Lakshmi Precision Screws EBITDA dropped on 55.1% and EBITDA Margin decreased on 6.1 pp from 12.4% to 6.3%

15-06-2016 • About Lakshmi Precision Screws ($LAKPRE) • By InTwits

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

EBITDA Margin is quite volatile: 6.3% in FY2016, 12.4% in FY2015, 7.0% in FY2014, 16.2% in FY2013, 15.9% in FY2012
The company has potentially unprofitable business model: ROIC is 2.4%
It operates with high leverage: Net Debt/EBITDA is 9.0x while industry average is 1.9x

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

Revenue and profitability

Lakshmi Precision Screws's Revenue dropped on 12.1%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.1 pp from 12.4% to 6.3% in FY2016.

Net Income margin decreased on 9.4 pp from 0.77% to -8.6% in FY2016.

Return on investment

The company operates at low but positive ROIC (2.4%) and negative ROE (-39.2%). ROIC decreased on 9.5 pp from 11.9% to 2.4% in FY2016. ROE dropped on 42.6 pp from 3.4% to -39.2% in FY2016.

Leverage (Debt)

Debt level is 9.0x Net Debt / EBITDA and 9.5x Debt / EBITDA. Net Debt / EBITDA surged on 4.6x from 4.4x to 9.0x in FY2016. Debt decreased on 9.7% while cash dropped on 32.8%.

Lakshmi Precision Screws has short term refinancing risk: cash is only 7.3% of short term debt.

Financial and operational results

Lakshmi Precision Screws ($LAKPRE) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	3,913	3,670	3,944	4,254	3,740	-12.1%
EBITDA	622	594	278	527	237	-55.1%
Net Income	96	53	-275	33	-323	-1,086.7%
Balance Sheet
Cash	102	121	139	160	107	-32.8%
Short Term Debt	1,388	1,814	1,871	1,611	1,473	-8.5%
Long Term Debt	383	319	525	880	776	-11.7%
Cash flow
Capex	333	93
Ratios
Revenue growth	9.9%	-6.2%	7.5%	7.9%	-12.1%
EBITDA growth	20.3%	-4.5%	-53.2%	89.7%	-55.1%

EBITDA Margin	15.9%	16.2%	7.0%	12.4%	6.3%	-6.1%
Net Income Margin	2.5%	1.4%	-7.0%	0.8%	-8.6%	-9.4%
CAPEX, % of revenue	8.5%	2.5%

ROIC	14.4%	11.9%	3.1%	11.9%	2.4%	-9.5%
ROE	8.4%	4.4%	-25.1%	3.4%	-39.2%	-42.6%
Net Debt/EBITDA	2.7x	3.4x	8.1x	4.4x	9.0x	4.6x

Peers in Iron & Steel Products

Below you can find Lakshmi Precision Screws benchmarking vs. other companies in Iron & Steel 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
Bedmutha Industries ($BEDMUTHA)	-	-7.4%	2.7%	44.6%	52.8%
Apl Apollo Tubes ($APLAPOLLO)	-	44.2%	24.3%	25.7%	34.3%
Vallabh Steels ($VALLABHSQ)	-	-9.7%	-15.7%	-18.8%	15.8%
Electrotherm (India) ($ELECTHERM)	-	-	-	-	11.0%
Nile ($NILE)	-	-19.1%	6.9%	38.7%	10.2%
Median (12 companies)	-	-7.4%	6.9%	12.0%	-9.7%
Lakshmi Precision Screws ($LAKPRE)	-	-6.2%	7.5%	7.9%	-12.1%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Gandhi Special Tubes ($GANDHITUBE)	-	-	-	25.5%	-
National Fittings ($NATFIT)	-	-	-	19.3%	-
Usha Martin ($USHAMART)	13.2%	18.1%	18.7%	16.5%	8.5%
Shree Steel Wire Ropes ($SSWRL)	-	-	-	12.5%	-
Uni Abex Alloy Products ($UNIABEXAL)	-	-	-	7.5%	-
Median (14 companies)	5.5%	6.0%	6.6%	5.8%	4.1%
Lakshmi Precision Screws ($LAKPRE)	15.9%	16.2%	7.0%	12.4%	6.3%

Top companies by CAPEX/Revenue, %


Top	FY2012	FY2013	FY2014	FY2015	FY2016
Usha Martin ($USHAMART)	21.6%	23.5%	29.0%	13.2%	9.2%
Apl Apollo Tubes ($APLAPOLLO)	5.6%	4.2%	5.1%	5.9%	3.0%
Gandhi Special Tubes ($GANDHITUBE)	-	-	-	4.0%	-
Median (3 companies)	5.8%	2.5%	15.4%	5.9%	6.1%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Apl Apollo Tubes ($APLAPOLLO)	18.2%	19.5%	16.0%	16.6%	22.7%
Gandhi Special Tubes ($GANDHITUBE)	28.3%	18.9%	13.2%	11.1%	13.3%
Usha Martin ($USHAMART)	4.3%	6.5%	7.6%	5.6%	0.7%
National Fittings ($NATFIT)	18.6%	22.1%	-	-	-
Uni Abex Alloy Products ($UNIABEXAL)	21.3%	13.5%	-	-	-
Median (23 companies)	8.5%	7.2%	7.6%	11.1%	13.3%
Lakshmi Precision Screws ($LAKPRE)	14.4%	11.9%	3.1%	11.9%	2.4%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Usha Martin ($USHAMART)	10.0x	4.8x	4.8x	5.2x	11.4x
Apl Apollo Tubes ($APLAPOLLO)	2.7x	2.8x	3.1x	2.3x	2.1x
Gujarat Containers ($GUJCONT)	2.6x	2.6x	0.0x	-	0.0x
Mukat Pipes ($MUKATPIP)	-	-	0.0x	-	0.0x
Rathi Bars ($RATHIBAR)	0.0x	3.9x	-	0.0x	0.0x
Median (11 companies)	2.6x	3.4x	0.0x	0.0x	0.0x
Lakshmi Precision Screws ($LAKPRE)	2.7x	3.4x	8.1x	4.4x	9.0x

Lakshmi Precision Screws stock price chart

Lakshmi Precision Screws financials

mln.	FY2010	FY2011	FY2012

Revenue	5,067	3,560	3,913
EBITDA	390.2	516.8	621.6
Net income	69.138	122.7	96.361
CAPEX	90.860	510.8	333.2
Debt	1,226	1,322	1,771
Cash	36.728	98.015	101.5

About Lakshmi Precision Screws

Lakshmi Precision Screws Limited manufactures and sells high tensile fasteners primarily in India. The company's products include bolts and screws, pins, nuts, and allen keys. Its products are used in various sectors, such as wind energy, oil and gas, locomotives, automobiles, agriculture equipment, defense, electronic and communication, construction, tool and die, machine building, and various other sectors. The company also exports its products primarily to the United States, Australia, Canada, Denmark, Dubai, France, Germany, Hong Kong, Indonesia, Japan, Malaysia, Singapore, South Africa, Switzerland, Sweden, etc. Lakshmi Precision Screws Limited was incorporated in 1968 and is headquartered in Rohtak, India.