Electrosteel Castings Debt dropped on 20.9% in 2016 and Revenue dropped on 11.7%
14 May 2016 • About Electrosteel Castings (
$ECS) • By InTwits
Electrosteel Castings reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Electrosteel Castings has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.0%. At the same time it's in pair with industry average of 6.8%.
- CAPEX is quite volatile: 434 in FY2016, 1,386 in FY2015, 1,625 in FY2014, 3,030 in FY2013, 2,491 in FY2012
- The company has potentially unprofitable business model: ROIC is at 5.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 6.6x while industry average is 7.6x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Electrosteel Castings ($ECS) key annual financial indicators
| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 21,017 | 22,141 | 24,592 | 24,018 | 21,216 | -11.7% |
| EBITDA | 2,074 | 1,981 | 3,546 | 3,085 | 2,882 | -6.6% |
| Net Income | -270 | -239 | -159 | -1,161 | -332 | -71.4% |
Balance Sheet
|
|---|
| Cash | 291 | 1,342 | 1,250 | 1,179 | 1,257 | 6.6% |
| Short Term Debt | 10,305 | 12,123 | 10,173 | 12,753 | 8,737 | -31.5% |
| Long Term Debt | 8,657 | 12,178 | 15,533 | 12,967 | 11,602 | -10.5% |
Cash flow
|
|---|
| Capex | 2,491 | 3,030 | 1,625 | 1,386 | 434 | -68.7% |
Ratios
|
|---|
| Revenue growth | 12.4% | 5.3% | 11.1% | -2.3% | -11.7% | |
| EBITDA growth | -23.2% | -4.5% | 79.0% | -13.0% | -6.6% | |
| EBITDA Margin | 9.9% | 8.9% | 14.4% | 12.8% | 13.6% | 0.7% |
| Net Income Margin | -1.3% | -1.1% | -0.6% | -4.8% | -1.6% | 3.3% |
| CAPEX, % of revenue | 11.9% | 13.7% | 6.6% | 5.8% | 2.0% | -3.7% |
| ROIC | 4.3% | 3.4% | 6.3% | 5.0% | 5.1% | 0.1% |
| ROE | -1.6% | -1.2% | -0.7% | -5.4% | -1.6% | 3.8% |
| Net Debt/EBITDA | 9.0x | 11.6x | 6.9x | 8.0x | 6.6x | -1.3x |
Revenue and profitability
Electrosteel Castings's Revenue dropped on 11.7% in FY2016. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.74 pp from 12.8% to 13.6% in FY2016.
Net Income marign increased on 3.3 pp from -4.8% to -1.6% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.0% in FY2016. The company's CAPEX/Revenue dropped on 11.6 pp from 13.7% in FY2013 to 2.0% in FY2016. It's average CAPEX/Revenue for the last three years was 4.8%.
Return on investment
The company operates at low but positive ROIC (5.05%) and negative ROE (-1.63%). ROIC showed almost no change in FY2016. ROE increased on 3.8 pp from -5.4% to -1.6% in FY2016.
Leverage (Debt)
Debt level is 6.6x Net Debt / EBITDA and 7.1x Debt / EBITDA. Net Debt / EBITDA dropped on 1.3x from 8.0x to 6.6x in FY2016. Debt dropped on 20.9% in FY2016 while cash increased on 6.6% in FY2016.
Appendix 1: Peers in Construction & Engineering
Below you can find Electrosteel Castings benchmarking vs. other companies in Construction & Engineering 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hindustan Construction Co ($HIN) | | 4.3% | 13.6% | 7.1% | -15.3% |
| Larsen & Toubro ($LTOD) | 23.5% | 16.1% | 14.2% | 6.0% | |
| |
|---|
| Median (2 companies) | 23.5% | 10.2% | 13.9% | 6.6% | -15.3% |
|---|
| Electrosteel Castings ($ECS) | | 5.3% | 11.1% | -2.3% | -11.7% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Larsen & Toubro ($LTOD) | 14.6% | 13.9% | 13.1% | 12.8% | |
| Hindustan Construction Co ($HIN) | 5.3% | 5.3% | 8.8% | 12.0% | 13.9% |
| |
|---|
| Median (2 companies) | 10.0% | 9.6% | 11.0% | 12.4% | 13.9% |
|---|
| Electrosteel Castings ($ECS) | 9.9% | 8.9% | 14.4% | 12.8% | 13.6% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hindustan Construction Co ($HIN) | 12.7% | 12.4% | 13.3% | 9.2% | 11.5% |
| Larsen & Toubro ($LTOD) | 11.5% | 10.6% | 8.2% | 7.0% | |
| |
|---|
| Median (2 companies) | 12.1% | 11.5% | 10.8% | 8.1% | 11.5% |
|---|
| Electrosteel Castings ($ECS) | 11.9% | 13.7% | 6.6% | 5.8% | 2.0% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hindustan Construction Co ($HIN) | 1.9% | 1.3% | 4.8% | 7.4% | 6.9% |
| Larsen & Toubro ($LTOD) | 11.1% | 9.6% | 8.6% | 6.8% | |
| |
|---|
| Median (2 companies) | 6.5% | 5.5% | 6.7% | 7.1% | 6.9% |
|---|
| Electrosteel Castings ($ECS) | 4.3% | 3.4% | 6.3% | 5.0% | 5.1% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Hindustan Construction Co ($HIN) | 18.8x | 20.3x | 12.3x | 9.3x | 8.8x |
| Larsen & Toubro ($LTOD) | 4.8x | 5.8x | 6.9x | 7.4x | |
| |
|---|
| Median (2 companies) | 11.8x | 13.0x | 9.6x | 8.3x | 8.8x |
|---|
| Electrosteel Castings ($ECS) | 9.0x | 11.6x | 6.9x | 8.0x | 6.6x |
