Tata Global Beverages Net Income dropped on 48.4% in 2015 while Revenue increased on 3.3%
28-05-2015 • About Tata Global Beverages (
$TATAGLOBAL) • By InTwits
Tata Global Beverages reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 9.7% in FY2015 vs. 9.7% in FY2014 vs. 10.2% in FY2011
- Tata Global Beverages has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.2%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: 1,508 in FY2015, 1,894 in FY2014, 3,449 in FY2013, 9,768 in FY2012, 15,571 in FY2011
- The company has business model with low profitability: ROIC is at 8.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tata Global Beverages ($TATAGLOBAL) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 59,824 | 66,400 | 73,510 | 77,376 | 79,934 | 3.3% |
| EBITDA | 6,094 | 6,231 | 7,702 | 7,521 | 7,759 | 3.2% |
| Net Income | 2,543 | 3,561 | 3,728 | 4,805 | 2,478 | -48.4% |
Balance Sheet
|
|---|
| Cash | 9,920 | 595 | 2,631 | 7,182 | 5,365 | -25.3% |
| Short Term Debt | 3,187 | 1,766 | 7,161 | 3,844 | 4,401 | 14.5% |
| Long Term Debt | 7,228 | 7,393 | 6,727 | 10,537 | 8,839 | -16.1% |
Cash flow
|
|---|
| Capex | 1,013 | 1,310 | 1,793 | 2,037 | 1,792 | -12.0% |
Ratios
|
|---|
| Revenue growth | 3.4% | 11.0% | 10.7% | 5.3% | 3.3% | |
| EBITDA growth | -11.2% | 2.2% | 23.6% | -2.4% | 3.2% | |
| EBITDA Margin | 10.2% | 9.4% | 10.5% | 9.7% | 9.7% | -0.0% |
| Net Income Margin | 4.3% | 5.4% | 5.1% | 6.2% | 3.1% | -3.1% |
| CAPEX, % of revenue | 1.7% | 2.0% | 2.4% | 2.6% | 2.2% | -0.4% |
| ROIC | 7.9% | 8.2% | 9.6% | 8.1% | 8.0% | -0.1% |
| ROE | 6.6% | 8.4% | 8.0% | 9.0% | 4.4% | -4.6% |
| Net Debt/EBITDA | 0.1x | 1.4x | 1.5x | 1.0x | 1.0x | 0.1x |
Revenue and profitability
Tata Global Beverages's Revenue increased on 3.3% 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 3.1 pp from 6.2% to 3.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 2.2% in FY2015. The company showed almost no change in CAPEX/Revenue from FY2012 to FY2015. It's average level of CAPEX/Revenue for the last three years was 2.4%.
Return on investment
The company operates at low ROIC (7.97%) and ROE (4.37%). ROIC showed almost no change in FY2015. ROE decreased on 4.6 pp from 9.0% to 4.4% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.0x and Debt / EBITDA is 1.7x. Net Debt / EBITDA increased on 0.1x from 1.0x to 1.0x in FY2015. Debt decreased on 7.9% in FY2015 while cash dropped on 25.3% in FY2015.
Valuation
The company's trades at EV/EBITDA 12.6x and P/E 36.1x while industy averages are 10.5x and 26.1x. Tata Global Beverages's EV/(EBITDA-CAPEX) is 16.3x with the industry average at 4.7x.
Management team
Ajoy Kumar Misra is a Tata Global Beverages's CEO. Ajoy Kumar Misra has spent 4 years at the company. Tata Global Beverages's CFO is L Krishnakumar. L Krishnakumar has 4 years tenure at the company.
Appendix 1: Peers in Tea & Coffee
Below we provide Tata Global Beverages benchmarking against other companies in Tea & Coffee 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 |
|---|
| Rossell India ($ROSSELLIND) | -51.1% | 5.4% | 27.9% | 33.6% | |
| Andrew Yule & Company ($ANDREWYU) | -40.5% | 17.1% | 4.7% | 19.3% | |
| Warren Tea ($WARRENTEA) | 40.0% | 0.9% | -44.0% | 17.7% | |
| Bombay Burmah Trading Corp ($BBTC) | | 15.7% | 10.0% | 11.5% | 12.7% |
| Ccl Products (India) ($CCL) | | 38.0% | 29.6% | 10.2% | 22.8% |
| |
|---|
| Median (11 companies) | -40.5% | 16.4% | 7.4% | 9.9% | 4.9% |
|---|
| Tata Global Beverages ($TATAGLOBAL) | | 11.0% | 10.7% | 5.3% | 3.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rossell India ($ROSSELLIND) | 32.2% | 31.0% | 27.5% | 26.5% | |
| Warren Tea ($WARRENTEA) | 19.0% | 7.9% | 17.7% | 21.8% | |
| Ccl Products (India) ($CCL) | 18.0% | 20.3% | 20.1% | 21.5% | 20.6% |
| Mcleod Russel India ($MCLEODRUSS) | 28.5% | 27.5% | 23.2% | 20.4% | 8.1% |
| Tata Coffee ($TATACOFFEE) | 19.8% | 12.8% | 19.2% | 19.9% | 20.2% |
| |
|---|
| Median (11 companies) | 16.8% | 8.4% | 17.1% | 17.1% | 12.7% |
|---|
| Tata Global Beverages ($TATAGLOBAL) | 10.2% | 9.4% | 10.5% | 9.7% | 9.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Rossell India ($ROSSELLIND) | 3.3% | 11.0% | 6.7% | 14.8% | |
| Mcleod Russel India ($MCLEODRUSS) | 4.9% | 10.0% | 6.0% | 9.4% | 9.8% |
| Ccl Products (India) ($CCL) | 12.0% | 11.1% | 5.8% | 8.3% | 2.4% |
| Jay Shree Tea & Industries ($JAYSHREETEA) | 10.7% | 4.5% | 3.7% | 6.4% | 3.5% |
| Tata Coffee ($TATACOFFEE) | 1.9% | 3.2% | 4.3% | 4.0% | 3.6% |
| |
|---|
| Median (9 companies) | 5.1% | 4.7% | 3.7% | 4.0% | 3.5% |
|---|
| Tata Global Beverages ($TATAGLOBAL) | 1.7% | 2.0% | 2.4% | 2.6% | 2.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Warren Tea ($WARRENTEA) | 19.3% | 4.3% | 12.7% | 25.7% | |
| Bombay Burmah Trading Corp ($BBTC) | 9.4% | 10.7% | 13.9% | 20.6% | 23.7% |
| Ccl Products (India) ($CCL) | 9.7% | 16.1% | 18.0% | 19.7% | 23.0% |
| Goodricke Group ($GOODRICKE) | 27.7% | 13.0% | 20.9% | 16.8% | |
| Tata Coffee ($TATACOFFEE) | 15.7% | 10.9% | 16.2% | 14.0% | 14.0% |
| |
|---|
| Median (14 companies) | 9.7% | 10.8% | 13.9% | 14.0% | 14.0% |
|---|
| Tata Global Beverages ($TATAGLOBAL) | 7.9% | 8.2% | 9.6% | 8.1% | 8.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | 5.9x | 8.6x | 4.5x | 8.2x | 19.5x |
| Tata Coffee ($TATACOFFEE) | 2.7x | 3.6x | 2.6x | 2.7x | 2.5x |
| Andrew Yule & Company ($ANDREWYU) | 4.3x | 2.1x | 5.4x | 1.9x | |
| Ccl Products (India) ($CCL) | 3.7x | 2.6x | 2.3x | 1.7x | 1.1x |
| Rossell India ($ROSSELLIND) | 0.4x | 0.0x | 1.9x | 1.5x | |
| |
|---|
| Median (13 companies) | 2.5x | 2.1x | 1.9x | 0.7x | 1.8x |
|---|
| Tata Global Beverages ($TATAGLOBAL) | 0.1x | 1.4x | 1.5x | 1.0x | 1.0x |
