Page Industries revenue growth decelerated from 37.5% in FY2014 to 30.0% in FY2015

28-05-2015 • About Page Industries ($PAGEIND) • By InTwits

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

• EBITDA Margin is relatively stable: 20.7% in FY2015 vs. 21.5% in FY2014 vs. 19.9% in FY2011
• Page Industries has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.6%. At the same time it's a lot of higher than industry average of 1.5%.
• CAPEX is quite volatile: 143 in FY2015, 142 in FY2014, 376 in FY2013, 581 in FY2012, 145 in FY2011
• The company has highly profitable business model: ROIC is at 59.2%

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

Page Industries ($PAGEIND) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	4,916	6,834	8,635	11,877	15,434	30.0%
EBITDA	976	1,441	1,768	2,551	3,194	25.2%
Net Income	585	900	1,125	1,538	1,960	27.5%
Balance Sheet
Cash	25	20	31	34	43	27.6%
Short Term Debt	860	540	716	1,299	1,227	-5.5%
Long Term Debt	289	219	291	333	345	3.7%
Cash flow
Capex	285	271	450	526	549	4.4%
Ratios
Revenue growth	-73.3%	39.0%	26.3%	37.5%	30.0%
EBITDA growth	34.9%	47.6%	22.6%	44.3%	25.2%
EBITDA Margin	19.9%	21.1%	20.5%	21.5%	20.7%	-0.8%
Net Income Margin	11.9%	13.2%	13.0%	12.9%	12.7%	-0.2%
CAPEX, % of revenue	5.8%	4.0%	5.2%	4.4%	3.6%	-0.9%
ROIC	44.2%	54.9%	58.5%	61.6%	59.2%	-2.3%
ROE	52.6%	62.1%	59.3%	61.2%	58.0%	-3.2%
Net Debt/EBITDA	1.2x	0.5x	0.6x	0.6x	0.5x	-0.1x

Revenue and profitability

The company's Revenue surged on 30.0% in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.6 pp from 2.4% to 5.0% in FY2015.

Net Income marign showed almost no change in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 3.6%. Page Industries's CAPEX/Revenue showed almost no change from FY2012 to FY2015. Average CAPEX/Revenue for the last three years was 4.4%.

Return on investment

The company operates at high and attractive ROIC (59.25%) and ROE (58.02%). ROIC decreased on 2.3 pp from 61.6% to 59.2% in FY2015. ROE decreased on 3.2 pp from 61.2% to 58.0% in FY2015.

Leverage (Debt)

Debt level is 0.5x Net Debt / EBITDA and 0.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.1x from 0.6x to 0.5x in FY2015. Debt decreased on 3.6% in FY2015 while cash surged on 27.6% in FY2015.

Valuation

The company's trades at EV/EBITDA 52.9x and P/E 85.4x while industy averages are 10.5x and 26.1x. Page Industries's EV/(EBITDA-CAPEX) is 63.8x with the industry average at 4.7x.

Appendix 1: Peers in Other Apparels & Accessories

Below you can find Page Industries benchmarking vs. other companies in Other Apparels & Accessories 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
Mini Diamonds (India) ($MINID)	-85.8%	35.0%	59.6%	117.1%
Bhartiya International ($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%
Asian Star Co ($ASTAR)		10.1%	34.2%	32.0%	-0.9%
Median (23 companies)	8.5%	10.1%	19.1%	14.1%	5.1%
Page Industries ($PAGEIND)		39.0%	26.3%	37.5%	30.0%

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 ($BIL)	10.6%	11.4%	9.2%	8.9%	9.5%
Median (19 companies)	7.9%	7.5%	5.5%	5.4%	5.2%
Page Industries ($PAGEIND)	19.9%	21.1%	20.5%	21.5%	20.7%

Top companies by CAPEX/Revenue, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Zodiac Clothing Co ($ZODIACLOTH)	9.3%	5.7%	3.9%	4.0%	5.0%
Tara Jewels ($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 ($THANGAMAYL)	1.9%	3.5%	1.2%	1.4%	0.2%
Median (14 companies)	1.9%	1.5%	1.3%	1.1%	0.7%
Page Industries ($PAGEIND)	5.8%	4.0%	5.2%	4.4%	3.6%

Top companies by ROIC, %

Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
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%
Tara Jewels ($TARAJEWELS)	14.8%	17.5%	18.6%	15.1%	13.5%
Median (40 companies)	8.8%	9.3%	7.2%	10.9%	7.3%
Page Industries ($PAGEIND)	44.2%	54.9%	58.5%	61.6%	59.2%

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 ($ASTAR)	8.2x	7.1x	7.1x	5.9x	4.8x
Median (24 companies)	2.7x	2.3x	2.9x	0.0x	2.1x
Page Industries ($PAGEIND)	1.2x	0.5x	0.6x	0.6x	0.5x

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