Is Rubfila International a solid growth stock? - The numbers tells it is
02-06-2014 • About Rubfila International (
$RUBFILA) • By InTwits
Rubfila International is a fast-growing stock in Auto Tyres & Rubber Products industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Rubfila International showed fast growth in the last financial year. Rubfila International's revenue surged on 25.1% in FY2014. The growth also happened in EBITDA of 5.55% for the same period.
In the last 3 years Rubfila International showed fast revenue growth of 16.6% from FY2011 to FY2014 annually. EBITDA surged on 48.8% from FY2011 to FY2014 annually.
Rubfila International ($RUBFILA) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 1,884 | 792 | 957 | 1,002 | 1,254 |
|---|
| Revenue growth, % | | -58.0% | 20.9% | 4.7% | 25.1% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 42 | 48 | 117 | 149 | 158 |
|---|
| EBITDA growth, % | | 13.0% | 145.8% | 27.1% | 5.5% |
|---|
| EBITDA margin, % | 2.24% | 6.03% | 12.3% | 14.9% | 12.6% |
|---|
| Net Income | 226 | 21 | 328 | 133 | 93 |
|---|
| Net Income margin, % | 12.0% | 2.71% | 34.2% | 13.3% | 7.41% |
|---|
| |
| CAPEX | 1 | 17 | 3 | 91 | 63 |
|---|
| CAPEX/Revenue, % | 0.0349% | 2.18% | 0.301% | 9.09% | 5.04% |
|---|
| Debt | 243 | 243 | 0 | 0 | 0 |
|---|
| Cash | 14 | 17 | 23 | 20 | 48 |
|---|
| Net Debt/EBITDA | 5.4x | 4.7x | -0.2x | -0.1x | -0.3x |
|---|
| |
| ROIC, % | 15.0% | 12.5% | 35.1% | 26.2% | 22.7% |
|---|
| ROE, % | | | | 29.0% | 17.1% |
|---|
Profitability and return on investment
EBITDA margin declined slightly from 14.9% in FY2013 to 12.6% in FY2014. If we look for the longer period EBITDA margin surged on 6.60 pp from 6% in FY2011 to 12.6% in FY2014.
We call Rubfila International an attractive growth stock as together with the growth it delivers high ROIC at 22.7%. During the last three years it surged - it was 12.5% in FY2011. For the last three years the average ROIC was 28.0%.
Net Income margin dropped on 5.90 pp from 13.3% to 7.40% in FY2014. In the longer period the company's Net Income margin surged on 4.70 pp from 2.70% in FY2011 to 7.40% in FY2014.
Rubfila International operates at ROE of 17.1%.
Capital expenditures (CAPEX)
To fuel this fast growth the company had to invest in CAPEX.In FY2014 the company had CAPEX/Revenue of 5.04%. The company's CAPEX/Revenue surged on 2.86 pp from 2.18% in FY2011 to 5.04% in FY2014. For the last three years the average CAPEX/Revenue was 4.81%.
Leverage (Debt)
Having such a fast growth profile the company keeps negative net debt at -0.3x Net Debt/EBITDA. If we look for the longer period Rubfila International's leverage dropped on 5.05x from 4.74x in FY2011 to -0.30x in FY2014.
Valuation vs. comparable companies
At the end of trading day today Rubfila International traded at 6.0x EV/EBITDA which is 62.2% lower than 16.0x Auto Tyres & Rubber Products peer group avearge calculated on the basis of 36 companies. The market closed today at 10.8x P/E for Rubfila International which is 23% lower than 14.0x Auto Tyres & Rubber Products peer group avearge calculated on the basis of 5 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. At the end of trading day today Rubfila International traded at 10.1x EV/(EBITDA-CAPEX) which is 19.2% lower than 12.5x Auto Tyres & Rubber Products peer group avearge calculated on the basis of 2 companies.
Peers in Auto Tyres & Rubber Products
Below we provide Rubfila International benchmarking against other companies in Auto Tyres & Rubber Products 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 |
|---|
| Balkrishna Industries ($BALKRISIND) | | -54.5% | 41.5% | 12.5% | 11.1% |
| Ceat ($CEATLTD) | | -46.5% | 28.0% | 8.7% | 9.9% |
| Apollo Tyres ($APOLLOTYRE) | | -52.8% | 37.1% | 5.3% | 4.0% |
| |
|---|
| Median (3 companies) | | -52.8% | 37.1% | 8.7% | 9.9% |
|---|
| Rubfila International ($RUBFILA) | | -58.0% | 20.9% | 4.7% | 25.1% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Balkrishna Industries ($BALKRISIND) | 8.2% | 17.6% | 17.0% | 20.1% | 26.0% |
| Apollo Tyres ($APOLLOTYRE) | 6.3% | 11.0% | 9.7% | 11.4% | 14.2% |
| Ceat ($CEATLTD) | 4.8% | 4.6% | 6.1% | 9.0% | 11.9% |
| |
|---|
| Median (3 companies) | 7.3% | 11.0% | 9.7% | 11.4% | 14.2% |
|---|
| Rubfila International ($RUBFILA) | 2.2% | 6.0% | 12.3% | 14.9% | 12.6% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Balkrishna Industries ($BALKRISIND) | 3.0% | 10.8% | 23.4% | 29.9% | 23.5% |
| Apollo Tyres ($APOLLOTYRE) | 5.6% | 12.6% | 6.5% | 4.9% | 3.7% |
| Ceat ($CEATLTD) | 4.0% | 16.7% | 3.1% | 1.7% | 2.7% |
| |
|---|
| Median (3 companies) | 4.8% | 12.6% | 6.5% | 4.9% | 3.7% |
|---|
| Rubfila International ($RUBFILA) | 0.0% | 2.2% | 0.3% | 9.1% | 5.0% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Ceat ($CEATLTD) | | 8.5% | 11.4% | 19.1% | 27.6% |
| Apollo Tyres ($APOLLOTYRE) | 28.5% | 15.0% | 14.7% | 16.8% | 23.6% |
| Balkrishna Industries ($BALKRISIND) | 25.0% | 17.4% | 17.7% | 17.3% | 19.7% |
| Falcon Tyres ($FALCONTQ) | | 9.2% | 6.2% | | |
| |
|---|
| Median (4 companies) | 26.7% | 12.1% | 13.1% | 17.3% | 23.6% |
|---|
| Rubfila International ($RUBFILA) | 15.0% | 12.5% | 35.1% | 26.2% | 22.7% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top |
|---|
| Balkrishna Industries ($BALKRISIND) | 1.3x | 1.7x | 3.2x | 3.2x | 2.5x |
| Ceat ($CEATLTD) | 2.0x | 5.8x | 4.5x | 2.1x | 1.3x |
| Apollo Tyres ($APOLLOTYRE) | 1.3x | 2.3x | 2.4x | 1.3x | 0.3x |
| |
|---|
| Median (3 companies) | 1.6x | 4.1x | 3.8x | 2.1x | 1.3x |
|---|
| Rubfila International ($RUBFILA) | 5.4x | 4.7x | -0.2x | -0.1x | -0.3x |
