Welspun India CAPEX surged on 82.9% and Revenue surged on 12.8%
25-04-2016 • About Welspun India (
$WELSPUNIND) • By InTwits
Welspun India reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Welspun India is a fast growth stock: FY2016 revenue growth was 12.8%, 5 year revenue CAGR was 26.4% at FY2016 ROIC 25.2%
- EBITDA Margin is expanding: 26.2% in FY2016 vs. 24.1% in FY2015 vs. 12.2% in FY2012
- Welspun India has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.7%. At the same time it's a lot of higher than industry average of 8.6%.
- CAPEX is quite volatile: ₹10,597m in FY2016, ₹5,795m in FY2015, ₹7,186m in FY2014, ₹2,847m in FY2013, ₹1,808m in FY2012
- The company has highly profitable business model: ROIC is 25.2%
- It operates with high leverage: Net Debt/EBITDA is 1.6x while industry average is 1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 12.8%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.3 pp from 13.7% to 16.0% in FY2016. EBITDA Margin stuck to a growing trend at 3.5 pp per annum in FY2012-FY2016.
Net Income margin increased slightly on 1.6 pp from 10.2% to 11.8% in FY2016. Net Income margin followed a growing trend at 2.8 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
Welspun India's CAPEX/Revenue was 17.7% in FY2016. CAPEX/Revenue increased on 9.9 pp from 7.8% in FY2013 to 17.7% in FY2016. For the last three years the average CAPEX/Revenue was 15.0%. The company invested a big chunk of EBITDA (67.8%) to CAPEX to fuel its growth.
Return on investment
The company operates at high and attractive ROIC (25.2%) and ROE (41.1%). ROIC increased on 3.2 pp from 21.9% to 25.2% in FY2016. ROE decreased slightly on 1.4 pp from 42.5% to 41.1% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.6x and Debt / EBITDA is 1.7x. Net Debt / EBITDA dropped on 0.5x from 2.2x to 1.6x in FY2016. Debt dropped on 13.7% while cash dropped on 62.5%. Net Debt/EBITDA stuck to a declining trend at -0.7x per annum in the last 5 years.
Welspun India has short term refinancing risk: cash is only 13.9% of short term debt.
Financial and operational results
Welspun India ($WELSPUNIND) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 32,205 | 36,473 | 43,730 | 53,025 | 59,795 | 12.8% |
| SG&A | | | | | 818 | |
| EBITDA | 3,927 | 6,131 | 9,881 | 12,784 | 15,640 | 22.3% |
| Net Income | -134 | 2,248 | 921 | 5,398 | 7,029 | 30.2% |
Balance Sheet
|
|---|
| Cash | 1,476 | 1,718 | 2,323 | 3,235 | 1,214 | -62.5% |
| Short Term Debt | 9,810 | 9,166 | 11,349 | 14,935 | 8,759 | -41.4% |
| Long Term Debt | 9,812 | 10,011 | 16,795 | 15,946 | 17,877 | 12.1% |
Cash flow
|
|---|
| Capex | 1,808 | 2,847 | 7,186 | 5,795 | 10,597 | 82.9% |
Ratios
|
|---|
| Revenue growth | 73.5% | 13.3% | 19.9% | 21.3% | 12.8% | |
| EBITDA growth | 58.6% | 56.1% | 61.2% | 29.4% | 22.3% | |
|
|---|
| EBITDA Margin | 12.2% | 16.8% | 22.6% | 24.1% | 26.2% | 2.0% |
| SG&A, % of revenue | | | | | 1.4% | |
| Net Income Margin | -0.4% | 6.2% | 2.1% | 10.2% | 11.8% | 1.6% |
| CAPEX, % of revenue | 5.6% | 7.8% | 16.4% | 10.9% | 17.7% | 6.8% |
|
|---|
| ROIC | 9.3% | 15.6% | 8.5% | 21.9% | 25.2% | 3.2% |
| ROE | -1.9% | 25.9% | 8.8% | 42.5% | 41.1% | -1.4% |
| Net Debt/EBITDA | 4.6x | 2.8x | 2.6x | 2.2x | 1.6x | -0.5x |
Peers in Textiles
Below we provide Welspun India benchmarking against other companies in Textiles 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Olympia Industries ($OLYMPTX) | -58.0% | -96.6% | 74,809.1% | 1,749.9% | - |
| Shri Dinesh Mills ($SHRIDINE) | 5.0% | 5.1% | -76.5% | 304.9% | - |
| Santaram Spinners ($SANTASPN) | 6.0% | 60.7% | -40.9% | 112.0% | - |
| Asahi Industries ($ASAHIIND) | 36.2% | 23.0% | 24.4% | 103.9% | - |
| Blue Chip Tex Industries ($BLUECHIPT) | - | 12.9% | 29.9% | 56.1% | 23.7% |
| |
|---|
| Median (73 companies) | 4.8% | 9.3% | 14.2% | -0.5% | 2.5% |
|---|
| Welspun India ($WELSPUNIND) | - | 13.3% | 19.9% | 21.3% | 12.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sil Investments ($SILINV) | - | - | - | 93.8% | - |
| Swadeshi Polytex ($SWADPOL) | - | - | - | 64.4% | - |
| Binny ($BINNY) | - | - | - | 60.9% | - |
| Ruby Mills ($RUBYMILLS) | 28.3% | 25.1% | 28.6% | 29.3% | - |
| Premier Synthetics ($PREMSYN) | - | - | - | 25.9% | - |
| |
|---|
| Median (84 companies) | 6.3% | 9.5% | 9.5% | 7.2% | 5.8% |
|---|
| Welspun India ($WELSPUNIND) | 12.2% | 16.8% | 22.6% | 24.1% | 26.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nitin Spinners ($NITINSPIN) | 1.9% | 2.6% | 8.0% | 42.3% | - |
| Maharaja Shree Umaid Mills ($MAHASHR) | 18.6% | 24.1% | 6.8% | 16.8% | - |
| Jindal Worldwide ($JINDWORLD) | 3.0% | 10.5% | 20.7% | 11.6% | - |
| SRF ($SRF) | 0.0% | 18.7% | 20.0% | 11.4% | - |
| Sutlej Textiles & Industries ($SUTLEJTEX) | 3.4% | 1.8% | 5.6% | 10.7% | - |
| |
|---|
| Median (20 companies) | 3.0% | 5.3% | 6.7% | 6.3% | - |
|---|
| Welspun India ($WELSPUNIND) | 5.6% | 7.8% | 16.4% | 10.9% | 17.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Maharaja Shree Umaid Mills ($MAHASHR) | -0.5% | 9.2% | 8.3% | 20.4% | - |
| Nitin Spinners ($NITINSPIN) | 6.0% | 19.5% | 21.5% | 17.5% | - |
| Sutlej Textiles & Industries ($SUTLEJTEX) | 9.5% | 13.6% | 19.8% | 14.6% | - |
| Arvind ($ARVIND) | 11.3% | 11.2% | 13.7% | 13.2% | - |
| Visagar Polytex ($VIVIDHA) | 8.7% | 7.1% | 7.1% | 13.0% | - |
| |
|---|
| Median (126 companies) | 3.5% | 9.0% | 9.6% | 9.0% | - |
|---|
| Welspun India ($WELSPUNIND) | 9.3% | 15.6% | 8.5% | 21.9% | 25.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bombay Rayon Fashions ($BRFL) | 4.9x | 4.9x | 11.6x | 10.0x | - |
| Ruby Mills ($RUBYMILLS) | 12.6x | 15.3x | 10.8x | 8.6x | - |
| Dcm ($DCM) | 13.5x | 3.5x | 3.7x | 5.5x | - |
| Nahar Spinning Mills ($NAHARSPING) | 70.8x | 3.8x | 3.2x | 4.9x | - |
| Rai Saheb Rekhchand Mohota Spg.& Wvg.Mills ($RAIREKMOH) | 10.0x | 0.0x | 0.0x | 4.6x | - |
| |
|---|
| Median (69 companies) | 3.8x | 3.2x | 0.0x | 0.0x | 2.5x |
|---|
| Welspun India ($WELSPUNIND) | 4.6x | 2.8x | 2.6x | 2.2x | 1.6x |
