Prestige Estates Projects reports 35.5% revenue growth in FY2016 and 6.5 pp EBITDA Margin decline from 29.1% to 22.5%
30-05-2016 • About Prestige Estates Projects (
$PRESTIGE) • By InTwits
Prestige Estates Projects reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Prestige Estates Projects is a fast growth stock: FY2016 revenue growth was 35.5%, 5 year revenue CAGR was 24.6% at FY2016 ROIC 9.4%
- Prestige Estates Projects has high CAPEX intensity: 5 year average CAPEX/Revenue was 21.9%. At the same time it's a lot of higher than industry average of 11.0%.
- CAPEX is quite volatile: ₹472m in FY2016, ₹151m in FY2015, ₹3,126m in FY2014, ₹3,094m in FY2013, ₹1,110m in FY2012
- The company has business model with low profitability: ROIC is 9.4%
- It operates with high leverage: Net Debt/EBITDA is 5.3x while industry average is 10.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Prestige Estates Projects's Revenue jumped on 35.5%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 6.5 pp from 29.1% to 22.5% in FY2016.
SG&A as a % of Revenue increased slightly on 0.89 pp from 2.2% to 3.1% in FY2016.
Net Income margin decreased on 2.1 pp from 9.7% to 7.6% in FY2016. During FY2012-FY2016 Net Income margin topped in FY2013 at 14.7% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 Prestige Estates Projects had CAPEX/Revenue of 11.2%. The company's CAPEX/Revenue dropped on 19.0 pp from 30.2% in FY2013 to 11.2% in FY2016. For the last three years the average CAPEX/Revenue was 13.9%. CAPEX as a % of Revenue declined at -7.2 pp per annum in FY2012-FY2016.
Return on investment
The company operates at low ROIC (9.4%) and ROE (8.8%). ROIC decreased on 2.1 pp from 11.5% to 9.4% in FY2016. ROE decreased slightly on 0.96 pp from 9.8% to 8.8% in FY2016. During FY2012-FY2016 ROIC topped in FY2015 at 11.5%. During FY2012-FY2016 ROE topped in FY2013 at 11.7% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.3x and Debt / EBITDA is 5.7x. Net Debt / EBITDA jumped on 1.7x from 3.6x to 5.3x in FY2016. Debt surged on 46.9% while cash decreased on 9.0%.
Prestige Estates Projects has short term refinancing risk: cash is only 19.2% of short term debt.
Valuation and dividends
Prestige Estates Projects's trades at EV/EBITDA 11.8x and P/E 19.3x while industy averages are 17.8x and 21.9x. Prestige Estates Projects's EV/(EBITDA-CAPEX) is 23.4x with the industry average at 22.8x.
Financial and operational results
Prestige Estates Projects ($PRESTIGE) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 10,523 | 19,476 | 25,492 | 34,198 | 46,344 | 35.5% |
| SG&A | | | | 758 | 1,439 | 89.9% |
| EBITDA | 2,992 | 5,811 | 7,277 | 9,939 | 10,437 | 5.0% |
| Net Income | 826 | 2,860 | 3,143 | 3,324 | 3,512 | 5.7% |
Balance Sheet
|
|---|
| Cash | 1,427 | 4,587 | 2,849 | 4,849 | 4,410 | -9.0% |
| Short Term Debt | 10,654 | 14,962 | 19,383 | 23,394 | 22,993 | -1.7% |
| Long Term Debt | 6,930 | 10,427 | 12,159 | 17,162 | 36,567 | 113.1% |
Cash flow
|
|---|
| Capex | 3,969 | 5,887 | 4,782 | 3,971 | 5,184 | 30.6% |
Ratios
|
|---|
| Revenue growth | -31.8% | 85.1% | 30.9% | 34.2% | 35.5% | |
| EBITDA growth | -20.1% | 94.2% | 25.2% | 36.6% | 5.0% | |
|
|---|
| EBITDA Margin | 28.4% | 29.8% | 28.5% | 29.1% | 22.5% | -6.5% |
| SG&A, % of revenue | | | | 2.2% | 3.1% | 0.9% |
| Net Income Margin | 7.8% | 14.7% | 12.3% | 9.7% | 7.6% | -2.1% |
| CAPEX, % of revenue | 37.7% | 30.2% | 18.8% | 11.6% | 11.2% | -0.4% |
|
|---|
| ROIC | 5.9% | 10.5% | 10.6% | 11.5% | 9.4% | -2.1% |
| ROE | 3.9% | 11.7% | 11.0% | 9.8% | 8.8% | -1.0% |
| Net Debt/EBITDA | 5.4x | 3.6x | 3.9x | 3.6x | 5.3x | 1.7x |
Peers in Realty
Below you can find Prestige Estates Projects benchmarking vs. other companies in Realty 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 |
|---|
| Pvp Ventures ($PVP) | - | - | 32.9% | -15.9% | 177.3% |
| Ajmera Realty & Infra India ($AJMERA) | - | -61.7% | -1.8% | 109.9% | 92.0% |
| Peninsula Land ($PENINLAND) | - | 39.2% | -62.3% | -42.4% | 90.2% |
| Oberoi Realty ($OBEROIRLTY) | - | 27.3% | -23.4% | 14.1% | 53.7% |
| Nila Infrastructures ($NILA) | - | - | - | 28.7% | 47.2% |
| |
|---|
| Median (28 companies) | -4.5% | 3.4% | -4.5% | 11.4% | 1.2% |
|---|
| Prestige Estates Projects ($PRESTIGE) | - | 85.1% | 30.9% | 34.2% | 35.5% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Godrej Properties ($GODREJPROP) | 24.9% | 33.3% | 28.9% | 19.4% | 14.7% |
| |
|---|
| Median (1 company) | 24.9% | 33.3% | 28.9% | 19.4% | 14.7% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hubtown ($HUBTOWN) | 53.3% | 72.4% | 67.6% | 82.4% | - |
| Housing Development & Infrastructure ($HDIL) | 75.8% | 40.6% | 102.5% | 78.9% | 68.4% |
| Tci Developers ($TCIDEVELOP) | - | - | - | 75.9% | - |
| Orbit Corporation ($ORBITCORP) | 42.4% | 53.3% | -127.2% | 69.8% | - |
| Oberoi Realty ($OBEROIRLTY) | 59.3% | 58.9% | 54.5% | 56.4% | 47.7% |
| |
|---|
| Median (43 companies) | 19.4% | 13.4% | 19.8% | 19.4% | 16.2% |
|---|
| Prestige Estates Projects ($PRESTIGE) | 28.4% | 29.8% | 28.5% | 29.1% | 22.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Prozone Intu Properties ($PROZONINTU) | - | - | - | 89.5% | - |
| Ashiana Housing ($ASHIANA) | - | - | - | 26.7% | - |
| Brigade Enterprises ($BRIGADE) | 45.7% | 10.7% | 17.0% | 18.5% | 56.3% |
| Parsvnath Developers ($PARSVNATH) | 15.9% | - | 11.6% | 10.6% | 15.6% |
| Vipul ($VIPUL) | 5.0% | 1.9% | 3.3% | 9.4% | 15.7% |
| |
|---|
| Median (30 companies) | 4.7% | 2.3% | 3.5% | 2.3% | 2.9% |
|---|
| Prestige Estates Projects ($PRESTIGE) | 37.7% | 30.2% | 18.8% | 11.6% | 11.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ahluwalia Contracts (India) ($AHLUCONT) | -3.2% | -15.8% | 5.6% | 21.2% | 27.1% |
| Poddar Developers ($PODDARDEV) | 3.9% | 2.6% | 12.9% | 19.1% | 7.5% |
| Lancor Holdings ($LANCORHOL) | 18.0% | 11.6% | 19.5% | 17.7% | - |
| Mahindra Lifespace Developers ($MAHLIFE) | 10.4% | 11.7% | 6.6% | 14.9% | 4.6% |
| Sobha Developers ($SOBHA) | 18.8% | 16.7% | 14.6% | 12.7% | 9.0% |
| |
|---|
| Median (50 companies) | 5.7% | 4.6% | 5.6% | 6.8% | 6.0% |
|---|
| Prestige Estates Projects ($PRESTIGE) | 5.9% | 10.5% | 10.6% | 11.5% | 9.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nitesh Estates ($NITESHEST) | 225.8x | - | 5.1x | 5.9x | 151.9x |
| D B Realty ($DBREALTY) | 13.2x | 135.4x | 14.0x | 54.8x | 51.1x |
| Parsvnath Developers ($PARSVNATH) | 5.1x | 4.7x | 14.6x | 9.0x | 36.3x |
| Vipul ($VIPUL) | 0.7x | 3.0x | 10.8x | 26.0x | 27.7x |
| D.S.Kulkarni Developers ($DSKULKARNI) | 56.4x | 16.0x | 12.2x | 9.8x | 19.6x |
| |
|---|
| Median (30 companies) | 5.1x | 5.1x | 5.0x | 4.0x | 4.1x |
|---|
| Prestige Estates Projects ($PRESTIGE) | 5.4x | 3.6x | 3.9x | 3.6x | 5.3x |
