Umang Dairies demonstrates fast growth in fundamentals
20-05-2014 • About Umang Dairies (
$UMANGDAIR) • By InTwits
Pay attention to Umang Dairies as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Umang Dairies showed fast growth in the last financial year. Umang Dairies's revenue surged on 24.5% in FY2014. Together with revenue growth Umang Dairies also managed to keep EBITDA growth. EBITDA grew -40.8% for the same period.
In the longer period the company showed fast revenue growth of 28.4% from FY2011 to FY2014 annually. EBITDA surged on 26.6% from FY2011 to FY2014 annually.
Umang Dairies ($UMANGDAIR) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 2,921 | 1,023 | 1,502 | 1,738 | 2,164 |
|---|
| Revenue growth, % | | -65.0% | 46.8% | 15.7% | 24.5% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | -6 | 52 | 155 | 177 | 105 |
|---|
| EBITDA growth, % | | -1,023.7% | 200.1% | 14.1% | -40.8% |
|---|
| EBITDA margin, % | -0.192% | 5.06% | 10.3% | 10.2% | 4.85% |
|---|
| Net Income | 54 | 33 | 138 | 123 | 60 |
|---|
| Net Income margin, % | 1.85% | 3.24% | 9.21% | 7.08% | 2.75% |
|---|
| |
| CAPEX | 37 | 12 | 30 | 76 | 59 |
|---|
| CAPEX/Revenue, % | 1.27% | 1.19% | 2.01% | 4.38% | 2.73% |
|---|
| Debt | 109 | 107 | 104 | 85 | 185 |
|---|
| Cash | 4 | 15 | 4 | 5 | 8 |
|---|
| Net Debt/EBITDA | -18.8x | 1.8x | 0.6x | 0.5x | 1.7x |
|---|
| |
| ROIC, % | -38.8% | 54.8% | 93.5% | 55.6% | 22.3% |
|---|
| ROE, % | | | | 96.4% | 30.4% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. If we look for the longer period the company's EBITDA margin decreased slightly on 0.200 pp from 5.10% in FY2011 to 4.90% in FY2014.
We call Umang Dairies an attractive growth stock as together with the growth it delivers high ROIC at 22.3%. During the last three years it dropped - it was 54.8% in FY2011. Average ROIC for the last three years was 57.1%.
Net Income margin dropped on 4.30 pp from 7.10% to 2.80% in FY2014. In the longer period Umang Dairies's Net Income margin dropped on 0.400 pp from 3.20% in FY2011 to 2.80% in FY2014.
Umang Dairies operates at ROE of 30.4%.
Capital expenditures (CAPEX)
The company's CAPEX/Revenue was 2.73% in FY2014. The company's CAPEX/Revenue surged on 1.54 pp from 1.19% in FY2011 to 2.73% in FY2014. Average CAPEX/Revenue for the last three years was 3.04%.
Leverage (Debt)
Having such a fast growth profile the company keeps medium debt level at 1.7x Net Debt/EBITDA. In the longer period leverage decreased on 0.10x from 1.78x in FY2011 to 1.69x in FY2014.
Valuation vs. comparable companies
At the end of trading day today Umang Dairies traded at 12.1x EV/EBITDA which is 24.5% lower than 16.0x Packaged Foods peer group avearge calculated on the basis of 72 companies. The company trades at 18.3x P/E which is the same as 18.4x Packaged Foods industry avearge calculated based on 13 companies.
Peers in Packaged Foods
Below we provide Umang Dairies benchmarking against other companies in Packaged Foods 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.
Top companies by Revenue growth, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Krbl ($KRBL) | | -2.2% | 5.6% | 27.6% | 39.9% |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | | -49.6% | 14.7% | 17.0% | 9.0% |
| |
|---|
| Median (2 companies) | | -25.9% | 10.1% | 22.3% | 24.5% |
|---|
| Umang Dairies ($UMANGDAIR) | | -65.0% | 46.8% | 15.7% | 24.5% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 9.3% | 18.8% | 18.6% | 17.8% | 22.5% |
| Krbl ($KRBL) | 12.5% | 14.7% | 14.1% | 14.2% | 15.1% |
| |
|---|
| Median (2 companies) | 10.9% | 16.7% | 16.4% | 16.0% | 18.8% |
|---|
| Umang Dairies ($UMANGDAIR) | -0.2% | 5.1% | 10.3% | 10.2% | 4.9% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Krbl ($KRBL) | 8.3% | 5.8% | 4.1% | 4.0% | 6.1% |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 2.1% | 3.6% | 2.7% | | 4.3% |
| |
|---|
| Median (2 companies) | 5.2% | 4.7% | 3.4% | 4.0% | 5.2% |
|---|
| Umang Dairies ($UMANGDAIR) | 1.3% | 1.2% | 2.0% | 4.4% | 2.7% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Krbl ($KRBL) | 15.6% | 14.4% | 11.7% | 14.5% | 18.3% |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 49.6% | 45.0% | 44.6% | | |
| |
|---|
| Median (2 companies) | 32.6% | 29.7% | 28.2% | 14.5% | 18.3% |
|---|
| Umang Dairies ($UMANGDAIR) | -38.8% | 54.8% | 93.5% | 55.6% | 22.3% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Krbl ($KRBL) | 2.8x | 3.7x | 4.1x | 2.9x | 3.0x |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | -2.0x | -2.1x | -2.5x | 0.0x | -2.1x |
| |
|---|
| Median (2 companies) | 0.4x | 0.8x | 0.8x | 1.5x | 0.5x |
|---|
| Umang Dairies ($UMANGDAIR) | | 1.8x | 0.6x | 0.5x | 1.7x |
