The numbers tell that Lloyd Electric & Engineering's growth is outstanding

06 Jun 2016 • About Lloyd Electric & Engineering ($LLD) • By InTwits

Lloyd Electric & Engineering is a fast-growing stock in Industrial Machinery industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.

Growth story

Lloyd Electric & Engineering showed fast growth in the last financial year. Lloyd Electric & Engineering's revenue surged on 27.3% in FY2016. Together with revenue growth Lloyd Electric & Engineering also managed to keep EBITDA growth. EBITDA grew 31.5% for the same period.

In the last 3 years Lloyd Electric & Engineering showed fast revenue growth of 23.3% from FY2013 to FY2016 annually. EBITDA surged on 24.2% from FY2013 to FY2016 annually.

Lloyd Electric & Engineering ($LLD) financials for the last 5 years

mln. INR	FY2012	FY2013	FY2014	FY2015	FY2016
Revenue	13,412	14,743	17,760	21,727	27,663
Revenue growth, %		9.9%	20.5%	22.3%	27.3%
SG&A, %					1.94%
EBITDA	1,208	1,592	1,711	2,322	3,053
EBITDA growth, %		31.8%	7.5%	35.7%	31.5%
EBITDA margin, %	9.01%	10.8%	9.64%	10.7%	11.0%
Net Income	351	528	891	884	419
Net Income margin, %	2.62%	3.58%	5.02%	4.07%	1.52%

CAPEX	374	371	615	277	551
CAPEX/Revenue, %	2.79%	2.52%	3.46%	1.28%	1.99%
Debt	4,188	4,999	6,940	7,983	8,980
Cash	294	209	543	637	737
Net Debt/EBITDA	3.2x	3.0x	3.7x	3.2x	2.7x

ROIC, %	10.0%	12.4%	11.3%	13.1%	15.8%
ROE, %	7.5%	10.0%	15.0%	12.7%	5.5%

Profitability and return on investment

Margin expansion supported EBITDA growth. EBITDA margin increased slightly on 0.300 pp from 10.7% to 11% in FY2016. In the longer period the company showed small growth in EBITDA margin of 0.200 pp from 10.8% in FY2013 to 11% in FY2016.

We call Lloyd Electric & Engineering an attractive growth stock as together with the growth it delivers high ROIC at 15.8%. During the last three years it surged - it was 12.4% in FY2013. It's average ROIC for the last three years was 13.4%.

Lloyd Electric & Engineering showed big decline in Net Income margin of 2.60 pp from 4.10% to 1.50% in FY2016. If we look for the longer period Lloyd Electric & Engineering showed big decline in Net Income margin of 2.10 pp from 3.60% in FY2013 to 1.50% in FY2016.

Lloyd Electric & Engineering operates at ROE of 5.46%. For the last three years the average ROE was 11.0%.

Capital expenditures (CAPEX)

In FY2016 Lloyd Electric & Engineering had CAPEX/Revenue of 1.99%. Lloyd Electric & Engineering's CAPEX/Revenue dropped on 0.524 pp from 2.52% in FY2013 to 1.99% in FY2016. For the last three years the average CAPEX/Revenue was 2.24%.

Leverage (Debt)

The company has medium debt level at 2.7x Net Debt/EBITDA to maintain high growth. In the last 3 years Lloyd Electric & Engineering showed big decline in leverage of 0.31x from 3.01x in FY2013 to 2.70x in FY2016.

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.