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Financial Technologies (India) Net Income dropped on 92.9% while Revenue increased on 6.5%

26-05-2017 • About Financial Technologies (India) ($FINANTECH) • By InTwits

Financial Technologies (India) reported FY2017 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • The company operates at negative EBITDA Margin: -57.3%
  • Financial Technologies (India) motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2013-FY2017 was 0.0% while average EBITDA Margin was -19.4% for the sames years
  • The company has unprofitable business model: ROIC is -4.3%
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 increased on 6.5%. During the last 5 years Revenue growth bottomed in FY2015 at -62.4% and was accelerating since that time. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 52.2 pp from -110% to -57.3% in FY2017.

Net Income margin dropped on 150 pp from 161% to 10.6% in FY2017.

Investments (CAPEX, working capital and M&A)


In FY2017 Financial Technologies (India) had CAPEX/Revenue of 9.2%. The company showed CAPEX/Revenue growth of 9.2 pp from in FY2014 to 9.2% in FY2017. For the last three years the average CAPEX/Revenue was 7.0%.

Return on investment


The company operates at negative ROIC (-4.3%) and low but positive ROE (0.7%). ROIC increased on 3.1 pp from -7.4% to -4.3% in FY2017. ROE dropped on 10.1 pp from 10.8% to 0.73% in FY2017.

Leverage (Debt)


Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is . Net Debt / EBITDA didn't change in FY2017. Debt decreased on 2.3% while cash jumped on 14.4%.

Financial Technologies (India) has no short term refinancing risk: cash is higher than short term debt (112.2%).

Financial and operational results


FY ended 31-03-2017

Financial Technologies (India) ($FINANTECH) key annual financial indicators

mln. INR201320142015201620172017/2016
P&L
Revenue7,4035,5732,0952,0402,1726.5%
SG&A174
EBITDA2,113-2,368-2,235-1,245
Net Income2,2744,2673,275231-92.9%
Balance Sheet
Cash2,9334,8443,8924,45114.4%
Short Term Debt2,59010203,968
Long Term Debt12,3304,8045,0911,008-80.2%
Cash flow
Capex84413711020082.4%
Ratios
Revenue growth51.7%-24.7%-62.4%-2.6%6.5%
EBITDA growth4,717.3%-5.6%-44.3%
EBITDA Margin28.5%-113.0%-109.6%-57.3%52.2%
SG&A, % of revenue8.5%
Net Income Margin30.7%203.7%160.6%10.6%-149.9%
CAPEX, % of revenue11.4%6.5%5.4%9.2%3.8%
ROIC5.6%-7.4%-4.3%3.1%
ROE13.0%10.8%0.7%-10.1%
Net Debt/EBITDA5.7x

Peers in IT Consulting & Software


Below you can find Financial Technologies (India) benchmarking vs. other companies in IT Consulting & Software 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 FY2013 FY2014 FY2015 FY2016 FY2017
Mindtree ($MINDTREE)23.2%28.8%17.0%31.8%-
Ramco Systems ($RAMCOSYS)7.3%9.9%37.0%24.2%-
Sqs India Bfsi ($SQSBFSI)32.9%20.4%10.1%23.4%-
Infinite Computer Solutions (India) ($INFINITE)31.7%24.6%0.3%21.3%-
Tech Mahindra ($TECHM)25.2%174.0%20.1%17.1%-
 
Median (23 companies)20.0%14.0%10.1%10.4%-25.6%
Financial Technologies (India) ($FINANTECH)--24.7%-62.4%-2.6%6.5%


Top companies by Gross margin, %

Top  FY2013 FY2014 FY2015 FY2016 FY2017
Tata Consultancy Services ($TCS)-47.4%42.4%43.9%-
Infosys ($INFY)98.1%35.9%38.3%37.4%-
Mindtree ($MINDTREE)36.2%-34.8%32.4%-
Wipro ($WIPRO)30.4%32.0%31.6%30.4%-
 
Median (4 companies)36.2%35.9%36.6%34.9%-


Top companies by EBITDA margin, %

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
Oracle Financial Services Software ($OFSS)35.2%37.4%39.7%41.1%-
Tata Consultancy Services ($TCS)28.6%30.7%26.1%28.2%-
Infosys ($INFY)27.9%26.3%27.1%27.1%-
Wipro ($WIPRO)20.9%22.4%22.3%21.1%-
Ramco Systems ($RAMCOSYS)-2.8%4.9%18.8%20.3%-
 
Median (22 companies)16.5%18.3%13.2%14.0%-
Financial Technologies (India) ($FINANTECH)28.5%--113.0%-109.6%-57.3%


Top companies by CAPEX/Revenue, %

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
Ramco Systems ($RAMCOSYS)22.1%15.3%12.4%10.3%-
Niit Technologies ($NIITTECH)4.6%6.1%7.9%6.0%-
Infosys ($INFY)5.2%5.5%4.2%4.4%-
Cyient ($CYIENT)3.9%3.5%3.0%4.2%-
Kpit Technologies ($KPIT)3.1%2.6%3.1%3.9%-
 
Median (18 companies)3.1%2.9%3.0%2.5%-
Financial Technologies (India) ($FINANTECH)11.4%-6.5%5.4%9.2%


Top companies by ROIC, %

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
Oracle Financial Services Software ($OFSS)16.8%16.3%24.2%45.7%-
Tata Consultancy Services ($TCS)48.4%50.2%40.5%44.4%-
Sqs India Bfsi ($SQSBFSI)27.0%29.4%30.6%39.9%-
Mindtree ($MINDTREE)34.6%36.2%32.0%28.9%-
Infosys ($INFY)28.3%27.2%25.1%25.3%-
 
Median (30 companies)20.7%22.9%20.6%20.5%-
Financial Technologies (India) ($FINANTECH)5.6%---7.4%-4.3%


Top companies by Net Debt / EBITDA

Top 5 FY2013 FY2014 FY2015 FY2016 FY2017
Agc Networks ($AGCNET)10.1x-4.6x22.8x-
3I Infotech ($3IINFOTECH)20.3x27.7x14.7x6.8x-
Onward Technologies ($ONWARDTEC)2.2x4.1x1.9x1.2x-
Wipro ($WIPRO)-0.3x-0.6x-0.8x0.2x-
Asm Technologies ($ASMTEC)2.1x-0.0x0.0x-
 
Median (25 companies)-0.2x-0.3x-0.2x-0.2x-


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