Redington (India) revenue surged on 12.9% in 2015 and EBITDA Margin showed almost no change

27-05-2015 • About Redington (India) ($REDINGTON) • By InTwits

Redington (India) reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

EBITDA Margin is relatively stable: 2.2% in FY2015 vs. 2.5% in FY2014 vs. 2.6% in FY2011
Redington (India) has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
The company has highly profitable business model: ROIC is at 15.3%
It operates with high leverage: Net Debt/EBITDA is 1.9x while industry average is 0.7x

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

Redington (India) ($REDINGTON) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	174,585	211,930	241,647	279,449	315,592	12.9%
Gross Profit	9,375
SG&A					1,379
EBITDA	4,564	6,046	6,434	6,928	6,984	0.8%
Net Income	2,260	2,927	3,231	3,366	3,865	14.8%
Balance Sheet
Cash	4,806	4,708	4,743	4,751	5,163	8.7%
Short Term Debt	0	15,482	17,646	14,549	16,529	13.6%
Long Term Debt	15,897	5,121	3,855	2,103	2,137	1.6%
Cash flow
Capex	564	521	1,574	569	506	-11.1%
Ratios
Revenue growth	-68.2%	21.4%	14.0%	15.6%	12.9%
EBITDA growth	31.4%	32.5%	6.4%	7.7%	0.8%
Gross Margin	5.4%					0.0%
EBITDA Margin	2.6%	2.9%	2.7%	2.5%	2.2%	-0.3%
Net Income Margin	1.3%	1.4%	1.3%	1.2%	1.2%	0.0%
SG&A, % of revenue					0.4%	0.4%
CAPEX, % of revenue	0.3%	0.2%	0.7%	0.2%	0.2%	-0.0%
ROIC	15.5%	17.2%	16.0%	16.3%	15.3%	-1.0%
ROE	20.0%	23.3%	21.8%	18.4%	17.6%	-0.8%
Net Debt/EBITDA	2.4x	2.6x	2.6x	1.7x	1.9x	0.2x

Revenue and profitability

The company's Revenue jumped on 12.9% in FY2015. EBITDA Margin showed almost no change in FY2015.

Net Income marign showed almost no change in FY2015.

Capital expenditures (CAPEX) and working capital investments

The company's CAPEX/Revenue was 0.16% in FY2015. The company showed almost no change in CAPEX/Revenue from FY2012 to FY2015. For the last three years the average CAPEX/Revenue was 0.34%.

Return on investment

The company operates at good ROIC (15.33%) and ROE (17.59%). ROIC decreased slightly on 1.00 pp from 16.3% to 15.3% in FY2015. ROE decreased slightly on 0.80 pp from 18.4% to 17.6% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 1.9x and Debt / EBITDA is 2.7x. Net Debt / EBITDA surged on 0.2x from 1.7x to 1.9x in FY2015. Debt surged on 12.1% in FY2015 while cash increased on 8.7% in FY2015.

Valuation

Redington (India)'s trades at EV/EBITDA 9.1x and P/E 12.9x while industy averages are 10.5x and 26.1x.

Appendix 1: Peers in Comm.Trading & Distribution

Below you can find Redington (India) benchmarking vs. other companies in Comm.Trading & Distribution 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, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Risa International ($RISAINTL)	285.4%			4,724.7%
Shri Krishna Prasadam ($SKP)		69.6%	57.3%	1,074.7%	148.2%
Parker Agrochem Exports ($PARKERAC)	-87.9%	-77.2%	1,542.3%	39.1%
Ennore Coke ($ENNORE)		-5.0%	-45.5%	34.0%	-26.1%
Gagan Polycot India ($GAGANPO)	-23.2%	-59.4%	76.3%	18.2%
Median (18 companies)	-33.2%	4.1%	12.6%	12.5%	1.4%
Redington (India) ($REDINGTON)		21.4%	14.0%	15.6%	12.9%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Hexa Tradex ($HEXATRADEX)					48.1%
Bombay Cycle & Motor Agency ($BOMBCYC)					19.5%
Ptl Enterprises ($PTL)	27.6%	26.6%	22.7%	21.6%	18.5%
Rama Vision ($RAMAVISION)					3.5%
Ph Capital ($PHCAP)					3.4%
Median (15 companies)	2.7%	2.7%	2.8%	1.8%	2.4%
Redington (India) ($REDINGTON)	2.6%	2.9%	2.7%	2.5%	2.2%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Maxwell Industries ($MAXWELL)	1.2%	0.9%	1.9%	2.4%
Ptl Enterprises ($PTL)	1.0%	5.0%	4.5%	2.4%	4.2%
Kothari Products ($KOTHARIPRO)	0.9%	2.5%	0.1%	0.2%	0.0%
Mmtc ($MMTC)	0.1%	0.0%	0.1%	0.1%	0.1%
Risa International ($RISAINTL)			0.0%	0.0%
Median (5 companies)	0.9%	0.9%	0.1%	0.2%	0.1%
Redington (India) ($REDINGTON)	0.3%	0.2%	0.7%	0.2%	0.2%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Kothari Products ($KOTHARIPRO)	7.4%	23.4%	20.0%	28.3%	10.6%
Ptl Enterprises ($PTL)	18.1%	18.5%	19.5%	21.1%	22.1%
Risa International ($RISAINTL)			-0.2%	14.8%
Bombay Cycle & Motor Agency ($BOMBCYC)			15.1%	13.5%
Mmtc ($MMTC)	1.0%	0.7%	1.6%	9.7%	-1.2%
Median (51 companies)	2.5%	4.5%	4.8%	9.6%	5.4%
Redington (India) ($REDINGTON)	15.5%	17.2%	16.0%	16.3%	15.3%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Ph Capital ($PHCAP)				18.4x	0.0x
Unitech International ($UNITINT)				5.1x
Vipul Dye Chem ($VIPULDYE)	2.9x	3.9x	5.1x	3.9x
Maxwell Industries ($MAXWELL)	5.7x	3.7x	5.8x	3.5x
Vadilal Enterprises ($VADILENT)	1.3x	2.3x	4.0x	2.3x
Median (27 companies)	3.2x	1.7x	1.8x	0.0x	0.0x
Redington (India) ($REDINGTON)	2.4x	2.6x	2.6x	1.7x	1.9x

Redington (India) stock price chart

Redington (India) financials

mln.	FY2010	FY2011	FY2012

Revenue	548,844	174,585	211,930
EBITDA	3,473	4,564	6,046
Net income	1,843	2,260	2,927
CAPEX	348.7	564.4	521.2
Debt	11,486	15,897	20,603
Cash	5,826	4,806	4,708

About Redington (India)

Redington (India) Limited, together with its subsidiaries, provides end-to-end supply chain solutions for various categories of information technology (IT) products, and consumer and lifestyle products to approximately 100 international brands. The company distributes IT hardware and software products; and consumer and lifestyle products comprising digital lifestyle, smart communications, telecom, consumer electronics, and digital printing products. It also offers hardware support services, such as warranty and post-warranty services through a network of hardware support service centers, including 70 owned service centers and 292 franchise service centers. The hardware support services cover solution design and consulting, technical helpdesk, field engineering support, parts warehousing, forward and reverse logistics, imports and re-exports, and asset recovery. In addition, the company provides end-to-end logistics services ranging from import, warehousing, and stock movement across geographies, to packing/repacking, order processing, and delivery anywhere within its operating footprint. Its warehousing and logistics services include third party logistics, such as forward logistics and reverse logistics, as well as the operation of automated distribution centers and reverse logistics centers. The company has operations in India, the Middle East, Africa, Turkey, Sri Lanka, Bangladesh, and the CIS countries. Redington (India) Limited was incorporated in 1961 and is based in Chennai, India.