Bgr Energy Systems reports 130% EBITDA growth in 2016 and 5.7 pp EBITDA Margin growth from 4.0% to 9.7%
30-05-2016 • About Bgr Energy Systems (
$BGRENERGY) • By InTwits
Bgr Energy Systems reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Bgr Energy Systems is a company in decline: FY2016 revenue growth was -5.3%, 5 years revenue CAGR was -7.7%
- EBITDA Margin is quite volatile: 9.7% in FY2016, 4.0% in FY2015, 12.2% in FY2014, 14.6% in FY2013, 14.1% in FY2012
- Bgr Energy Systems has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's a lot of higher than industry average of 7.7%.
- CAPEX is quite volatile: ₹978m in FY2016, ₹105m in FY2015, ₹126m in FY2014, ₹1,826m in FY2013, ₹1,475m in FY2012
- The company has business model with low profitability: ROIC is 7.4%
- It operates with high leverage: Net Debt/EBITDA is 6.9x while industry average is 1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Bgr Energy Systems's Revenue decreased on 5.3%. During FY2012-FY2016 Revenue growth topped in FY2014 at 6.0% and was decelerating since that time. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.7 pp from 4.0% to 9.7% in FY2016.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income margin increased on 3.2 pp from -2.4% to 0.87% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2015 at -2.4%.
Investments (CAPEX, working capital and M&A)
In FY2016 Bgr Energy Systems had CAPEX/Revenue of 3.1%. CAPEX/Revenue decreased on 2.8 pp from 5.9% in FY2013 to 3.1% in FY2016. It's average level of CAPEX/Revenue for the last three years was 1.3%.
Return on investment
The company operates at low ROIC (7.4%) and ROE (2.2%). ROIC increased on 4.6 pp from 2.8% to 7.4% in FY2016. ROE increased on 8.6 pp from -6.4% to 2.2% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2015 at 2.8%. ROE followed a declining trend at -5.9 pp per annum in FY2012-FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.9x and Debt / EBITDA is 7.5x. Net Debt / EBITDA dropped on 6.0x from 13.0x to 6.9x in FY2016. Debt increased on 8.7% while cash dropped on 57.8%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2015 at 13.0x.
Bgr Energy Systems has short term refinancing risk: cash is only 8.3% of short term debt.
Valuation and dividends
Bgr Energy Systems's trades at EV/EBITDA 9.5x and P/E 28.9x while industy averages are 17.8x and 21.9x. Bgr Energy Systems's EV/(EBITDA-CAPEX) is 13.9x with the industry average at 22.8x.
Management team
Bgr Energy Systems's CEO is A Swaminathan. A Swaminathan has 7 years tenure with the company.
Financial and operational results
Bgr Energy Systems ($BGRENERGY) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 34,505 | 31,133 | 33,009 | 33,663 | 31,884 | -5.3% |
| SG&A | | | | 95 | 106 | 11.7% |
| EBITDA | 4,848 | 4,549 | 4,032 | 1,342 | 3,089 | 130.1% |
| Net Income | 2,242 | 1,621 | 961 | -799 | 276 | |
Balance Sheet
|
|---|
| Cash | 5,192 | 6,350 | 3,698 | 3,764 | 1,587 | -57.8% |
| Short Term Debt | 17,267 | 22,031 | 20,119 | 17,660 | 19,135 | 8.3% |
| Long Term Debt | 424 | 131 | 78 | 3,518 | 3,896 | 10.8% |
Cash flow
|
|---|
| Capex | 1,475 | 1,826 | 126 | 105 | 978 | 828.9% |
Ratios
|
|---|
| Revenue growth | -27.4% | -9.8% | 6.0% | 2.0% | -5.3% | |
| EBITDA growth | -17.7% | -6.2% | -11.4% | -66.7% | 130.1% | |
|
|---|
| EBITDA Margin | 14.1% | 14.6% | 12.2% | 4.0% | 9.7% | 5.7% |
| SG&A, % of revenue | | | | 0.3% | 0.3% | 0.1% |
| Net Income Margin | 6.5% | 5.2% | 2.9% | -2.4% | 0.9% | 3.2% |
| CAPEX, % of revenue | 4.3% | 5.9% | 0.4% | 0.3% | 3.1% | 2.8% |
|
|---|
| ROIC | 15.5% | 11.9% | 9.7% | 2.8% | 7.4% | 4.6% |
| ROE | 21.7% | 13.8% | 7.6% | -6.4% | 2.2% | 8.6% |
| Net Debt/EBITDA | 2.6x | 3.5x | 4.1x | 13.0x | 6.9x | -6.0x |
Peers in Heavy Electrical Equipment
Below you can find Bgr Energy Systems benchmarking vs. other companies in Heavy Electrical Equipment 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 |
|---|
| Ujaas Energy ($UJAAS) | - | 614.7% | 116.7% | -78.9% | 149.4% |
| Techno Electric And Engineering Co. ($TECHNO) | - | -15.7% | 1.7% | 12.6% | 38.9% |
| Techno Electric & Engineering Company ($TECHELE) | - | -15.7% | 1.7% | 12.6% | 38.9% |
| Voltamp Transformers ($VOLTAMP) | - | -7.7% | -13.7% | 16.2% | 9.0% |
| Transformers And Rectifiers (India) ($TRIL) | - | -1.3% | 42.8% | -24.3% | 7.4% |
| |
|---|
| Median (16 companies) | - | -5.3% | 0.8% | 3.7% | -6.1% |
|---|
| Bgr Energy Systems ($BGRENERGY) | - | -9.8% | 6.0% | 2.0% | -5.3% |
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% |
| Sterlite Technologies ($STRTECH) | 7.5% | 7.5% | 10.8% | 15.0% | 20.9% |
| Techno Electric And Engineering Co. ($TECHNO) | 27.0% | 34.5% | 28.5% | 26.5% | 20.2% |
| Techno Electric & Engineering Company ($TECHELE) | 27.0% | 34.5% | 28.5% | 26.5% | 20.2% |
| Suzlon Energy ($SUZLON) | 8.9% | -5.3% | 0.8% | 4.0% | 11.7% |
| |
|---|
| Median (15 companies) | 8.9% | 8.1% | 6.4% | 7.1% | 7.7% |
|---|
| Bgr Energy Systems ($BGRENERGY) | 14.1% | 14.6% | 12.2% | 4.0% | 9.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Swelect Energy Systems ($SWELECTES) | 5.1% | 42.5% | 50.8% | 21.8% | 44.0% |
| Sterlite Technologies ($STRTECH) | 24.9% | 47.2% | 64.9% | 37.4% | 10.3% |
| Bharat Heavy Electricals ($BHEL) | 3.3% | 3.6% | 4.1% | 1.1% | 5.3% |
| Suzlon Energy ($SUZLON) | 4.2% | 3.7% | 3.4% | 3.7% | 4.3% |
| T D Power Systems ($TDPOWERSYS) | 3.7% | 14.5% | 15.1% | 3.8% | 3.4% |
| |
|---|
| Median (13 companies) | 5.4% | 3.0% | 2.4% | 2.5% | 2.6% |
|---|
| Bgr Energy Systems ($BGRENERGY) | 4.3% | 5.9% | 0.4% | 0.3% | 3.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ujaas Energy ($UJAAS) | 0.0% | 28.5% | 33.7% | 10.2% | 16.2% |
| Techno Electric And Engineering Co. ($TECHNO) | 15.5% | 12.6% | 9.3% | 10.2% | 11.3% |
| Techno Electric & Engineering Company ($TECHELE) | 15.5% | 12.6% | 9.3% | 10.2% | 11.3% |
| Voltamp Transformers ($VOLTAMP) | 8.7% | 6.5% | 1.9% | 5.4% | 9.8% |
| Suzlon Energy ($SUZLON) | 6.2% | -9.4% | -3.5% | -0.1% | 9.4% |
| |
|---|
| Median (17 companies) | 14.1% | 6.3% | 7.4% | 4.1% | 4.0% |
|---|
| Bgr Energy Systems ($BGRENERGY) | 15.5% | 11.9% | 9.7% | 2.8% | 7.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Emco ($EMCO) | 8.1x | 7.3x | 5.7x | 7.3x | 11.2x |
| Suzlon Energy ($SUZLON) | 6.1x | - | 87.6x | 19.1x | 9.5x |
| Schneider Electric Infrastructure ($SCHNEIDER) | 2.2x | 5.5x | - | - | 4.2x |
| Transformers And Rectifiers (India) ($TRIL) | -0.9x | 4.2x | 4.1x | 4.8x | 3.6x |
| Swelect Energy Systems ($SWELECTES) | 0.5x | 1.3x | 5.0x | -8.1x | 3.0x |
| |
|---|
| Median (14 companies) | 1.6x | 2.6x | 2.5x | 2.6x | 1.9x |
|---|
| Bgr Energy Systems ($BGRENERGY) | 2.6x | 3.5x | 4.1x | 13.0x | 6.9x |
