Marg EBITDA Margin dropped on 13.0 pp from 13.0% to in 2016

01-06-2016 • About Marg ($MARG) • By InTwits

Marg reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:

Marg is a company in decline: FY2016 revenue growth was -2.9%, 5 years revenue CAGR was -16.6%
It operates with high leverage: Net Debt/EBITDA is 12.6x while industry average is 11.1x

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

Revenue and profitability

Marg's Revenue decreased on 2.9%. During the last 5 years Revenue growth bottomed in FY2014 at -39.1% and was accelerating since that time.

Net Income margin jumped on 61.5 pp from -110% to -48.6% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2015 at -110%.

Financial and operational results

Marg ($MARG) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	10,074	9,414	5,737	3,920	3,805	-2.9%
EBITDA	1,151	934		508
Net Income	11	-1,598	-5,575	-4,320	-1,851
Balance Sheet
Cash	462
Short Term Debt	7,494
Long Term Debt	23,311
Cash flow
Capex	8,559
Ratios
Revenue growth	7.0%	-6.6%	-39.1%	-31.7%	-2.9%
EBITDA growth	-23.7%	-18.9%

EBITDA Margin	11.4%	9.9%		13.0%
Net Income Margin	0.1%	-17.0%	-97.2%	-110.2%	-48.6%	61.5%
CAPEX, % of revenue	85.0%

ROIC	2.1%
ROE	0.3%
Net Debt/EBITDA	26.4x	0.0x		0.0x

Peers in Realty

Below we provide Marg benchmarking against other companies in Realty 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 5	FY2012	FY2013	FY2014	FY2015	FY2016
Pvp Ventures ($PVP)	-	-	32.9%	-15.9%	177.3%
Sunteck Realty ($SUNTECK)	-	77.7%	2,963.6%	-67.3%	159.7%
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 ($OBEROIRLTY)	-	27.3%	-23.4%	14.1%	53.7%
Median (31 companies)	-21.1%	5.6%	-1.8%	13.2%	1.4%
Marg ($MARG)	-	-6.6%	-39.1%	-31.7%	-2.9%

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 ($OBEROIRLTY)	59.3%	58.9%	54.5%	56.4%	47.7%
Median (43 companies)	20.1%	18.1%	20.0%	22.6%	17.1%
Marg ($MARG)	11.4%	9.9%	-	13.0%	-

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 ($BRIGADE)	45.7%	10.7%	17.0%	18.5%	56.3%
Prestige Estates Projects ($PRESTIGE)	37.7%	30.2%	18.8%	11.6%	11.2%
Parsvnath Developers ($PARSVNATH)	15.9%	-	11.6%	10.6%	15.6%
Median (31 companies)	4.7%	2.5%	3.6%	2.4%	2.9%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Ahluwalia Contracts (India) ($AHLUCONT)	-3.2%	-15.8%	5.6%	21.2%	27.1%
Ashiana Housing ($ASHIANA)	34.1%	6.6%	5.8%	6.0%	20.4%
B.L.Kashyap And Sons ($BLKASHYAP)	4.4%	6.9%	2.6%	-2.6%	20.2%
Ajmera Realty & Infra India ($AJMERA)	6.6%	2.3%	2.4%	8.3%	14.2%
Brigade Enterprises ($BRIGADE)	4.5%	6.2%	9.3%	10.5%	10.9%
Median (45 companies)	5.9%	4.9%	5.6%	6.8%	6.9%
Marg ($MARG)	2.1%	-	-	-	-

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 (33 companies)	5.1x	5.1x	5.0x	4.0x	4.2x

Marg stock price chart

Marg financials

mln.	FY2010	FY2011	FY2012

Revenue	4,690	9,418	10,074
EBITDA	832.0	1,509	1,151
Net income	114.3	182.3	10.600
CAPEX	5,465	6,055	8,559
Debt	18,204	24,807	30,805
Cash	998.6	692.6	461.8

About Marg

MARG Limited engages in the construction and infrastructure development business in India. It operates in four segments: EPC, Urban Infrastructure Development, Port and Logistics, and Leasing. The company provides integrated turnkey solutions, such as design, engineering, material procurement, field services, and construction and project management services for infrastructure sector and real estate projects. It also develops and operates ports that handle bulk, break bulk, liquid bulk, and various types of containers, as well as offers integrated logistics services to the EXIM Customers of Karaikal Port. In addition, the company is involved in the development of residential and commercial projects; and sale and short term rental/lease of integrated industrial and services townships. Further, it provides education services through its educational institutions; leases digital zones; and develops multi level car parking projects. The company was formerly known as Marg Constructions Limited and changed its name to MARG Limited in December 2007. MARG Limited was founded in 1994 and is based in Chennai, India.