Uttam Galva Steels reports 108% EBITDA decline in 2016 and 1.6% Revenue decline
28-05-2016 • About Uttam Galva Steels (
$UTTAMSTL) • By InTwits
Uttam Galva Steels reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: -0.5% in FY2016, 6.1% in FY2015, 9.7% in FY2014, 9.6% in FY2013, 9.3% in FY2012
- Uttam Galva Steels has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.2%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: ₹2,811m in FY2016, ₹4,488m in FY2015, ₹9,924m in FY2014, ₹5,139m in FY2013, ₹6,186m in FY2012
- The company has unprofitable business model: ROIC is -6.2%
- It operates with high leverage: Net Debt/EBITDA is 12.4x while industry average is 3.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Uttam Galva Steels's Revenue decreased slightly on 1.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.6 pp from 23.5% to 29.1% in FY2016. During the last 5 years EBITDA Margin topped in FY2014 at 9.7% and was declining since that time.
Net Income margin dropped on 19.0 pp from 0.23% to -18.8% in FY2016. Net Income margin followed a declining trend in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
Uttam Galva Steels's CAPEX/Revenue was 3.4% in FY2016. Uttam Galva Steels's CAPEX/Revenue decreased on 4.8 pp from 8.2% in FY2013 to 3.4% in FY2016. It's average CAPEX/Revenue for the last three years was 9.0%.
Return on investment
The company operates at negative ROIC (-6.2%) and ROE (-131.6%). ROIC dropped on 11.6 pp from 5.4% to -6.2% in FY2016. ROE dropped on 133 pp from 1.2% to -132% in FY2016. ROIC followed a declining trend in the last 5 years. ROE followed a declining trend in FY2012-FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 12.4x and Debt / EBITDA is . Net Debt / EBITDA dropped on 7.0x from 7.0x to in FY2016. Debt showed almost no change in FY2016 while cash dropped on 50.9%.
Uttam Galva Steels has short term refinancing risk: cash is only 5.2% of short term debt.
Management team
Gursharan S Sawhney is a Uttam Galva Steels's CFO. Gursharan S Sawhney has spent 6 years at the company.
Financial and operational results
Uttam Galva Steels ($UTTAMSTL) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 56,474 | 62,709 | 54,405 | 84,325 | 82,954 | -1.6% |
| SG&A | | | | | 2,332 | |
| EBITDA | 5,280 | 6,003 | 5,272 | 5,185 | -391 | -107.5% |
| Net Income | 731 | 548 | 297 | 198 | -15,555 | -7,967.7% |
Balance Sheet
|
|---|
| Cash | 1,781 | 2,999 | 1,304 | 1,327 | 652 | -50.9% |
| Short Term Debt | 11,944 | 22,008 | 11,150 | 7,418 | 12,489 | 68.4% |
| Long Term Debt | 22,291 | 17,757 | 23,583 | 30,086 | 24,906 | -17.2% |
Cash flow
|
|---|
| Capex | 6,186 | 5,139 | 9,924 | 4,488 | 2,811 | -37.4% |
Ratios
|
|---|
| Revenue growth | 12.0% | 11.0% | -13.2% | 55.0% | -1.6% | |
| EBITDA growth | 16.0% | 13.7% | -12.2% | -1.7% | -107.5% | |
|
|---|
| EBITDA Margin | 9.3% | 9.6% | 9.7% | 6.1% | -0.5% | -6.6% |
| SG&A, % of revenue | | | | | 2.8% | |
| Net Income Margin | 1.3% | 0.9% | 0.5% | 0.2% | -18.8% | -19.0% |
| CAPEX, % of revenue | 11.0% | 8.2% | 18.2% | 5.3% | 3.4% | -1.9% |
|
|---|
| ROIC | 9.1% | 8.4% | 6.0% | 5.4% | -6.2% | -11.6% |
| ROE | 7.5% | 4.9% | 2.4% | 1.2% | -131.6% | -132.9% |
| Net Debt/EBITDA | 6.1x | 6.1x | 6.3x | 7.0x | |
Peers in Iron & Steel/Interm.Products
Below we provide Uttam Galva Steels 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 ($OISL) | - | 5.5% | 86.6% | 69.1% | -65.1% |
| Modern Steels ($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% |
| Vaswani Industries ($VASWANI) | 51.4% | -2.1% | 5.6% | 12.6% | - |
| |
|---|
| Median (34 companies) | 31.0% | 5.5% | 3.7% | -1.6% | -14.2% |
|---|
| Uttam Galva Steels ($UTTAMSTL) | - | 11.0% | -13.2% | 55.0% | -1.6% |
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 ($TATAMETALI) | -9.6% | 0.9% | 6.8% | 14.6% | 16.8% |
| |
|---|
| Median (31 companies) | 9.4% | 9.0% | 7.0% | 7.3% | 9.6% |
|---|
| Uttam Galva Steels ($UTTAMSTL) | 9.3% | 9.6% | 9.7% | 6.1% | -0.5% |
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 ($BHUSANSTL) | 47.2% | 44.0% | 50.4% | 16.2% | - |
| |
|---|
| Median (18 companies) | 9.7% | 11.7% | 7.7% | 5.0% | 7.0% |
|---|
| Uttam Galva Steels ($UTTAMSTL) | 11.0% | 8.2% | 18.2% | 5.3% | 3.4% |
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 ($GALLANTT) | 8.7% | 11.7% | 8.5% | 11.7% | - |
| |
|---|
| Median (42 companies) | 6.8% | 5.4% | 5.5% | 4.5% | 3.8% |
|---|
| Uttam Galva Steels ($UTTAMSTL) | 9.1% | 8.4% | 6.0% | 5.4% | -6.2% |
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 ($BHUSANSTL) | 6.3x | 8.6x | 12.9x | 17.7x | - |
| |
|---|
| Median (28 companies) | 4.6x | 4.4x | 3.4x | 1.7x | 0.9x |
|---|
| Uttam Galva Steels ($UTTAMSTL) | 6.1x | 6.1x | 6.3x | 7.0x | - |
