Looking for a growth stock? Pay attention to V-Mart Retail
11-05-2015 • About V-Mart Retail (
$VMART) • By InTwits
V-Mart Retail is a fast-growing stock in Department Stores industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
V-Mart Retail showed fast growth in the last financial year. V-Mart Retail's revenue surged on 25.3% in FY2015. In addition to revenue V-Mart Retail also keeps delivering EBITDA growth. It was 17.6% in FY2015
If we look for the longer period V-Mart Retail showed fast revenue growth of 36.7% from FY2012 to FY2015 annually. EBITDA surged on 29.9% from FY2012 to FY2015 annually.
V-Mart Retail ($VMART) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 2,140 | 2,819 | 3,835 | 5,750 | 7,202 |
|---|
| Revenue growth, % | | 31.7% | 36.0% | 49.9% | 25.3% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 194 | 291 | 402 | 542 | 637 |
|---|
| EBITDA growth, % | | 50.3% | 38.1% | 34.8% | 17.6% |
|---|
| EBITDA margin, % | 9.04% | 10.3% | 10.5% | 9.43% | 8.85% |
|---|
| Net Income | 63 | 105 | 180 | 252 | 374 |
|---|
| Net Income margin, % | 2.93% | 3.71% | 4.70% | 4.38% | 5.19% |
|---|
| |
| CAPEX | 94 | 136 | 222 | 333 | 335 |
|---|
| CAPEX/Revenue, % | 4.40% | 4.82% | 5.78% | 5.79% | 4.66% |
|---|
| Debt | 378 | 402 | 353 | 438 | 302 |
|---|
| Cash | 15 | 11 | 153 | 16 | 28 |
|---|
| Net Debt/EBITDA | 1.9x | 1.3x | 0.5x | 0.8x | 0.4x |
|---|
| |
| ROIC, % | 19.7% | 26.3% | 23.5% | 21.9% | 26.3% |
|---|
| ROE, % | 15.4% | 21.3% | 17.8% | 15.8% | 19.9% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 9.40% in FY2014 to 8.90% in FY2015. If we look for the longer period the company showed big decline in EBITDA margin of 1.40 pp from 10.3% in FY2012 to 8.90% in FY2015.
We call V-Mart Retail an attractive growth stock as together with the growth it delivers high ROIC at 26.3%. During the last three years it showed almost no change - it was 26.3% in FY2012. Average ROIC for the last three years was 23.9%.
V-Mart Retail's Net Income margin surged on 0.800 pp from 4.40% to 5.20% in FY2015. In the last 3 years V-Mart Retail's Net Income margin surged on 1.50 pp from 3.70% in FY2012 to 5.20% in FY2015.
V-Mart Retail operates at ROE of 19.9%. For the last three years the average ROE was 17.9%.
Capital expenditures (CAPEX)
In FY2015 the company had CAPEX/Revenue of 4.66%. V-Mart Retail's CAPEX/Revenue decreased slightly on 0.159 pp from 4.82% in FY2012 to 4.66% in FY2015. For the last three years the average CAPEX/Revenue was 5.41%.
Leverage (Debt)
Having such a fast growth profile the company keeps low debt level at 0.4x Net Debt/EBITDA. In the longer period leverage dropped on 0.92x from 1.34x in FY2012 to 0.43x in FY2015.
Valuation vs. comparable companies
At the end of trading day today V-Mart Retail traded at 15.4x EV/EBITDA which is 10.3% higher than 13.9x Department Stores peer group avearge calculated on the basis of 12 companies. At the end of trading day today V-Mart Retail traded at 25.5x P/E which is 8.08% lower than 27.7x Department Stores peer group avearge calculated on the basis of 4 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 32.4x EV/(EBITDA-CAPEX) which is not surprisingly 669% higher than 4.2x Department Stores industry avearge calculated based on 2 companies.
Peers in Department Stores
Below you can find V-Mart Retail benchmarking vs. other companies in Department Stores industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Pantaloons Fashion & Retail ($PFRL) | -99.4% | 36.3% | 7,273.1% | 29.3% | |
| Trent ($TRENT) | -45.4% | 22.1% | 15.6% | 9.4% | |
| Future Market Networks ($FMNL) | -42.8% | 58.6% | -3.8% | 1.1% | |
| |
|---|
| Median (3 companies) | -45.4% | 36.3% | 15.6% | 9.4% | |
|---|
| V-Mart Retail ($VMART) | | 31.7% | 36.0% | 49.9% | 25.3% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Future Market Networks ($FMNL) | 12.5% | 25.1% | | 18.4% | |
| Pantaloons Fashion & Retail ($PFRL) | 1.0% | 2.5% | 5.5% | 2.1% | |
| Trent ($TRENT) | 1.5% | -2.3% | -0.4% | 0.7% | |
| |
|---|
| Median (3 companies) | 1.3% | 2.5% | 2.6% | 2.1% | 31.2% |
|---|
| V-Mart Retail ($VMART) | 9.0% | 10.3% | 10.5% | 9.4% | 8.9% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Trent ($TRENT) | 12.1% | 8.8% | 5.4% | 5.8% | |
| Pantaloons Fashion & Retail ($PFRL) | 0.0% | 0.0% | 2.3% | 5.7% | |
| |
|---|
| Median (2 companies) | 6.1% | 8.8% | 3.9% | 5.8% | |
|---|
| V-Mart Retail ($VMART) | 4.4% | 4.8% | 5.8% | 5.8% | 4.7% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Trent ($TRENT) | -0.8% | -6.2% | -3.5% | -2.6% | |
| Pantaloons Fashion & Retail ($PFRL) | | 33.2% | 1.3% | -3.6% | |
| Rei Six Ten Retail ($REISIXTEN) | 31.2% | 1.2% | -3.4% | | |
| Future Market Networks ($FMNL) | | 2.5% | | | |
| Store One Retail India ($STOREONE) | | | | | |
| |
|---|
| Median (5 companies) | 15.2% | 1.8% | -3.4% | -3.1% | |
|---|
| V-Mart Retail ($VMART) | 19.7% | 26.3% | 23.5% | 21.9% | 26.3% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Future Market Networks ($FMNL) | 2.2x | 14.3x | | 37.1x | |
| Pantaloons Fashion & Retail ($PFRL) | -0.3x | -0.1x | 23.9x | 30.0x | |
| Trent ($TRENT) | 9.5x | | | 16.6x | |
| |
|---|
| Median (3 companies) | 1.2x | -0.1x | 11.8x | 30.0x | 0.0x |
|---|
| V-Mart Retail ($VMART) | 1.9x | 1.3x | 0.5x | 0.8x | 0.4x |
