.8%	40.6%	-27.4%	16.6%	4.5%

EBITDA Margin	18.2%	19.0%	18.2%	23.5%	29.1%	5.6%
Net Income Margin	-1.1%	-7.8%	-21.8%	-21.7%	-3.4%	18.4%
CAPEX, % of revenue	65.9%	13.6%	1.5%	1.7%

ROIC	4.3%	3.8%	1.8%	2.7%	3.5%	0.8%
ROE	-2.4%	-25.6%	-88.7%
Net Debt/EBITDA	16.3x	12.9x	19.2x	17.5x	18.1x	0.6x

Peers in Electric Utilities

Below we provide Lanco Infratech benchmarking against other companies in Electric Utilities 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
Bf Utilities ($BFUTILITIE)	41.4%	9.2%	20.6%	117.9%	-
Jaiprakash Power Ventures ($JPPOWER)	-	52.2%	9.0%	38.1%	11.1%
Adani Power ($ADANIPOWER)	-	65.7%	128.0%	21.7%	34.1%
Torrent Power ($TORNTPOWER)	-	9.9%	5.6%	19.8%	12.4%
Ptc India ($PTC)	-	14.2%	31.5%	14.9%	0.6%
Median (17 companies)	22.8%	14.2%	8.8%	8.1%	7.9%
Lanco Infratech ($LITL)	-	35.1%	-24.1%	-10.1%	-15.6%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Power Grid Corporation Of India ($POWERGRID)	83.7%	85.6%	84.9%	85.8%	87.0%
Orient Green Power Company ($GREENPOWER)	24.4%	53.3%	57.8%	82.8%	86.9%
Bf Utilities ($BFUTILITIE)	43.9%	55.1%	61.2%	72.2%	-
Nhpc ($NHPC)	71.4%	66.5%	59.3%	63.4%	59.9%
Jaiprakash Power Ventures ($JPPOWER)	91.7%	70.6%	60.1%	63.3%	57.2%
Median (18 companies)	28.3%	25.5%	26.2%	22.3%	30.3%
Lanco Infratech ($LITL)	18.2%	19.0%	18.2%	23.5%	29.1%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Power Grid Corporation Of India ($POWERGRID)	184.3%	172.4%	173.4%	169.8%	120.3%
Jaiprakash Power Ventures ($JPPOWER)	378.9%	341.9%	229.9%	113.6%	66.7%
Ksk Energy Ventures ($KSK)	161.9%	80.3%	57.0%	57.4%	-
Nava Bharat Ventures ($NBVENTURES)	69.0%	30.5%	70.6%	55.3%	-
Gvk Power & Infrastructure ($GVKPIL)	139.1%	136.7%	109.1%	52.7%	36.9%
Median (15 companies)	104.0%	46.8%	39.9%	20.9%	11.2%
Lanco Infratech ($LITL)	65.9%	13.6%	1.5%	1.7%	-

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Bf Utilities ($BFUTILITIE)	1.9%	4.5%	6.0%	17.2%	-
Alstom T&D India ($ALSTOMT&D)	0.0%	15.7%	14.6%	16.1%	10.6%
Ptc India ($PTC)	11.2%	10.4%	13.6%	12.3%	13.6%
Torrent Power ($TORNTPOWER)	19.0%	7.3%	4.9%	8.1%	12.2%
Power Grid Corporation Of India ($POWERGRID)	8.3%	8.8%	8.4%	7.7%	8.4%
Median (19 companies)	5.6%	5.8%	5.5%	6.2%	8.4%
Lanco Infratech ($LITL)	4.3%	3.8%	1.8%	2.7%	3.5%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Ksk Energy Ventures ($KSK)	16.3x	16.2x	27.0x	35.7x	-
Gvk Power & Infrastructure ($GVKPIL)	19.1x	23.9x	20.1x	20.2x	14.2x
Gmr Infrastructure ($GMRINFRA)	19.5x	15.1x	16.7x	17.7x	-
Jaiprakash Power Ventures ($JPPOWER)	11.6x	13.1x	16.7x	13.4x	10.7x
Reliance Infrastructure ($RELINFRA)	6.2x	7.3x	8.4x	10.9x	5.8x
Median (18 companies)	8.6x	6.6x	6.2x	6.1x	5.0x
Lanco Infratech ($LITL)	16.3x	12.9x	19.2x	17.5x	18.1x

Lanco Infratech stock price chart

Lanco Infratech financials

mln.	FY2010	FY2011	FY2012

Revenue	109,268	77,020	101,690
EBITDA	17,110	16,894	18,555
Net income	4,585	4,461	-1,120.350
CAPEX	15,383	83,096	66,963
Debt	83,614	166,530	312,299
Cash	9,628	9,714	9,491

About Lanco Infratech

Lanco Infratech Limited is engaged in engineering, procurement, and construction (EPC); and power, natural resources, infrastructure, and property development businesses. The company operates through five segments: EPC and Construction, Power, Property Development, Infrastructure, and Resources. The EPC and Construction segment provides EPC services for various projects, such as thermal and hydro power projects, chimneys, cooling towers and balance of plant, and transmission and distribution projects, as well as for roads, highways and bridges, metros and railways, buildings and airports, sea ports and marine structures, and water and pipeline facilities. The Power segment is engaged in generation and trading of power from thermal, hydro, wind, and solar sources. The Property Development segment develops integrated properties comprising commercial and residential buildings. The Infrastructure segment is involved in the development of civil and urban projects, such as roads, highways, ports, airports, railway lines, etc. on build, operate, and transfer basis. The Resources segment is engaged in the exploration, mining, and marketing of coal. The company is also involved in the construction of water supply and irrigation projects, including dam, tunnels, etc. It has operations in India, Australia, Singapore, and other countries. The company was founded in 1960 and is based in Gurgaon, India. Lanco Infratech Limited is a subsidiary of Lanco Group Limited.