Nitin Spinners reports 30.8% EBITDA growth in 2016 and 24.4% Revenue growth
03-05-2016 • About Nitin Spinners (
$NITINSPIN) • By InTwits
Nitin Spinners reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Nitin Spinners is a growth stock: FY2016 revenue growth was 24.4%, 5 year revenue CAGR was 13.3% at FY2016 ROIC 17.8%
- Nitin Spinners has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.9%. At the same time it's a lot of higher than industry average of 6.9%.
- CAPEX is quite volatile: ₹360m in FY2016, ₹2,610m in FY2015, ₹392m in FY2014, ₹117m in FY2013, ₹83m in FY2012
- The company has highly profitable business model: ROIC is 17.8%
- It operates with high leverage: Net Debt/EBITDA is 2.2x 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 24.4%. Revenue growth was accelerating on average by 6.2 pp per annum in FY2012-FY2016. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.9 pp from 16.9% to 18.8% in FY2016.
Net Income margin decreased slightly on 0.89 pp from 6.6% to 5.8% in FY2016. During FY2012-FY2016 Net Income margin topped in FY2014 at 7.1% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 Nitin Spinners had CAPEX/Revenue of 4.7%. Nitin Spinners's CAPEX/Revenue increased on 2.1 pp from 2.6% in FY2013 to 4.7% in FY2016. It's average CAPEX/Revenue for the last three years was 18.4%. During the last 5 years CAPEX as a % of Revenue topped in FY2015 at 42.3%.
Return on investment
The company operates at high and attractive ROE (23.7%) while ROIC is a bit lower (17.8%). ROIC showed almost no change in FY2016. ROE decreased on 3.7 pp from 27.4% to 23.7% in FY2016. During the last 5 years ROE topped in FY2014 at 29.9% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 2.2x. Net Debt / EBITDA dropped on 1.1x from 3.3x to 2.2x in FY2016. Debt dropped on 14.1% while cash dropped on 16.1%.
Nitin Spinners has short term refinancing risk: cash is only 1.0% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 4.4x and P/E 6.8x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 5.9x with the industry average at 22.8x.
Financial and operational results
Nitin Spinners ($NITINSPIN) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,283 | 4,461 | 4,883 | 6,165 | 7,669 | 24.4% |
| EBITDA | 451 | 879 | 941 | 1,048 | 1,371 | 30.8% |
| Net Income | 3 | 141 | 348 | 410 | 442 | 7.8% |
Balance Sheet
|
|---|
| Cash | 1 | 3 | 1 | 7 | 6 | -16.1% |
| Short Term Debt | 652 | 443 | 454 | 533 | 577 | 8.2% |
| Long Term Debt | 1,837 | 1,623 | 1,307 | 2,942 | 2,409 | -18.1% |
Cash flow
|
|---|
| Capex | 83 | 117 | 392 | 2,610 | 360 | -86.2% |
Ratios
|
|---|
| Revenue growth | 4.2% | 4.1% | 9.5% | 26.2% | 24.4% | |
| EBITDA growth | -53.7% | 95.1% | 7.0% | 11.4% | 30.8% | |
|
|---|
| EBITDA Margin | 10.5% | 19.7% | 19.3% | 17.0% | 17.9% | 0.9% |
| Net Income Margin | 0.1% | 3.2% | 7.1% | 6.6% | 5.8% | -0.9% |
| CAPEX, % of revenue | 1.9% | 2.6% | 8.0% | 42.3% | 4.7% | -37.6% |
|
|---|
| ROIC | 6.0% | 19.5% | 21.5% | 17.5% | 17.8% | 0.3% |
| ROE | 0.4% | 15.1% | 29.9% | 27.4% | 23.7% | -3.7% |
| Net Debt/EBITDA | 5.5x | 2.3x | 1.9x | 3.3x | 2.2x | -1.1x |
Peers in Textiles
Below you can find Nitin Spinners benchmarking vs. other companies in Textiles 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 | 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 ($BLUECHIPT) | - | 12.9% | 29.9% | 56.1% | 23.7% |
| |
|---|
| Median (73 companies) | 4.8% | 10.0% | 14.4% | -0.5% | 8.8% |
|---|
| Nitin Spinners ($NITINSPIN) | - | 4.1% | 9.5% | 26.2% | 24.4% |
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 ($PREMSYN) | - | - | - | 25.9% | - |
| |
|---|
| Median (84 companies) | 6.3% | 9.5% | 9.5% | 7.2% | 7.4% |
|---|
| Nitin Spinners ($NITINSPIN) | 10.5% | 19.7% | 19.3% | 17.0% | 17.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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 ($SRF) | 0.0% | 18.7% | 20.0% | 11.4% | - |
| Welspun India ($WELSPUNIND) | 5.6% | 7.8% | 16.4% | 10.9% | 17.7% |
| Sutlej Textiles & Industries ($SUTLEJTEX) | 3.4% | 1.8% | 5.6% | 10.7% | - |
| |
|---|
| Median (20 companies) | 3.4% | 5.9% | 6.7% | 6.3% | 12.0% |
|---|
| Nitin Spinners ($NITINSPIN) | 1.9% | 2.6% | 8.0% | 42.3% | 4.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Welspun India ($WELSPUNIND) | 9.3% | 15.6% | 8.5% | 21.9% | 25.2% |
| Maharaja Shree Umaid Mills ($MAHASHR) | -0.5% | 9.2% | 8.3% | 20.4% | - |
| Sutlej Textiles & Industries ($SUTLEJTEX) | 9.5% | 13.6% | 19.8% | 14.6% | - |
| Arvind ($ARVIND) | 11.3% | 11.2% | 13.7% | 13.2% | - |
| Visagar Polytex ($VIVIDHA) | 8.7% | 7.1% | 7.1% | 13.0% | - |
| |
|---|
| Median (126 companies) | 3.5% | 9.0% | 8.9% | 9.0% | 16.3% |
|---|
| Nitin Spinners ($NITINSPIN) | 6.0% | 19.5% | 21.5% | 17.5% | 17.8% |
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 ($RAIREKMOH) | 10.0x | 0.0x | 0.0x | 4.6x | - |
| |
|---|
| Median (69 companies) | 3.8x | 3.2x | 0.0x | 0.0x | 1.6x |
|---|
| Nitin Spinners ($NITINSPIN) | 5.5x | 2.3x | 1.9x | 3.3x | 2.2x |
