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TCS Group Holding reports 45.6% Net Income decline

02 Mar 2016 • About TCS Group Holding ($TCS) • By InTwits

TCS Group Holding reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • TCS Group Holding has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 5.3%.
  • CAPEX is quite volatile: 1,726 in 2015, 126 in 2014, 341 in 2013, 558 in 2012, 253 in 2011
  • The company has potentially unprofitable business model: ROIC is at 3.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

TCS Group Holding ($TCS) key annual financial indicators

mln. RUB201120122013201420152015/2014
P&L
Revenue9,97820,18735,12039,17643,34210.6%
Net Income2,0113,7875,7583,4011,850-45.6%
Balance Sheet
Cash5,46714,66619,85711,38514,36426.2%
Short Term Debt0517010,3316,392-38.1%
Long Term Debt13,26427,08332,88530,66516,514-46.1%
Cash flow
Capex2535583411261,7261,267.1%
Ratios
Revenue growth120.8%102.3%74.0%11.5%10.6%
Net Income Margin20.2%18.8%16.4%8.7%4.3%-4.4%
CAPEX, % of revenue2.5%2.8%1.0%0.3%4.0%3.7%
ROIC21.7%16.6%14.2%6.7%3.4%-3.3%
ROE85.0%58.7%39.0%16.3%8.4%-7.9%

Revenue and profitability


The company's Revenue surged on 10.6% in 2015.

Net Income marign decreased on 4.4 pp from 8.7% to 4.3% in 2015.

Capital expenditures (CAPEX) and working capital investments


The company's CAPEX/Revenue was 4.0% in 2015. CAPEX/Revenue increased slightly on 1.2 pp from 2.8% in 2012 to 4.0% in 2015. It's average level of CAPEX/Revenue for the last three years was 1.8%.

Return on investment


The company operates at low ROIC (3.44%) and ROE (8.43%). ROIC decreased on 3.3 pp from 6.7% to 3.4% in 2015. ROE decreased on 7.9 pp from 16.3% to 8.4% in 2015.

Leverage (Debt)


Debt dropped on 44.1% in 2015 while cash jumped on 26.2% in 2015.

Appendix 1: Peers in Banks


Below you can find TCS Group Holding 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
Banque Intl Arabe De Tunisie ($BIND)9.5%-20.2%17.3%50.2%
European Islamic Investment Bank ($EIIB)-41.8%121.2%12.6%42.3%
Tsb Banking Grp ($TSB)-3.2%-33.8%39.2%-1.4%
VTB Bank JSC ($VTBR)23.8%48.1%16.5%29.8%
Bank Audi S.A.L. ($BQAD)9.1%11.7%23.9%7.1%
 
Median (43 companies)6.4%9.3%4.2%12.1%3.7%
TCS Group Holding ($TCS)102.3%74.0%11.5%10.6%


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%10.2%
Finansbank ($FBKD)2.0%1.9%2.8%8.5%2.7%
Tsb Banking Grp ($TSB)1.3%1.8%4.4%7.2%3.4%
Guaranty Trust Bank ($GRTB)10.0%6.7%6.1%6.8%
 
Median (40 companies)2.3%2.2%2.8%2.2%2.4%
TCS Group Holding ($TCS)2.5%2.8%1.0%0.3%4.0%


Top companies by ROIC, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Commercial Intl Bank(Egypt)S.A.E ($CBKD)16.3%21.7%26.9%30.1%30.3%
Guaranty Trust Bank ($GRTB)14.2%19.8%18.9%17.8%
Mcb Bank Ltd ($MCBS)18.7%15.0%14.4%15.8%14.9%
Zenith Bank ($ZENB)13.8%19.0%17.6%15.0%
United Bank Ltd ($UBLS)12.6%11.7%11.8%13.8%12.6%
 
Median (43 companies)6.9%6.0%5.3%4.4%3.3%
TCS Group Holding ($TCS)21.7%16.6%14.2%6.7%3.4%