Vardhman Textiles reports 44.3% Net Income decline and 7.8 pp EBITDA Margin decline from 24.3% to 16.5%
08-05-2015 • About Vardhman Textiles (
$VTL) • By InTwits
Vardhman Textiles reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Vardhman Textiles has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.5%. At the same time it's in pair with industry average of 9.8%.
- CAPEX is quite volatile: 2,272 in FY2015, 3,747 in FY2014, 3,885 in FY2013, 2,452 in FY2012, 1,452 in FY2011
- The company has business model with low profitability: ROIC is at 8.5%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.3x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Vardhman Textiles ($VTL) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 44,185 | 46,407 | 49,721 | 61,664 | 67,860 | 10.0% |
| EBITDA | 11,006 | 6,405 | 9,997 | 14,996 | 11,203 | -25.3% |
| Net Income | 5,253 | 1,414 | 3,564 | 7,183 | 4,002 | -44.3% |
Balance Sheet
|
|---|
| Cash | 436 | 819 | 626 | 789 | 852 | 8.1% |
| Short Term Debt | 8,628 | 7,135 | 10,741 | 13,176 | 12,218 | -7.3% |
| Long Term Debt | 19,212 | 20,436 | 20,996 | 20,552 | 14,183 | -31.0% |
Cash flow
|
|---|
| Capex | 3,595 | 4,234 | 5,025 | 6,582 | 3,128 | -52.5% |
Ratios
|
|---|
| Revenue growth | -46.4% | 5.0% | 7.1% | 24.0% | 10.0% | |
| EBITDA growth | 55.0% | -41.8% | 56.1% | 50.0% | -25.3% | |
| EBITDA Margin | 24.9% | 13.8% | 20.1% | 24.3% | 16.5% | -7.8% |
| Net Income Margin | 11.9% | 3.0% | 7.2% | 11.6% | 5.9% | -5.8% |
| CAPEX, % of revenue | 8.1% | 9.1% | 10.1% | 10.7% | 4.6% | -6.1% |
| ROIC | 15.5% | 6.6% | 11.9% | 17.3% | 8.5% | -8.8% |
| ROE | 27.2% | 6.3% | 15.1% | 25.5% | 12.3% | -13.2% |
| Net Debt/EBITDA | 2.5x | 4.2x | 3.1x | 2.2x | 2.3x | 0.1x |
Revenue and profitability
Vardhman Textiles's Revenue jumped on 10.0% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 7.8 pp from 24.3% to 16.5% in FY2015.
Net Income marign decreased on 5.8 pp from 11.6% to 5.9% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 4.6%. The company's CAPEX/Revenue decreased on 4.5 pp from 9.1% in FY2012 to 4.6% in FY2015. It's average level of CAPEX/Revenue for the last three years was 8.5%.
Return on investment
The company operates at good ROE (12.30%) while ROIC is low (8.48%). ROIC decreased on 8.8 pp from 17.3% to 8.5% in FY2015. ROE dropped on 13.2 pp from 25.5% to 12.3% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.3x and Debt / EBITDA is 2.4x. Net Debt / EBITDA increased on 0.1x from 2.2x to 2.3x in FY2015. Debt dropped on 21.7% in FY2015 while cash increased on 8.1% in FY2015.
Appendix 1: Peers in Textiles
Below we provide Vardhman Textiles 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 ($GTNTEX) | -27.7% | -8.8% | 51.2% | 39.4% | |
| |
|---|
| Median (73 companies) | -30.3% | 4.8% | 10.0% | 14.2% | 2.5% |
|---|
| Vardhman Textiles ($VTL) | | 5.0% | 7.1% | 24.0% | 10.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ruby Mills ($RUBYMILLS) | 25.2% | 28.3% | 25.1% | 28.6% | |
| Welspun India ($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% | |
| Grasim Industries ($GRASIM) | 23.4% | 22.3% | 21.4% | 16.9% | 15.9% |
| |
|---|
| Median (53 companies) | 12.7% | 6.3% | 9.5% | 9.5% | 11.8% |
|---|
| Vardhman Textiles ($VTL) | 24.9% | 13.8% | 20.1% | 24.3% | 16.5% |
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 ($GRASIM) | 7.8% | 17.7% | 21.7% | 11.6% | 10.2% |
| |
|---|
| Median (20 companies) | 4.5% | 3.0% | 5.3% | 6.7% | 9.5% |
|---|
| Vardhman Textiles ($VTL) | 8.1% | 9.1% | 10.1% | 10.7% | 4.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nitin Spinners ($NITINSPIN) | 13.8% | 6.0% | 19.5% | 21.5% | 17.5% |
| Sutlej Textiles & Industries ($SUTLEJTEX) | 16.0% | 9.5% | 13.6% | 19.8% | 14.6% |
| Maral Overseas ($MARALOVER) | | 4.6% | 14.1% | 16.0% | |
| Rswm ($RSWM) | 17.4% | 2.2% | 15.2% | 15.5% | 11.8% |
| Mandhana Industries ($MANDHANA) | 86.1% | 12.1% | 13.2% | 14.2% | |
| |
|---|
| Median (126 companies) | 10.1% | 3.5% | 9.0% | 8.9% | 12.3% |
|---|
| Vardhman Textiles ($VTL) | 15.5% | 6.6% | 11.9% | 17.3% | 8.5% |
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 ($RUBYMILLS) | 15.9x | 12.6x | 15.3x | 10.8x | |
| |
|---|
| Median (69 companies) | 3.9x | 3.8x | 3.2x | 0.0x | 1.7x |
|---|
| Vardhman Textiles ($VTL) | 2.5x | 4.2x | 3.1x | 2.2x | 2.3x |
