Garg Furnace reports 166% EBITDA decline in 2016 and 43.7% Revenue decline

30-05-2016 • About Garg Furnace ($GARGFUR) • By InTwits

Garg Furnace reported FY2016 financial results today. Here are the key drivers of the company's long term financial model: Garg Furnace is a company in decline: FY2016 revenue growth was -43.7%, 5 years revenue CAGR was -13.6%.

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

Revenue and profitability

Garg Furnace's Revenue dropped on 43.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.8 pp from 6.6% to 9.5% in FY2016.

Net Income margin dropped on 15.0 pp from 0.33% to -14.7% in FY2016.

Financial and operational results

Garg Furnace ($GARGFUR) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	2,056	2,116	1,648	1,599	900	-43.7%
EBITDA	50	86		77	-51	-165.6%
Net Income	18	9	9	5	-132	-2,572.3%
Balance Sheet
Cash	3	23
Short Term Debt	264	337
Long Term Debt	89	67
Cash flow
Ratios
Revenue growth	10.1%	2.9%	-22.1%	-3.0%	-43.7%
EBITDA growth	20.3%	74.0%			-165.6%
EBITDA Margin	2.4%	4.1%		4.8%	-5.6%	-10.5%
Net Income Margin	0.9%	0.4%	0.6%	0.3%	-14.7%	-15.0%
ROIC	6.8%	10.6%
ROE	6.3%	3.1%
Net Debt/EBITDA	7.1x	4.4x		0.0x

Peers in Iron & Steel/Interm.Products

Below you can find Garg Furnace benchmarking vs. other companies in Iron & Steel/Interm.Products 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
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 ($VISASTEEL)	-	-24.1%	42.0%	-12.0%	1.8%
Median (29 companies)	23.1%	8.8%	3.7%	-0.4%	-13.1%
Garg Furnace ($GARGFUR)	-	2.9%	-22.1%	-3.0%	-43.7%

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 ($JAICORPLTD)	14.1%	16.3%	16.0%	12.7%	15.8%
Median (27 companies)	9.4%	9.2%	7.2%	7.3%	9.2%
Garg Furnace ($GARGFUR)	2.4%	4.1%	-	4.8%	-5.6%

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 (17 companies)	10.2%	11.7%	8.3%	5.3%	6.1%

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 ($SUNFLAG)	7.2%	5.6%	8.3%	11.2%	13.4%
Median (34 companies)	7.2%	5.4%	5.8%	4.6%	3.2%
Garg Furnace ($GARGFUR)	6.8%	10.6%	-	-	-

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 ($BHUSANSTL)	6.3x	8.6x	12.9x	17.7x	20.7x
Median (28 companies)	4.6x	4.4x	3.8x	2.2x	0.9x
Garg Furnace ($GARGFUR)	7.1x	4.4x	-	0.0x	-

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