Lloyd Electric & Engineering reports 31.5% EBITDA growth and 27.3% Revenue growth

30 May 2016 • About Lloyd Electric & Engineering ($LLD) • By InTwits

Lloyd Electric & Engineering reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Lloyd Electric & Engineering is a fast growth stock: FY2016 revenue growth was 27.3%, 5 year revenue CAGR was 22.2% at FY2016 ROIC 15.8%
Lloyd Electric & Engineering has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's a lot of higher than industry average of 2.0%.
CAPEX is quite volatile: 1,021 in 2016, 561 in 2015, 401 in 2014, 503 in 2013, 264 in 2012
The company has highly profitable business model: ROIC is at 15.8%
It operates with medium-size leverage: Net Debt/EBITDA is 2.7x while industry average is 2.7x

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

Lloyd Electric & Engineering ($LLD) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	13,412	14,743	17,760	21,727	27,663	27.3%
SG&A					536
EBITDA	1,208	1,592	1,711	2,322	3,053	31.5%
Net Income	351	528	891	884	419	-52.6%
Balance Sheet
Cash	294	209	543	637	737	15.7%
Short Term Debt	3,074	4,053	5,473	6,897	8,063	16.9%
Long Term Debt	1,113	947	1,467	1,086	916	-15.6%
Cash flow
Capex	374	371	615	277	551	98.6%
Ratios
Revenue growth	32.2%	9.9%	20.5%	22.3%	27.3%
EBITDA growth	32.6%	31.8%	7.5%	35.7%	31.5%
EBITDA Margin	9.0%	10.8%	9.6%	10.7%	11.0%	0.3%
Net Income Margin	2.6%	3.6%	5.0%	4.1%	1.5%	-2.6%
SG&A, % of revenue					1.9%	1.9%
CAPEX, % of revenue	2.8%	2.5%	3.5%	1.3%	2.0%	0.7%
ROIC	10.0%	12.4%	11.3%	13.1%	15.8%	2.7%
ROE	7.5%	10.0%	15.0%	12.7%	5.5%	-7.2%
Net Debt/EBITDA	3.2x	3.0x	3.7x	3.2x	2.7x	-0.5x

Revenue and profitability

The company's Revenue surged on 27.3% in FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.63 pp from 24.1% to 24.7% in 2016.

Net Income marign decreased on 2.6 pp from 4.1% to 1.5% in FY2016.

Capital expenditures (CAPEX) and working capital investments

Lloyd Electric & Engineering's CAPEX/Revenue was 2.0% in FY2016. The company's CAPEX/Revenue decreased slightly on 0.52 pp from 2.5% in FY2013 to 2.0% in FY2016. It's average level of CAPEX/Revenue for the last three years was 2.2%.

Return on investment

The company operates at good ROIC (15.81%) while ROE is low (5.46%). ROIC increased on 2.7 pp from 13.1% to 15.8% in FY2016. ROE decreased on 7.2 pp from 12.7% to 5.5% in FY2016.

Leverage (Debt)

Debt level is 2.7x Net Debt / EBITDA and 2.9x Debt / EBITDA. Net Debt / EBITDA dropped on 0.5x from 3.2x to 2.7x in FY2016. Debt jumped on 12.5% in FY2016 while cash jumped on 15.7% in FY2016.

Appendix 1: Peers in Industrial Machinery

Below we provide Lloyd Electric & Engineering benchmarking against other companies in Industrial Machinery 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.

Lloyd Electric & Engineering stock price chart

Lloyd Electric & Engineering financials

mln.	FY2010	FY2011	FY2012

Revenue	8,171	10,149	13,412
EBITDA	819.7	911.2	1,208
Net income	338.1	375.7	351.2
CAPEX	398.0	446.1	374.2
Debt	2,580	3,844	4,188
Cash	127.3	154.0	294.3

About Lloyd Electric & Engineering

Lloyd Electric & Engineering Limited manufactures and sells heat exchangers and evaporator coils for heating, ventilation, air-conditioning (AC), and refrigeration industry primarily in India. The company offers fin and tube type heat exchangers used in various applications, such as commercial refrigeration systems, automobile-buses/car AC, railway and marine AC, telecom/mainframe AC, and special application coils, as well as window, split, and package AC systems; packaged AC units, including the AC units for passenger coaches and locomotives in the railway industry; window/split air conditioners; oil coolers for railways; and heavy automobile and tube mill for MB radiators. It is also involved in the design, manufacture, supply, installation, and maintenance of dry coolers used in various segments, such as thermal power plants, nuclear power plants, industrial water cooling segments, oil cooling segments, cement industry, textile industry, etc. In addition, the company offers return bands, distributors, and suction/discharge lines of various sizes; and manufactures air conditioners for various brands on original equipment manufacturing and ODM basis, as well as under its own LLOYD brand. Further, it offers air conditioners, LED TVs, refrigerators, washing machines, chest freezers, water dispensers, induction cookers, room heaters, and other products; and trades in air conditioners, as well as consumer durable products, including LCD/LED products, chest freezers, etc. under the LLOYD brand. The company also exports its products primarily to the Middle East, Africa, Europe, and North America. Lloyd Electric & Engineering Limited was incorporated in 1987 and is headquartered in New Delhi, India.