Axis Bank Net Income dropped on 88.5% while Revenue increased slightly on 1.5%
26-04-2018 • About Axis Bank (
$AXISBANK) • By InTwits
Axis Bank reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Axis Bank has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's in pair with industry average of 1.6%
- CAPEX is quite volatile: ₹8,550m in FY2018, ₹7,737m in FY2017, ₹14,944m in FY2016, ₹5,386m in FY2015, ₹6,078m in FY2014
- The company has potentially unprofitable business model: ROIC is 0.2%
- It operates with high leverage: Net Debt/EBITDA is 9.0x while industry average is
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased slightly on 1.5%. During FY2014-FY2018 Revenue growth topped in FY2015 at 15.6% and was decelerating since that time.
Net Income margin decreased on 6.1 pp from 6.9% to 0.78% in FY2018. Net Income margin stuck to a declining trend at -4.1 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 1.5%. CAPEX/Revenue showed almost no change from FY2015 to FY2018. Average CAPEX/Revenue for the last three years was 1.9%.
Return on investment
The company operates at low ROIC (0.2%) and ROE (0.8%). ROIC decreased on 2.8 pp from 3.1% to 0.25% in FY2018. ROE decreased on 6.4 pp from 7.2% to 0.76% in FY2018. ROIC followed a declining trend at -2.3 pp per annum in FY2014-FY2018. ROE followed a declining trend at -4.4 pp per annum in FY2014-FY2018.
Leverage (Debt)
Debt surged on 35.3% while cash surged on 15.0%.
Axis Bank has no short term refinancing risk: cash is higher than short term debt (151.9%).
Financial and operational results
FY ended 31-03-2018
Axis Bank ($AXISBANK) key annual financial indicators| mln. INR | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 386,025 | 446,166 | 512,801 | 575,967 | 584,767 | 1.5% |
| Net Income | 63,101 | 74,479 | 83,497 | 39,530 | 4,558 | -88.5% |
Balance Sheet
|
|---|
| Cash | 170,414 | 198,188 | 223,612 | 308,579 | 354,811 | 15.0% |
| Short Term Debt | 187,333 | 162,944 | 157,172 | 199,690 | 233,588 | 17.0% |
| Long Term Debt | 527,392 | 843,935 | 1,138,477 | 1,124,548 | 1,557,671 | 38.5% |
Cash flow
|
|---|
| Capex | 6,078 | 5,386 | 14,944 | 7,737 | 8,550 | 10.5% |
Ratios
|
|---|
| Revenue growth | 13.1% | 15.6% | 14.9% | 12.3% | 1.5% | |
|
|---|
| Net Income Margin | 16.3% | 16.7% | 16.3% | 6.9% | 0.8% | -6.1% |
| CAPEX, % of revenue | 1.6% | 1.2% | 2.9% | 1.3% | 1.5% | 0.1% |
|
|---|
| ROIC | 9.1% | 8.8% | 7.6% | 3.1% | 0.2% | -2.8% |
| ROE | 17.6% | 17.9% | 17.0% | 7.2% | 0.8% | -6.4% |
Peers in Banks
Below we provide Axis Bank benchmarking against other companies in Banks 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Federal Bank ($FEDERALBNK) | 31.9% | -7.4% | 2.2% | 14.3% | - |
| State Bank Of India ($SBIN) | 12.2% | 14.1% | 5.9% | 8.7% | - |
| Standard Chartered Plc ($STAN) | - | -15.4% | -6.0% | 7.1% | - |
| |
|---|
| Median (3 companies) | 10.6% | 10.2% | 2.0% | 8.7% | - |
|---|
| Axis Bank ($AXISBANK) | - | 15.6% | 14.9% | 12.3% | 1.5% |
Top companies by CAPEX/Revenue, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| State Bank Of India ($SBIN) | 1.4% | 1.3% | 1.4% | 1.5% | - |
| Federal Bank ($FEDERALBNK) | 1.3% | 1.4% | 1.9% | 1.0% | - |
| Standard Chartered Plc ($STAN) | 0.8% | 0.6% | 1.0% | 0.8% | - |
| |
|---|
| Median (3 companies) | 1.2% | 1.3% | 1.2% | 1.0% | - |
|---|
| Axis Bank ($AXISBANK) | 1.6% | 1.2% | 2.9% | 1.3% | 1.5% |
Top companies by ROIC, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Federal Bank ($FEDERALBNK) | - | - | 4.7% | 6.1% | - |
| Standard Chartered Plc ($STAN) | 2.7% | -0.5% | 0.6% | 1.5% | - |
| State Bank Of India ($SBIN) | 4.9% | 5.5% | 3.2% | 0.1% | - |
| |
|---|
| Median (3 companies) | 3.2% | 4.2% | 3.6% | 1.5% | - |
|---|
| Axis Bank ($AXISBANK) | 9.1% | 8.8% | 7.6% | 3.1% | 0.2% |
