Nitin Spinners is an attractive growth stock
11-05-2015 • About Nitin Spinners (
$NITINSPIN) • By InTwits
Have you thought about Nitin Spinners as a growth stock? Its revenue performance, profitability and financial model stands it out vs. other public companies on the market.
Growth story
Nitin Spinners showed fast growth in the last financial year. Nitin Spinners's revenue surged on 26.2% in FY2015. At the same time the company well managed its profitability and also showed EBITDA growth of 11.4% for the same period.
If we look for the longer period the company showed fast revenue growth of 12.9% from FY2012 to FY2015 annually. EBITDA surged on 32.5% from FY2012 to FY2015 annually.
Nitin Spinners ($NITINSPIN) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 4,109 | 4,283 | 4,461 | 4,883 | 6,165 |
|---|
| Revenue growth, % | | 4.2% | 4.1% | 9.5% | 26.2% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 973 | 451 | 879 | 941 | 1,048 |
|---|
| EBITDA growth, % | | -53.7% | 95.1% | 7.0% | 11.4% |
|---|
| EBITDA margin, % | 23.7% | 10.5% | 19.7% | 19.3% | 17.0% |
|---|
| Net Income | 67 | 3 | 141 | 348 | 410 |
|---|
| Net Income margin, % | 1.64% | 0.0708% | 3.17% | 7.12% | 6.64% |
|---|
| |
| CAPEX | 10 | 83 | 117 | 392 | 2,610 |
|---|
| CAPEX/Revenue, % | 0.238% | 1.93% | 2.61% | 8.03% | 42.3% |
|---|
| Debt | 2,840 | 2,489 | 2,066 | 1,761 | 3,476 |
|---|
| Cash | 1 | 1 | 3 | 1 | 7 |
|---|
| Net Debt/EBITDA | 2.9x | 5.5x | 2.3x | 1.9x | 3.3x |
|---|
| |
| ROIC, % | 13.8% | 6.0% | 19.5% | 21.5% | 17.5% |
|---|
| ROE, % | 8.1% | 0.4% | 15.1% | 29.9% | 27.4% |
|---|
Profitability and return on investment
Despite revenue growth EBITDA margin declined slightly from 19.3% in FY2014 to 17% in FY2015. In the longer period the company's EBITDA margin surged on 6.50 pp from 10.5% in FY2012 to 17% in FY2015.
We call Nitin Spinners an attractive growth stock as together with the growth it delivers high ROIC at 17.5%. During the last three years it surged - it was 5.98% in FY2012. For the last three years the average ROIC was 19.5%.
The company showed decline of 0.500 pp from 7.10% to 6.60% in FY2015. If we look for the longer period Net Income margin surged on 6.50 pp from 0.100% in FY2012 to 6.60% in FY2015.
Nitin Spinners operates at ROE of 27.4%. Average ROE for the last three years was 24.2%.
Capital expenditures (CAPEX)
To fuel this fast growth the company had to invest in CAPEX.In FY2015 Nitin Spinners had CAPEX/Revenue of 42.3%. Nitin Spinners's CAPEX/Revenue surged on 40.4 pp from 1.93% in FY2012 to 42.3% in FY2015. For the last three years the average CAPEX/Revenue was 17.7%.
Leverage (Debt)
Nitin Spinners has medium debt level at 3.3x Net Debt/EBITDA to maintain high growth. In the last 3 years the company showed big decline in leverage of 2.21x from 5.52x in FY2012 to 3.31x in FY2015.
Valuation vs. comparable companies
At the end of trading day today Nitin Spinners traded at 5.3x EV/EBITDA which is 66.4% lower than 15.6x Textiles peer group avearge calculated on the basis of 451 companies. At the end of trading day today Nitin Spinners traded at 5.0x P/E which is 77.9% lower than 22.5x Textiles peer group avearge calculated on the basis of 39 companies.
Peers in Textiles
Below we provide Nitin Spinners 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($GTNTEX) | -27.7% | -8.8% | 51.2% | 39.4% | |
| |
|---|
| Median (73 companies) | -32.1% | 5.0% | 10.0% | 14.4% | 7.7% |
|---|
| Nitin Spinners ($NITINSPIN) | | 4.2% | 4.1% | 9.5% | 26.2% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Ruby Mills ($RUBYMILLS) | 25.2% | 28.3% | 25.1% | 28.6% | |
| Vardhman Textiles ($VTL) | 24.9% | 13.8% | 20.1% | 24.3% | |
| Welspun India ($WELSPUNIND) | 13.3% | 12.2% | 16.8% | 22.6% | 24.1% |
| Shri Dinesh Mills ($SHRIDINE) | 24.7% | 22.4% | 18.5% | 18.7% | |
| Grasim Industries ($GRASIM) | 23.4% | 22.3% | 21.4% | 16.9% | 15.9% |
| |
|---|
| Median (53 companies) | 12.7% | 6.3% | 9.5% | 9.5% | 14.2% |
|---|
| Nitin Spinners ($NITINSPIN) | 23.7% | 10.5% | 19.7% | 19.3% | 17.0% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($GRASIM) | 7.8% | 17.7% | 21.7% | 11.6% | 10.2% |
| |
|---|
| Median (20 companies) | 4.5% | 3.4% | 5.9% | 6.7% | 8.4% |
|---|
| Nitin Spinners ($NITINSPIN) | 0.2% | 1.9% | 2.6% | 8.0% | 42.3% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | 16.0% | 9.5% | 13.6% | 19.8% | |
| Vardhman Textiles ($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 ($MANDHANA) | 86.1% | 12.1% | 13.2% | 14.2% | |
| |
|---|
| Median (126 companies) | 10.1% | 3.5% | 9.0% | 8.9% | 10.5% |
|---|
| Nitin Spinners ($NITINSPIN) | 13.8% | 6.0% | 19.5% | 21.5% | 17.5% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 ($RUBYMILLS) | 15.9x | 12.6x | 15.3x | 10.8x | |
| |
|---|
| Median (69 companies) | 3.9x | 3.8x | 3.2x | 0.0x | 2.3x |
|---|
| Nitin Spinners ($NITINSPIN) | 2.9x | 5.5x | 2.3x | 1.9x | 3.3x |
