SRF reports 86.4% Net Income growth and 2.8 pp EBITDA Margin growth from 13.2% to 16.0%
11-05-2015 • About SRF (
$SRF) • By InTwits
SRF reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- SRF has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.0%. At the same time it's in pair with industry average of 9.4%.
- CAPEX is quite volatile: 5,118 in FY2015, 7,995 in FY2014, 7,042 in FY2013, 0 in FY2012, 0 in FY2011
- The company has business model with low profitability: ROIC is at 9.7%
- It operates with high leverage: Net Debt/EBITDA is 3.3x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
SRF ($SRF) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 33,914 | 39,809 | 37,689 | 39,927 | 44,924 | 12.5% |
| EBITDA | 9,296 | 9,408 | 6,789 | 5,265 | 7,175 | 36.3% |
| Net Income | 4,842 | 3,788 | 2,530 | 1,625 | 3,028 | 86.4% |
Balance Sheet
|
|---|
| Cash | 819 | 1,300 | 1,804 | 746 | 991 | 32.8% |
| Short Term Debt | 6,395 | 8,007 | 6,079 | 4,627 | 6,467 | 39.8% |
| Long Term Debt | 5,695 | 7,171 | 10,961 | 17,126 | 17,882 | 4.4% |
Cash flow
|
|---|
| Capex | 0 | 0 | 7,042 | 7,995 | 5,118 | -36.0% |
Ratios
|
|---|
| Revenue growth | -39.6% | 17.4% | -5.3% | 5.9% | 12.5% | |
| EBITDA growth | 44.3% | 1.2% | -27.8% | -22.4% | 36.3% | |
| EBITDA Margin | 27.4% | 23.6% | 18.0% | 13.2% | 16.0% | 2.8% |
| Net Income Margin | 14.3% | 9.5% | 6.7% | 4.1% | 6.7% | 2.7% |
| CAPEX, % of revenue | 0.0% | 0.0% | 18.7% | 20.0% | 11.4% | -8.6% |
| ROIC | 25.7% | 20.9% | 11.1% | 7.1% | 9.7% | 2.6% |
| ROE | 32.6% | 21.3% | 13.2% | 8.1% | 13.9% | 5.8% |
| Net Debt/EBITDA | 1.2x | 1.5x | 2.2x | 4.0x | 3.3x | -0.7x |
Revenue and profitability
SRF's Revenue jumped on 12.5% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.7 pp from 12.4% to 15.1% in FY2015.
Net Income marign increased on 2.7 pp from 4.1% to 6.7% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 SRF had CAPEX/Revenue of 11.4%. The company showed fast CAPEX/Revenue growth11.4 pp from 0% in FY2012 to 11.4% in FY2015. For the last three years the average CAPEX/Revenue was 16.7%.To deliver this fast growth the company invested a large share of EBITDA (71.3%) to CAPEX.
Return on investment
The company operates at good ROE (13.88%) while ROIC is low (9.70%). ROIC increased on 2.6 pp from 7.1% to 9.7% in FY2015. ROE increased on 5.8 pp from 8.1% to 13.9% in FY2015.
Leverage (Debt)
Debt level is 3.3x Net Debt / EBITDA and 3.4x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 4.0x to 3.3x in FY2015. Debt surged on 11.9% in FY2015 while cash jumped on 32.8% in FY2015.
Appendix 1: Peers in Textiles
Below we provide SRF 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 ($GTNTEX) | -27.7% | -8.8% | 51.2% | 39.4% | |
| |
|---|
| Median (73 companies) | -29.3% | 4.8% | 10.0% | 14.4% | 3.0% |
|---|
| SRF ($SRF) | | 17.4% | -5.3% | 5.9% | 12.5% |
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% | 16.5% |
| 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 ($SHRIDINE) | 24.7% | 22.4% | 18.5% | 18.7% | |
| |
|---|
| Median (53 companies) | 12.7% | 6.3% | 9.5% | 9.5% | 11.8% |
|---|
| SRF ($SRF) | 27.4% | 23.6% | 18.0% | 13.2% | 16.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jindal Worldwide ($JINDWORLD) | 3.6% | 3.0% | 10.5% | 20.7% | |
| Welspun India ($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% |
| Dcm ($DCM) | 3.0% | 2.7% | 9.1% | 11.6% | |
| |
|---|
| Median (20 companies) | 4.5% | 3.4% | 5.3% | 6.7% | 8.9% |
|---|
| SRF ($SRF) | 0.0% | 0.0% | 18.7% | 20.0% | 11.4% |
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% |
| Vardhman Textiles ($VTL) | 15.5% | 6.6% | 11.9% | 17.3% | 8.5% |
| Maral Overseas ($MARALOVER) | | 4.6% | 14.1% | 16.0% | |
| Rswm ($RSWM) | 17.4% | 2.2% | 15.2% | 15.5% | 11.8% |
| |
|---|
| Median (126 companies) | 10.1% | 3.5% | 9.0% | 9.6% | 11.8% |
|---|
| SRF ($SRF) | 25.7% | 20.9% | 11.1% | 7.1% | 9.7% |
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 ($RUBYMILLS) | 15.9x | 12.6x | 15.3x | 10.8x | |
| |
|---|
| Median (69 companies) | 3.9x | 3.8x | 3.2x | 0.0x | 1.2x |
|---|
| SRF ($SRF) | 1.2x | 1.5x | 2.2x | 4.0x | 3.3x |
