Techno Electric And Engineering Co. reports 38.9% revenue growth in FY2016 and 6.3 pp EBITDA Margin decline from 26.5% to 20.2%
28-05-2016 • About Techno Electric And Engineering Co. (
$TECHNO) • By InTwits
Techno Electric And Engineering Co. reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is declining: 20.2% in FY2016 vs. 26.5% in FY2015 vs. 27.0% in FY2012
- Techno Electric And Engineering Co. has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.9%. At the same time it's a lot of higher than industry average of 5.4%.
- CAPEX is quite volatile: ₹101m in FY2016, ₹11m in FY2015, ₹54m in FY2014, ₹200m in FY2013, ₹4,034m in FY2012
- The company has business model with average profitability: ROIC is 11.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Techno Electric And Engineering Co.'s Revenue surged on 38.9%. During the last 5 years Revenue growth bottomed in FY2013 at -15.7% and was accelerating since that time. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 6.3 pp from 26.5% to 20.2% in FY2016. During FY2012-FY2016 EBITDA Margin topped in FY2013 at 34.5% and was declining since that time.
Net Income margin showed almost no change in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.93% in FY2016. CAPEX/Revenue decreased slightly on 2.0 pp from 2.9% in FY2013 to 0.93% in FY2016. It's average level of CAPEX/Revenue for the last three years was 0.61%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2015 at 0.14%.
Return on investment
The company operates at good ROE (14.6%) while ROIC is low (11.3%). ROIC increased slightly on 1.1 pp from 10.2% to 11.3% in FY2016. ROE increased on 2.6 pp from 12.0% to 14.6% in FY2016. During the last 5 years ROIC bottomed in FY2014 at 9.3% and was growing since that time. During the last 5 years ROE bottomed in FY2014 at 10.9% and was growing since that time.
Leverage (Debt)
Debt level is 1.9x Net Debt / EBITDA and 2.3x Debt / EBITDA. Net Debt / EBITDA dropped on 0.8x from 2.6x to 1.9x in FY2016. Debt decreased on 9.3% while cash surged on 388%.
Techno Electric And Engineering Co. has short term refinancing risk: cash is only 50.6% of short term debt.
Financial and operational results
Techno Electric And Engineering Co. ($TECHNO) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 8,137 | 6,859 | 6,975 | 7,853 | 10,910 | 38.9% |
| EBITDA | 2,196 | 2,370 | 1,989 | 2,081 | 2,205 | 5.9% |
| Net Income | 1,209 | 1,204 | 875 | 1,051 | 1,406 | 33.8% |
Balance Sheet
|
|---|
| Cash | 75 | 583 | 388 | 213 | 1,039 | 387.8% |
| Short Term Debt | 1,546 | 1,504 | 614 | 1,682 | 2,054 | 22.1% |
| Long Term Debt | 4,164 | 5,172 | 4,785 | 3,967 | 3,068 | -22.7% |
Cash flow
|
|---|
| Capex | 4,034 | 200 | 54 | 11 | 101 | 844.7% |
Ratios
|
|---|
| Revenue growth | 13.6% | -15.7% | 1.7% | 12.6% | 38.9% | |
| EBITDA growth | 31.6% | 7.9% | -16.1% | 4.7% | 5.9% | |
|
|---|
| EBITDA Margin | 27.0% | 34.5% | 28.5% | 26.5% | 20.2% | -6.3% |
| Net Income Margin | 14.9% | 17.5% | 12.5% | 13.4% | 12.9% | -0.5% |
| CAPEX, % of revenue | 49.6% | 2.9% | 0.8% | 0.1% | 0.9% | 0.8% |
|
|---|
| ROIC | 15.5% | 12.6% | 9.3% | 10.2% | 11.3% | 1.1% |
| ROE | 19.6% | 16.7% | 10.9% | 12.0% | 14.6% | 2.6% |
| Net Debt/EBITDA | 2.6x | 2.6x | 2.5x | 2.6x | 1.9x | -0.8x |
Peers in Heavy Electrical Equipment
Below we provide Techno Electric And Engineering Co. benchmarking against other companies in Heavy Electrical Equipment 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 |
|---|
| Swelect Energy Systems ($SWELECTES) | - | -70.6% | -0.0% | 25.7% | -7.0% |
| T D Power Systems ($TDPOWERSYS) | - | -43.1% | -18.2% | 24.4% | -15.9% |
| Sterlite Technologies ($STRTECH) | - | 17.9% | -17.1% | 20.8% | -30.2% |
| Voltamp Transformers ($VOLTAMP) | 4.3% | -7.7% | -13.7% | 16.2% | - |
| Techno Electric & Engineering Company ($TECHELE) | - | -15.7% | 1.7% | 12.6% | 38.9% |
| |
|---|
| Median (16 companies) | 4.3% | -5.3% | 0.8% | 1.1% | -7.0% |
|---|
| Techno Electric And Engineering Co. ($TECHNO) | - | -15.7% | 1.7% | 12.6% | 38.9% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Suzlon Energy ($SUZLON) | 33.2% | 27.2% | 28.6% | 31.3% | 40.6% |
| |
|---|
| Median (1 company) | 33.2% | 27.2% | 28.6% | 31.3% | 40.6% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ujaas Energy ($UJAAS) | 1.2% | 18.7% | 17.4% | 38.1% | 22.6% |
| Techno Electric & Engineering Company ($TECHELE) | 27.0% | 34.5% | 28.5% | 26.5% | 20.2% |
| Sterlite Technologies ($STRTECH) | 7.5% | 7.5% | 10.8% | 15.0% | 20.9% |
| Emco ($EMCO) | 7.4% | 9.5% | 11.3% | 9.3% | - |
| Crompton Greaves ($CROMPGREAV) | 7.1% | 3.2% | 6.2% | 8.8% | 7.7% |
| |
|---|
| Median (16 companies) | 8.9% | 8.1% | 6.4% | 5.5% | 7.7% |
|---|
| Techno Electric And Engineering Co. ($TECHNO) | 27.0% | 34.5% | 28.5% | 26.5% | 20.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sterlite Technologies ($STRTECH) | 24.9% | 47.2% | 64.9% | 37.4% | 10.3% |
| Swelect Energy Systems ($SWELECTES) | 5.1% | 42.5% | 50.8% | 21.8% | 44.0% |
| Transformers And Rectifiers (India) ($TRIL) | 5.7% | 8.4% | 2.8% | 5.8% | 1.4% |
| T D Power Systems ($TDPOWERSYS) | 3.7% | 14.5% | 15.1% | 3.8% | 3.4% |
| Suzlon Energy ($SUZLON) | 4.2% | 3.7% | 3.4% | 3.7% | 4.3% |
| |
|---|
| Median (15 companies) | 4.7% | 3.3% | 2.4% | 2.5% | 3.0% |
|---|
| Techno Electric And Engineering Co. ($TECHNO) | 49.6% | 2.9% | 0.8% | 0.1% | 0.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Alstom India ($AIL) | 27.2% | 25.6% | 13.2% | 10.7% | -27.7% |
| Ujaas Energy ($UJAAS) | 0.0% | 28.5% | 33.7% | 10.2% | 16.2% |
| Techno Electric & Engineering Company ($TECHELE) | 15.5% | 12.6% | 9.3% | 10.2% | 11.3% |
| Emco ($EMCO) | 4.3% | 6.1% | 7.4% | 6.1% | - |
| Voltamp Transformers ($VOLTAMP) | 8.7% | 6.5% | 1.9% | 5.4% | - |
| |
|---|
| Median (19 companies) | 14.1% | 6.3% | 7.4% | 4.0% | 3.9% |
|---|
| Techno Electric And Engineering Co. ($TECHNO) | 15.5% | 12.6% | 9.3% | 10.2% | 11.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jyoti Structures ($JYOTISTRUC) | 2.4x | 3.6x | 5.7x | 88.2x | - |
| Suzlon Energy ($SUZLON) | 6.1x | - | 87.6x | 19.1x | 9.5x |
| Bgr Energy Systems ($BGRENERGY) | 2.6x | 3.5x | 4.1x | 13.0x | - |
| Sterlite Technologies ($STRTECH) | 4.6x | 10.2x | 15.4x | 11.1x | 2.2x |
| Emco ($EMCO) | 8.1x | 7.3x | 5.7x | 7.3x | - |
| |
|---|
| Median (14 companies) | 1.6x | 3.0x | 2.5x | 2.7x | 2.1x |
|---|
| Techno Electric And Engineering Co. ($TECHNO) | 2.6x | 2.6x | 2.5x | 2.6x | 1.9x |
