Sunflag Iron & Steel Co reports 12.0% EBITDA growth in 2016 while 5.4% Revenue decline
28-05-2016 • About Sunflag Iron & Steel Co (
$SUNFLAG) • By InTwits
Sunflag Iron & Steel Co reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 11.4% in FY2016 vs. 9.6% in FY2015 vs. 7.4% in FY2012
- Sunflag Iron & Steel Co has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.1%. At the same time it's a lot of higher than industry average of 7.7%.
- CAPEX is quite volatile: ₹162m in FY2016, ₹42m in FY2015, ₹68m in FY2014, ₹544m in FY2013, ₹1,648m in FY2012
- The company has highly profitable business model: ROIC is 13.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Sunflag Iron & Steel Co's Revenue decreased on 5.4%. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.8 pp from 9.6% to 11.4% in FY2016. EBITDA Margin stuck to a growing trend at 1.0 pp per annum in the last 5 years.
Net Income margin increased slightly on 2.0 pp from 1.4% to 3.3% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2013 at -0.80% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 0.97%. The company showed decline in CAPEX/Revenue of 2.5 pp from 3.5% in FY2013 to 0.97% in FY2016. It's average level of CAPEX/Revenue for the last three years was 0.55%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2015 at 0.24%.
Return on investment
The company operates at good ROIC (13.4%) while ROE is low (9.1%). ROIC increased on 2.2 pp from 11.2% to 13.4% in FY2016. ROE increased on 4.6 pp from 4.5% to 9.1% in FY2016. ROIC grew at 1.8 pp per annum in the last 5 years. During FY2012-FY2016 ROE bottomed in FY2013 at -2.6% and was growing since that time.
Leverage (Debt)
Debt level is 1.3x Net Debt / EBITDA and 1.4x Debt / EBITDA. Net Debt / EBITDA dropped on 1.1x from 2.5x to 1.3x in FY2016. Debt dropped on 37.7% while cash jumped on 60.1%. Net Debt/EBITDA stuck to a declining trend at -0.9x per annum in FY2012-FY2016.
Sunflag Iron & Steel Co has short term refinancing risk: cash is only 4.0% of short term debt.
Financial and operational results
Sunflag Iron & Steel Co ($SUNFLAG) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 16,182 | 15,693 | 15,854 | 17,566 | 16,614 | -5.4% |
| EBITDA | 1,203 | 1,185 | 1,470 | 1,693 | 1,896 | 12.0% |
| Net Income | 193 | -125 | 217 | 244 | 556 | 127.7% |
Balance Sheet
|
|---|
| Cash | 153 | 106 | 106 | 47 | 76 | 60.1% |
| Short Term Debt | 2,552 | 2,240 | 2,494 | 2,789 | 1,887 | -32.4% |
| Long Term Debt | 3,528 | 2,815 | 2,277 | 1,425 | 738 | -48.2% |
Cash flow
|
|---|
| Capex | 1,648 | 544 | 68 | 42 | 162 | 287.5% |
Ratios
|
|---|
| Revenue growth | 4.8% | -3.0% | 1.0% | 10.8% | -5.4% | |
| EBITDA growth | -25.9% | -1.5% | 24.1% | 15.1% | 12.0% | |
|
|---|
| EBITDA Margin | 7.4% | 7.5% | 9.3% | 9.6% | 11.4% | 1.8% |
| Net Income Margin | 1.2% | -0.8% | 1.4% | 1.4% | 3.3% | 2.0% |
| CAPEX, % of revenue | 10.2% | 3.5% | 0.4% | 0.2% | 1.0% | 0.7% |
|
|---|
| ROIC | 7.2% | 5.6% | 8.3% | 11.2% | 13.4% | 2.2% |
| ROE | 4.0% | -2.6% | 4.4% | 4.5% | 9.1% | 4.6% |
| Net Debt/EBITDA | 4.9x | 4.2x | 3.2x | 2.5x | 1.3x | -1.1x |
Peers in Iron & Steel/Interm.Products
Below you can find Sunflag Iron & Steel Co benchmarking vs. other companies in Iron & Steel/Interm.Products 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 |
|---|
| Ocl Iron And Steel ($OISL) | - | 5.5% | 86.6% | 69.1% | -65.1% |
| Uttam Galva Steels ($UTTAMSTL) | - | 11.0% | -13.2% | 55.0% | -1.6% |
| Modern Steels ($MDRNSTL) | - | -22.7% | 0.7% | 20.3% | -15.3% |
| Maithan Alloys ($MAITHANALL) | - | 59.1% | 1.1% | 15.0% | 4.0% |
| Pennar Industries ($PENIND) | - | -8.5% | 0.5% | 12.7% | 3.4% |
| |
|---|
| Median (34 companies) | 31.0% | 8.8% | 3.7% | -1.6% | -14.2% |
|---|
| Sunflag Iron & Steel Co ($SUNFLAG) | - | -3.0% | 1.0% | 10.8% | -5.4% |
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 ($TATAMETALI) | -9.6% | 0.9% | 6.8% | 14.6% | 16.8% |
| |
|---|
| Median (31 companies) | 9.4% | 9.2% | 7.0% | 7.2% | 8.4% |
|---|
| Sunflag Iron & Steel Co ($SUNFLAG) | 7.4% | 7.5% | 9.3% | 9.6% | 11.4% |
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 ($BHUSANSTL) | 47.2% | 44.0% | 50.4% | 16.2% | - |
| |
|---|
| Median (18 companies) | 9.9% | 11.7% | 9.2% | 5.4% | 7.0% |
|---|
| Sunflag Iron & Steel Co ($SUNFLAG) | 10.2% | 3.5% | 0.4% | 0.2% | 1.0% |
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 ($GALLANTT) | 8.7% | 11.7% | 8.5% | 11.7% | - |
| |
|---|
| Median (42 companies) | 6.8% | 5.4% | 5.5% | 4.5% | 2.9% |
|---|
| Sunflag Iron & Steel Co ($SUNFLAG) | 7.2% | 5.6% | 8.3% | 11.2% | 13.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Visa Steel ($VISASTEEL) | 20.1x | - | 24.4x | 187.1x | - |
| Ismt ($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 ($BHUSANSTL) | 6.3x | 8.6x | 12.9x | 17.7x | - |
| |
|---|
| Median (28 companies) | 4.6x | 4.4x | 4.2x | 1.7x | 0.8x |
|---|
| Sunflag Iron & Steel Co ($SUNFLAG) | 4.9x | 4.2x | 3.2x | 2.5x | 1.3x |
