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Reliance Infrastructure reports 90.1% EBITDA growth and 17.1 pp EBITDA Margin growth from 19.0% to 36.1%

28 May 2016 • About Reliance Infrastructure ($RIFS) • By InTwits

Reliance Infrastructure reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is quite volatile: 36.1% in FY2016, 19.0% in FY2015, 21.1% in FY2014, 19.1% in FY2013, 15.7% in FY2012
  • The company has potentially unprofitable business model: ROIC is at 6.3%
  • It operates with medium-size leverage: Net Debt/EBITDA is 5.6x while industry average is 5.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Reliance Infrastructure ($RIFS) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue173,632155,101132,815121,403121,4950.1%
EBITDA27,25929,58628,05923,05343,83190.1%
Net Income15,86822,46819,13718,00219,7469.7%
Balance Sheet
Cash13,5904,9176,5045,3514,711-12.0%
Short Term Debt65,89493,40592,40095,97359,607-37.9%
Long Term Debt117,003126,357150,491161,725191,40118.3%
Cash flow
Ratios
Revenue growth77.0%-10.7%-14.4%-8.6%0.1%
EBITDA growth51.8%8.5%-5.2%-17.8%90.1%
EBITDA Margin15.7%19.1%21.1%19.0%36.1%17.1%
Net Income Margin9.1%14.5%14.4%14.8%16.3%1.4%
ROIC5.9%5.2%4.5%2.8%6.3%3.5%
ROE6.6%8.9%7.3%6.7%7.2%0.5%
Net Debt/EBITDA6.2x7.3x8.4x10.9x5.6x-5.3x

Revenue and profitability


The company's Revenue showed almost no change in FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 10.5 pp from 4.0% to 14.5% in FY2016.

Net Income marign increased slightly on 1.4 pp from 14.8% to 16.3% in FY2016.

Return on investment


The company operates at low ROIC (6.30%) and ROE (7.23%). ROIC increased on 3.5 pp from 2.8% to 6.3% in FY2016. ROE increased slightly on 0.50 pp from 6.7% to 7.2% in FY2016.

Leverage (Debt)


Debt level is 5.6x Net Debt / EBITDA and 5.7x Debt / EBITDA. Net Debt / EBITDA dropped on 5.3x from 10.9x to 5.6x in FY2016. Debt decreased on 2.6% in FY2016 while cash dropped on 12.0% in FY2016.

Appendix 1: Peers in Electric Utilities


Below we provide Reliance Infrastructure benchmarking against other companies in Electric Utilities 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  FY2012 FY2013 FY2014 FY2015 FY2016
Tata Power Co ($TPCL)27.0%8.6%-6.0%11.1%
 
Median (1 company)27.0%8.6%-6.0%11.1%
Reliance Infrastructure ($RIFS)-10.7%-14.4%-8.6%0.1%


Top companies by EBITDA margin, %

Top  FY2012 FY2013 FY2014 FY2015 FY2016
Tata Power Co ($TPCL)20.5%20.1%21.5%18.7%24.0%
 
Median (1 company)20.5%20.1%21.5%18.7%24.0%
Reliance Infrastructure ($RIFS)15.7%19.1%21.1%19.0%36.1%


Top companies by CAPEX/Revenue, %

Top  FY2012 FY2013 FY2014 FY2015 FY2016
Tata Power Co ($TPCL)20.6%12.9%12.1%10.4%10.6%
 
Median (1 company)20.6%12.9%12.1%10.4%10.6%


Top companies by ROIC, %

Top  FY2012 FY2013 FY2014 FY2015 FY2016
Tata Power Co ($TPCL)8.9%8.8%9.0%7.1%11.1%
 
Median (1 company)8.9%8.8%9.0%7.1%11.1%
Reliance Infrastructure ($RIFS)5.9%5.2%4.5%2.8%6.3%


Top companies by Net Debt / EBITDA

Top  FY2012 FY2013 FY2014 FY2015 FY2016
Tata Power Co ($TPCL)5.7x5.4x5.0x6.2x4.3x
 
Median (1 company)5.7x5.4x5.0x6.2x4.3x
Reliance Infrastructure ($RIFS)6.2x7.3x8.4x10.9x5.6x