Gallantt Metal reports 22.5% Net Income growth in 2016 while 7.0% Revenue decline
30-05-2016 • About Gallantt Metal (
$GALLANTT) • By InTwits
Gallantt Metal reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Gallantt Metal has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.2%. At the same time it's a lot of higher than industry average of 6.6%.
- CAPEX is quite volatile: ₹868m in FY2016, ₹4,419m in FY2015, ₹189m in FY2014, ₹533m in FY2013, ₹89m in FY2012
- The company has business model with average profitability: ROIC is 11.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Gallantt Metal's Revenue decreased on 7.0%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.81 pp from 9.0% to 9.8% in FY2016.
Net Income margin increased slightly on 1.5 pp from 4.7% to 6.2% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 3.6%. Gallantt Metal's CAPEX/Revenue increased slightly on 1.7 pp from 1.9% in FY2013 to 3.6% in FY2016. It's average CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at good ROE (13.8%) while ROIC is low (11.5%). ROIC showed almost no change in FY2016. ROE increased slightly on 0.92 pp from 12.8% to 13.8% in FY2016.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and 0.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.4x from 1.4x to 0.9x in FY2016. Debt dropped on 31.8% while cash dropped on 80.6%.
Gallantt Metal has short term refinancing risk: cash is only 0.6% of short term debt.
Valuation and dividends
Gallantt Metal's trades at EV/EBITDA 5.1x and P/E 6.7x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 8.2x with the industry average at 22.8x.
Management team
Gallantt Metal's CFO Sandip Kumar Agarwal has spent 6 years with the company.
Financial and operational results
Gallantt Metal ($GALLANTT) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 5,853 | 6,627 | 6,690 | 7,203 | 6,700 | -7.0% |
| EBITDA | 456 | 555 | 482 | 649 | 657 | 1.4% |
| Net Income | 145 | 318 | 151 | 339 | 416 | 22.5% |
Balance Sheet
|
|---|
| Cash | 3 | 25 | 25 | 19 | 4 | -80.6% |
| Short Term Debt | 791 | 368 | 1,212 | 911 | 621 | -31.8% |
| Long Term Debt | 379 | 217 | 63 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 186 | 129 | 291 | 214 | 244 | 14.3% |
Ratios
|
|---|
| Revenue growth | 5.1% | 13.2% | 0.9% | 7.7% | -7.0% | |
| EBITDA growth | -6.7% | 21.8% | -13.2% | 34.7% | 1.4% | |
|
|---|
| EBITDA Margin | 7.8% | 8.4% | 7.2% | 9.0% | 9.8% | 0.8% |
| Net Income Margin | 2.5% | 4.8% | 2.3% | 4.7% | 6.2% | 1.5% |
| CAPEX, % of revenue | 3.2% | 1.9% | 4.3% | 3.0% | 3.6% | 0.7% |
|
|---|
| ROIC | 8.7% | 11.7% | 8.5% | 11.7% | 11.5% | -0.2% |
| ROE | 7.5% | 14.7% | 6.3% | 12.8% | 13.8% | 0.9% |
| Net Debt/EBITDA | 2.6x | 1.0x | 2.6x | 1.4x | 0.9x | -0.4x |
Peers in Iron & Steel/Interm.Products
Below we provide Gallantt Metal 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 |
|---|
| India Steel Works ($ISWL) | - | 20.5% | -15.4% | -16.3% | 13.8% |
| Bhushan Steel ($BHUSANSTL) | - | 3.2% | -5.9% | 10.0% | 10.9% |
| Maithan Alloys ($MAITHANALL) | - | 59.1% | 1.1% | 15.0% | 4.0% |
| Pennar Industries ($PENIND) | - | -8.5% | 0.5% | 12.7% | 3.4% |
| Visa Steel ($VISASTEEL) | - | -24.1% | 42.0% | -12.0% | 1.8% |
| |
|---|
| Median (29 companies) | 23.1% | 5.5% | 3.7% | -1.6% | -15.3% |
|---|
| Gallantt Metal ($GALLANTT) | - | 13.2% | 0.9% | 7.7% | -7.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ramsarup Industries ($RAMSARUP) | -5.1% | -51.9% | -17.8% | - | 82.3% |
| Bhushan Steel ($BHUSANSTL) | 31.2% | 32.3% | 28.1% | 20.4% | 17.7% |
| Jindal Steel & Power ($JINDALSTEL) | 37.5% | 30.5% | 28.1% | 29.8% | 17.2% |
| Tata Metaliks ($TATAMETALI) | -9.6% | 0.9% | 6.8% | 14.6% | 16.8% |
| Jai Corp ($JAICORPLTD) | 14.1% | 16.3% | 16.0% | 12.7% | 15.8% |
| |
|---|
| Median (27 companies) | 9.4% | 9.2% | 7.2% | 7.2% | 7.6% |
|---|
| Gallantt Metal ($GALLANTT) | 7.8% | 8.4% | 7.2% | 9.0% | 9.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jindal Steel & Power ($JINDALSTEL) | 34.2% | 47.6% | 69.6% | 26.4% | 21.8% |
| Steel Authority Of India ($SAIL) | 20.9% | 20.7% | 19.3% | 16.9% | 17.3% |
| Jsw Steel ($JSWSTEEL) | 11.9% | 14.7% | 11.3% | 12.7% | 12.4% |
| Pennar Industries ($PENIND) | 4.8% | 1.8% | 4.5% | 2.4% | 12.3% |
| Sarda Energy & Minerals ($SARDAEN) | 48.9% | 24.1% | 6.1% | 5.5% | 11.1% |
| |
|---|
| Median (16 companies) | 10.4% | 11.7% | 9.2% | 5.4% | 6.3% |
|---|
| Gallantt Metal ($GALLANTT) | 3.2% | 1.9% | 4.3% | 3.0% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Metaliks ($TATAMETALI) | -23.5% | -3.7% | 19.9% | 57.4% | 42.6% |
| Maithan Alloys ($MAITHANALL) | 16.3% | 15.1% | 5.5% | 15.3% | 19.0% |
| Pennar Industries ($PENIND) | 26.8% | 18.4% | 12.3% | 15.7% | 16.6% |
| Kirloskar Ferrous Industries ($KIRLFER) | 19.1% | 16.8% | 12.4% | 14.7% | 15.9% |
| Sunflag Iron & Steel Co ($SUNFLAG) | 7.2% | 5.6% | 8.3% | 11.2% | 13.4% |
| |
|---|
| Median (34 companies) | 6.8% | 5.4% | 5.5% | 4.5% | 3.1% |
|---|
| Gallantt Metal ($GALLANTT) | 8.7% | 11.7% | 8.5% | 11.7% | 11.5% |
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 ($KAJARIR) | 9.2x | 3.0x | 18.2x | 19.8x | 2.5x |
| Ocl Iron And Steel ($OISL) | 164.7x | 1,935.8x | 41.6x | 19.4x | - |
| Bhushan Steel ($BHUSANSTL) | 6.3x | 8.6x | 12.9x | 17.7x | 20.7x |
| |
|---|
| Median (28 companies) | 4.8x | 4.4x | 4.2x | 2.2x | 1.1x |
|---|
| Gallantt Metal ($GALLANTT) | 2.6x | 1.0x | 2.6x | 1.4x | 0.9x |
