United Spirits Debt dropped on 40.0% in 2015 and Revenue dropped on 12.8%
27-05-2015 • About United Spirits (
$UNITDSPR) • By InTwits
United Spirits reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- United Spirits is a company in decline: FY2015 revenue growth was -12.8%, 5 years revenue CAGR was -3.0%
- EBITDA Margin is quite volatile: 6.1% in FY2015, -1.3% in FY2014, 12.6% in FY2013, 12.2% in FY2012, 15.5% in FY2011
- United Spirits has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.6%. At the same time it's in pair with industry average of 39.4%.
- CAPEX is quite volatile: 1,643 in FY2015, 2,325 in FY2014, 2,902 in FY2013, 6,831 in FY2012, 2,764 in FY2011
- The company has potentially unprofitable business model: ROIC is at 3.7%
- It operates with high leverage: Net Debt/EBITDA is 8.4x while industry average is 2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
United Spirits ($UNITDSPR) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 73,762 | 91,865 | 104,115 | 105,009 | 91,594 | -12.8% |
| EBITDA | 11,439 | 11,181 | 13,169 | -1,375 | 5,569 | |
| Net Income | 5,695 | 1,879 | -3,301 | -14,413 | -19,299 | |
Balance Sheet
|
|---|
| Cash | 6,069 | 3,133 | 1,851 | 6,154 | 2,906 | -52.8% |
| Short Term Debt | 42,495 | 30,485 | 35,669 | 73,104 | 38,695 | -47.1% |
| Long Term Debt | 24,612 | 53,960 | 46,755 | 9,967 | 11,173 | 12.1% |
Cash flow
|
|---|
| Capex | 2,764 | 6,831 | 2,902 | 2,325 | 1,643 | -29.3% |
Ratios
|
|---|
| Revenue growth | -30.7% | 24.5% | 13.3% | 0.9% | -12.8% | |
| EBITDA growth | 10.9% | -2.3% | 17.8% | -110.4% | -504.9% | |
| EBITDA Margin | 15.5% | 12.2% | 12.6% | -1.3% | 6.1% | 7.4% |
| Net Income Margin | 7.7% | 2.0% | -3.2% | -13.7% | -21.1% | -7.3% |
| CAPEX, % of revenue | 3.7% | 7.4% | 2.8% | 2.2% | 1.8% | -0.4% |
| ROIC | 10.4% | 8.1% | 8.7% | -2.7% | 3.7% | 6.4% |
| ROE | 14.3% | 4.3% | -7.0% | -36.9% | -104.5% | -67.7% |
| Net Debt/EBITDA | 5.3x | 7.3x | 6.1x | | 8.4x | 8.4x |
Revenue and profitability
The company's Revenue dropped on 12.8% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.4 pp from -1.3% to 6.1% in FY2015.
Net Income marign decreased on 7.3 pp from -13.7% to -21.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 1.8% in FY2015. United Spirits's CAPEX/Revenue decreased on 5.6 pp from 7.4% in FY2012 to 1.8% in FY2015. It's average level of CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at low but positive ROIC (3.67%) and negative ROE (-104.55%). ROIC increased on 6.4 pp from -2.7% to 3.7% in FY2015. ROE dropped on 67.7 pp from -36.9% to -105% in FY2015.
Leverage (Debt)
Debt level is 8.4x Net Debt / EBITDA and 9.0x Debt / EBITDA. Net Debt / EBITDA surged8.4x from to 8.4x in FY2015. Debt dropped on 40.0% in FY2015 while cash dropped on 52.8% in FY2015.
Management team
The company's CEO Anand Kripalu has spent 4 years at the company.
Appendix 1: Peers in Breweries & Distilleries
Below we provide United Spirits benchmarking against other companies in Breweries & Distilleries 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 |
|---|
| Khoday India ($KHODAY) | -25.0% | 19.9% | -24.7% | 34.3% | |
| Pioneer Distilleries ($PIONDIST) | | 94.2% | -0.9% | 25.1% | 17.0% |
| Tilaknagar Industries ($TI) | -38.1% | 17.0% | 34.6% | 9.4% | |
| United Breweries ($UBL) | -47.2% | 16.3% | 9.5% | 8.5% | |
| Ifb Agro Industries ($IFBAGRO) | -37.5% | -4.8% | 5.4% | 8.4% | |
| |
|---|
| Median (7 companies) | -37.5% | 16.3% | 5.4% | 8.5% | 11.8% |
|---|
| United Spirits ($UNITDSPR) | | 24.5% | 13.3% | 0.9% | -12.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Tilaknagar Industries ($TI) | 24.6% | 26.2% | 22.7% | 21.0% | |
| Khoday India ($KHODAY) | 9.1% | 28.0% | 7.1% | 19.2% | |
| Som Distilleries & Breweries ($SDBL) | 15.0% | 14.4% | 15.0% | 15.0% | |
| G.M.Breweries ($GMBREW) | 15.5% | 10.0% | 9.1% | 13.7% | 11.5% |
| United Breweries ($UBL) | 12.8% | 11.6% | 12.3% | 10.3% | |
| |
|---|
| Median (7 companies) | 12.8% | 11.6% | 10.8% | 13.7% | 15.5% |
|---|
| United Spirits ($UNITDSPR) | 15.5% | 12.2% | 12.6% | -1.3% | 6.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pioneer Distilleries ($PIONDIST) | 33.1% | 29.8% | 35.0% | 30.0% | 12.3% |
| Tilaknagar Industries ($TI) | 23.7% | 20.6% | 10.0% | 14.8% | |
| Ifb Agro Industries ($IFBAGRO) | 2.7% | 4.6% | 1.8% | 9.8% | |
| United Breweries ($UBL) | 14.4% | 10.7% | 9.8% | 5.0% | |
| Som Distilleries & Breweries ($SDBL) | 3.9% | 12.3% | 3.3% | 0.9% | |
| |
|---|
| Median (6 companies) | 7.2% | 10.7% | 6.7% | 7.4% | 6.1% |
|---|
| United Spirits ($UNITDSPR) | 3.7% | 7.4% | 2.8% | 2.2% | 1.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| G.M.Breweries ($GMBREW) | 29.6% | 18.4% | 17.0% | 21.9% | 18.0% |
| Som Distilleries & Breweries ($SDBL) | 25.8% | 23.3% | 22.2% | 19.2% | |
| Ifb Agro Industries ($IFBAGRO) | 25.9% | 33.3% | 26.7% | 18.8% | |
| Tilaknagar Industries ($TI) | 13.3% | 11.6% | 11.7% | 10.7% | |
| United Breweries ($UBL) | 12.4% | 11.5% | 11.6% | 8.1% | |
| |
|---|
| Median (11 companies) | 12.4% | 15.0% | 11.6% | 10.7% | 44.3% |
|---|
| United Spirits ($UNITDSPR) | 10.4% | 8.1% | 8.7% | -2.7% | 3.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Pioneer Distilleries ($PIONDIST) | | | | 10.4x | 2.1x |
| Tilaknagar Industries ($TI) | 3.6x | 4.3x | 3.8x | 4.8x | |
| United Breweries ($UBL) | 1.9x | 2.0x | 2.5x | 2.7x | |
| Silver Oak (India) ($SILVOAK) | | 2.7x | 1.1x | 1.2x | |
| G.M.Breweries ($GMBREW) | 0.9x | 0.9x | 0.7x | 0.6x | 0.5x |
| |
|---|
| Median (8 companies) | 1.9x | 2.0x | 1.1x | 0.9x | 1.3x |
|---|
