Financial Technologies (India) revenue surged on 48.1% and EBITDA Margin surged on 34.6 pp from -57.3% to -22.7%

21 May 2018 • About Financial Technologies (India) ($FTIS) • By InTwits

Financial Technologies (India) reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:

The company operates at negative EBITDA Margin: -22.7%
Financial Technologies (India) spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 0.0%. Average EBITDA Margin for the same period was -43.6%
The company has unprofitable business model: ROIC is -2.9%
It operates with medium-size leverage: Net Debt/EBITDA is 3.9x while industry average is -0.8x

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

Revenue and profitability

Financial Technologies (India)'s Revenue surged on 48.1%. During the last 5 years Revenue growth bottomed in FY2015 at -62.4% and was accelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 14.4 pp from 24.9% to 10.6% in FY2018.

Net Income margin decreased on 6.9 pp from 10.6% to 3.8% in FY2018.

Investments (CAPEX, working capital and M&A)

In FY2018 Financial Technologies (India) had CAPEX/Revenue of 4.7%. Financial Technologies (India) showed small CAPEX/Revenue decline of 1.9 pp from 6.5% in FY2015 to 4.7% in FY2018. It's average CAPEX/Revenue for the last three years was 6.4%.

Return on investment

The company operates at negative ROIC (-2.9%) and low but positive ROE (0.4%). ROIC increased slightly on 1.4 pp from -4.3% to -2.9% in FY2018. ROE showed almost no change in FY2018.

Leverage (Debt)

Company's Net Debt / EBITDA is 3.9x and Debt / EBITDA is . Debt dropped on 79.7% while cash jumped on 79.7%.

Financial Technologies (India) has no short term refinancing risk: cash is higher than short term debt (790.9%).

Financial and operational results

FY ended 31 Mar 2018

Financial Technologies (India) ($FTIS) key annual financial indicators

mln. INR	2014	2015	2016	2017	2018	2018/2017
P&L
Revenue	5,573	2,095	2,040	2,172	3,217	48.1%
SG&A			174
EBITDA		-2,368	-2,235	-1,245	-732
Net Income		4,267	3,275	231	121	-47.8%
Balance Sheet
Cash		4,844	3,892	4,451	8,000	79.7%
Short Term Debt		102	0	3,968	1,011	-74.5%
Long Term Debt		4,804	5,091	1,008	0	-100.0%
Cash flow
Capex		137	110	200	151	-24.6%
Ratios
Revenue growth	-24.7%	-62.4%	-2.6%	6.5%	48.1%
EBITDA growth			-5.6%	-44.3%	-41.2%

EBITDA Margin		-113.0%	-109.6%	-57.3%	-22.7%	34.6%
SG&A, % of revenue			8.5%
Net Income Margin		203.7%	160.6%	10.6%	3.8%	-6.9%
CAPEX, % of revenue		6.5%	5.4%	9.2%	4.7%	-4.5%

ROIC			-7.4%	-4.3%	-2.9%	1.4%
ROE			10.8%	0.7%	0.4%	-0.4%

Peers in IT Consulting & Software

Below you can find Financial Technologies (India) benchmarking vs. other companies in IT Consulting & Software 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	FY2014	FY2015	FY2016	FY2017	FY2018
Hexaware Technologies ($HEXD)	13.0%	21.0%	13.2%	11.5%
Median (1 company)	13.0%	21.0%	13.2%	11.5%
Financial Technologies (India) ($FTIS)		-62.4%	-2.6%	6.5%	48.1%

Top companies by EBITDA margin, %


Top	FY2014	FY2015	FY2016	FY2017	FY2018
Hexaware Technologies ($HEXD)	18.5%	17.2%	16.3%	16.6%
Median (1 company)	18.5%	17.2%	16.3%	16.6%
Financial Technologies (India) ($FTIS)		-113.0%	-109.6%	-57.3%	-22.7%

Top companies by CAPEX/Revenue, %


Top	FY2014	FY2015	FY2016	FY2017	FY2018
Hexaware Technologies ($HEXD)	2.3%	4.4%	6.3%	2.4%
Median (1 company)	2.3%	4.4%	6.3%	2.4%
Financial Technologies (India) ($FTIS)		6.5%	5.4%	9.2%	4.7%

Top companies by ROIC, %


Top	FY2014	FY2015	FY2016	FY2017	FY2018
Hexaware Technologies ($HEXD)	34.7%	35.7%	33.8%	33.5%
Median (1 company)	34.7%	35.7%	33.8%	33.5%
Financial Technologies (India) ($FTIS)			-7.4%	-4.3%	-2.9%

Top companies by Net Debt / EBITDA


Top	FY2014	FY2015	FY2016	FY2017	FY2018
Hexaware Technologies ($HEXD)	-0.6x	-0.7x	-0.5x	-0.8x
Median (1 company)	-0.6x	-0.7x	-0.5x	-0.8x

Financial Technologies (India) stock price chart

Financial Technologies (India) financials

mln.	FY2010	FY2011	FY2012

Revenue	3,101	3,888	4,880
EBITDA	-1,167.908	-1,090.759	43.858
Net income	1,401	-1,368.040	2,641
CAPEX	507.3	2,641	432.9
Debt	4,222	6,236	12,529
Cash	2,165	6,621	5,194

About Financial Technologies (India)

Financial Technologies (India) Limited, together with its subsidiaries, provides technology intellectual (IT) property and domain services to create and trade on financial markets in equities, commodities, currencies, and bonds. It offers exchange, brokerage, messaging, consulting, and banking risk solutions. The company operates a network of six exchanges connecting economies of Africa, the Middle East, India, and the Southeast Asia; and two ecosystem ventures to address upstream and downstream opportunities in exchanges, such as clearing, depository, information vending, payment gateway, and others. It also offers consultancy services; IT enabled services; online trading platform services; technology for mobile-phone based payment solutions; coaching and training services; and software services. In addition, the company is engaged in the financing, infrastructure, and other real estate projects businesses; and establishing, developing, providing, operating, and maintaining various types of telecommunication services, including Internet service provider, data communication, and other forms of communication. Additionally, it establishes/acquires/holds investments in an automated electronic market place and/or a software company and/or a knowledge-based company, as well as researches on commodities and publications of commodity reports and manuals etc. The company serves exchanges, brokerage houses, fund houses, AMC