Rossell India reports 79.0% Net Income decline and almost no change in Revenue of 1,411
29-05-2015 • About Rossell India (
$ROSSELLIND) • By InTwits
Rossell India reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 14.7% in FY2015 vs. 26.5% in FY2014 vs. 32.2% in FY2011
- Rossell India has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.4%. At the same time it's a lot of higher than industry average of 4.3%.
- CAPEX is quite volatile: 156 in FY2015, 210 in FY2014, 71.5 in FY2013, 91.3 in FY2012, 26.1 in FY2011
- The company has potentially unprofitable business model: ROIC is at 4.1%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.6x while industry average is 2.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Rossell India ($ROSSELLIND) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 786 | 828 | 1,059 | 1,416 | 1,411 | -0.3% |
| EBITDA | 253 | 257 | 292 | 376 | 207 | -44.8% |
| Net Income | 181 | 186 | 303 | 204 | 43 | -79.0% |
Balance Sheet
|
|---|
| Cash | 39 | 86 | 39 | 11 | 9 | -20.4% |
| Short Term Debt | 144 | 94 | 167 | 258 | 333 | 29.0% |
| Long Term Debt | | 0 | 418 | 319 | 220 | -31.1% |
Cash flow
|
|---|
| Capex | 26 | 91 | 71 | 210 | 156 | -25.6% |
Ratios
|
|---|
| Revenue growth | -51.1% | 5.4% | 27.9% | 33.6% | -0.3% | |
| EBITDA growth | -4.0% | 1.7% | 13.4% | 28.7% | -44.8% | |
| EBITDA Margin | 32.2% | 31.0% | 27.5% | 26.5% | 14.7% | -11.8% |
| Net Income Margin | 23.0% | 22.5% | 28.6% | 14.4% | 3.0% | -11.4% |
| CAPEX, % of revenue | 3.3% | 11.0% | 6.7% | 14.8% | 11.1% | -3.8% |
| ROIC | | | 12.1% | 12.7% | 4.1% | -8.6% |
| ROE | 12.8% | 11.8% | 16.7% | 10.0% | 2.0% | -8.0% |
| Net Debt/EBITDA | 0.4x | 0.0x | 1.9x | 1.5x | 2.6x | 1.1x |
Revenue and profitability
Rossell India's Revenue showed almost no change in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 10.3 pp from 40.2% to 50.5% in FY2015.
Net Income marign dropped on 11.4 pp from 14.4% to 3.0% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 11.1%. CAPEX/Revenue showed almost no change from FY2012 to FY2015. It's average CAPEX/Revenue for the last three years was 10.9%.The company invested a big chunk of EBITDA (75.4%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (4.11%) and ROE (2.02%). ROIC decreased on 8.6 pp from 12.7% to 4.1% in FY2015. ROE decreased on 8.0 pp from 10.0% to 2.0% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 2.7x. Net Debt / EBITDA jumped on 1.1x from 1.5x to 2.6x in FY2015. Debt decreased on 4.2% in FY2015 while cash dropped on 20.4% in FY2015.
Valuation
Rossell India's trades at EV/EBITDA 9.6x and P/E 33.5x while industy averages are 10.5x and 26.1x. Rossell India's EV/(EBITDA-CAPEX) is 38.9x with the industry average at 4.7x.
Appendix 1: Peers in Tea & Coffee
Below you can find Rossell India benchmarking vs. other companies in Tea & Coffee 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 |
|---|
| Andrew Yule & Company ($ANDREWYU) | -40.5% | 17.1% | 4.7% | 19.3% | |
| Warren Tea ($WARRENTEA) | | 0.9% | -44.0% | 17.7% | -7.5% |
| 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% |
| Diana Tea Co ($DIANATEA) | -17.9% | -12.6% | -11.1% | 9.9% | |
| |
|---|
| Median (11 companies) | -40.5% | 16.4% | 7.4% | 7.8% | 4.0% |
|---|
| Rossell India ($ROSSELLIND) | | 5.4% | 27.9% | 33.6% | -0.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% |
| B & A ($BNALTD) | | 18.4% | 17.1% | 17.1% | 14.8% |
| |
|---|
| Median (11 companies) | 14.1% | 8.4% | 13.7% | 9.7% | 10.5% |
|---|
| Rossell India ($ROSSELLIND) | 32.2% | 31.0% | 27.5% | 26.5% | 14.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| 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% |
| Tata Global Beverages ($TATAGLOBAL) | 1.7% | 2.0% | 2.4% | 2.6% | 2.2% |
| |
|---|
| Median (9 companies) | 5.1% | 4.5% | 3.6% | 2.6% | 2.9% |
|---|
| Rossell India ($ROSSELLIND) | 3.3% | 11.0% | 6.7% | 14.8% | 11.1% |
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 ($TATACOFFEE) | 15.7% | 10.9% | 16.2% | 14.0% | 14.0% |
| |
|---|
| Median (14 companies) | 9.7% | 10.7% | 13.9% | 14.0% | 11.0% |
|---|
| Rossell India ($ROSSELLIND) | | | 12.1% | 12.7% | 4.1% |
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 |
| Bombay Burmah Trading Corp ($BBTC) | 4.2x | 3.0x | 1.8x | 1.0x | 0.7x |
| |
|---|
| Median (13 companies) | 2.5x | 2.1x | 1.8x | 0.7x | 1.1x |
|---|
| Rossell India ($ROSSELLIND) | 0.4x | 0.0x | 1.9x | 1.5x | 2.6x |
