Century Enka reports 62.6% Net Income growth in 2016 and 2.7 pp EBITDA Margin growth from 9.8% to 12.4%
04-05-2016 • About Century Enka (
$CENTENKA) • By InTwits
Century Enka reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Century Enka is a company in decline: FY2016 revenue growth was -6.1%, 5 years revenue CAGR was -3.3%
- Century Enka has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.7%. At the same time it's a lot of higher than industry average of 2.9%.
- CAPEX is quite volatile: ₹220m in FY2016, ₹555m in FY2015, ₹386m in FY2014, ₹241m in FY2013, ₹488m in FY2012
- The company has business model with average profitability: ROIC is 10.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Century Enka's Revenue decreased on 6.1%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 2.7 pp from 9.8% to 12.4% in FY2016.
Net Income margin increased on 2.2 pp from 3.0% to 5.2% in FY2016. Net Income margin stuck to a growing trend at 1.1 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 1.9%. The company's CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 3.0%.
Return on investment
The company operates at low ROIC (10.7%) and ROE (8.1%). ROIC increased on 3.0 pp from 7.7% to 10.7% in FY2016. ROE increased on 2.9 pp from 5.2% to 8.1% in FY2016.
Leverage (Debt)
Debt level is 0.5x Net Debt / EBITDA and 0.5x Debt / EBITDA. Net Debt / EBITDA dropped on 0.8x from 1.2x to 0.5x in FY2016. Debt dropped on 54.2% while cash surged on 13.6%. Net Debt/EBITDA declined at -0.8x per annum in FY2012-FY2016.
Century Enka has short term refinancing risk: cash is only 26.0% of short term debt.
Financial and operational results
Century Enka ($CENTENKA) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 16,495 | 15,522 | 14,668 | 12,185 | 11,436 | -6.1% |
| EBITDA | 814 | 1,378 | 1,814 | 1,188 | 1,423 | 19.8% |
| Net Income | 88 | 219 | 629 | 366 | 595 | 62.6% |
Balance Sheet
|
|---|
| Cash | 40 | 34 | 49 | 42 | 48 | 13.6% |
| Short Term Debt | 2,074 | 2,096 | 1,466 | 869 | 183 | -79.0% |
| Long Term Debt | 1,450 | 671 | 482 | 652 | 514 | -21.1% |
Cash flow
|
|---|
| Capex | 488 | 241 | 386 | 555 | 220 | -60.3% |
Ratios
|
|---|
| Revenue growth | 22.3% | -5.9% | -5.5% | -16.9% | -6.1% | |
| EBITDA growth | -53.1% | 69.2% | 31.7% | -34.5% | 19.8% | |
|
|---|
| EBITDA Margin | 4.9% | 8.9% | 12.4% | 9.8% | 12.4% | 2.7% |
| Net Income Margin | 0.5% | 1.4% | 4.3% | 3.0% | 5.2% | 2.2% |
| CAPEX, % of revenue | 3.0% | 1.6% | 2.6% | 4.6% | 1.9% | -2.6% |
|
|---|
| ROIC | 1.2% | 6.1% | 10.9% | 7.7% | 10.7% | 3.0% |
| ROE | 1.4% | 3.4% | 9.3% | 5.2% | 8.1% | 2.9% |
| Net Debt/EBITDA | 4.3x | 2.0x | 1.0x | 1.2x | 0.5x | -0.8x |
Peers in Textiles
Below you can find Century Enka 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 ($BLUECHIPT) | - | 12.9% | 29.9% | 56.1% | 23.7% |
| |
|---|
| Median (74 companies) | 4.5% | 9.7% | 14.5% | 0.2% | 8.8% |
|---|
| Century Enka ($CENTENKA) | - | -5.9% | -5.5% | -16.9% | -6.1% |
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 ($PREMSYN) | - | - | - | 25.9% | - |
| |
|---|
| Median (85 companies) | 6.5% | 9.5% | 9.5% | 7.0% | 7.4% |
|---|
| Century Enka ($CENTENKA) | 4.9% | 8.9% | 12.4% | 9.8% | 12.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Nitin Spinners ($NITINSPIN) | 1.9% | 2.6% | 8.0% | 42.3% | 4.7% |
| Maharaja Shree Umaid Mills ($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 ($WELSPUNIND) | 5.6% | 7.8% | 16.4% | 10.9% | 17.7% |
| |
|---|
| Median (20 companies) | 3.4% | 5.9% | 7.4% | 6.7% | 6.2% |
|---|
| Century Enka ($CENTENKA) | 3.0% | 1.6% | 2.6% | 4.6% | 1.9% |
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% | - |
| Nitin Spinners ($NITINSPIN) | 6.0% | 19.5% | 21.5% | 17.5% | 17.8% |
| Sutlej Textiles & Industries ($SUTLEJTEX) | 9.5% | 13.6% | 19.8% | 14.6% | - |
| Arvind ($ARVIND) | 11.3% | 11.2% | 13.7% | 13.2% | - |
| |
|---|
| Median (127 companies) | 3.6% | 9.2% | 8.6% | 9.6% | 17.8% |
|---|
| Century Enka ($CENTENKA) | 1.2% | 6.1% | 10.9% | 7.7% | 10.7% |
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 ($RAIREKMOH) | 10.0x | 0.0x | 0.0x | 4.6x | - |
| |
|---|
| Median (70 companies) | 3.8x | 3.2x | 0.0x | 0.0x | 1.6x |
|---|
| Century Enka ($CENTENKA) | 4.3x | 2.0x | 1.0x | 1.2x | 0.5x |
