Vardhman Textiles Net Income surged on 44.6% while Revenue decreased on 2.2%
09-05-2016 • About Vardhman Textiles (
$VTL) • By InTwits
Vardhman Textiles reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Vardhman Textiles has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.2%. At the same time it's a lot of higher than industry average of 6.7%.
- CAPEX is quite volatile: ₹6,571m in FY2016, ₹2,272m in FY2015, ₹3,747m in FY2014, ₹3,885m in FY2013, ₹2,452m in FY2012
- The company has highly profitable business model: ROIC is 14.0%
- It operates with high leverage: Net Debt/EBITDA is 1.4x while industry average is 1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Vardhman Textiles's Revenue decreased on 2.2%. During FY2012-FY2016 Revenue growth topped in FY2014 at 24.0% and was decelerating since that time. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.6 pp from 16.5% to 20.1% in FY2016.
Net Income margin increased on 2.8 pp from 5.9% to 8.7% in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 6.3% in FY2016. The company's CAPEX/Revenue decreased on 3.8 pp from 10.1% in FY2013 to 6.3% in FY2016. Average CAPEX/Revenue for the last three years was 7.2%.
Return on investment
The company operates at good ROIC (14.0%) and ROE (16.0%). ROIC increased on 5.5 pp from 8.5% to 14.0% in FY2016. ROE increased on 3.7 pp from 12.3% to 16.0% in FY2016.
Leverage (Debt)
Debt level is 1.4x Net Debt / EBITDA and 1.7x Debt / EBITDA. Net Debt / EBITDA dropped on 0.9x from 2.3x to 1.4x in FY2016. Debt dropped on 16.3% while cash surged on 259%. Net Debt/EBITDA followed a declining trend at -0.6x per annum in FY2012-FY2016.
Vardhman Textiles has short term refinancing risk: cash is only 29.0% of short term debt.
Financial and operational results
Vardhman Textiles ($VTL) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 46,407 | 49,721 | 61,664 | 67,860 | 66,369 | -2.2% |
| EBITDA | 6,405 | 9,997 | 14,996 | 11,203 | 13,361 | 19.3% |
| Net Income | 1,414 | 3,564 | 7,183 | 4,002 | 5,786 | 44.6% |
Balance Sheet
|
|---|
| Cash | 819 | 626 | 789 | 852 | 3,060 | 258.9% |
| Short Term Debt | 7,135 | 10,741 | 13,176 | 12,218 | 10,536 | -13.8% |
| Long Term Debt | 20,436 | 20,996 | 20,552 | 14,183 | 11,554 | -18.5% |
Cash flow
|
|---|
| Capex | 4,234 | 5,025 | 6,582 | 3,128 | 4,172 | 33.4% |
Ratios
|
|---|
| Revenue growth | 5.0% | 7.1% | 24.0% | 10.0% | -2.2% | |
| EBITDA growth | -41.8% | 56.1% | 50.0% | -25.3% | 19.3% | |
|
|---|
| EBITDA Margin | 13.8% | 20.1% | 24.3% | 16.5% | 20.1% | 3.6% |
| Net Income Margin | 3.0% | 7.2% | 11.6% | 5.9% | 8.7% | 2.8% |
| CAPEX, % of revenue | 9.1% | 10.1% | 10.7% | 4.6% | 6.3% | 1.7% |
|
|---|
| ROIC | 6.6% | 11.9% | 17.3% | 8.5% | 14.0% | 5.5% |
| ROE | 6.3% | 15.1% | 25.5% | 12.3% | 16.0% | 3.7% |
| Net Debt/EBITDA | 4.2x | 3.1x | 2.2x | 2.3x | 1.4x | -0.9x |
Peers in Textiles
Below we provide Vardhman Textiles 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 ($BLUECHIPT) | - | 12.9% | 29.9% | 56.1% | 23.7% |
| |
|---|
| Median (74 companies) | 4.3% | 9.7% | 14.3% | -0.3% | 4.1% |
|---|
| Vardhman Textiles ($VTL) | - | 7.1% | 24.0% | 10.0% | -2.2% |
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 ($PREMSYN) | - | - | - | 25.9% | - |
| |
|---|
| Median (85 companies) | 6.2% | 9.3% | 9.5% | 7.0% | 12.4% |
|---|
| Vardhman Textiles ($VTL) | 13.8% | 20.1% | 24.3% | 16.5% | 20.1% |
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 ($WELSPUNIND) | 5.6% | 7.8% | 16.4% | 10.9% | 17.7% |
| |
|---|
| Median (20 companies) | 3.2% | 5.3% | 6.7% | 6.7% | 6.2% |
|---|
| Vardhman Textiles ($VTL) | 9.1% | 10.1% | 10.7% | 4.6% | 6.3% |
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 ($ARVIND) | 11.3% | 11.2% | 13.7% | 13.2% | - |
| |
|---|
| Median (127 companies) | 3.5% | 8.9% | 8.6% | 9.6% | 12.9% |
|---|
| Vardhman Textiles ($VTL) | 6.6% | 11.9% | 17.3% | 8.5% | 14.0% |
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 ($RAIREKMOH) | 10.0x | 0.0x | 0.0x | 4.6x | - |
| |
|---|
| Median (70 companies) | 3.8x | 3.2x | 0.0x | 0.0x | 1.6x |
|---|
| Vardhman Textiles ($VTL) | 4.2x | 3.1x | 2.2x | 2.3x | 1.4x |
