Venky'S (India) reports 100% EBITDA growth and 3.9 pp EBITDA Margin growth from 3.9% to 7.8%
29-05-2015 • About Venky'S (India) (
$VENKYS) • By InTwits
Venky'S (India) reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 7.8% in FY2015, 3.9% in FY2014, 4.4% in FY2013, 7.2% in FY2012, 14.1% in FY2011
- Venky'S (India) has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.0%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: 1,340 in FY2015, 1,801 in FY2014, 920 in FY2013, 844 in FY2012, 518 in FY2011
- The company has business model with low profitability: ROIC is at 9.7%
- It operates with high leverage: Net Debt/EBITDA is 3.9x while industry average is 1.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Venky'S (India) ($VENKYS) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 8,069 | 9,523 | 13,906 | 17,361 | 17,308 | -0.3% |
| EBITDA | 1,137 | 686 | 608 | 676 | 1,354 | 100.3% |
| Net Income | 730 | 411 | 248 | 340 | 187 | -45.1% |
Balance Sheet
|
|---|
| Cash | 92 | 151 | 1,435 | 1,743 | 1,858 | 6.6% |
| Short Term Debt | 952 | 943 | 1,686 | 3,939 | 4,694 | 19.2% |
| Long Term Debt | 193 | 986 | 1,465 | 2,317 | 2,461 | 6.2% |
Cash flow
|
|---|
| Capex | 518 | 844 | 920 | 1,801 | 1,340 | -25.6% |
Ratios
|
|---|
| Revenue growth | -61.1% | 18.0% | 46.0% | 24.8% | -0.3% | |
| EBITDA growth | 23.9% | -39.7% | -11.3% | 11.2% | 100.3% | |
| EBITDA Margin | 14.1% | 7.2% | 4.4% | 3.9% | 7.8% | 3.9% |
| Net Income Margin | 9.1% | 4.3% | 1.8% | 2.0% | 1.1% | -0.9% |
| CAPEX, % of revenue | 6.4% | 8.9% | 6.6% | 10.4% | 7.7% | -2.6% |
| ROIC | 28.9% | 12.1% | 7.5% | 5.7% | 9.7% | 4.0% |
| ROE | 30.4% | 13.9% | 7.6% | 9.7% | 5.1% | -4.6% |
| Net Debt/EBITDA | 0.9x | 2.6x | 2.8x | 6.7x | 3.9x | -2.8x |
Revenue and profitability
Venky'S (India)'s Revenue showed almost no change in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.9 pp from 3.9% to 7.8% in FY2015.
Net Income marign decreased slightly on 0.88 pp from 2.0% to 1.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 7.7% in FY2015. Venky'S (India) showed small CAPEX/Revenue decline of 1.1 pp from 8.9% in FY2012 to 7.7% in FY2015. It's average CAPEX/Revenue for the last three years was 8.2%.Battling declining revenue Venky'S (India) invested a large share of EBITDA (98.9%) to CAPEX but that didn't help at least in this year.
Return on investment
The company operates at low ROIC (9.67%) and ROE (5.06%). ROIC increased on 4.0 pp from 5.7% to 9.7% in FY2015. ROE decreased on 4.6 pp from 9.7% to 5.1% in FY2015.
Leverage (Debt)
Debt level is 3.9x Net Debt / EBITDA and 5.3x Debt / EBITDA. Net Debt / EBITDA dropped on 2.8x from 6.7x to 3.9x in FY2015. Debt jumped on 14.4% in FY2015 while cash increased on 6.6% in FY2015.
Valuation
The company's trades at EV/EBITDA 5.9x and P/E 14.4x while industy averages are 10.5x and 26.1x. Venky'S (India)'s EV/(EBITDA-CAPEX) is 547.3x with the industry average at 4.7x.
Appendix 1: Peers in Packaged Foods
Below we provide Venky'S (India) benchmarking against other companies in Packaged Foods 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 |
|---|
| Krbl ($KRBL) | | 5.6% | 27.6% | 39.9% | 8.6% |
| Sunil Agro Foods ($SUNILAGR) | -34.2% | 1.6% | 38.3% | 29.1% | |
| Milkfood ($MLKFOOD) | -29.8% | -1.1% | 9.3% | 27.7% | |
| Simran Farms ($SIMRAN) | | 38.4% | 23.8% | 27.5% | 23.4% |
| Umang Dairies ($UMANGDAIR) | | 46.8% | 15.7% | 24.5% | 16.1% |
| |
|---|
| Median (15 companies) | -35.3% | 14.7% | 14.8% | 15.7% | 13.8% |
|---|
| Venky'S (India) ($VENKYS) | | 18.0% | 46.0% | 24.8% | -0.3% |
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% | |
| Krbl ($KRBL) | 14.7% | 14.1% | 14.2% | 15.1% | 15.4% |
| Vadilal Industries ($VADILALIND) | 10.1% | 19.8% | 11.6% | 11.2% | |
| Britannia Industries ($BRITANNIA) | 5.2% | 5.7% | 6.9% | 9.2% | 11.1% |
| |
|---|
| Median (12 companies) | 5.8% | 8.0% | 8.7% | 8.7% | 8.8% |
|---|
| Venky'S (India) ($VENKYS) | 14.1% | 7.2% | 4.4% | 3.9% | 7.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Krbl ($KRBL) | 5.8% | 4.1% | 4.0% | 6.1% | 7.3% |
| Vadilal Industries ($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 ($HERITGFOOD) | 2.8% | 2.1% | 1.9% | 3.7% | 2.5% |
| |
|---|
| Median (9 companies) | 3.1% | 3.7% | 3.9% | 3.7% | 2.5% |
|---|
| Venky'S (India) ($VENKYS) | 6.4% | 8.9% | 6.6% | 10.4% | 7.7% |
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 ($UMANGDAIR) | 54.8% | 93.5% | 55.6% | 22.3% | 28.4% |
| |
|---|
| Median (19 companies) | 11.3% | 12.2% | 14.1% | 22.3% | 28.4% |
|---|
| Venky'S (India) ($VENKYS) | 28.9% | 12.1% | 7.5% | 5.7% | 9.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vadilal Industries ($VADILALIND) | 5.8x | 2.6x | 4.5x | 3.9x | |
| Bambino Agro Industries ($BAMBINO) | 3.1x | 3.2x | | 3.2x | |
| Krbl ($KRBL) | 3.7x | 4.1x | 2.9x | 3.0x | 2.7x |
| Umang Dairies ($UMANGDAIR) | 1.8x | 0.6x | 0.5x | 1.7x | 1.1x |
| Adf Foods ($ADFFOODS) | 1.5x | 1.6x | 1.7x | 1.2x | 0.0x |
| |
|---|
| Median (12 companies) | 2.3x | 1.7x | 0.8x | 0.7x | 0.0x |
|---|
| Venky'S (India) ($VENKYS) | 0.9x | 2.6x | 2.8x | 6.7x | 3.9x |
