Britannia Industries reports 74.2% Net Income growth and 1.9 pp EBITDA Margin growth from 9.2% to 11.1%
21-05-2015 • About Britannia Industries (
$BRITANNIA) • By InTwits
Britannia Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 11.1% in FY2015 vs. 9.2% in FY2014 vs. 5.2% in FY2011
- Britannia Industries has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's a lot of higher than industry average of 5.7%.
- CAPEX is quite volatile: 1,177 in FY2015, 1,101 in FY2014, 2,250 in FY2013, 2,659 in FY2012, 897 in FY2011
- The company has highly profitable business model: ROIC is at 59.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Britannia Industries ($BRITANNIA) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 45,897 | 54,608 | 61,359 | 68,293 | 77,751 | 13.8% |
| EBITDA | 2,375 | 3,109 | 4,206 | 6,282 | 8,639 | 37.5% |
| Net Income | 1,344 | 1,996 | 2,595 | 3,954 | 6,886 | 74.2% |
Balance Sheet
|
|---|
| Cash | 753 | 594 | 1,029 | 1,086 | 2,215 | 103.9% |
| Short Term Debt | 145 | 5,425 | 3,528 | 1,213 | 1,017 | -16.2% |
| Long Term Debt | 6,043 | 617 | 272 | 284 | 433 | 52.5% |
Cash flow
|
|---|
| Capex | 897 | 2,659 | 2,250 | 1,101 | 1,177 | 6.9% |
Ratios
|
|---|
| Revenue growth | -50.3% | 19.0% | 12.4% | 11.3% | 13.8% | |
| EBITDA growth | 29.8% | 30.9% | 35.3% | 49.4% | 37.5% | |
| EBITDA Margin | 5.2% | 5.7% | 6.9% | 9.2% | 11.1% | 1.9% |
| Net Income Margin | 2.9% | 3.7% | 4.2% | 5.8% | 8.9% | 3.1% |
| CAPEX, % of revenue | 2.0% | 4.9% | 3.7% | 1.6% | 1.5% | -0.1% |
| ROIC | 17.8% | 24.6% | 33.7% | 54.0% | 59.4% | 5.4% |
| ROE | 44.1% | 54.3% | 53.7% | 58.3% | 67.4% | 9.1% |
| Net Debt/EBITDA | 2.3x | 1.8x | 0.7x | 0.1x | -0.1x | -0.2x |
Revenue and profitability
The company's Revenue surged on 13.8% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 1.2 pp from 20.9% to 19.7% in FY2015.
Net Income marign increased on 3.1 pp from 5.8% to 8.9% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.5% in FY2015. The company showed decline in CAPEX/Revenue of 3.4 pp from 4.9% in FY2012 to 1.5% in FY2015. For the last three years the average CAPEX/Revenue was 2.3%.
Return on investment
The company operates at high and attractive ROIC (59.45%) and ROE (67.41%). ROIC increased on 5.4 pp from 54.0% to 59.4% in FY2015. ROE increased on 9.1 pp from 58.3% to 67.4% in FY2015.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 0.2x Debt / EBITDA. Net Debt / EBITDA dropped on 0.2x from 0.1x to -0.1x in FY2015. Debt decreased on 3.1% in FY2015 while cash surged on 104% in FY2015.
Valuation
The company's trades at EV/EBITDA 31.4x and P/E 39.5x while industy averages are 10.5x and 26.1x. Britannia Industries's EV/(EBITDA-CAPEX) is 36.4x with the industry average at 4.7x.
Appendix 1: Peers in Packaged Foods
Below we provide Britannia Industries benchmarking against other companies in Packaged Foods 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 |
|---|
| Krbl ($KRBL) | -2.2% | 5.6% | 27.6% | 39.9% | |
| Sunil Agro Foods ($SUNILAGR) | -34.2% | 1.6% | 38.3% | 29.1% | |
| Milkfood ($MLKFOOD) | -29.8% | -1.1% | 9.3% | 27.7% | |
| Simran Farms ($SIMRAN) | -69.5% | 38.4% | 23.8% | 27.5% | |
| Venky'S (India) ($VENKYS) | -61.1% | 18.0% | 46.0% | 24.8% | |
| |
|---|
| Median (15 companies) | -36.5% | 14.7% | 15.0% | 16.0% | 12.9% |
|---|
| Britannia Industries ($BRITANNIA) | | 19.0% | 12.4% | 11.3% | 13.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 18.8% | 18.6% | 17.8% | 22.5% | 17.2% |
| Nestle India ($NESTLEIND) | 20.5% | 22.0% | 21.7% | 20.9% | |
| Krbl ($KRBL) | 14.7% | 14.1% | 14.2% | 15.1% | |
| Vadilal Industries ($VADILALIND) | 10.1% | 19.8% | 11.6% | 11.2% | |
| Bambino Agro Industries ($BAMBINO) | 7.7% | 8.0% | | 8.8% | |
| |
|---|
| Median (12 companies) | 7.7% | 8.0% | 8.7% | 7.1% | 6.6% |
|---|
| Britannia Industries ($BRITANNIA) | 5.2% | 5.7% | 6.9% | 9.2% | 11.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Venky'S (India) ($VENKYS) | 6.4% | 8.9% | 6.6% | 10.4% | |
| Krbl ($KRBL) | 5.8% | 4.1% | 4.0% | 6.1% | |
| Vadilal Industries ($VADILALIND) | 20.1% | 12.2% | 9.4% | 5.9% | |
| Adf Foods ($ADFFOODS) | 21.8% | 1.9% | 18.3% | 5.8% | |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 3.6% | 2.7% | | 4.3% | 2.5% |
| |
|---|
| Median (9 companies) | 3.6% | 3.7% | 4.2% | 4.3% | 2.9% |
|---|
| Britannia Industries ($BRITANNIA) | 2.0% | 4.9% | 3.7% | 1.6% | 1.5% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Nestle India ($NESTLEIND) | 85.4% | 57.7% | 47.9% | 49.6% | |
| Kse ($KSE) | 14.7% | 27.7% | 14.1% | 36.9% | |
| Heritage Foods ($HERITGFOOD) | 5.9% | 11.7% | 29.6% | 22.4% | |
| Umang Dairies ($UMANGDAIR) | 54.8% | 93.5% | 55.6% | 22.3% | 28.4% |
| Krbl ($KRBL) | 14.4% | 11.7% | 14.5% | 18.3% | |
| |
|---|
| Median (19 companies) | 11.3% | 12.1% | 10.9% | 20.3% | 32.3% |
|---|
| Britannia Industries ($BRITANNIA) | 17.8% | 24.6% | 33.7% | 54.0% | 59.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Venky'S (India) ($VENKYS) | 0.9x | 2.6x | 2.8x | 6.7x | |
| Vadilal Industries ($VADILALIND) | 5.8x | 2.6x | 4.5x | 3.9x | |
| Bambino Agro Industries ($BAMBINO) | 3.1x | 3.2x | | 3.2x | |
| Krbl ($KRBL) | 3.7x | 4.1x | 2.9x | 3.0x | |
| Umang Dairies ($UMANGDAIR) | 1.8x | 0.6x | 0.5x | 1.7x | 1.1x |
| |
|---|
| Median (12 companies) | 2.2x | 1.9x | 1.3x | 1.1x | 0.0x |
|---|
| Britannia Industries ($BRITANNIA) | 2.3x | 1.8x | 0.7x | 0.1x | -0.1x |
