Krbl reports 31.0% CAPEX growth and 8.6% Revenue growth

28-05-2015 • About Krbl ($KRBL) • By InTwits

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

• Krbl is a growth stock: FY2015 revenue growth was 8.6%, 5 year revenue CAGR was 14.9% at FY2015 ROIC 17.0%
• EBITDA Margin is relatively stable: 15.4% in FY2015 vs. 15.1% in FY2014 vs. 14.7% in FY2011
• Krbl has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.5%. At the same time it's a lot of higher than industry average of 4.1%.
• CAPEX is quite volatile: 2,321 in FY2015, 1,772 in FY2014, 829 in FY2013, 666 in FY2012, 893 in FY2011
• The company has highly profitable business model: ROIC is at 17.0%
• It operates with high leverage: Net Debt/EBITDA is 2.7x while industry average is 1.2x

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

Krbl ($KRBL) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	15,446	16,310	20,804	29,105	31,597	8.6%
EBITDA	2,269	2,303	2,960	4,393	4,881	11.1%
Net Income	1,203	730	1,299	2,551	3,217	26.1%
Balance Sheet
Cash	46	31	107	658	240	-63.6%
Short Term Debt	7,478	8,316	7,929	11,712	11,147	-4.8%
Long Term Debt	915	1,064	774	2,083	2,363	13.4%
Cash flow
Capex	893	666	829	1,772	2,321	31.0%
Ratios
Revenue growth	-2.2%	5.6%	27.6%	39.9%	8.6%
EBITDA growth	14.6%	1.5%	28.5%	48.4%	11.1%
EBITDA Margin	14.7%	14.1%	14.2%	15.1%	15.4%	0.4%
Net Income Margin	7.8%	4.5%	6.2%	8.8%	10.2%	1.4%
CAPEX, % of revenue	5.8%	4.1%	4.0%	6.1%	7.3%	1.3%
ROIC	14.4%	11.7%	14.5%	18.3%	17.0%	-1.4%
ROE	20.4%	10.7%	16.8%	27.2%	27.2%	-0.1%
Net Debt/EBITDA	3.7x	4.1x	2.9x	3.0x	2.7x	-0.3x

Revenue and profitability

The company's Revenue increased on 8.6% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 39.8 pp from -76.1% to -36.3% in FY2015.

Net Income marign increased slightly on 1.4 pp from 8.8% to 10.2% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 7.3%. Krbl showed CAPEX/Revenue growth of 3.3 pp from 4.1% in FY2012 to 7.3% in FY2015. It's average CAPEX/Revenue for the last three years was 5.8%.

Return on investment

The company operates at high and attractive ROE (27.16%) while ROIC is a bit lower (16.96%). ROIC decreased slightly on 1.4 pp from 18.3% to 17.0% in FY2015. ROE showed almost no change in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 2.7x and Debt / EBITDA is 2.8x. Net Debt / EBITDA dropped on 0.3x from 3.0x to 2.7x in FY2015. Debt decreased on 2.1% in FY2015 while cash dropped on 63.6% in FY2015.

Valuation

Krbl's trades at EV/EBITDA 11.3x and P/E 13.0x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 21.6x with the industry average at 4.7x.

Appendix 1: Peers in Packaged Foods

Below you can find Krbl benchmarking vs. other companies in Packaged Foods 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
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%
Umang Dairies ($UMANGDAIR)		46.8%	15.7%	24.5%	16.1%
Median (15 companies)	-36.5%	18.0%	14.8%	15.7%	15.0%
Krbl ($KRBL)		5.6%	27.6%	39.9%	8.6%

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%
Vadilal Industries ($VADILALIND)	10.1%	19.8%	11.6%	11.2%
Britannia Industries ($BRITANNIA)	5.2%	5.7%	6.9%	9.2%	11.1%
Bambino Agro Industries ($BAMBINO)	7.7%	8.0%		8.8%
Median (12 companies)	5.8%	7.2%	7.1%	7.1%	6.6%
Krbl ($KRBL)	14.7%	14.1%	14.2%	15.1%	15.4%

Top companies by CAPEX/Revenue, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Venky'S (India) ($VENKYS)	6.4%	8.9%	6.6%	10.4%
Vadilal Industries ($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%
Heritage Foods ($HERITGFOOD)	2.8%	2.1%	1.9%	3.7%	2.5%
Median (9 companies)	3.1%	3.7%	4.1%	3.7%	2.5%
Krbl ($KRBL)	5.8%	4.1%	4.0%	6.1%	7.3%

Top companies by ROIC, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Britannia Industries ($BRITANNIA)	17.8%	24.6%	33.7%	54.0%	59.4%
Nestle India ($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%	13.5%
Umang Dairies ($UMANGDAIR)	54.8%	93.5%	55.6%	22.3%	28.4%
Median (19 companies)	11.3%	12.3%	10.9%	22.3%	32.3%
Krbl ($KRBL)	14.4%	11.7%	14.5%	18.3%	17.0%

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 ($BAMBINO)	3.1x	3.2x		3.2x
Umang Dairies ($UMANGDAIR)	1.8x	0.6x	0.5x	1.7x	1.1x
Adf Foods ($ADFFOODS)	1.5x	1.6x	1.7x	1.2x
Median (12 companies)	2.2x	1.7x	0.8x	0.7x	0.0x
Krbl ($KRBL)	3.7x	4.1x	2.9x	3.0x	2.7x

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