Godrej Consumer Products reports 19.4% Net Income growth and 1.1 pp EBITDA Margin growth from 15.5% to 16.6%
28-04-2015 • About Godrej Consumer Products (
$GODREJCP) • By InTwits
Godrej Consumer Products reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Godrej Consumer Products has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.9%. At the same time it's a lot of higher than industry average of 5.7%.
- CAPEX is quite volatile: 2,126 in FY2015, 1,329 in FY2014, 2,636 in FY2013, 1,565 in FY2012, 13,880 in FY2011
- The company has highly profitable business model: ROIC is at 18.8%
- It operates with high leverage: Net Debt/EBITDA is 1.7x while industry average is 0.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Godrej Consumer Products ($GODREJCP) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 36,763 | 48,509 | 63,908 | 75,826 | 82,422 | 8.7% |
| EBITDA | 6,531 | 8,759 | 10,152 | 11,771 | 13,686 | 16.3% |
| Net Income | 5,147 | 7,267 | 7,961 | 7,597 | 9,071 | 19.4% |
Balance Sheet
|
|---|
| Cash | 2,269 | 4,640 | 7,596 | 6,353 | 4,127 | -35.0% |
| Short Term Debt | 6,587 | 3,488 | 5,902 | 7,826 | 6,941 | -11.3% |
| Long Term Debt | 13,420 | 15,281 | 18,662 | 15,903 | 20,230 | 27.2% |
Cash flow
|
|---|
| Capex | 13,880 | 1,565 | 2,636 | 1,329 | 2,126 | 60.0% |
Ratios
|
|---|
| Revenue growth | -61.4% | 32.0% | 31.7% | 18.6% | 8.7% | |
| EBITDA growth | 59.4% | 34.1% | 15.9% | 16.0% | 16.3% | |
| EBITDA Margin | 17.8% | 18.1% | 15.9% | 15.5% | 16.6% | 1.1% |
| Net Income Margin | 14.0% | 15.0% | 12.5% | 10.0% | 11.0% | 1.0% |
| CAPEX, % of revenue | 37.8% | 3.2% | 4.1% | 1.8% | 2.6% | 0.8% |
| ROIC | 25.5% | 19.1% | 17.4% | 17.7% | 18.8% | 1.1% |
| ROE | 38.4% | 32.1% | 26.0% | 21.4% | 22.4% | 1.0% |
| Net Debt/EBITDA | 2.7x | 1.6x | 1.7x | 1.5x | 1.7x | 0.2x |
Revenue and profitability
The company's Revenue increased on 8.7% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.4 pp from -1.3% to 6.1% in FY2015.
Net Income marign increased slightly on 0.99 pp from 10.0% to 11.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Godrej Consumer Products had CAPEX/Revenue of 2.6%. Godrej Consumer Products's CAPEX/Revenue decreased slightly on 0.65 pp from 3.2% in FY2012 to 2.6% in FY2015. For the last three years the average CAPEX/Revenue was 2.8%.
Return on investment
The company operates at high and attractive ROE (22.44%) while ROIC is a bit lower (18.79%). ROIC increased slightly on 1.1 pp from 17.7% to 18.8% in FY2015. ROE increased slightly on 1.0 pp from 21.4% to 22.4% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.7x and Debt / EBITDA is 2.0x. Net Debt / EBITDA jumped on 0.2x from 1.5x to 1.7x in FY2015. Debt jumped on 14.5% in FY2015 while cash dropped on 35.0% in FY2015.
Valuation
The company's trades at EV/EBITDA 29.0x and P/E 41.2x while industy averages are 10.5x and 26.1x. Godrej Consumer Products's EV/(EBITDA-CAPEX) is 34.3x with the industry average at 4.7x.
Appendix 1: Peers in Personal Products
Below we provide Godrej Consumer Products benchmarking against other companies in Personal 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Procter & Gamble Hygiene & Health Care ($PGHH) | -65.3% | 29.4% | 29.9% | 21.5% | |
| Dabur India ($DABUR) | -56.2% | 29.3% | 16.3% | 15.0% | |
| Colgate-Palmolive (India) ($COLPAL) | -55.8% | 17.8% | 17.5% | 13.1% | |
| Hindustan Unilever ($HINDUNILVR) | -60.1% | 17.0% | 14.5% | 8.4% | |
| Emami ($EMAMILTD) | -53.7% | 16.6% | 16.9% | 7.2% | |
| |
|---|
| Median (7 companies) | -56.0% | 22.4% | 16.9% | 8.4% | |
|---|
| Godrej Consumer Products ($GODREJCP) | | 32.0% | 31.7% | 18.6% | 8.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Emami ($EMAMILTD) | 21.8% | 20.9% | 20.5% | 24.3% | |
| Bliss Gvs Pharma ($BLISSGVS) | | 27.2% | 28.1% | 20.9% | |
| Procter & Gamble Hygiene & Health Care ($PGHH) | 16.6% | 16.3% | 15.4% | 20.7% | |
| Colgate-Palmolive (India) ($COLPAL) | 22.6% | 21.7% | 21.0% | 18.6% | |
| Hindustan Unilever ($HINDUNILVR) | 14.0% | 15.2% | 16.0% | 16.6% | |
| |
|---|
| Median (7 companies) | 17.6% | 16.3% | 16.0% | 18.6% | |
|---|
| Godrej Consumer Products ($GODREJCP) | 17.8% | 18.1% | 15.9% | 15.5% | 16.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bliss Gvs Pharma ($BLISSGVS) | | 8.7% | 5.0% | 16.7% | |
| Colgate-Palmolive (India) ($COLPAL) | 1.8% | 3.8% | 4.9% | 9.0% | |
| Procter & Gamble Hygiene & Health Care ($PGHH) | 5.5% | 4.2% | 2.2% | 7.2% | |
| Emami ($EMAMILTD) | 4.0% | 8.0% | 5.0% | 3.6% | |
| Dabur India ($DABUR) | 22.7% | 4.4% | 3.9% | 3.0% | |
| |
|---|
| Median (7 companies) | 4.7% | 4.2% | 4.9% | 3.6% | |
|---|
| Godrej Consumer Products ($GODREJCP) | 37.8% | 3.2% | 4.1% | 1.8% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Hindustan Unilever ($HINDUNILVR) | 96.0% | 99.9% | 114.4% | 133.0% | |
| Colgate-Palmolive (India) ($COLPAL) | 134.8% | 121.4% | 120.4% | 104.4% | |
| Emami ($EMAMILTD) | 28.2% | 31.5% | 36.7% | 43.3% | |
| Procter & Gamble Hygiene & Health Care ($PGHH) | 25.2% | 28.1% | 30.3% | 43.2% | |
| Dabur India ($DABUR) | 36.5% | 29.4% | 28.7% | 30.8% | |
| |
|---|
| Median (9 companies) | 27.1% | 28.7% | 30.3% | 30.8% | |
|---|
| Godrej Consumer Products ($GODREJCP) | 25.5% | 19.1% | 17.4% | 17.7% | 18.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Bliss Gvs Pharma ($BLISSGVS) | | 0.0x | 1.1x | 1.9x | |
| Cupid ($CUPID) | 2.2x | 1.7x | 0.5x | 1.4x | |
| Marico ($MARICO) | 1.4x | 1.5x | 1.3x | 0.9x | |
| Dabur India ($DABUR) | 1.0x | 0.8x | 1.2x | 0.3x | |
| Hindustan Unilever ($HINDUNILVR) | -0.6x | -0.3x | -0.1x | -0.2x | |
| |
|---|
| Median (8 companies) | 0.6x | 0.5x | 0.2x | 0.1x | |
|---|
| Godrej Consumer Products ($GODREJCP) | 2.7x | 1.6x | 1.7x | 1.5x | 1.7x |
