Dhanlaxmi Bank reports 14.0% revenue decline in FY2016

30-05-2016 • About Dhanlaxmi Bank ($DHANBANK) • By InTwits

Dhanlaxmi Bank reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:

Dhanlaxmi Bank has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's in pair with industry average of 1.7%
CAPEX is quite volatile: ₹94m in FY2016, ₹111m in FY2015, ₹281m in FY2014, ₹242m in FY2013, ₹458m in FY2012
The company has unprofitable business model: ROIC is -14.9%
It operates with medium-size leverage: Net Debt/EBITDA is 0.4x while industry average is

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Dhanlaxmi Bank's Revenue dropped on 14.0%.

Net Income margin showed almost no change in FY2016.

Investments (CAPEX, working capital and M&A)

In FY2016 Dhanlaxmi Bank had CAPEX/Revenue of 0.77%. CAPEX/Revenue decreased slightly on 0.93 pp from 1.7% in FY2013 to 0.77% in FY2016. For the last three years the average CAPEX/Revenue was 1.3%. CAPEX as a % of Revenue followed a declining trend at -0.53 pp per annum in FY2012-FY2016.

Return on investment

The company operates at negative ROIC (-14.9%) and ROE (-34.0%). ROIC decreased on 7.1 pp from -7.7% to -14.9% in FY2016. ROE decreased slightly on 0.93 pp from -33.1% to -34.0% in FY2016. ROIC stuck to a declining trend at -3.0 pp per annum in the last 5 years.

Leverage (Debt)

Debt dropped on 81.3% while cash dropped on 13.4%.

Dhanlaxmi Bank has no short term refinancing risk: cash is higher than short term debt (395.3%).

Management team

Dhanlaxmi Bank's CEO is G Sreeram. G Sreeram has 5 years tenure with the company. Bhasi K V is a Dhanlaxmi Bank's CFO. Bhasi K V has spent 5 years at the company.

Financial and operational results

Dhanlaxmi Bank ($DHANBANK) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	15,363	14,219	12,723	14,183	12,203	-14.0%
Net Income	-1,156	26	-2,519	-2,415	-2,095
Balance Sheet
Cash	8,679	5,098	6,302	6,693	5,795	-13.4%
Short Term Debt	28,257	18,504	16,323	13,764	1,466	-89.3%
Long Term Debt	5,244	4,667	3,171	1,839	1,452	-21.0%
Cash flow
Capex	458	242	281	111	94	-15.6%
Ratios
Revenue growth	45.9%	-7.4%	-10.5%	11.5%	-14.0%

Net Income Margin	-7.5%	0.2%	-19.8%	-17.0%	-17.2%	-0.1%
CAPEX, % of revenue	3.0%	1.7%	2.2%	0.8%	0.8%	-0.0%

ROIC	-3.5%	-0.6%	-6.6%	-7.7%	-14.9%	-7.1%
ROE	-14.7%	0.4%	-33.5%	-33.1%	-34.0%	-0.9%

Peers in Banks

Below you can find Dhanlaxmi Bank benchmarking vs. other companies in Banks 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
Kotak Mahindra Bank ($KOTAKBANK)	-	22.9%	7.1%	26.1%	29.2%
Dcb Bank ($DCBBANK)	-	26.2%	22.5%	25.3%	20.8%
Yes Bank ($YESBANK)	-	33.7%	21.6%	17.7%	18.9%
Axis Bank ($AXISBANK)	-	24.5%	13.1%	15.6%	14.9%
Lakshmi Vilas Bank ($LAKSHVILAS)	-	16.7%	11.7%	14.2%	14.6%
Median (28 companies)	-	16.7%	11.2%	10.2%	2.5%
Dhanlaxmi Bank ($DHANBANK)	-	-7.4%	-10.5%	11.5%	-14.0%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Indian Overseas Bank ($IOB)	1.1%	1.0%	0.9%	0.6%	4.8%
Union Bank Of India ($UNIONBANK)	1.2%	1.3%	1.2%	1.0%	4.4%
Indian Bank ($INDIANB)	1.2%	1.3%	1.0%	1.4%	4.3%
Axis Bank ($AXISBANK)	1.4%	1.4%	1.6%	1.2%	2.9%
Lakshmi Vilas Bank ($LAKSHVILAS)	2.1%	1.4%	1.6%	2.4%	2.4%
Median (28 companies)	1.2%	1.2%	1.2%	1.3%	1.3%
Dhanlaxmi Bank ($DHANBANK)	3.0%	1.7%	2.2%	0.8%	0.8%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Karur Vysya Bank ($KARURVYSYA)	14.5%	11.0%	5.3%	5.7%	12.4%
Karnataka Bank ($KTKBANK)	6.8%	10.2%	7.7%	10.4%	10.1%
Yes Bank ($YESBANK)	9.8%	8.4%	8.4%	8.7%	9.0%
Axis Bank ($AXISBANK)	9.6%	8.9%	9.1%	8.8%	7.6%
Kotak Mahindra Bank ($KOTAKBANK)	6.8%	6.5%	7.1%	8.5%	7.3%
Median (28 companies)	7.6%	6.5%	3.4%	4.5%	3.9%
Dhanlaxmi Bank ($DHANBANK)	-3.5%	-0.6%	-6.6%	-7.7%	-14.9%

Dhanlaxmi Bank stock price chart

Dhanlaxmi Bank financials

mln.	FY2010	FY2011	FY2012

Revenue	16,689	10,527	15,363
EBITDA	0.000	0.000	0.000
Net income	233.0	260.6	-1,156.270
CAPEX	543.9	718.9	457.6
Debt	3,051	16,428	33,502
Cash	6,129	8,028	8,679

About Dhanlaxmi Bank

Dhanlaxmi Bank Limited provides various banking and financial services in India. It offers deposit products, such as savings and current accounts, and term deposits; loans, including property, car, commercial, personal, education, and business loans, as well as loans against securities; and foreign exchange services comprising foreign currency cash, cheque deposits, foreign currency demand drafts, remittances, and foreign exchange cards. The company also provides investment products, such as gold coins and silver bars; export and import services; credit products comprising industrial and trade advance, import export assistance, and agricultural assistance; corporate salary products; and cash management services, as well as life, health, car, travel, and house and shop insurance products. In addition, it offers non-resident Indians banking, micro and agricultural banking, and financial planning services; and SME banking services, including working capital facilities, trade facilities, and capacity expansion services. Further, the company provides credit, debit, and gift cards; online services comprising mobile banking, bill payment, InstaPay, shopping, e-IT return filing, immediate payment, and mobile/DTH recharge services; and other services, including locker facilities and depository services. It serves corporate and institutional clients; micro, small, and medium enterprises; and individuals, traders, contractors, businessmen, professionals, etc. As of March 31, 2014, the company had 266 branches and 396 ATMs. Dhanlaxmi Bank Limited was founded in 1927 and is headquartered in Thrissur, India.