Asian Star Co Debt jumped on 24.3% and Revenue increased on 2.5%
19-05-2016 • About Asian Star Co (
$ASTAR) • By InTwits
Asian Star Co reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 3.9% in FY2016 vs. 4.5% in FY2015 vs. 4.4% in FY2012
- Asian Star Co has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
- The company has potentially unprofitable business model: ROIC is 6.6%
- It operates with high leverage: Net Debt/EBITDA is 5.2x while industry average is 4.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Asian Star Co's Revenue increased on 2.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.7 pp from 4.0% to 9.7% in FY2016.
Net Income margin showed almost no change in FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.29% in FY2016. The company showed small CAPEX/Revenue decline of 0.72 pp from 1.0% in FY2013 to 0.29% in FY2016. Average CAPEX/Revenue for the last three years was 0.63%. During FY2012-FY2016 CAPEX as a % of Revenue topped in FY2013 at 1.0% and was declining since that time.
Return on investment
The company operates at low ROIC (6.6%) and ROE (10.9%). ROIC decreased slightly on 1.6 pp from 8.2% to 6.6% in FY2016. ROE decreased on 3.0 pp from 13.9% to 10.9% in FY2016. During the last 5 years ROIC topped in FY2014 at 8.5% and was declining since that time. During FY2012-FY2016 ROE topped in FY2014 at 15.3% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.2x and Debt / EBITDA is 8.8x. Net Debt / EBITDA surged on 0.4x from 4.8x to 5.2x in FY2016. Debt jumped on 24.3% while cash jumped on 120%. Net Debt/EBITDA stuck to a declining trend at -0.6x per annum in FY2012-FY2016.
Asian Star Co has short term refinancing risk: cash is only 43.3% of short term debt.
Valuation and dividends
Asian Star Co's trades at EV/EBITDA 14.1x and P/E 15.8x while industy averages are 17.8x and 21.9x.
Financial and operational results
Asian Star Co ($ASTAR) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 18,354 | 24,622 | 32,502 | 32,213 | 33,008 | 2.5% |
| SG&A | | | | | 31 | |
| EBITDA | 803 | 941 | 1,336 | 1,459 | 1,280 | -12.2% |
| Net Income | 414 | 478 | 780 | 820 | 726 | -11.5% |
Balance Sheet
|
|---|
| Cash | 890 | 1,540 | 2,161 | 2,111 | 4,642 | 119.9% |
| Short Term Debt | 6,020 | 7,782 | 9,439 | 8,583 | 10,726 | 25.0% |
| Long Term Debt | 548 | 439 | 582 | 468 | 524 | 11.9% |
Cash flow
|
|---|
| Capex | 83 | 249 | 302 | 217 | 95 | -56.4% |
Ratios
|
|---|
| Revenue growth | 10.1% | 34.2% | 32.0% | -0.9% | 2.5% | |
| EBITDA growth | 3.3% | 17.1% | 42.0% | 9.2% | -12.2% | |
|
|---|
| EBITDA Margin | 4.4% | 3.8% | 4.1% | 4.5% | 3.9% | -0.6% |
| SG&A, % of revenue | | | | | 0.1% | |
| Net Income Margin | 2.3% | 1.9% | 2.4% | 2.5% | 2.2% | -0.3% |
| CAPEX, % of revenue | 0.5% | 1.0% | 0.9% | 0.7% | 0.3% | -0.4% |
|
|---|
| ROIC | 6.6% | 6.9% | 8.5% | 8.2% | 6.6% | -1.6% |
| ROE | 10.2% | 10.6% | 15.3% | 13.9% | 10.9% | -3.0% |
| Net Debt/EBITDA | 7.1x | 7.1x | 5.9x | 4.8x | 5.2x | 0.4x |
Peers in Other Apparels & Accessories
Below we provide Asian Star Co benchmarking against other companies in Other Apparels & Accessories 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 |
|---|
| Bhartiya International ($BIL) | 28.4% | 20.9% | 36.7% | 34.7% | - |
| Page Industries ($PAGEIND) | 39.0% | 26.3% | 37.5% | 30.0% | - |
| Mini Diamonds (India) ($MINID) | - | 59.6% | 117.1% | 26.9% | 3.1% |
| Cantabil Retail India ($CANTABIL) | -11.6% | -30.4% | -3.3% | 25.0% | - |
| Thangamayil Jewellery ($THANGAMAYL) | 72.0% | 34.6% | -21.8% | 19.3% | - |
| |
|---|
| Median (23 companies) | 9.4% | 19.1% | 14.1% | 2.4% | -5.7% |
|---|
| Asian Star Co ($ASTAR) | - | 34.2% | 32.0% | -0.9% | 2.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Ceenik Exports (India) ($CEENIK) | - | - | - | 27.2% | - |
| Arrow Textiles ($ARROWTEX) | - | - | - | 25.2% | - |
| Page Industries ($PAGEIND) | 21.1% | 20.5% | 21.5% | 20.7% | - |
| Banaras Beads ($BANARBEADS) | - | - | - | 17.9% | - |
| Rupa & Company ($RUPA) | 12.7% | 15.0% | 15.3% | 14.5% | - |
| |
|---|
| Median (31 companies) | 7.6% | 6.1% | 6.1% | 5.2% | 2.3% |
|---|
| Asian Star Co ($ASTAR) | 4.4% | 3.8% | 4.1% | 4.5% | 3.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | 5.7% | 3.9% | 4.0% | 5.0% | - |
| Page Industries ($PAGEIND) | 4.0% | 5.2% | 4.4% | 3.6% | - |
| Pearl Global Industries ($PGIL) | 0.9% | 0.7% | 1.3% | 3.1% | - |
| Rupa & Company ($RUPA) | 1.9% | 3.9% | 1.7% | 2.2% | - |
| Bhartiya International ($BIL) | 4.5% | 3.9% | 1.8% | 2.1% | - |
| |
|---|
| Median (10 companies) | 1.8% | 1.7% | 1.2% | 1.4% | 0.6% |
|---|
| Asian Star Co ($ASTAR) | 0.5% | 1.0% | 0.9% | 0.7% | 0.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Page Industries ($PAGEIND) | 54.9% | 58.5% | 61.6% | 59.2% | - |
| Ashapura Intimates Fashion ($AIFL) | 24.1% | 19.1% | 23.4% | 39.9% | - |
| Rupa & Company ($RUPA) | 22.4% | 27.1% | 25.8% | 23.8% | - |
| Tara Jewels ($TARAJEWELS) | 17.5% | 18.6% | 15.1% | 13.5% | - |
| Bhartiya International ($BIL) | 13.0% | 10.6% | 11.2% | 12.8% | - |
| |
|---|
| Median (40 companies) | 10.1% | 7.2% | 11.0% | 7.3% | 2.5% |
|---|
| Asian Star Co ($ASTAR) | 6.6% | 6.9% | 8.5% | 8.2% | 6.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Thangamayil Jewellery ($THANGAMAYL) | 2.2x | 2.6x | 11.9x | 61.2x | - |
| Shrenuj & Co ($SHRENUJ) | 9.3x | 11.2x | 11.7x | 13.5x | - |
| Gokaldas Exports ($GOKEX) | - | - | 3.6x | 10.4x | - |
| Tribhovandas Bhimji Zaveri ($TBZ) | 1.6x | 2.7x | 4.1x | 6.6x | 16.2x |
| Bhartiya International ($BIL) | 2.3x | 3.2x | 3.5x | 3.1x | - |
| |
|---|
| Median (24 companies) | 2.2x | 2.7x | 0.0x | 0.2x | 0.0x |
|---|
| Asian Star Co ($ASTAR) | 7.1x | 7.1x | 5.9x | 4.8x | 5.2x |
