Steel Authority Of India reports 172% EBITDA decline and 14.5% Revenue decline
30 May 2016 • About Steel Authority Of India (
$SAUD) • By InTwits
Steel Authority Of India reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Steel Authority Of India doesn't have a profitable business model yet: FY2016 ROIC is -7.6%
- EBITDA Margin is quite volatile: -9.0% in FY2016, 10.6% in FY2015, 9.0% in FY2014, 11.2% in FY2013, 13.9% in FY2012
- Steel Authority Of India has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.0%. At the same time it's a lot of higher than industry average of 13.5%.
- CAPEX is quite volatile: 321 in 2016, 1,122 in 2015, 1,428 in 2014, 1,271 in 2013, 1,228 in 2012
- The company has unprofitable business model: ROIC is at -7.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 10.5x while industry average is 10.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Steel Authority Of India ($SAUD) key annual financial indicators
| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 460,069 | 444,773 | 464,677 | 455,908 | 389,672 | -14.5% |
| EBITDA | 64,166 | 49,740 | 41,787 | 48,343 | -35,010 | -172.4% |
| Net Income | 35,935 | 23,291 | 26,521 | 20,353 | -42,968 | -311.1% |
Balance Sheet
|
|---|
| Cash | 7,303 | 6,359 | 4,473 | 5,193 | 5,628 | 8.4% |
| Short Term Debt | 50,069 | 83,839 | 118,875 | 164,311 | 177,308 | 7.9% |
| Long Term Debt | 123,983 | 141,549 | 141,330 | 157,152 | 167,004 | 6.3% |
Cash flow
|
|---|
| Capex | 96,324 | 92,164 | 89,563 | 77,043 | 66,593 | -13.6% |
Ratios
|
|---|
| Revenue growth | 7.4% | -3.3% | 4.5% | -1.9% | -14.5% | |
| EBITDA growth | -18.1% | -22.5% | -16.0% | 15.7% | -172.4% | |
| EBITDA Margin | 13.9% | 11.2% | 9.0% | 10.6% | -9.0% | -19.6% |
| Net Income Margin | 7.8% | 5.2% | 5.7% | 4.5% | -11.0% | -15.5% |
| CAPEX, % of revenue | 20.9% | 20.7% | 19.3% | 16.9% | 17.1% | 0.2% |
| ROIC | 7.9% | 5.5% | 3.6% | 3.9% | -7.6% | -11.5% |
| ROE | 9.2% | 5.7% | 6.2% | 4.7% | -10.3% | -14.9% |
| Net Debt/EBITDA | 2.6x | 4.4x | 6.1x | 6.5x | | -6.5x |
Revenue and profitability
The company's Revenue dropped on 14.5% in FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 19.6 pp from 10.6% to -9.0% in FY2016.
Net Income marign dropped on 15.5 pp from 4.5% to -11.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 17.1% in FY2016. CAPEX/Revenue decreased on 3.6 pp from 20.7% in FY2013 to 17.1% in FY2016. It's average level of CAPEX/Revenue for the last three years was 17.8%.
Return on investment
The company operates at negative ROIC (-7.61%) and ROE (-10.27%). ROIC dropped on 11.5 pp from 3.9% to -7.6% in FY2016. ROE dropped on 14.9 pp from 4.7% to -10.3% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 10.5x and Debt / EBITDA is . Net Debt / EBITDA dropped on 6.5x from 6.5x to in FY2016. Debt increased on 7.1% in FY2016 while cash increased on 8.4% in FY2016.
Appendix 1: Peers in Iron & Steel/Interm.Products
Below you can find Steel Authority Of India benchmarking vs. other companies in Iron & Steel/Interm.Products 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 |
|---|
| Tata Steel ($TTST) | | 0.9% | 10.4% | -6.1% | -16.2% |
| |
|---|
| Median (1 company) | | 0.9% | 10.4% | -6.1% | -16.2% |
|---|
| Steel Authority Of India ($SAUD) | | -3.3% | 4.5% | -1.9% | -14.5% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Steel ($TTST) | 9.4% | 9.2% | 11.1% | 9.1% | 6.5% |
| |
|---|
| Median (1 company) | 9.4% | 9.2% | 11.1% | 9.1% | 6.5% |
|---|
| Steel Authority Of India ($SAUD) | 13.9% | 11.2% | 9.0% | 10.6% | -9.0% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Steel ($TTST) | 9.1% | 11.6% | 11.1% | 9.8% | 9.9% |
| |
|---|
| Median (1 company) | 9.1% | 11.6% | 11.1% | 9.8% | 9.9% |
|---|
| Steel Authority Of India ($SAUD) | 20.9% | 20.7% | 19.3% | 16.9% | 17.1% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Steel ($TTST) | 7.6% | 6.2% | 8.9% | 5.4% | 2.1% |
| |
|---|
| Median (1 company) | 7.6% | 6.2% | 8.9% | 5.4% | 2.1% |
|---|
| Steel Authority Of India ($SAUD) | 7.9% | 5.5% | 3.6% | 3.9% | -7.6% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tata Steel ($TTST) | 4.0x | 4.8x | 4.4x | 5.7x | 10.5x |
| |
|---|
| Median (1 company) | 4.0x | 4.8x | 4.4x | 5.7x | 10.5x |
|---|
| Steel Authority Of India ($SAUD) | 2.6x | 4.4x | 6.1x | 6.5x | |
