Federal Bank reports 24.5% Net Income growth and 9.9% Revenue growth

29 Apr 2015 • About Federal Bank ($FEDS) • By InTwits

Federal Bank reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Federal 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 5.8%.
CAPEX is quite volatile: 3,254 in 2015, 1,358 in 2014, 3,561 in 2013, 6,643 in 2012, 4,872 in 2011
It operates with high leverage: Net Debt/EBITDA is 0.7x while industry average is

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

Federal Bank ($FEDS) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	45,700	61,136	69,108	76,897	84,473	9.9%
Net Income	5,565	7,537	8,527	8,497	10,578	24.5%
Balance Sheet
Cash	29,364	24,297	27,489	31,084	33,820	8.8%
Short Term Debt	1,670	332	302	228	25,361	11,002.9%
Long Term Debt	20,876	47,422	52,390	57,675	23,930	-58.5%
Cash flow
Capex	609	1,035	1,563	1,226	1,211	-1.2%
Ratios
Revenue growth	6.2%	33.8%	13.0%	11.3%	9.9%
Net Income Margin	12.2%	12.3%	12.3%	11.1%	12.5%	1.5%
CAPEX, % of revenue	1.3%	1.7%	2.3%	1.6%	1.4%	-0.2%
ROIC	11.6%	11.8%	10.1%			0.0%
ROE	11.5%	14.2%	14.4%	12.9%	14.5%	1.6%

Revenue and profitability

The company's Revenue increased on 9.9% in FY2015.

Net Income marign increased slightly on 1.5 pp from 11.1% to 12.5% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 1.4%. Federal Bank's CAPEX/Revenue showed almost no change from FY2012 to FY2015. Average CAPEX/Revenue for the last three years was 1.8%.

Leverage (Debt)

Debt dropped on 14.9% in FY2015 while cash increased on 8.8% in FY2015.

Appendix 1: Peers in Banks

Below you can find Federal Bank benchmarking vs. other companies in Banks 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	FY2011	FY2012	FY2013	FY2014	FY2015
European Islamic Investment Bank ($EIIB)	-41.8%	121.2%	12.6%	42.3%
VTB Bank JSC ($VTBR)	23.8%	48.1%	16.5%	29.8%
Bank Audi S.A.L. ($BQAD)	7.1%	9.1%	11.7%	23.9%
Sberbank Of Russia ($SBER)	6.7%	37.2%	25.1%	23.4%
Turk Ekonomi Bankasi As ($TURA)	67.5%	34.8%	6.3%	23.0%
Median (41 companies)	8.9%	10.2%	4.2%	11.5%	2.8%
Federal Bank ($FEDS)		33.8%	13.0%	11.3%	9.9%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Lloyds Banking Group ($LLPC)		8.0%	8.9%	13.1%	13.6%
Banco Santander Sa ($BNC)	2.2%	2.7%	2.6%	8.9%
Finansbank ($FBKD)	2.0%	1.9%	2.8%	8.5%
Guaranty Trust Bank ($GRTB)	10.0%	6.7%	6.1%	6.8%
Diamond Bank ($DBPA)		8.2%	7.9%	6.0%	6.7%
Median (38 companies)	2.4%	2.4%	2.7%	2.1%	3.5%
Federal Bank ($FEDS)	1.3%	1.7%	2.3%	1.6%	1.4%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Commercial Intl Bank(Egypt)S.A.E ($CBKD)	16.3%	21.7%	26.9%	30.1%
Guaranty Trust Bank ($GRTB)	14.2%	19.8%	18.9%	17.8%
Mcb Bank Ltd ($MCBS)	18.7%	15.0%	14.4%	15.8%
Zenith Bank ($ZENB)	13.8%	19.0%	17.6%	15.0%
United Bank Ltd ($UBLS)	12.6%	11.7%	11.8%	13.8%
Median (41 companies)	7.0%	6.0%	5.2%	4.4%	1.3%
Federal Bank ($FEDS)	11.6%	11.8%	10.1%

Federal Bank stock price chart

Federal Bank financials

mln.	FY2010	FY2011	FY2012

Revenue	42,058	45,704	61,139
EBITDA	0.000	0.000	0.000
Net income	4,397	5,565	7,537
CAPEX	614.7	609.1	1,035
Debt	20,283	22,546	47,755
Cash	23,189	29,364	24,297

About Federal Bank

The Federal Bank Limited provides various banking and financial services for individuals, NRI and corporate customers, and SME-businesses in India. It offers savings accounts, current accounts, salary accounts, fixed deposits, cash certificates, and recurring deposits; gold, housing, car, property, educational or career, travel, cash, business, and agriculture and agriculture allied loan products; and loans against deposits, as well as overdraft facility against recurring deposits. The company also provides account, and fund and cash transfer services, as well as working capital finance, term finance, trade finance, specialized corporate finance, structured finance, and syndication services. In addition, it offers safe deposit lockers, NRI and value added services, online trading and depository services, e-commerce services, and value added services. Further, the company provides mobile banking, Internet banking, and ATM services; life and general insurance products; and mutual funds; debit, gift, and travel cards, as well as treasury products and services. As of March 31, 2014, it operated through a network of 1,174 branches and 1,359 ATMs. The company was formerly known as Travancore Federal Bank Limited and changed its name to The Federal Bank Limited in March 1947. The Federal Bank Limited was incorporated in 1931 and is headquartered in Aluva, India.