G.M.Breweries reports 13.5% Net Income decline while 6.5% Revenue growth
07-04-2015 • About G.M.Breweries (
$GMBREW) • By InTwits
G.M.Breweries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- G.M.Breweries has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's in pair with industry average of 4.2%.
- CAPEX is quite volatile: 0 in FY2015, 0 in FY2014, 193 in FY2013, 79.5 in FY2012, 166 in FY2011
- The company has highly profitable business model: ROIC is at 18.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
G.M.Breweries ($GMBREW) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,316 | 2,570 | 2,878 | 2,886 | 3,073 | 6.5% |
| EBITDA | 358 | 258 | 261 | 394 | 352 | -10.6% |
| Net Income | 206 | 138 | 139 | 215 | 186 | -13.5% |
Balance Sheet
|
|---|
| Cash | 6 | 6 | 37 | 50 | 92 | 85.6% |
| Short Term Debt | 296 | 236 | 174 | 54 | 71 | 30.7% |
| Long Term Debt | 21 | 0 | 54 | 232 | 192 | -17.3% |
Cash flow
|
|---|
| Capex | 166 | 79 | 193 | 0 | 0 | |
Ratios
|
|---|
| Revenue growth | -37.0% | 10.9% | 12.0% | 0.3% | 6.5% | |
| EBITDA growth | 122.5% | -28.0% | 1.2% | 51.0% | -10.6% | |
| EBITDA Margin | 15.5% | 10.0% | 9.1% | 13.7% | 11.5% | -2.2% |
| Net Income Margin | 8.9% | 5.4% | 4.8% | 7.5% | 6.1% | -1.4% |
| CAPEX, % of revenue | 7.2% | 3.1% | 6.7% | 0.0% | 0.0% | 0.0% |
| ROIC | 29.6% | 18.4% | 17.0% | 21.9% | 18.0% | -3.9% |
| ROE | 31.5% | 17.3% | 15.4% | 20.5% | 15.5% | -5.0% |
| Net Debt/EBITDA | 0.9x | 0.9x | 0.7x | 0.6x | 0.5x | -0.1x |
Revenue and profitability
The company's Revenue increased on 6.5% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin surged on 16.0 pp from -6.3% to 9.7% in FY2015.
Net Income marign decreased slightly on 1.4 pp from 7.5% to 6.1% in FY2015.
Return on investment
The company operates at good ROIC (18.00%) and ROE (15.48%). ROIC decreased on 3.9 pp from 21.9% to 18.0% in FY2015. ROE decreased on 5.0 pp from 20.5% to 15.5% in FY2015.
Leverage (Debt)
Debt level is 0.5x Net Debt / EBITDA and 0.7x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from 0.6x to 0.5x in FY2015. Debt decreased on 8.2% in FY2015 while cash surged on 85.6% in FY2015.
Valuation
G.M.Breweries's trades at EV/EBITDA 4.3x and P/E 7.3x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 4.3x with the industry average at 4.7x.
Appendix 1: Peers in Breweries & Distilleries
Below we provide G.M.Breweries benchmarking against other companies in Breweries & Distilleries 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Khoday India ($KHODAY) | -25.0% | 19.9% | -24.7% | 34.3% | |
| Pioneer Distilleries ($PIONDIST) | -68.6% | 94.2% | -0.9% | 25.1% | |
| Tilaknagar Industries ($TI) | -38.1% | 17.0% | 34.6% | 9.4% | |
| United Breweries ($UBL) | -47.2% | 16.3% | 9.5% | 8.5% | |
| Ifb Agro Industries ($IFBAGRO) | -37.5% | -4.8% | 5.4% | 8.4% | |
| |
|---|
| Median (7 companies) | -37.5% | 17.0% | 5.4% | 8.5% | |
|---|
| G.M.Breweries ($GMBREW) | | 10.9% | 12.0% | 0.3% | 6.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tilaknagar Industries ($TI) | 24.6% | 26.2% | 22.7% | 21.0% | |
| Khoday India ($KHODAY) | 9.1% | 28.0% | 7.1% | 19.2% | |
| Som Distilleries & Breweries ($SDBL) | 15.0% | 14.4% | 15.0% | 15.0% | |
| United Breweries ($UBL) | 12.8% | 11.6% | 12.3% | 10.3% | |
| Ifb Agro Industries ($IFBAGRO) | 7.8% | 11.5% | 10.8% | 9.2% | |
| |
|---|
| Median (7 companies) | 12.8% | 12.2% | 12.3% | 10.3% | |
|---|
| G.M.Breweries ($GMBREW) | 15.5% | 10.0% | 9.1% | 13.7% | 11.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pioneer Distilleries ($PIONDIST) | 33.1% | 29.8% | 35.0% | 30.0% | |
| Tilaknagar Industries ($TI) | 23.7% | 20.6% | 10.0% | 14.8% | |
| Ifb Agro Industries ($IFBAGRO) | 2.7% | 4.6% | 1.8% | 9.8% | |
| United Breweries ($UBL) | 14.4% | 10.7% | 9.8% | 5.0% | |
| United Spirits ($UNITDSPR) | 3.7% | 7.4% | 2.8% | 2.2% | |
| |
|---|
| Median (6 companies) | 7.2% | 10.7% | 4.5% | 7.4% | |
|---|
| G.M.Breweries ($GMBREW) | 7.2% | 3.1% | 6.7% | 0.0% | 0.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Som Distilleries & Breweries ($SDBL) | 25.8% | 23.3% | 22.2% | 19.2% | |
| Ifb Agro Industries ($IFBAGRO) | 25.9% | 33.3% | 26.7% | 18.8% | |
| Tilaknagar Industries ($TI) | 13.3% | 11.6% | 11.7% | 10.7% | |
| United Breweries ($UBL) | 12.4% | 11.5% | 11.6% | 8.1% | |
| Silver Oak (India) ($SILVOAK) | | | 8.4% | 0.3% | |
| |
|---|
| Median (11 companies) | 10.4% | 11.5% | 8.7% | 8.1% | |
|---|
| G.M.Breweries ($GMBREW) | 29.6% | 18.4% | 17.0% | 21.9% | 18.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pioneer Distilleries ($PIONDIST) | | | | 10.4x | |
| Tilaknagar Industries ($TI) | 3.6x | 4.3x | 3.8x | 4.8x | |
| United Breweries ($UBL) | 1.9x | 2.0x | 2.5x | 2.7x | |
| Silver Oak (India) ($SILVOAK) | | 2.7x | 1.1x | 1.2x | |
| Khoday India ($KHODAY) | 7.8x | 2.5x | 12.4x | 0.0x | |
| |
|---|
| Median (7 companies) | 3.6x | 2.5x | 2.5x | 1.2x | |
|---|
| G.M.Breweries ($GMBREW) | 0.9x | 0.9x | 0.7x | 0.6x | 0.5x |
