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Ajel Net Income dropped on 148% while EBITDA Margin increased on 3.9 pp from -11.7% to -7.8%

16-09-2020 • About Ajel ($AJEL) • By InTwits

Ajel reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Ajel is a company in decline: FY2020 revenue growth was -22.1%, 5 years revenue CAGR was -29.5%
  • The company operates at negative EBITDA Margin: -7.8%
  • Ajel motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 0.0% while average EBITDA Margin was -0.5% for the sames years
  • In the last 5 years the company invested considerably less than D&A: ₹2m vs. ₹11m
  • The company has unprofitable business model: ROIC is -2.3%
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 dropped on 22.1%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.9 pp from -11.7% to -7.8% in FY2020.

Net Income margin dropped on 28.1 pp from 17.4% to -10.7% in FY2020.

Return on investment

The company operates at negative ROIC (-2.3%) and ROE (-3.4%).

Leverage (Debt)

Debt level is Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2020. Debt increased on 6.2% while cash jumped on 90.9%.

Ajel has no short term refinancing risk: cash is higher than short term debt (306.7%).

Financial and operational results

Ajel ($AJEL) key annual financial indicators

mln. INR201620172018201920202020/2019
Net Income-4.6-7.9-9.59.5-4.6-147.9%
Balance Sheet
Short Term Debt0.21.9997.2%
Long Term Debt46.848.02.5%
Cash flow
Revenue growth-16.9%-25.6%-55.4%-18.6%-22.1%
EBITDA growth-179.2%-48.1%

EBITDA Margin3.5%-11.7%-7.8%3.9%
EBIT Margin-2.2%
Net Income Margin-2.3%-5.2%-14.2%17.4%-10.7%-28.1%
CAPEX, % of revenue3.2%

Insider ownership44.2%

Ajel ($AJEL) key quoterly financial indicators

mln. INRFY20Q1FY20Q2FY20Q3FY20Q4 YoY change
Revenue1212109 ----
Net Income-11-0-4 ----
Balance Sheet
Net Income Margin -5.5% 7.1% -4.6% -48.7% ----

Peers in IT Consulting & Software

Below we provide Ajel benchmarking against other companies in IT Consulting & Software 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  FY2016 FY2017 FY2018 FY2019 FY2020
Hexaware Technologies ($HEXAWARE)13.2%11.5%17.9%20.1%-
Median (1 company)10.4%9.0%33.0%20.1%-
Ajel ($AJEL)--25.6%-55.4%-18.6%-22.1%

Top companies by EBITDA margin, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Hexaware Technologies ($HEXAWARE)16.3%16.6%15.8%15.7%-
Median (1 company)14.3%-20.4%-3.5%15.7%-
Ajel ($AJEL)3.5%---11.7%-7.8%

Top companies by CAPEX/Revenue, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Hexaware Technologies ($HEXAWARE)6.3%2.4%1.3%2.3%-
Median (1 company)2.9%5.8%3.0%2.3%-
Ajel ($AJEL)---3.2%-

Top companies by ROIC, %

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Hexaware Technologies ($HEXAWARE)33.8%33.5%32.3%30.7%-
Median (1 company)20.5%14.6%14.7%30.7%-
Ajel ($AJEL)-----2.3%

Top companies by Net Debt / EBITDA

Top  FY2016 FY2017 FY2018 FY2019 FY2020
Hexaware Technologies ($HEXAWARE)-0.5x-0.8x-1.1x-0.1x-
Median (1 company)-0.2x-0.8x-1.1x-0.1x-