Kse demonstrated healthy growth in recent years
06-06-2014 • About Kse (
$KSE) • By InTwits
Pay attention to Kse as a growth stock. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Kse showed fast growth in the last financial year. The company's revenue surged on 15.7% in FY2014. At the same time the company well managed its profitability and showed even faster growth in EBITDA of 106% for the same period.
In the last 3 years Kse showed fast revenue growth of 21.1% from FY2011 to FY2014 annually. EBITDA surged on 27.9% from FY2011 to FY2014 annually.
Kse ($KSE) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 10,654 | 4,537 | 5,422 | 6,972 | 8,063 |
|---|
| Revenue growth, % | | -57.4% | 19.5% | 28.6% | 15.7% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 185 | 138 | 227 | 140 | 289 |
|---|
| EBITDA growth, % | | -25.6% | 64.9% | -38.3% | 106.0% |
|---|
| EBITDA margin, % | 1.74% | 3.04% | 4.19% | 2.01% | 3.58% |
|---|
| Net Income | 83 | 45 | 104 | 47 | 154 |
|---|
| Net Income margin, % | 0.776% | 0.991% | 1.93% | 0.667% | 1.91% |
|---|
| |
| CAPEX | 55 | 27 | 27 | 79 | 10 |
|---|
| CAPEX/Revenue, % | 0.515% | 0.602% | 0.493% | 1.13% | 0.124% |
|---|
| Debt | 292 | 253 | 276 | 263 | 167 |
|---|
| Cash | 68 | 31 | 58 | 38 | 31 |
|---|
| Net Debt/EBITDA | 1.2x | 1.6x | 1.0x | 1.6x | 0.5x |
|---|
| |
| ROIC, % | 23.6% | 14.7% | 27.7% | 14.1% | 36.9% |
|---|
| ROE, % | 27.3% | 13.6% | 28.6% | 11.6% | 34.4% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. Kse's EBITDA margin surged on 1.60 pp from 2% to 3.60% in FY2014. In the longer period EBITDA margin surged on 0.600 pp from 3% in FY2011 to 3.60% in FY2014.
Kse shows attractive ROIC at 36.9% for the last 12 months which assumes stable development model. Three years ago it was considerably lower at 14.7%. It's average level of ROIC for the last three years was 26.2%.
Net Income margin surged on 1.20 pp from 0.700% to 1.90% in FY2014. In the longer period the company showed fast Net Income margin growth of 0.900 pp from 1% in FY2011 to 1.90% in FY2014.
Kse operates at ROE of 34.4%. For the last three years the average ROE was 24.9%.
Capital expenditures (CAPEX)
In FY2014 Kse had CAPEX/Revenue of 0.124%. CAPEX/Revenue dropped on 0.478 pp from 0.602% in FY2011 to 0.124% in FY2014. It's average CAPEX/Revenue for the last three years was 0.581%.
Leverage (Debt)
The company has low debt level at 0.5x Net Debt/EBITDA - at the same time with high growth. In the longer period the company showed big decline in leverage of 1.14x from 1.61x in FY2011 to 0.47x in FY2014.
Valuation vs. comparable companies
The company trades at 3.8x EV/EBITDA which is 76.1% lower than 16.0x Packaged Foods industry avearge calculated based on 72 companies. The market closed today at 6.3x P/E for Kse which is 65.8% lower than 18.4x Packaged Foods peer group avearge calculated on the basis of 13 companies.
Peers in Packaged Foods
Below we provide Kse 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 5 |
|---|
| Krbl ($KRBL) | | -2.2% | 5.6% | 27.6% | 39.9% |
| Sunil Agro Foods ($SUNILAGR) | | -34.2% | 1.6% | 38.3% | 29.1% |
| Simran Farms ($SIMRAN) | | -69.5% | 38.4% | 23.8% | 27.5% |
| Venky'S (India) ($VENKYS) | | -61.1% | 18.0% | 46.0% | 24.8% |
| Umang Dairies ($UMANGDAIR) | | -65.0% | 46.8% | 15.7% | 24.5% |
| |
|---|
| Median (11 companies) | | -50.3% | 19.0% | 15.7% | 16.0% |
|---|
| Kse ($KSE) | | -57.4% | 19.5% | 28.6% | 15.7% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| 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% |
| Vadilal Industries ($VADILALIND) | 4.0% | 10.1% | 19.8% | 11.6% | 11.2% |
| Britannia Industries ($BRITANNIA) | 2.0% | 5.2% | 5.7% | 6.9% | 9.2% |
| Adf Foods ($ADFFOODS) | 11.9% | 16.2% | 13.5% | 11.2% | 8.6% |
| |
|---|
| Median (10 companies) | 3.9% | 5.8% | 7.2% | 8.7% | 7.1% |
|---|
| Kse ($KSE) | 1.7% | 3.0% | 4.2% | 2.0% | 3.6% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Venky'S (India) ($VENKYS) | 0.8% | 6.4% | 8.9% | 6.6% | 10.4% |
| Krbl ($KRBL) | 8.3% | 5.8% | 4.1% | 4.0% | 6.1% |
| Vadilal Industries ($VADILALIND) | 6.9% | 20.1% | 12.2% | 9.4% | 5.9% |
| Adf Foods ($ADFFOODS) | 3.7% | 21.8% | 1.9% | 18.3% | 5.8% |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 2.1% | 3.6% | 2.7% | | 4.3% |
| |
|---|
| Median (8 companies) | 1.1% | 3.1% | 2.7% | 4.4% | 5.1% |
|---|
| Kse ($KSE) | 0.5% | 0.6% | 0.5% | 1.1% | 0.1% |
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Britannia Industries ($BRITANNIA) | 12.6% | 17.8% | 24.6% | 33.7% | 54.0% |
| Heritage Foods ($HERITGFOOD) | 11.2% | 5.9% | 11.7% | 29.6% | 22.4% |
| Umang Dairies ($UMANGDAIR) | -38.8% | 54.8% | 93.5% | 55.6% | 22.3% |
| Krbl ($KRBL) | 15.6% | 14.4% | 11.7% | 14.5% | 18.3% |
| Vadilal Industries ($VADILALIND) | 11.0% | 9.6% | 20.5% | 9.2% | 9.4% |
| |
|---|
| Median (13 companies) | 11.2% | 11.3% | 12.0% | 10.9% | 18.3% |
|---|
| Kse ($KSE) | 23.6% | 14.7% | 27.7% | 14.1% | 36.9% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Venky'S (India) ($VENKYS) | 0.9x | 0.9x | 2.6x | 2.8x | 6.7x |
| Vadilal Industries ($VADILALIND) | 4.7x | 5.8x | 2.6x | 4.5x | 3.9x |
| Krbl ($KRBL) | 2.8x | 3.7x | 4.1x | 2.9x | 3.0x |
| Umang Dairies ($UMANGDAIR) | | 1.8x | 0.6x | 0.5x | 1.7x |
| Adf Foods ($ADFFOODS) | -0.0x | 1.5x | 1.6x | 1.7x | 1.2x |
| |
|---|
| Median (10 companies) | 3.0x | 2.3x | 1.8x | 0.9x | 1.1x |
|---|
| Kse ($KSE) | 1.2x | 1.6x | 1.0x | 1.6x | 0.5x |
