Sutlej Textiles & Industries reports 24.2% Net Income growth in 2016 and almost no change in EBITDA Margin of 12.3%
11-05-2016 • About Sutlej Textiles & Industries (
$SUTLEJTEX) • By InTwits
Sutlej Textiles & Industries reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sutlej Textiles & Industries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.7%. At the same time it's in pair with industry average of 6.4%
- CAPEX is quite volatile: ₹1,604m in FY2016, ₹2,016m in FY2015, ₹1,059m in FY2014, ₹307m in FY2013, ₹522m in FY2012
- The company has highly profitable business model: ROIC is 14.4%
- It operates with high leverage: Net Debt/EBITDA is 2.7x 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 surged on 20.9%. EBITDA Margin showed almost no change in FY2016. During FY2012-FY2016 EBITDA Margin topped in FY2014 at 14.3% and was declining since that time.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income margin showed almost no change in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 7.1%. CAPEX/Revenue increased on 5.2 pp from 1.8% in FY2013 to 7.1% in FY2016. It's average CAPEX/Revenue for the last three years was 7.8%. Sutlej Textiles & Industries invested a big chunk of EBITDA (57.3%) to CAPEX to fuel its growth.
Return on investment
The company operates at high and attractive ROE (23.2%) while ROIC is a bit lower (14.4%). ROIC showed almost no change in FY2016. ROE increased slightly on 0.61 pp from 22.6% to 23.2% in FY2016. During the last 5 years ROIC topped in FY2014 at 19.8% and was declining since that time.
Leverage (Debt)
Debt level is 2.7x Net Debt / EBITDA and 2.7x Debt / EBITDA. Net Debt / EBITDA jumped on 0.2x from 2.6x to 2.7x in FY2016. Debt jumped on 28.3% while cash increased on 9.4%. During the last 5 years Net Debt/EBITDA bottomed in FY2014 at 1.9x and was growing since that time.
Sutlej Textiles & Industries has short term refinancing risk: cash is only 0.8% of short term debt.
Valuation and dividends
Sutlej Textiles & Industries's trades at EV/EBITDA 5.8x and P/E 5.9x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 13.5x with the industry average at 22.8x.
Financial and operational results
Sutlej Textiles & Industries ($SUTLEJTEX) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 15,370 | 16,802 | 18,806 | 18,782 | 22,713 | 20.9% |
| SG&A | | | | 267 | 285 | 6.9% |
| EBITDA | 1,662 | 1,977 | 2,698 | 2,321 | 2,798 | 20.6% |
| Net Income | 317 | 770 | 1,314 | 1,155 | 1,434 | 24.2% |
Balance Sheet
|
|---|
| Cash | 35 | 43 | 34 | 26 | 29 | 9.4% |
| Short Term Debt | 1,927 | 2,088 | 2,453 | 2,585 | 3,398 | 31.5% |
| Long Term Debt | 4,115 | 3,377 | 2,667 | 3,392 | 4,273 | 26.0% |
Cash flow
|
|---|
| Capex | 522 | 307 | 1,059 | 2,016 | 1,604 | -20.4% |
Ratios
|
|---|
| Revenue growth | -2.8% | 9.3% | 11.9% | -0.1% | 20.9% | |
| EBITDA growth | -31.0% | 18.9% | 36.5% | -14.0% | 20.6% | |
|
|---|
| EBITDA Margin | 10.8% | 11.8% | 14.3% | 12.4% | 12.3% | -0.0% |
| SG&A, % of revenue | | | | 1.4% | 1.3% | -0.2% |
| Net Income Margin | 2.1% | 4.6% | 7.0% | 6.1% | 6.3% | 0.2% |
| CAPEX, % of revenue | 3.4% | 1.8% | 5.6% | 10.7% | 7.1% | -3.7% |
|
|---|
| ROIC | 9.5% | 13.6% | 19.8% | 14.6% | 14.4% | -0.2% |
| ROE | 12.1% | 24.7% | 32.5% | 22.6% | 23.2% | 0.6% |
| Net Debt/EBITDA | 3.6x | 2.7x | 1.9x | 2.6x | 2.7x | 0.2x |
Peers in Textiles
Below you can find Sutlej Textiles & Industries 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 ($BLUECHIPT) | - | 12.9% | 29.9% | 56.1% | 23.7% |
| |
|---|
| Median (74 companies) | 4.8% | 9.2% | 14.5% | 0.0% | 0.9% |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | - | 9.3% | 11.9% | -0.1% | 20.9% |
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 ($PREMSYN) | - | - | - | 25.9% | - |
| |
|---|
| Median (85 companies) | 6.2% | 9.3% | 9.5% | 7.0% | 12.4% |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | 10.8% | 11.8% | 14.3% | 12.4% | 12.3% |
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% | 13.0% |
| Welspun India ($WELSPUNIND) | 5.6% | 7.8% | 16.4% | 10.9% | 17.7% |
| |
|---|
| Median (20 companies) | 3.2% | 5.9% | 7.4% | 6.3% | 6.2% |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | 3.4% | 1.8% | 5.6% | 10.7% | 7.1% |
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 ($NITINSPIN) | 6.0% | 19.5% | 21.5% | 17.5% | 17.8% |
| Arvind ($ARVIND) | 11.3% | 11.2% | 13.7% | 13.2% | - |
| Visagar Polytex ($VIVIDHA) | 8.7% | 7.1% | 7.1% | 13.0% | - |
| |
|---|
| Median (127 companies) | 3.5% | 8.9% | 8.6% | 9.0% | 13.3% |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | 9.5% | 13.6% | 19.8% | 14.6% | 14.4% |
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 ($RAIREKMOH) | 10.0x | 0.0x | 0.0x | 4.6x | - |
| |
|---|
| Median (70 companies) | 3.8x | 3.2x | 0.0x | 0.0x | 1.5x |
|---|
| Sutlej Textiles & Industries ($SUTLEJTEX) | 3.6x | 2.7x | 1.9x | 2.6x | 2.7x |
