Bengal & Assam Company reports 343% Net Income growth in 2016 and 2.3 pp EBITDA Margin growth from 10.3% to 12.7%
30-05-2016 • About Bengal & Assam Company (
$BENGALASM) • By InTwits
Bengal & Assam Company reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bengal & Assam Company is a growth stock: FY2016 revenue growth was 6.6%, 5 year revenue CAGR was 13.1% at FY2016 ROIC
- Bengal & Assam Company has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.6%. At the same time it's a lot of higher than industry average of 1.4%.
- CAPEX is quite volatile: ₹572m in FY2016, ₹279m in FY2015, ₹138m in FY2014, ₹514m in FY2013, ₹1,507m in FY2012
- It operates with medium-size leverage: Net Debt/EBITDA is 2.4x while industry average is 2.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 6.6%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.1 pp from 12.8% to 11.7% in FY2016.
Net Income margin jumped on 13.1 pp from 4.2% to 17.3% in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 4.1% in FY2016. CAPEX/Revenue showed almost no change from FY2013 to FY2016. For the last three years the average CAPEX/Revenue was 2.5%. During FY2012-FY2016 CAPEX as a % of Revenue bottomed in FY2014 at 1.2% and was growing since that time.
Leverage (Debt)
Debt level is 2.4x Net Debt / EBITDA and 2.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 3.0x to 2.4x in FY2016. Debt increased on 8.4% while cash surged on 61.0%. Net Debt/EBITDA followed a declining trend at -0.4x per annum in the last 5 years.
Bengal & Assam Company has short term refinancing risk: cash is only 6.6% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 4.7x and P/E 1.6x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 6.9x with the industry average at 22.8x.
Financial and operational results
Bengal & Assam Company ($BENGALASM) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 9,491 | 11,356 | 11,679 | 13,160 | 14,035 | 6.6% |
| EBITDA | 1,030 | 1,619 | 933 | 1,362 | 1,781 | 30.8% |
| Net Income | 304 | 349 | 726 | 547 | 2,423 | 343.1% |
Balance Sheet
|
|---|
| Cash | 199 | 55 | 58 | 70 | 112 | 61.0% |
| Short Term Debt | 2,260 | 2,823 | 2,527 | 3,067 | 1,706 | -44.4% |
| Long Term Debt | 2,175 | 3,093 | 1,185 | 1,029 | 2,734 | 165.8% |
Cash flow
|
|---|
| Capex | 1,507 | 514 | 138 | 279 | 572 | 104.7% |
Ratios
|
|---|
| Revenue growth | 25.4% | 19.7% | 2.8% | 12.7% | 6.6% | |
| EBITDA growth | -17.9% | 57.3% | -42.4% | 46.0% | 30.8% | |
|
|---|
| EBITDA Margin | 10.8% | 14.3% | 8.0% | 10.3% | 12.7% | 2.3% |
| Net Income Margin | 3.2% | 3.1% | 6.2% | 4.2% | 17.3% | 13.1% |
| CAPEX, % of revenue | 15.9% | 4.5% | 1.2% | 2.1% | 4.1% | 2.0% |
|
|---|
| ROE | 6.6% | 7.9% | 14.6% | 6.0% | 17.3% | 11.2% |
| Net Debt/EBITDA | 4.1x | 3.6x | 3.9x | 3.0x | 2.4x | -0.5x |
Peers in Finance (including NBFCs)
Below we provide Bengal & Assam Company benchmarking against other companies in Finance (including NBFCs) 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 |
|---|
| Sks Microfinance ($SKSMICRO) | - | -25.6% | 55.0% | 47.3% | 64.5% |
| Motilal Oswal Financial Services ($MOTILALOFS) | - | 0.4% | -0.9% | 64.7% | 39.8% |
| K.Z.Leasing & Finance ($KZLFIN) | - | 41.6% | - | - | 26.5% |
| Bajaj Finserv ($BAJAJFINSV) | - | 28.1% | 18.8% | 26.8% | 23.9% |
| Muthoot Capital Services ($MUTHTFN) | - | 59.3% | 48.1% | 20.5% | 19.5% |
| |
|---|
| Median (25 companies) | 44.0% | 27.4% | 20.8% | 14.3% | 8.8% |
|---|
| Bengal & Assam Company ($BENGALASM) | - | 19.7% | 2.8% | 12.7% | 6.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Microse India ($MICROSE) | - | - | - | 101.1% | - |
| Pnb Gilts ($PNBGILTS) | 94.0% | 96.4% | 96.4% | 96.1% | 95.4% |
| Jsw Holdings ($JSWHL) | - | - | - | 93.8% | - |
| Rural Electrification Corporation ($RECLTD) | 97.2% | 97.3% | 96.7% | 93.3% | 92.0% |
| Bajaj Holdings & Investment ($BAJAJHLDNG) | 96.1% | 95.4% | 92.3% | 92.7% | 91.4% |
| |
|---|
| Median (51 companies) | 70.0% | 67.8% | 66.4% | 61.9% | 62.7% |
|---|
| Bengal & Assam Company ($BENGALASM) | 10.8% | 14.3% | 8.0% | 10.3% | 12.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| IDFC Limited ($IDFC) | 0.1% | 0.1% | 0.2% | 0.5% | 4.8% |
| Motilal Oswal Financial Services ($MOTILALOFS) | 15.5% | 5.3% | 1.7% | 3.4% | 2.5% |
| Cholamandalam Investment And Finance Company ($CHOLAFIN) | 1.8% | 1.4% | 0.8% | 0.8% | 1.8% |
| Reliance Capital ($RELCAPITAL) | 2.0% | 0.7% | 2.5% | 1.0% | 1.6% |
| Sks Microfinance ($SKSMICRO) | 0.6% | 0.2% | 0.7% | 0.6% | 1.1% |
| |
|---|
| Median (17 companies) | 0.6% | 0.7% | 0.9% | 0.7% | 0.9% |
|---|
| Bengal & Assam Company ($BENGALASM) | 15.9% | 4.5% | 1.2% | 2.1% | 4.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Motilal Oswal Financial Services ($MOTILALOFS) | - | 12.0% | 9.7% | 11.9% | 7.8% |
| Sks Microfinance ($SKSMICRO) | - | - | 4.1% | 6.6% | 7.6% |
| Nalwa Sons Investments ($NSIL) | - | - | - | - | 6.4% |
| Shriram City Union Finance ($SHRIRAMCIT) | 6.1% | 5.8% | 5.8% | 5.7% | 4.6% |
| Rural Electrification Corporation ($RECLTD) | - | 4.7% | 5.2% | 4.7% | 4.3% |
| |
|---|
| Median (48 companies) | 4.1% | 4.6% | 4.1% | 4.1% | 4.2% |
|---|
| Bengal & Assam Company ($BENGALASM) | - | - | - | - | - |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Fortune Financial Services (India) ($FORTUNEF) | 9.0x | - | 10.8x | 8.9x | -0.5x |
| Pnb Gilts ($PNBGILTS) | 14.2x | 11.2x | 11.3x | 8.8x | 15.0x |
| Srei Infrastructure Finance ($SREINFRA) | 7.0x | 6.2x | 7.5x | 8.0x | - |
| Rural Electrification Corporation ($RECLTD) | 8.3x | 8.0x | 7.5x | 8.0x | 7.8x |
| Magma Fincorp ($MAGMA) | 7.7x | 8.5x | 7.0x | 7.7x | 7.5x |
| |
|---|
| Median (47 companies) | 5.1x | 3.6x | 3.4x | 0.0x | 0.0x |
|---|
| Bengal & Assam Company ($BENGALASM) | 4.1x | 3.6x | 3.9x | 3.0x | 2.4x |
