Kaveri Seed Company Net Income dropped on 42.6% and Revenue dropped on 23.1%
10-05-2016 • About Kaveri Seed Company (
$KSCL) • By InTwits
Kaveri Seed Company reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Kaveri Seed Company has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.3%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: ₹258m in FY2016, ₹821m in FY2015, ₹255m in FY2014, ₹420m in FY2013, ₹108m in FY2012
- The company has highly profitable business model: ROIC is 19.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Kaveri Seed Company's Revenue dropped on 23.1%. Revenue decline was accelerating on average at -24.1 pp per annum in FY2012-FY2016. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.4 pp from 26.7% to 21.3% in FY2016.
Net Income margin decreased on 6.6 pp from 25.9% to 19.3% in FY2016. During the last 5 years Net Income margin topped in FY2015 at 25.9%.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 2.9%. Kaveri Seed Company's CAPEX/Revenue decreased on 3.0 pp from 5.9% in FY2013 to 2.9% in FY2016. Average CAPEX/Revenue for the last three years was 4.2%.
Return on investment
The company operates at high and attractive ROE (20.8%) while ROIC is a bit lower (19.3%). ROIC dropped on 26.6 pp from 45.9% to 19.3% in FY2016. ROE dropped on 26.6 pp from 47.4% to 20.8% in FY2016. During the last 5 years ROIC topped in FY2014 at 46.8% and was declining since that time. During the last 5 years ROE topped in FY2014 at 48.6% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.0x and Debt / EBITDA is 0.0x. Debt surged on 14.8% while cash surged on 44.6%.
Kaveri Seed Company has no short term refinancing risk: cash is higher than short term debt (96,310.9%).
Valuation and dividends
The company's trades at EV/EBITDA 14.6x and P/E 16.2x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 16.9x with the industry average at 22.8x.
Management team
The company's CFO K V Chalapathi Reddy has spent 4 years with the company.
Financial and operational results
Kaveri Seed Company ($KSCL) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,724 | 7,120 | 10,111 | 11,609 | 8,929 | -23.1% |
| EBITDA | 770 | 1,393 | 2,212 | 3,103 | 1,904 | -38.6% |
| Net Income | 581 | 1,281 | 2,090 | 3,010 | 1,727 | -42.6% |
Balance Sheet
|
|---|
| Cash | 96 | 143 | 67 | 66 | 95 | 44.6% |
| Short Term Debt | 190 | 0 | 0 | 0 | 0 | -62.3% |
| Long Term Debt | 26 | 8 | 9 | 14 | 16 | 16.3% |
Cash flow
|
|---|
| Capex | 108 | 420 | 255 | 821 | 258 | -68.5% |
Ratios
|
|---|
| Revenue growth | 59.4% | 91.2% | 42.0% | 14.8% | -23.1% | |
| EBITDA growth | 43.0% | 81.0% | 58.8% | 40.3% | -38.6% | |
|
|---|
| EBITDA Margin | 20.7% | 19.6% | 21.9% | 26.7% | 21.3% | -5.4% |
| Net Income Margin | 15.6% | 18.0% | 20.7% | 25.9% | 19.3% | -6.6% |
| CAPEX, % of revenue | 2.9% | 5.9% | 2.5% | 7.1% | 2.9% | -4.2% |
|
|---|
| ROIC | 27.5% | 41.1% | 46.8% | 45.9% | 19.3% | -26.6% |
| ROE | 27.0% | 43.7% | 48.6% | 47.4% | 20.8% | -26.6% |
| Net Debt/EBITDA | 0.2x | -0.1x | -0.0x | -0.0x | -0.0x | -0.0x |
Peers in Other Agricultural Products
Below you can find Kaveri Seed Company benchmarking vs. other companies in Other Agricultural Products 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 |
|---|
| Vikas Granaries ($VIKASGRAN) | -13.9% | 88.0% | -34.7% | 108.5% | - |
| Modi Naturals ($MODINATUR) | 51.2% | 16.2% | 8.3% | 11.5% | - |
| Anik Industries ($ANIKINDS) | 26.0% | -21.3% | 14.6% | 1.4% | - |
| Freshtrop Fruits ($FRSHTRP) | 14.7% | 43.8% | 29.1% | 0.0% | - |
| Agro Tech Foods ($ATFL) | - | 12.1% | -3.2% | -0.8% | 3.2% |
| |
|---|
| Median (9 companies) | 38.6% | 16.2% | 14.6% | -0.8% | 3.2% |
|---|
| Kaveri Seed Company ($KSCL) | - | 91.2% | 42.0% | 14.8% | -23.1% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Indrayani Biotech ($INDRANIB) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (1 company) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Avt Natural Products ($AVTNPL) | 37.6% | 30.8% | 25.9% | 17.5% | - |
| Freshtrop Fruits ($FRSHTRP) | 9.3% | 8.9% | 9.8% | 14.1% | - |
| Agro Tech Foods ($ATFL) | 7.6% | 8.3% | 9.2% | 8.0% | 7.3% |
| Vikas Granaries ($VIKASGRAN) | 10.6% | 14.2% | 9.8% | 5.0% | - |
| Anik Industries ($ANIKINDS) | 3.3% | 3.1% | 1.3% | 4.1% | - |
| |
|---|
| Median (9 companies) | 4.7% | 8.3% | 9.8% | 4.1% | 7.3% |
|---|
| Kaveri Seed Company ($KSCL) | 20.7% | 19.6% | 21.9% | 26.7% | 21.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Agro Tech Foods ($ATFL) | 4.1% | 6.0% | 6.3% | 5.6% | 5.7% |
| Avt Natural Products ($AVTNPL) | 2.3% | 5.0% | 3.3% | 4.0% | - |
| Kohinoor Foods ($KOHINOOR) | 1.6% | 1.5% | 1.0% | 0.3% | - |
| |
|---|
| Median (3 companies) | 1.0% | 2.9% | 3.3% | 4.0% | 5.7% |
|---|
| Kaveri Seed Company ($KSCL) | 2.9% | 5.9% | 2.5% | 7.1% | 2.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Avt Natural Products ($AVTNPL) | 58.2% | 41.5% | 32.8% | 19.0% | - |
| Agro Tech Foods ($ATFL) | 24.0% | 25.3% | 21.2% | 13.9% | 10.2% |
| Indrayani Biotech ($INDRANIB) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Kohinoor Foods ($KOHINOOR) | 3.1% | 8.8% | 10.3% | -1.3% | - |
| Himalya International ($HIMIN) | 9.4% | 10.2% | - | - | - |
| |
|---|
| Median (13 companies) | 8.3% | 8.9% | 15.7% | 7.0% | 5.1% |
|---|
| Kaveri Seed Company ($KSCL) | 27.5% | 41.1% | 46.8% | 45.9% | 19.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kohinoor Foods ($KOHINOOR) | 19.2x | 7.8x | 6.1x | 296.6x | - |
| Agro Tech Foods ($ATFL) | -0.8x | -0.2x | 0.1x | 0.3x | 1.6x |
| Unique Organics ($UNIQUEO) | - | 0.0x | 0.0x | 0.0x | - |
| Freshtrop Fruits ($FRSHTRP) | 3.3x | 2.5x | 0.0x | 0.0x | - |
| Modi Naturals ($MODINATUR) | 3.9x | 2.2x | - | 0.0x | - |
| |
|---|
| Median (9 companies) | 3.6x | 2.4x | 0.0x | 0.0x | 1.6x |
|---|
| Kaveri Seed Company ($KSCL) | 0.2x | -0.1x | -0.0x | -0.0x | -0.0x |
