EV/ EBITDA:
The EV/EBITDA of LMCE with its nearest competitor by market value is shown below:
30/06/2006 | 30/06/2007 | 30/06/2008 | 30/06/2009 | 30/06/2010 | Mean | |
LMCE | ||||||
EV/EBITDA | 10.5 | 11.4 | 6.3 | 8.6 | 12.3 | 9.8 |
Revenue growth | 11% | 5% | 16% | -2% | -6% | 5% |
ROIC | 5.21 | 8.29 | 11.06 | 12.07 | 8.84 | 9.1 |
YTL cements | ||||||
EV/EBITDA | 7.5 | 9.9 | 6.4 | 5.5 | 3.9 | 6.6 |
Revenue growth | 57% | 8% | 28% | 34% | -6% | 24% |
ROIC | 8.9 | 9.15 | 9.62 | 10.63 | 10.39 | 9.7 |
Based on its EV/EBITDA ratio, LMCE appears overvalued on an average, when compared to YTL. The only exception was in 2008. LMCE’s average ‘Return on capital employed (ROIC)’ and Revenue growth is lower than YTL at 9.1 and 5%. This overvaluation seems to be valid also as per the P/Sales figure which we saw earlier. But, even on a 5% average revenue growth, LMCE’s average ROIC was less only by 0.6% from YTL.
