Sutlej Textiles & Industries reports 90.3% CAPEX growth and almost no change in Revenue of 18,782
07-05-2015 • About Sutlej Textiles & Industries (
$SUTLEJTEX) • By InTwits
Sutlej Textiles & Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sutlej Textiles & Industries has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.8%. At the same time it's a lot of higher than industry average of 5.8%.
- CAPEX is quite volatile: 2,016 in FY2015, 1,059 in FY2014, 307 in FY2013, 522 in FY2012, 370 in FY2011
- The company has highly profitable business model: ROIC is at 14.6%
- It operates with high leverage: Net Debt/EBITDA is 2.6x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sutlej Textiles & Industries ($SUTLEJTEX) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 15,816 | 15,370 | 16,802 | 18,806 | 18,782 | -0.1% |
| SG&A | | | | | 267 | |
| EBITDA | 2,409 | 1,662 | 1,977 | 2,698 | 2,321 | -14.0% |
| Net Income | 1,143 | 317 | 770 | 1,314 | 1,155 | -12.1% |
Balance Sheet
|
|---|
| Cash | 41 | 35 | 43 | 34 | 26 | -22.9% |
| Short Term Debt | 3,436 | 1,927 | 2,088 | 2,453 | 2,585 | 5.3% |
| Long Term Debt | 4,644 | 4,115 | 3,377 | 2,667 | 3,392 | 27.2% |
Cash flow
|
|---|
| Capex | 370 | 522 | 307 | 1,059 | 2,016 | 90.3% |
Ratios
|
|---|
| Revenue growth | -32.1% | -2.8% | 9.3% | 11.9% | -0.1% | |
| EBITDA growth | 92.7% | -31.0% | 18.9% | 36.5% | -14.0% | |
| EBITDA Margin | 15.2% | 10.8% | 11.8% | 14.3% | 12.4% | -2.0% |
| Net Income Margin | 7.2% | 2.1% | 4.6% | 7.0% | 6.1% | -0.8% |
| SG&A, % of revenue | | | | | 1.4% | 1.4% |
| CAPEX, % of revenue | 2.3% | 3.4% | 1.8% | 5.6% | 10.7% | 5.1% |
| ROIC | 16.0% | 9.5% | 13.6% | 19.8% | 14.6% | -5.3% |
| ROE | 57.5% | 12.1% | 24.7% | 32.5% | 22.6% | -9.9% |
| Net Debt/EBITDA | 3.3x | 3.6x | 2.7x | 1.9x | 2.6x | 0.7x |
Revenue and profitability
Sutlej Textiles & Industries's Revenue showed almost no change in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 2.0 pp from 14.3% to 12.4% in FY2015.
Net Income marign decreased slightly on 0.84 pp from 7.0% to 6.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 10.7%. The company showed CAPEX/Revenue growth of 7.3 pp from 3.4% in FY2012 to 10.7% in FY2015. It's average level of CAPEX/Revenue for the last three years was 6.1%.Battling declining revenue Sutlej Textiles & Industries invested a large share of EBITDA (86.8%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at high and attractive ROE (22.62%) while ROIC is a bit lower (14.57%). ROIC decreased on 5.3 pp from 19.8% to 14.6% in FY2015. ROE decreased on 9.9 pp from 32.5% to 22.6% in FY2015.
Leverage (Debt)
Debt level is 2.6x Net Debt / EBITDA and 2.6x Debt / EBITDA. Net Debt / EBITDA jumped on 0.7x from 1.9x to 2.6x in FY2015. Debt jumped on 16.7% in FY2015 while cash dropped on 22.9% in FY2015.
Valuation
The company's trades at EV/EBITDA 5.1x and P/E 5.0x while industy averages are 10.5x and 26.1x. Sutlej Textiles & Industries's EV/(EBITDA-CAPEX) is 38.5x with the industry average at 4.7x.
Appendix 1: Peers in Textiles
Below we provide Sutlej Textiles & Industries 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Olympia Industries ($OLYMPTX) | -99.6% | -58.0% | -96.6% | 74,809.1% | |
| Gujarat Cotex ($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 ($GTNTEX) | -27.7% | -8.8% | 51.2% | 39.4% | |
| |
|---|
| Median (73 companies) | -32.8% | 5.0% | 10.0% | 14.4% | 3.5% |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | | -2.8% | 9.3% | 11.9% | -0.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ruby Mills ($RUBYMILLS) | 25.2% | 28.3% | 25.1% | 28.6% | |
| Vardhman Textiles ($VTL) | 24.9% | 13.8% | 20.1% | 24.3% | |
| Welspun India ($WELSPUNIND) | 13.3% | 12.2% | 16.8% | 22.6% | 24.1% |
| Nitin Spinners ($NITINSPIN) | 23.7% | 10.5% | 19.7% | 19.3% | 17.0% |
| Shri Dinesh Mills ($SHRIDINE) | 24.7% | 22.4% | 18.5% | 18.7% | |
| |
|---|
| Median (53 companies) | 12.7% | 6.3% | 9.5% | 9.5% | 11.9% |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | 15.2% | 10.8% | 11.8% | 14.3% | 12.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Worldwide ($JINDWORLD) | 3.6% | 3.0% | 10.5% | 20.7% | |
| SRF ($SRF) | 0.0% | 0.0% | 18.7% | 20.0% | |
| Welspun India ($WELSPUNIND) | 11.3% | 5.6% | 7.8% | 16.4% | 10.9% |
| Sel Manufacturing Company ($SELMCL) | 54.2% | 53.9% | 25.1% | 14.0% | |
| Grasim Industries ($GRASIM) | 7.8% | 17.7% | 21.7% | 11.6% | 10.2% |
| |
|---|
| Median (20 companies) | 4.5% | 3.0% | 5.9% | 7.4% | 8.4% |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | 2.3% | 3.4% | 1.8% | 5.6% | 10.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nitin Spinners ($NITINSPIN) | 13.8% | 6.0% | 19.5% | 21.5% | 17.5% |
| Vardhman Textiles ($VTL) | 15.5% | 6.6% | 11.9% | 17.3% | |
| Maral Overseas ($MARALOVER) | | 4.6% | 14.1% | 16.0% | |
| Rswm ($RSWM) | 17.4% | 2.2% | 15.2% | 15.5% | |
| Mandhana Industries ($MANDHANA) | 86.1% | 12.1% | 13.2% | 14.2% | |
| |
|---|
| Median (126 companies) | 10.1% | 3.5% | 9.0% | 8.9% | 10.5% |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | 16.0% | 9.5% | 13.6% | 19.8% | 14.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jaybharat Textiles & Real Estate ($JAYTEX) | 8.4x | 10.9x | 53.6x | 23.8x | |
| Sree Jayalakshmi Autospin ($SREEJAYA) | 3.4x | | 9.7x | 12.8x | |
| Bombay Rayon Fashions ($BRFL) | 5.9x | 4.9x | 4.9x | 11.6x | |
| Sel Manufacturing Company ($SELMCL) | 5.6x | 9.4x | 6.6x | 11.5x | |
| Ruby Mills ($RUBYMILLS) | 15.9x | 12.6x | 15.3x | 10.8x | |
| |
|---|
| Median (69 companies) | 3.9x | 3.8x | 3.2x | 0.0x | 2.2x |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | 3.3x | 3.6x | 2.7x | 1.9x | 2.6x |
