Electrosteel Castings reports 625% Net Income growth in 2017 while 5.7% Revenue decline
15-05-2017 • About Electrosteel Castings (
$ELECTCAST) • By InTwits
Electrosteel Castings reported FY2017 financial results today. Here are the key drivers of the company's long term financial model:
- Electrosteel Castings has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.0%. At the same time it's in pair with industry average of 6.0%
- CAPEX is quite volatile: ₹318m in FY2017, ₹382m in FY2016, ₹1,386m in FY2015, ₹1,625m in FY2014, ₹3,030m in FY2013
- The company has potentially unprofitable business model: ROIC is 4.6%
- It operates with high leverage: Net Debt/EBITDA is 5.2x while industry average is 96.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased on 5.7%. Revenue decline was accelerating on average at -4.3 pp per annum in the last 5 years. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.6 pp from 12.3% to 13.9% in FY2017.
Net Income margin increased on 8.2 pp from -1.2% to 6.9% in FY2017.
Investments (CAPEX, working capital and M&A)
In FY2017 the company had CAPEX/Revenue of 1.5%. The company's CAPEX/Revenue decreased on 5.3 pp from 6.9% in FY2014 to 1.5% in FY2017. For the last three years the average CAPEX/Revenue was 3.0%. CAPEX as a % of Revenue declined at -3.0 pp per annum in FY2013-FY2017.
Return on investment
The company operates at low ROIC (4.6%) and ROE (5.9%). ROIC showed almost no change in FY2017. ROE increased on 7.1 pp from -1.2% to 5.9% in FY2017.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.2x and Debt / EBITDA is 6.4x. Net Debt / EBITDA dropped on 1.7x from 6.9x to 5.2x in FY2017. Debt decreased on 8.0% while cash surged on 154%.
Electrosteel Castings has short term refinancing risk: cash is only 49.6% of short term debt.
Financial and operational results
FY ended 31-03-2017
Electrosteel Castings ($ELECTCAST) key annual financial indicators| mln. INR | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 21,544 | 23,674 | 24,018 | 22,042 | 20,785 | -5.7% |
| EBITDA | 1,981 | 3,546 | 3,085 | 2,709 | 2,882 | 6.4% |
| Net Income | -239 | -159 | -1,161 | -274 | 1,441 | |
Balance Sheet
|
|---|
| Cash | 1,342 | 1,250 | 1,179 | 1,403 | 3,566 | 154.1% |
| Short Term Debt | 12,123 | 10,173 | 12,753 | 8,622 | 7,193 | -16.6% |
| Long Term Debt | 12,178 | 15,533 | 12,967 | 11,525 | 11,350 | -1.5% |
Cash flow
|
|---|
| Capex | 3,030 | 1,625 | 1,386 | 382 | 318 | -16.9% |
Ratios
|
|---|
| Revenue growth | 6.7% | 9.9% | 1.5% | -8.2% | -5.7% | |
| EBITDA growth | -4.5% | 79.0% | -13.0% | -12.2% | 6.4% | |
|
|---|
| EBITDA Margin | 9.2% | 15.0% | 12.8% | 12.3% | 13.9% | 1.6% |
| Net Income Margin | -1.1% | -0.7% | -4.8% | -1.2% | 6.9% | 8.2% |
| CAPEX, % of revenue | 14.1% | 6.9% | 5.8% | 1.7% | 1.5% | -0.2% |
|
|---|
| ROIC | 3.4% | 6.3% | 5.0% | 4.6% | 4.6% | 0.1% |
| ROE | -1.2% | -0.7% | -5.4% | -1.2% | 5.9% | 7.1% |
| Net Debt/EBITDA | 11.6x | 6.9x | 8.0x | 6.9x | 5.2x | -1.7x |
Peers in Construction & Engineering
Below we provide Electrosteel Castings benchmarking against other companies in Construction & Engineering 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Ramky Infrastructure ($RAMKY) | -5.0% | -37.9% | -33.6% | 44.2% | - |
| Shristi Infrastructure Development Corporation ($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 ($SKIPPER) | 21.5% | 15.7% | 26.0% | 14.7% | - |
| |
|---|
| Median (29 companies) | 7.1% | 6.6% | -0.0% | -4.9% | 15.5% |
|---|
| Electrosteel Castings ($ELECTCAST) | - | 9.9% | 1.5% | -8.2% | -5.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Madhucon Projects ($MADHUCON) | 31.9% | 22.1% | 32.1% | 40.2% | - |
| Shristi Infrastructure Development Corporation ($SHRISTI) | 30.0% | 30.0% | 29.8% | 29.6% | - |
| Jaiprakash Associates ($JPASSOCIAT) | 35.9% | 32.4% | 31.5% | 27.6% | - |
| Pba Infrastructure ($PBAINFRA) | 15.8% | - | - | 21.2% | - |
| Supreme Infrastructure India ($SUPREMEINF) | 15.6% | 17.5% | 20.0% | 19.7% | - |
| |
|---|
| Median (25 companies) | 11.3% | 10.2% | 9.9% | 10.5% | 7.9% |
|---|
| Electrosteel Castings ($ELECTCAST) | 9.2% | 15.0% | 12.8% | 12.3% | 13.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Shristi Infrastructure Development Corporation ($SHRISTI) | 11.2% | 14.1% | 40.8% | 25.2% | - |
| Jaiprakash Associates ($JPASSOCIAT) | 65.5% | 45.0% | 31.6% | 18.9% | - |
| Supreme Infrastructure India ($SUPREMEINF) | 31.1% | 43.1% | 45.8% | 14.8% | - |
| Mbl Infrastructures ($MBLINFRA) | 12.7% | 11.7% | 9.6% | 14.8% | - |
| Ramky Infrastructure ($RAMKY) | 11.9% | 8.6% | 1.4% | 6.8% | - |
| |
|---|
| Median (19 companies) | 6.6% | 4.0% | 3.1% | 3.5% | 2.5% |
|---|
| Electrosteel Castings ($ELECTCAST) | 14.1% | 6.9% | 5.8% | 1.7% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Skipper ($SKIPPER) | 13.5% | 14.7% | 27.4% | 24.4% | - |
| Voltas ($VOLTAS) | 11.7% | 11.8% | 19.3% | 18.2% | - |
| Itd Cementation India ($ITDCEM) | 11.3% | 3.8% | 12.6% | 15.8% | - |
| Spml Infra ($SPMLINFRA) | 9.7% | 7.1% | 10.6% | 13.1% | - |
| Mbl Infrastructures ($MBLINFRA) | 13.4% | 14.0% | 13.6% | 11.2% | - |
| |
|---|
| Median (38 companies) | 7.5% | 5.6% | 6.8% | 7.2% | 8.2% |
|---|
| Electrosteel Castings ($ELECTCAST) | 3.4% | 6.3% | 5.0% | 4.6% | 4.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Mcnally Bharat Engineering Company ($MBECL) | 7.0x | 7.6x | 28.3x | 2,779.7x | - |
| Atlanta ($ATLANTA) | 4.8x | 6.4x | 7.6x | 71.7x | - |
| Ramky Infrastructure ($RAMKY) | 4.6x | - | - | 20.6x | - |
| Supreme Infrastructure India ($SUPREMEINF) | 6.1x | 6.8x | 11.3x | 16.2x | - |
| Jaiprakash Associates ($JPASSOCIAT) | 8.9x | 11.0x | 11.9x | 14.1x | - |
| |
|---|
| Median (26 companies) | 5.2x | 5.4x | 2.7x | 4.7x | 8.5x |
|---|
| Electrosteel Castings ($ELECTCAST) | 11.6x | 6.9x | 8.0x | 6.9x | 5.2x |
