Ramky Infrastructure CAPEX jumped on 597% and Revenue jumped on 44.2%

31-05-2016 • About Ramky Infrastructure ($RAMKY) • By InTwits

Ramky Infrastructure reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

EBITDA Margin is quite volatile: 8.6% in FY2016, -9.2% in FY2015, -9.6% in FY2014, 14.7% in FY2013, 15.5% in FY2012
Ramky Infrastructure has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.8%. At the same time it's a lot of higher than industry average of 5.8%.
CAPEX is quite volatile: ₹1,468m in FY2016, ₹211m in FY2015, ₹1,941m in FY2014, ₹4,346m in FY2013, ₹4,084m in FY2012
The company has potentially unprofitable business model: ROIC is 2.3%
It operates with high leverage: Net Debt/EBITDA is 20.6x while industry average is 90.3x

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

Revenue and profitability

Ramky Infrastructure's Revenue surged on 44.2%. During the last 5 years Revenue growth bottomed in FY2014 at -37.9% and was accelerating since that time. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin jumped on 17.8 pp from -9.2% to 8.6% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2014 at -9.6% and was growing since that time.

Net Income margin surged on 32.9 pp from -32.1% to 0.80% in FY2016. During the last 5 years Net Income margin bottomed in FY2015 at -32.1%.

Investments (CAPEX, working capital and M&A)

Ramky Infrastructure's CAPEX/Revenue was 6.8% in FY2016. Ramky Infrastructure's CAPEX/Revenue decreased on 5.1 pp from 11.9% in FY2013 to 6.8% in FY2016. It's average level of CAPEX/Revenue for the last three years was 5.6%. The company invested a big chunk of EBITDA (78.5%) to CAPEX to fuel its growth.

Return on investment

The company operates at low ROIC (2.3%) and ROE (2.2%). ROIC increased on 7.3 pp from -5.0% to 2.3% in FY2016. ROE jumped on 49.7 pp from -47.5% to 2.2% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2014 at -6.2% and was growing since that time. During the last 5 years ROE bottomed in FY2015 at -47.5%.

Leverage (Debt)

Debt level is 20.6x Net Debt / EBITDA and 21.4x Debt / EBITDA. Net Debt / EBITDA surged20.6x from to 20.6x in FY2016. Debt jumped on 11.5% while cash surged on 42.0%.

Ramky Infrastructure has short term refinancing risk: cash is only 19.1% of short term debt.

Valuation and dividends

Ramky Infrastructure's trades at EV/EBITDA 22.9x and P/E 24.3x while industy averages are 17.8x and 21.9x. Ramky Infrastructure's EV/(EBITDA-CAPEX) is 106.4x with the industry average at 22.8x.

Financial and operational results

Ramky Infrastructure ($RAMKY) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	38,477	36,551	22,698	15,061	21,714	44.2%
EBITDA	5,950	5,388	-2,176	-1,382	1,870
Net Income	2,441	1,513	-4,149	-4,830	173
Balance Sheet
Cash	693	732	475	1,014	1,441	42.0%
Short Term Debt	8,855	10,264	13,807	15,587	7,527	-51.7%
Long Term Debt	10,511	15,423	17,736	20,268	32,450	60.1%
Cash flow
Capex	4,084	4,346	1,941	211	1,468	597.4%
Ratios
Revenue growth	22.3%	-5.0%	-37.9%	-33.6%	44.2%
EBITDA growth	34.8%	-9.4%	-140.4%	-36.5%	-235.3%

EBITDA Margin	15.5%	14.7%	-9.6%	-9.2%	8.6%	17.8%
Net Income Margin	6.3%	4.1%	-18.3%	-32.1%	0.8%	32.9%
CAPEX, % of revenue	10.6%	11.9%	8.6%	1.4%	6.8%	5.4%

ROIC	18.9%	12.2%	-6.2%	-5.0%	2.3%	7.3%
ROE	21.0%	10.7%	-29.7%	-47.5%	2.2%	49.7%
Net Debt/EBITDA	3.1x	4.6x			20.6x

Peers in Construction & Engineering

Below you can find Ramky Infrastructure benchmarking vs. other companies in Construction & Engineering 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
Shristi Infrastructure Development Corporation ($SHRISTI)	-	-2.1%	-2.3%	1.0%	28.2%
Prakash Constrowell ($PRAKASHCON)	-	19.4%	-3.4%	-26.4%	23.8%
Mbl Infrastructures ($MBLINFRA)	-	7.1%	30.3%	11.1%	19.4%
Skipper ($SKIPPER)	-	21.5%	15.7%	26.0%	14.7%
Madhucon Projects ($MADHUCON)	-	61.7%	81.2%	26.0%	14.6%
Median (28 companies)	-11.6%	6.9%	7.1%	1.2%	-6.8%
Ramky Infrastructure ($RAMKY)	-	-5.0%	-37.9%	-33.6%	44.2%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Madhucon Projects ($MADHUCON)	8.4%	31.9%	22.1%	32.1%	40.2%
Jaiprakash Associates ($JPASSOCIAT)	36.9%	35.9%	32.4%	31.5%	27.6%
Arss Infrastructure Projects ($ARSSINFRA)	14.0%	13.9%	22.0%	31.3%	-
Reliance Industrial Infrastructure ($RIIL)	-	-	-	30.8%	-
Shristi Infrastructure Development Corporation ($SHRISTI)	27.2%	30.0%	30.0%	29.8%	29.6%
Median (37 companies)	11.9%	11.2%	10.7%	10.3%	10.9%
Ramky Infrastructure ($RAMKY)	15.5%	14.7%	-9.6%	-9.2%	8.6%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Shristi Infrastructure Development Corporation ($SHRISTI)	0.0%	11.2%	14.1%	40.8%	25.2%
Jaiprakash Associates ($JPASSOCIAT)	97.0%	65.5%	45.0%	31.6%	18.9%
Supreme Infrastructure India ($SUPREMEINF)	46.6%	31.1%	43.1%	45.8%	14.8%
Mbl Infrastructures ($MBLINFRA)	7.0%	12.7%	11.7%	9.6%	14.8%
Skipper ($SKIPPER)	7.6%	6.6%	3.1%	2.5%	6.7%
Median (19 companies)	7.3%	6.6%	4.0%	3.2%	3.5%
Ramky Infrastructure ($RAMKY)	10.6%	11.9%	8.6%	1.4%	6.8%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Skipper ($SKIPPER)	10.4%	13.5%	14.7%	27.4%	24.4%
Voltas ($VOLTAS)	19.6%	11.7%	11.8%	19.3%	18.2%
Spml Infra ($SPMLINFRA)	8.6%	9.7%	7.1%	10.6%	13.1%
Mbl Infrastructures ($MBLINFRA)	21.3%	13.4%	14.0%	13.6%	11.2%
Madhucon Projects ($MADHUCON)	-2.4%	0.7%	3.8%	7.5%	10.9%
Median (35 companies)	8.6%	7.1%	6.3%	6.8%	6.8%
Ramky Infrastructure ($RAMKY)	18.9%	12.2%	-6.2%	-5.0%	2.3%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Mcnally Bharat Engineering Company ($MBECL)	4.3x	7.0x	7.6x	28.3x	2,779.7x
Atlanta ($ATLANTA)	10.7x	4.8x	6.4x	7.6x	71.7x
Supreme Infrastructure India ($SUPREMEINF)	6.0x	6.1x	6.8x	11.3x	16.2x
Jaiprakash Associates ($JPASSOCIAT)	9.2x	8.9x	11.0x	11.9x	14.1x
Shristi Infrastructure Development Corporation ($SHRISTI)	11.8x	8.6x	7.9x	9.4x	8.8x
Median (25 companies)	4.7x	5.5x	5.9x	2.9x	5.0x
Ramky Infrastructure ($RAMKY)	3.1x	4.6x	-	-	20.6x

Ramky Infrastructure stock price chart

Ramky Infrastructure financials

mln.	FY2010	FY2011	FY2012

Revenue	18,238	31,469	38,477
EBITDA	2,440	4,414	5,950
Net income	1,274	2,061	2,441
CAPEX	200.2	4,033	4,084
Debt	10,119	11,296	19,367
Cash	3,499	1,846	692.9

About Ramky Infrastructure

Ramky Infrastructure Limited, together with its subsidiaries, provides integrated construction, infrastructure development, and management services primarily in India. The company operates through Construction and Developer divisions. The Construction division undertakes water and waste water projects, such as water treatment plants, water transmission and distribution systems, elevated and ground level service reservoirs, sewage treatment plants, common effluent treatment plants, tertiary treatment plants, underground drainage systems, and lake restorations; and irrigation projects, including cross-drainage works, lift irrigation projects, dams, and barrages. This division is also involved in industrial construction projects comprising industrial parks and SEZs; transportation projects, such as expressways, highways, bridges, flyovers, and dedicated service corridors; commercial, residential, public, institutional, corporate, and mass housing buildings, as well as related infrastructure and facilities, including hospitals and shopping malls; and power transmission and distribution projects comprising electricity transmission networks, substation feeder lines, and low tension distribution lines. The Developer division undertakes various development projects, including industrial parks, transportation, integrated townships, and energy projects on a public private partnership basis with the government. In addition, the company provides consultancy services in various areas, such as infrastructure development, waste management, environment, and property development. It also has operations in Gabon, West Africa, and the United Arab Emirates. Ramky Infrastructure Limited was founded in 1994 and is based in Hyderabad, India.