Pantaloons Fashion & Retail Net Debt / EBITDA dropped on 12.2x from 30.0x to 17.8x in 2015 while Debt jumped on 24.8%

13-05-2015 • About Pantaloons Fashion & Retail ($PFRL) • By InTwits

Pantaloons Fashion & Retail reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

• Pantaloons Fashion & Retail doesn't have a profitable business model yet: FY2015 ROIC is -6.8%
• EBITDA Margin is quite volatile: 4.0% in FY2015, 2.1% in FY2014, 5.5% in FY2013, 2.5% in FY2012, 1.0% in FY2011
• Pantaloons Fashion & Retail has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's a lot of higher than industry average of 5.8%.
• CAPEX is quite volatile: 1,163 in FY2015, 950 in FY2014, 300 in FY2013, 0 in FY2012, 0 in FY2011
• The company has unprofitable business model: ROIC is at -6.8%
• It operates with high leverage: Net Debt/EBITDA is 17.8x while industry average is 14.4x

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Pantaloons Fashion & Retail ($PFRL) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	128	174	12,851	16,612	18,507	11.4%
SG&A					733
EBITDA	1	4	713	347	733	111.5%
Net Income	0	12	-689	-1,877	-2,281
Balance Sheet
Cash	0	1	253	108	72	-33.5%
Short Term Debt	0	0	12,458	355	3,731	952.3%
Long Term Debt	0	0	4,849	10,150	9,375	-7.6%
Cash flow
Capex	0	0	300	950	1,163	22.4%
Ratios
Revenue growth	-99.4%	36.3%	7,273.1%	29.3%	11.4%
EBITDA growth	-100.9%	246.0%	16,102.3%	-51.4%	111.5%
EBITDA Margin	1.0%	2.5%	5.5%	2.1%	4.0%	1.9%
Net Income Margin	0.1%	7.0%	-5.4%	-11.3%	-12.3%	-1.0%
SG&A, % of revenue					4.0%	4.0%
CAPEX, % of revenue	0.0%	0.0%	2.3%	5.7%	6.3%	0.6%
ROIC		33.2%	1.3%	-3.6%	-6.8%	-3.2%
ROE	-6.2%	126.7%	-17.9%	-27.9%	-49.4%	-21.5%
Net Debt/EBITDA	-0.3x	-0.1x	23.9x	30.0x	17.8x	-12.2x

Revenue and profitability

Pantaloons Fashion & Retail's Revenue surged on 11.4% 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 1.0 pp from -11.3% to -12.3% in FY2015.

Capital expenditures (CAPEX) and working capital investments

Pantaloons Fashion & Retail's CAPEX/Revenue was 6.3% in FY2015. CAPEX/Revenue increased6.3 pp from 0% in FY2012 to 6.3% in FY2015. It's average CAPEX/Revenue for the last three years was 4.8%.To secure this fast growth the company made large investments to CAPEX (159% of EBITDA).

Return on investment

The company operates at negative ROIC (-6.77%) and ROE (-49.39%). ROIC decreased on 3.2 pp from -3.6% to -6.8% in FY2015. ROE dropped on 21.5 pp from -27.9% to -49.4% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 17.8x and Debt / EBITDA is 17.9x. Net Debt / EBITDA dropped on 12.2x from 30.0x to 17.8x in FY2015. Debt jumped on 24.8% in FY2015 while cash dropped on 33.5% in FY2015.

Appendix 1: Peers in Department Stores

Below we provide Pantaloons Fashion & Retail benchmarking against other companies in Department Stores 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	FY2011	FY2012	FY2013	FY2014	FY2015
V-Mart Retail ($VMART)		31.7%	36.0%	49.9%	25.3%
Trent ($TRENT)	-45.4%	22.1%	15.6%	9.4%
Future Market Networks ($FMNL)	-42.8%	58.6%	-3.8%	1.1%
Median (3 companies)	-44.1%	31.7%	15.6%	9.4%	25.3%
Pantaloons Fashion & Retail ($PFRL)		36.3%	7,273.1%	29.3%	11.4%

Top companies by EBITDA margin, %

Top	FY2011	FY2012	FY2013	FY2014	FY2015
Future Market Networks ($FMNL)	12.5%	25.1%		18.4%
V-Mart Retail ($VMART)	9.0%	10.3%	10.5%	9.4%	8.9%
Trent ($TRENT)	1.5%	-2.3%	-0.4%	0.7%
Median (3 companies)	5.3%	10.3%	5.0%	9.4%	20.0%
Pantaloons Fashion & Retail ($PFRL)	1.0%	2.5%	5.5%	2.1%	4.0%

Top companies by CAPEX/Revenue, %

Top	FY2011	FY2012	FY2013	FY2014	FY2015
Trent ($TRENT)	12.1%	8.8%	5.4%	5.8%
V-Mart Retail ($VMART)	4.4%	4.8%	5.8%	5.8%	4.7%
Median (2 companies)	8.2%	8.8%	5.6%	5.8%	4.7%
Pantaloons Fashion & Retail ($PFRL)	0.0%	0.0%	2.3%	5.7%	6.3%

Top companies by ROIC, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
V-Mart Retail ($VMART)	19.7%	26.3%	23.5%	21.9%	26.3%
Trent ($TRENT)	-0.8%	-6.2%	-3.5%	-2.6%
Rei Six Ten Retail ($REISIXTEN)	31.2%	1.2%	-3.4%
Future Market Networks ($FMNL)		2.5%
Store One Retail India ($STOREONE)
Median (5 companies)	19.7%	1.8%	-3.4%	9.6%	26.3%
Pantaloons Fashion & Retail ($PFRL)		33.2%	1.3%	-3.6%	-6.8%

Top companies by Net Debt / EBITDA

Top	FY2011	FY2012	FY2013	FY2014	FY2015
Future Market Networks ($FMNL)	2.2x	14.3x		37.1x
Trent ($TRENT)	9.5x			16.6x
V-Mart Retail ($VMART)	1.9x	1.3x	0.5x	0.8x	0.4x
Median (3 companies)	2.0x	1.3x	0.1x	16.6x	0.2x
Pantaloons Fashion & Retail ($PFRL)	-0.3x	-0.1x	23.9x	30.0x	17.8x

Similar news

13-05-2015 Fortune Financial Services (India) reports 371% CAPEX growth and 188% Revenue growth

13-05-2015 Jayant Agro-Organics Debt dropped on 37.4% in 2015 while Revenue increased slightly on 1.2%

13-05-2015 Capital First Net Income surged on 117% in 2015 while EBITDA Margin decreased slightly on 1.0 pp from 67.6% to 66.6%

13-05-2015 Pennar Industries EBITDA jumped on 31.0% in 2015 and EBITDA Margin increased slightly on 1.3 pp from 8.0% to 9.3%

13-05-2015 Aditya Birla Chemicals (India) reports 48.7% CAPEX decline while 5.6% Revenue growth