Bombay Rayon Fashions EBITDA surged on 41.1% and Revenue jumped on 17.4%

20-05-2016 • About Bombay Rayon Fashions ($BRFL) • By InTwits

Bombay Rayon Fashions reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Bombay Rayon Fashions has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.7%. At the same time it's in pair with industry average of 6.1%
CAPEX is quite volatile: ₹0m in FY2016, ₹84m in FY2015, ₹439m in FY2014, ₹3,538m in FY2013, ₹4,658m in FY2012
The company has business model with low profitability: ROIC is 7.3%
It operates with high leverage: Net Debt/EBITDA is 7.3x while industry average is 1.1x

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 17.4%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.1 pp from 19.1% to 27.2% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2014 at 13.1% and was growing since that time.

Net Income margin increased on 5.0 pp from -3.7% to 1.3% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2014 at -16.1% and was growing since that time.

Return on investment

The company operates at low ROIC (7.3%) and ROE (2.2%). ROIC increased on 2.5 pp from 4.7% to 7.3% in FY2016. ROE increased on 7.7 pp from -5.5% to 2.2% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2014 at 1.1% and was growing since that time. During the last 5 years ROE bottomed in FY2014 at -18.1% and was growing since that time.

Leverage (Debt)

Company's Net Debt / EBITDA is 7.3x and Debt / EBITDA is 7.5x. Net Debt / EBITDA dropped on 2.7x from 10.0x to 7.3x in FY2016. Debt increased on 3.5% while cash surged on 19.4%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2014 at 11.6x and was declining since that time.

Bombay Rayon Fashions has short term refinancing risk: cash is only 3.5% of short term debt.

Financial and operational results

Bombay Rayon Fashions ($BRFL) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	29,021	33,020	29,946	35,814	42,041	17.4%
SG&A					26
EBITDA	6,935	7,890	3,922	5,275	7,441	41.1%
Net Income	1,669	1,294	-4,834	-1,323	540
Balance Sheet
Cash	1,214	898	1,031	889	1,062	19.4%
Short Term Debt	21,930	24,757	18,789	26,185	29,991	14.5%
Long Term Debt	13,076	14,934	27,909	27,417	25,504	-7.0%
Cash flow
Capex	4,658	3,538	439	84	0	-100.0%
Ratios
Revenue growth	7.8%	13.8%	-9.3%	19.6%	17.4%
EBITDA growth	32.8%	13.8%	-50.3%	34.5%	41.1%

EBITDA Margin	23.9%	23.9%	13.1%	14.7%	17.7%	3.0%
SG&A, % of revenue					0.1%
Net Income Margin	5.7%	3.9%	-16.1%	-3.7%	1.3%	5.0%
CAPEX, % of revenue	16.0%	10.7%	1.5%	0.2%	0.0%

ROIC	7.3%	7.2%	1.1%	4.7%	7.3%	2.5%
ROE	5.9%	4.5%	-18.1%	-5.5%	2.2%	7.7%
Net Debt/EBITDA	4.9x	4.9x	11.6x	10.0x	7.3x	-2.7x

Peers in Textiles

Below you can find Bombay Rayon Fashions 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 ($BLUECHIPT)	-	12.9%	29.9%	56.1%	23.7%
Median (74 companies)	4.5%	8.9%	14.5%	-0.3%	2.3%
Bombay Rayon Fashions ($BRFL)	-	13.8%	-9.3%	19.6%	17.4%

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 ($PREMSYN)	-	-	-	25.9%	-
Median (85 companies)	6.2%	9.3%	9.5%	7.0%	12.4%
Bombay Rayon Fashions ($BRFL)	23.9%	23.9%	13.1%	14.7%	17.7%

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 ($WELSPUNIND)	5.6%	7.8%	16.4%	10.9%	17.7%
Median (20 companies)	3.2%	5.3%	7.4%	6.7%	6.3%
Bombay Rayon Fashions ($BRFL)	16.0%	10.7%	1.5%	0.2%	0.0%

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%	14.4%
Arvind ($ARVIND)	11.3%	11.2%	13.7%	13.2%	13.1%
Median (127 companies)	3.5%	9.2%	9.2%	9.6%	13.1%
Bombay Rayon Fashions ($BRFL)	7.3%	7.2%	1.1%	4.7%	7.3%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
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	-
Raymond ($RAYMOND)	3.7x	4.6x	3.7x	4.1x	4.5x
Median (70 companies)	3.8x	3.2x	0.0x	0.0x	1.6x
Bombay Rayon Fashions ($BRFL)	4.9x	4.9x	11.6x	10.0x	7.3x

Bombay Rayon Fashions stock price chart

Bombay Rayon Fashions financials

mln.	FY2010	FY2011	FY2012

Revenue	43,312	26,909	29,021
EBITDA	3,749	5,222	6,935
Net income	1,616	2,028	1,669
CAPEX	10,061	13,788	4,658
Debt	24,903	31,243	35,005
Cash	372.5	423.3	1,214

About Bombay Rayon Fashions

Bombay Rayon Fashions Limited, a vertically integrated textile company, manufactures, sells, and exports yarn, fabrics, and garments internationally. It offers various fabrics, such as cotton, polyester, tencel, modal, lycra, wool, and various blends; and cotton yarn and knitted grey fabric products. The company also produces a range of apparels; and polyester buttons for shirts, coats, outer wear, and trousers, as well as fancy buttons. In addition, it is engaged in the wholesale marketing and distribution of clothing products; and retail of readymade garments and other accessories under GURU the brand name in Europe. The company operates GURU stores in 18 countries, including Italy, Spain, France, Germany, Holland, Belgium, Luxemburg, Greece, England, Portugal, the Middle East, Turkey, Russia, Ukraine, Austria, Switzerland, the Canary Islands, Scandinavia, China, and India. Bombay Rayon Fashions Limited was founded in 1986 and is headquartered in Mumbai, India.