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Jindal Worldwide is an attractive growth stock

06-06-2014 • About Jindal Worldwide ($JINDWORLD) • By InTwits

Pay attention to Jindal Worldwide as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.

Growth story


Jindal Worldwide showed fast growth in the last financial year. Jindal Worldwide's revenue surged on 28.8% in FY2014. The growth also happened in EBITDA of 51.2% for the same period.

In the longer period Jindal Worldwide showed fast revenue growth of 28.1% from FY2011 to FY2014 annually. EBITDA surged on 25.2% from FY2011 to FY2014 annually.

Jindal Worldwide ($JINDWORLD) financials for the last 5 years

mln. INR FY2010 FY2011 FY2012 FY2013 FY2014
Revenue10,0483,7175,0306,0597,804
Revenue growth, %-63.0%35.3%20.5%28.8%
SG&A, %
EBITDA205357379463700
EBITDA growth, %74.4%6.4%22.1%51.2%
EBITDA margin, %2.04%9.60%7.54%7.64%8.98%
Net Income72133151136254
Net Income margin, % 0.717%3.58%3.01%2.25%3.26%
 
CAPEX01351496331,614
CAPEX/Revenue, %0%3.64%2.97%10.5%20.7%
Debt9181,0971,1551,5773,100
Cash16190290272118
Net Debt/EBITDA4.4x2.5x2.3x2.8x4.3x
 
ROIC, %9.1%15.6%14.5%15.2%13.7%
ROE, %9.9%16.4%16.2%12.6%20.0%

Profitability and return on investment


Margin expansion supported EBITDA growth. EBITDA margin surged on 1.40 pp from 7.60% to 9% in FY2014. In the longer period the company showed decline of 0.600 pp from 9.60% in FY2011 to 9% in FY2014.

We call Jindal Worldwide an attractive growth stock as together with the growth it delivers high ROIC at 13.7%. Three years ago it was a bit higher at 15.6%. It's average ROIC for the last three years was 14.5%.

Jindal Worldwide showed fast Net Income margin growth of 1.10 pp from 2.20% to 3.30% in FY2014. In the longer period the company's Net Income margin decreased on 0.300 pp from 3.60% in FY2011 to 3.30% in FY2014.

Jindal Worldwide operates at ROE of 20.0%. Average ROE for the last three years was 16.2%.

Capital expenditures (CAPEX)


To this fast growth the company had to invest in CAPEX.In FY2014 the company had CAPEX/Revenue of 20.7%. The company showed fast CAPEX/Revenue growth of 17.0 pp from 3.64% in FY2011 to 20.7% in FY2014. Average CAPEX/Revenue for the last three years was 11.4%.

Leverage (Debt)


Having such a fast growth profile Jindal Worldwide keeps high debt level at 4.3x Net Debt/EBITDA. This could become a risk fastor if the growth slows down but the company doesn't decrease debt level by that time. If we look for the longer period Jindal Worldwide's leverage surged on 1.71x from 2.54x in FY2011 to 4.26x in FY2014.

Valuation vs. comparable companies


At the end of trading day today Jindal Worldwide traded at 8.3x EV/EBITDA which is 49.8% lower than 16.5x Textiles peer group avearge calculated on the basis of 451 companies. The market closed today at 11.1x P/E for Jindal Worldwide which is 21.5% lower than 14.1x Textiles peer group avearge calculated on the basis of 43 companies.

Peers in Textiles


Below we provide Jindal Worldwide benchmarking against other companies in Textiles 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 5
Gujarat Cotex ($GUJCOTEX)625.9%-6.2%-66.0%176.2%
T T ($TTL)-39.2%-21.8%28.7%47.8%
Filatex India ($FILATEX)-74.3%-2.7%158.7%44.5%
Gtn Textiles ($GTNTEX)-27.7%-8.8%51.2%39.4%
Suryalata Spinning Mills ($SURYALA)-43.8%3.5%6.7%37.4%
 
Median (61 companies)-32.4%4.3%9.3%14.6%
Jindal Worldwide ($JINDWORLD)-63.0%35.3%20.5%28.8%


Top companies by EBITDA margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Loyal Textile Mills ($LOYALTEX)4.3%12.2%11.1%82.0%10.9%
Ruby Mills ($RUBYMILLS)23.9%25.2%28.3%25.1%28.6%
Grasim Industries ($GRASIM)10.6%23.4%22.3%21.4%16.9%
Vardhman Textiles ($VTL)8.6%24.9%13.8%20.1%24.3%
Nitin Spinners ($NITINSPIN)4.6%23.7%10.5%19.7%19.3%
 
Median (61 companies)5.5%13.0%6.2%9.8%10.9%
Jindal Worldwide ($JINDWORLD)2.0%9.6%7.5%7.6%9.0%


Top companies by CAPEX/Revenue, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
SRF ($SRF)6.4%0.0%0.0%18.7%20.0%
Welspun India ($WELSPUNIND)1.2%11.3%5.6%7.8%16.4%
Sel Manufacturing Company ($SELMCL)10.9%54.2%53.9%25.1%14.0%
Grasim Industries ($GRASIM)2.6%7.8%17.7%21.7%11.6%
Dcm ($DCM)0.8%3.0%2.7%9.1%11.6%
 
Median (18 companies)1.7%4.5%3.0%5.6%7.4%
Jindal Worldwide ($JINDWORLD)3.6%3.0%10.5%20.7%


Top companies by ROIC, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Nitin Spinners ($NITINSPIN)4.2%13.8%6.0%19.5%21.5%
Sutlej Textiles & Industries ($SUTLEJTEX)16.0%9.5%13.6%19.8%
Vardhman Textiles ($VTL)9.5%15.5%6.6%11.9%17.3%
Maral Overseas ($MARALOVER)4.6%14.1%16.0%
Rswm ($RSWM)6.8%17.4%2.2%15.2%15.5%
 
Median (100 companies)6.3%10.1%2.2%9.0%10.0%
Jindal Worldwide ($JINDWORLD)9.1%15.6%14.5%15.2%13.7%


Top companies by Net Debt / EBITDA

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Shree Ram Urban Infrastructure ($SHREERAM)60.3x48.3x227.3x
Jaybharat Textiles & Real Estate ($JAYTEX)6.6x8.4x10.9x53.6x23.8x
Sri Ramakrishna Mills (Coimbatore) ($SRMCL)1.2x4.9x39.5x
Gravity (India) ($GRAVITY)13.3x0.0x19.9x
Ruby Mills ($RUBYMILLS)7.6x15.9x12.6x15.3x10.8x
 
Median (82 companies)4.9x3.9x4.2x3.2x0.0x
Jindal Worldwide ($JINDWORLD)4.4x2.5x2.3x2.8x4.3x


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