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Aurionpro Solutions reports 138% Net Income growth in 2016 while 3.8 pp EBITDA Margin decline from 16.9% to 13.0%

31-05-2016 • About Aurionpro Solutions ($AURIONPRO) • By InTwits

Aurionpro Solutions reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Aurionpro Solutions has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.4%. At the same time it's a lot of higher than industry average of 4.2%.
  • CAPEX is quite volatile: ₹147m in FY2016, ₹126m in FY2015, ₹54m in FY2014, ₹106m in FY2013, ₹522m in FY2012
  • The company has business model with average profitability: ROIC is 11.0%
  • It operates with medium-size leverage: Net Debt/EBITDA is 1.3x while industry average is -0.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


Aurionpro Solutions's Revenue decreased on 3.6%. During the last 5 years Revenue growth topped in FY2013 at 17.7% and was decelerating since that time. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 3.8 pp from 16.9% to 13.0% in FY2016.

Net Income margin surged on 27.1 pp from -19.5% to 7.6% in FY2016.

Investments (CAPEX, working capital and M&A)


In FY2016 Aurionpro Solutions had CAPEX/Revenue of 6.1%. The company's CAPEX/Revenue decreased on 6.1 pp from 12.3% in FY2013 to 6.1% in FY2016. For the last three years the average CAPEX/Revenue was 10.7%.

Return on investment


The company operates at low ROIC (11.0%) and ROE (10.1%). ROIC decreased slightly on 1.2 pp from 12.1% to 11.0% in FY2016. ROE surged on 36.6 pp from -26.5% to 10.1% in FY2016.

Leverage (Debt)


Debt level is 1.3x Net Debt / EBITDA and 1.6x Debt / EBITDA. Net Debt / EBITDA increased on 0.1x from 1.2x to 1.3x in FY2016. Debt dropped on 14.9% while cash surged on 24.3%.

Aurionpro Solutions has short term refinancing risk: cash is only 26.4% of short term debt.

Valuation and dividends


Aurionpro Solutions's trades at EV/EBITDA 4.5x and P/E 5.5x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 8.5x with the industry average at 22.8x.

Management team


Aurionpro Solutions's CEO is Samir Shah. Samir Shah has 6 years tenure with the company.

Financial and operational results


Aurionpro Solutions ($AURIONPRO) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue4,8275,6836,4877,3697,104-3.6%
EBITDA7678257761,245927-25.6%
Net Income435458600-1,438542
Balance Sheet
Cash10512830125331424.3%
Short Term Debt7491,3561,5581,2401,193-3.8%
Long Term Debt645160248538321-40.3%
Cash flow
Capex845696815984435-55.8%
Ratios
Revenue growth13.9%17.7%14.2%13.6%-3.6%
EBITDA growth-15.2%7.4%-5.8%60.3%-25.6%
EBITDA Margin15.9%14.5%12.0%16.9%13.0%-3.8%
Net Income Margin9.0%8.1%9.3%-19.5%7.6%27.1%
CAPEX, % of revenue17.5%12.3%12.6%13.4%6.1%-7.2%
ROIC8.6%8.6%5.9%12.1%11.0%-1.2%
ROE11.7%10.6%11.2%-26.5%10.1%36.6%
Net Debt/EBITDA1.7x1.7x1.9x1.2x1.3x0.1x

Peers in IT Software Products


Below you can find Aurionpro Solutions benchmarking vs. other companies in IT Software 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
Trigyn Technologies ($TRIGYN)-27.1%29.8%9.1%26.9%
Tata Elxsi ($TATAELXSI)-15.4%24.6%9.6%26.6%
Polaris Financial Technology ($POLARIS)-10.2%7.3%-21.9%7.6%
Cranes Software International ($CRANESSOFT)-14.8%9.4%8.4%5.6%
Saksoft ($SAKSOFT)-29.5%41.1%3.1%5.3%
 
Median (14 companies)11.9%15.4%21.8%9.4%-1.8%
Aurionpro Solutions ($AURIONPRO)-17.7%14.2%13.6%-3.6%


Top companies by EBITDA margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Atishay Infotech ($ATISHAY)35.7%28.1%25.8%24.5%21.9%
Subex ($SUBEX)27.3%17.0%24.9%23.6%20.8%
Tata Elxsi ($TATAELXSI)13.8%11.9%17.6%20.9%23.0%
Cambridge Technology Enterprises ($CTE)---20.9%-
Virinchi Technologies ($VIRNICHIQ)---17.4%-
 
Median (23 companies)7.5%8.5%9.9%9.2%10.0%
Aurionpro Solutions ($AURIONPRO)15.9%14.5%12.0%16.9%13.0%


Top companies by CAPEX/Revenue, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Dion Global Solutions ($DION)39.9%11.9%29.6%4.0%18.4%
Tata Elxsi ($TATAELXSI)5.3%5.4%3.1%3.9%3.6%
Datamatics Global Services ($DATAMATICS)20.2%3.1%12.9%2.2%3.5%
Mastek ($MASTKBBPH)2.2%-0.0%4.9%2.4%
Polaris Financial Technology ($POLARIS)7.2%2.5%1.5%3.9%1.6%
 
Median (7 companies)3.1%4.3%1.9%2.2%2.4%
Aurionpro Solutions ($AURIONPRO)17.5%12.3%12.6%13.4%6.1%


Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Tata Elxsi ($TATAELXSI)22.5%19.1%38.3%55.4%65.9%
Polaris Financial Technology ($POLARIS)19.5%15.1%12.6%16.2%24.8%
Saksoft ($SAKSOFT)11.0%13.5%--22.3%
Mindteck (India) ($MINDTECK)-2.6%1.2%20.0%17.5%10.6%
Datamatics Global Services ($DATAMATICS)9.8%11.4%16.4%11.3%7.8%
 
Median (26 companies)3.8%4.7%16.3%13.8%10.6%
Aurionpro Solutions ($AURIONPRO)8.6%8.6%5.9%12.1%11.0%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Subex ($SUBEX)4.6x13.1x8.5x8.0x0.9x
Dion Global Solutions ($DION)11.8x11.3x-7.4x-
Saksoft ($SAKSOFT)2.8x2.3x0.0x1.2x0.3x
Datamatics Global Services ($DATAMATICS)0.5x0.3x0.5x0.3x0.4x
Virinchi Technologies ($VIRNICHIQ)0.8x1.1x-0.0x-
 
Median (19 companies)0.5x0.0x0.0x0.0x0.0x
Aurionpro Solutions ($AURIONPRO)1.7x1.7x1.9x1.2x1.3x


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