Zodiac Clothing Co Net Income dropped on 59.0% in 2015 and EBITDA Margin decreased on 5.6 pp from 10.8% to 5.2%
27-05-2015 • About Zodiac Clothing Co (
$ZODIACLOTH) • By InTwits
Zodiac Clothing Co reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Zodiac Clothing Co is a company in decline: FY2015 revenue growth was -4.0%, 5 years revenue CAGR was -3.4%
- Zodiac Clothing Co has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.6%. At the same time it's a lot of higher than industry average of 1.5%.
- CAPEX is quite volatile: 196 in FY2015, 163 in FY2014, 139 in FY2013, 215 in FY2012, 332 in FY2011
- The company has potentially unprofitable business model: ROIC is at 3.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Zodiac Clothing Co ($ZODIACLOTH) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,571 | 3,775 | 3,600 | 4,106 | 3,940 | -4.0% |
| EBITDA | 394 | 352 | 315 | 443 | 205 | -53.8% |
| Net Income | 332 | 177 | 140 | 220 | 90 | -59.0% |
Balance Sheet
|
|---|
| Cash | 137 | 148 | 138 | 243 | 216 | -11.2% |
| Short Term Debt | 365 | 487 | 509 | 458 | 506 | 10.6% |
| Long Term Debt | 79 | 76 | 64 | 65 | 73 | 13.6% |
Cash flow
|
|---|
| Capex | 332 | 215 | 139 | 163 | 196 | 20.4% |
Ratios
|
|---|
| Revenue growth | -23.9% | 5.7% | -4.7% | 14.1% | -4.0% | |
| EBITDA growth | -0.1% | -10.6% | -10.5% | 40.5% | -53.8% | |
| EBITDA Margin | 11.0% | 9.3% | 8.8% | 10.8% | 5.2% | -5.6% |
| Net Income Margin | 9.3% | 4.7% | 3.9% | 5.4% | 2.3% | -3.1% |
| CAPEX, % of revenue | 9.3% | 5.7% | 3.9% | 4.0% | 5.0% | 1.0% |
| ROIC | 13.4% | 9.8% | 7.2% | 10.8% | 3.1% | -7.7% |
| ROE | 16.7% | 8.0% | 5.9% | 8.8% | 3.4% | -5.3% |
| Net Debt/EBITDA | 0.8x | 1.2x | 1.4x | 0.6x | 1.8x | 1.1x |
Revenue and profitability
Zodiac Clothing Co's Revenue decreased on 4.0% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 17.3 pp from -19.1% to -1.8% in FY2015.
Net Income marign decreased on 3.1 pp from 5.4% to 2.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 5.0%. CAPEX/Revenue decreased slightly on 0.72 pp from 5.7% in FY2012 to 5.0% in FY2015. It's average level of CAPEX/Revenue for the last three years was 4.3%.The company invested a big chunk of EBITDA (95.8%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (3.07%) and ROE (3.42%). ROIC decreased on 7.7 pp from 10.8% to 3.1% in FY2015. ROE decreased on 5.3 pp from 8.8% to 3.4% in FY2015.
Leverage (Debt)
Debt level is 1.8x Net Debt / EBITDA and 2.8x Debt / EBITDA. Net Debt / EBITDA jumped on 1.1x from 0.6x to 1.8x in FY2015. Debt surged on 11.0% in FY2015 while cash dropped on 11.2% in FY2015.
Valuation
Zodiac Clothing Co's trades at EV/EBITDA 29.6x and P/E 63.2x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 698.7x with the industry average at 4.7x.
Appendix 1: Peers in Other Apparels & Accessories
Below we provide Zodiac Clothing Co benchmarking against other companies in Other Apparels & Accessories 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 |
|---|
| Mini Diamonds (India) ($MINID) | -85.8% | 35.0% | 59.6% | 117.1% | |
| Page Industries ($PAGEIND) | -73.3% | 39.0% | 26.3% | 37.5% | |
| Bhartiya International ($BIL) | | 28.4% | 20.9% | 36.7% | 34.7% |
| Celebrity Fashions ($CELEBRITY) | | 1.0% | -8.6% | 35.2% | -21.7% |
| Super Tannery ($SUPTANERY) | -30.0% | -1.4% | 0.3% | 34.6% | |
| |
|---|
| Median (23 companies) | 6.9% | 10.4% | 19.5% | 15.3% | 6.4% |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | | 5.7% | -4.7% | 14.1% | -4.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Arrow Textiles ($ARROWTEX) | | | | | 25.2% |
| Rupa & Company ($RUPA) | 10.7% | 12.7% | 15.0% | 15.3% | 14.5% |
| Ashapura Intimates Fashion ($AIFL) | 8.9% | 9.5% | 10.5% | 10.7% | 13.7% |
| Cantabil Retail India ($CANTABIL) | 13.8% | -10.4% | -22.3% | | 10.4% |
| Bhartiya International ($BIL) | 10.6% | 11.4% | 9.2% | 8.9% | 9.5% |
| |
|---|
| Median (17 companies) | 7.9% | 7.5% | 5.5% | 5.4% | 5.6% |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | 11.0% | 9.3% | 8.8% | 10.8% | 5.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Page Industries ($PAGEIND) | 5.8% | 4.0% | 5.2% | 4.4% | |
| Tara Jewels ($TARAJEWELS) | 1.8% | 1.6% | 1.3% | 3.1% | |
| Bhartiya International ($BIL) | 4.5% | 4.5% | 3.9% | 1.8% | 2.1% |
| Rupa & Company ($RUPA) | 4.5% | 1.9% | 3.9% | 1.7% | 2.2% |
| Thangamayil Jewellery ($THANGAMAYL) | 1.9% | 3.5% | 1.2% | 1.4% | 0.2% |
| |
|---|
| Median (14 companies) | 1.9% | 1.5% | 1.3% | 1.1% | 0.7% |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | 9.3% | 5.7% | 3.9% | 4.0% | 5.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Page Industries ($PAGEIND) | 44.2% | 54.9% | 58.5% | 61.6% | |
| Oscar Global ($OSCARGLO) | | | 12.6% | 52.3% | |
| Virat Industries ($VIRAT) | 13.2% | 20.7% | 26.2% | 30.9% | |
| Rupa & Company ($RUPA) | 20.2% | 22.4% | 27.1% | 25.8% | 23.8% |
| Ashapura Intimates Fashion ($AIFL) | 21.7% | 24.1% | 19.1% | 23.4% | 39.9% |
| |
|---|
| Median (40 companies) | 8.8% | 9.6% | 7.2% | 11.0% | 7.7% |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | 13.4% | 9.8% | 7.2% | 10.8% | 3.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Thangamayil Jewellery ($THANGAMAYL) | 2.2x | 2.2x | 2.6x | 11.9x | 61.2x |
| Shrenuj & Co ($SHRENUJ) | 8.6x | 9.3x | 11.2x | 11.7x | 13.5x |
| Pearl Global Industries ($PGIL) | 8.4x | 4.5x | 4.7x | 7.0x | 2.7x |
| C. Mahendra Exports ($CMAHENDRA) | 4.1x | 4.5x | 4.9x | 6.0x | |
| Asian Star Co ($ASTAR) | 8.2x | 7.1x | 7.1x | 5.9x | 4.8x |
| |
|---|
| Median (24 companies) | 2.7x | 2.3x | 2.9x | 0.0x | 2.4x |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | 0.8x | 1.2x | 1.4x | 0.6x | 1.8x |
