Hindustan Copper reports 83.8% CAPEX growth in 2016 while 3.9% Revenue decline
30-05-2016 • About Hindustan Copper (
$HINDCOPPER) • By InTwits
Hindustan Copper reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Hindustan Copper is a company in decline: FY2016 revenue growth was -3.9%, 5 years revenue CAGR was -3.7%
- EBITDA Margin is quite volatile: 12.3% in FY2016, 12.6% in FY2015, 34.5% in FY2014, 23.9% in FY2013, 36.8% in FY2012
- Hindustan Copper has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.1%. At the same time it's a lot of higher than industry average of 1.2%.
- CAPEX is quite volatile: ₹2,865m in FY2016, ₹1,559m in FY2015, ₹886m in FY2014, ₹404m in FY2013, ₹201m in FY2012
- The company has unprofitable business model: ROIC is -0.1%
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 decreased on 3.9%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 6.2 pp from 3.6% to 9.8% in FY2016.
Net Income margin decreased on 2.1 pp from 6.7% to 4.5% in FY2016. Net Income margin stuck to a declining trend at -5.5 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 29.7% in FY2016. The company's CAPEX/Revenue surged on 26.6 pp from 3.1% in FY2013 to 29.7% in FY2016. Average CAPEX/Revenue for the last three years was 17.0%. The company has spent a lot to CAPEX (242% of EBITDA) which didn't stop revenue from falling. CAPEX as a % of Revenue grew at 6.9 pp per annum in the last 5 years.
Return on investment
The company operates at negative ROIC (-0.1%) and low but positive ROE (2.3%). ROIC decreased slightly on 0.89 pp from 0.78% to -0.10% in FY2016. ROE decreased slightly on 1.3 pp from 3.6% to 2.3% in FY2016. ROIC stuck to a declining trend at -7.2 pp per annum in the last 5 years. ROE followed a declining trend at -6.5 pp per annum in FY2012-FY2016.
Leverage (Debt)
Debt level is -0.3x Net Debt / EBITDA and 1.7x Debt / EBITDA. Debt surged while cash dropped on 24.9%.
The company has no short term refinancing risk: short term debt is zero.
Valuation and dividends
The company's trades at EV/EBITDA 35.6x and P/E 97.5x while industy averages are 17.8x and 21.9x.
Financial and operational results
Hindustan Copper ($HINDCOPPER) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14,876 | 13,231 | 14,889 | 10,048 | 9,658 | -3.9% |
| EBITDA | 5,469 | 3,158 | 5,130 | 1,271 | 1,184 | -6.8% |
| Net Income | 3,235 | 3,556 | 2,864 | 669 | 436 | -34.9% |
Balance Sheet
|
|---|
| Cash | 397 | 133 | 177 | 3,198 | 2,402 | -24.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 2,072 | |
Cash flow
|
|---|
| Capex | 201 | 404 | 886 | 1,559 | 2,865 | 83.8% |
Ratios
|
|---|
| Revenue growth | 27.5% | -11.1% | 12.5% | -32.5% | -3.9% | |
| EBITDA growth | 38.0% | -42.3% | 62.5% | -75.2% | -6.8% | |
|
|---|
| EBITDA Margin | 36.8% | 23.9% | 34.5% | 12.6% | 12.3% | -0.4% |
| Net Income Margin | 21.7% | 26.9% | 19.2% | 6.7% | 4.5% | -2.1% |
| CAPEX, % of revenue | 1.4% | 3.1% | 6.0% | 15.5% | 29.7% | 14.1% |
|
|---|
| ROIC | 31.2% | 10.7% | 19.0% | 0.8% | -0.1% | -0.9% |
| ROE | 25.1% | 23.4% | 16.5% | 3.6% | 2.3% | -1.3% |
| Net Debt/EBITDA | -0.1x | -0.0x | -0.0x | -2.5x | -0.3x | 2.2x |
Peers in Copper
Below we provide Hindustan Copper benchmarking against other companies in Copper 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Arcotech ($ARCOTECH) | - | 46.0% | 69.3% | 4.9% | 11.0% |
| |
|---|
| Median (1 company) | - | 46.0% | 69.3% | 4.9% | 11.0% |
|---|
| Hindustan Copper ($HINDCOPPER) | - | -11.1% | 12.5% | -32.5% | -3.9% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Arcotech ($ARCOTECH) | 15.2% | 12.9% | 13.6% | 13.0% | 12.3% |
| |
|---|
| Median (1 company) | 15.2% | 12.9% | 13.6% | 13.0% | 12.3% |
|---|
| Hindustan Copper ($HINDCOPPER) | 36.8% | 23.9% | 34.5% | 12.6% | 12.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Arcotech ($ARCOTECH) | 4.0% | 6.2% | 3.5% | 1.4% | 4.3% |
| |
|---|
| Median (1 company) | 4.0% | 6.2% | 3.5% | 1.4% | 4.3% |
|---|
| Hindustan Copper ($HINDCOPPER) | 1.4% | 3.1% | 6.0% | 15.5% | 29.7% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Arcotech ($ARCOTECH) | 25.8% | 21.5% | 25.7% | 21.6% | 18.9% |
| Baroda Extrusion ($BAROEXT) | 2.9% | - | - | - | - |
| |
|---|
| Median (2 companies) | 14.4% | 21.5% | 25.7% | 21.6% | 18.9% |
|---|
| Hindustan Copper ($HINDCOPPER) | 31.2% | 10.7% | 19.0% | 0.8% | -0.1% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Arcotech ($ARCOTECH) | 2.0x | 3.0x | 2.5x | 2.4x | 3.0x |
| |
|---|
| Median (1 company) | 13.3x | 3.0x | 2.5x | 2.4x | 3.0x |
|---|
| Hindustan Copper ($HINDCOPPER) | -0.1x | -0.0x | -0.0x | -2.5x | -0.3x |
