Britannia Industries reports 42.0% EBITDA growth in 2016 and 3.1 pp EBITDA Margin growth from 11.1% to 14.3%
20-05-2016 • About Britannia Industries (
$BRITANNIA) • By InTwits
Britannia Industries reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Britannia Industries is a growth stock: FY2016 revenue growth was 10.7%, 5 year revenue CAGR was 13.4% at FY2016 ROIC 66.7%
- EBITDA Margin is expanding: 14.3% in FY2016 vs. 11.1% in FY2015 vs. 5.7% in FY2012
- EBITDA Margin is quite volatile: 14.3% in FY2016, 11.1% in FY2015, 9.2% in FY2014, 6.9% in FY2013, 5.7% in FY2012
- Britannia Industries has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's in pair with industry average of 3.0%
- CAPEX is quite volatile: ₹2,508m in FY2016, ₹1,177m in FY2015, ₹1,101m in FY2014, ₹2,250m in FY2013, ₹2,659m in FY2012
- The company has highly profitable business model: ROIC is 66.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Britannia Industries's Revenue jumped on 10.7%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.1 pp from 11.1% to 14.3% in FY2016. EBITDA Margin grew at 2.1 pp per annum in FY2012-FY2016.
Net Income margin increased slightly on 0.51 pp from 8.9% to 9.4% in FY2016. Net Income margin grew at 1.6 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2016 Britannia Industries had CAPEX/Revenue of 2.9%. The company showed small CAPEX/Revenue decline of 0.75 pp from 3.7% in FY2013 to 2.9% in FY2016. It's average level of CAPEX/Revenue for the last three years was 2.0%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2015 at 1.5%.
Return on investment
The company operates at high and attractive ROIC (66.7%) and ROE (53.5%). ROIC increased on 7.3 pp from 59.4% to 66.7% in FY2016. ROE dropped on 13.9 pp from 67.4% to 53.5% in FY2016. ROIC stuck to a growing trend at 11.0 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 0.0x Net Debt / EBITDA and 0.1x Debt / EBITDA. Net Debt / EBITDA surged on 0.1x from -0.1x to 0.038x in FY2016. Debt decreased on 7.3% while cash dropped on 60.4%. During the last 5 years Net Debt/EBITDA bottomed in FY2015 at -0.1x.
Britannia Industries has short term refinancing risk: cash is only 93.6% of short term debt.
Valuation and dividends
Britannia Industries's trades at EV/EBITDA 28.5x and P/E 43.3x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 35.8x with the industry average at 22.8x.
Financial and operational results
Britannia Industries ($BRITANNIA) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 54,608 | 61,359 | 68,293 | 77,751 | 86,071 | 10.7% |
| EBITDA | 3,109 | 4,206 | 6,282 | 8,639 | 12,265 | 42.0% |
| Net Income | 1,996 | 2,595 | 3,954 | 6,886 | 8,061 | 17.1% |
Balance Sheet
|
|---|
| Cash | 594 | 1,029 | 1,086 | 2,215 | 877 | -60.4% |
| Short Term Debt | 5,425 | 3,528 | 1,213 | 1,017 | 936 | -8.0% |
| Long Term Debt | 617 | 272 | 284 | 433 | 408 | -5.8% |
Cash flow
|
|---|
| Capex | 2,659 | 2,250 | 1,101 | 1,177 | 2,508 | 113.1% |
Ratios
|
|---|
| Revenue growth | 19.0% | 12.4% | 11.3% | 13.8% | 10.7% | |
| EBITDA growth | 30.9% | 35.3% | 49.4% | 37.5% | 42.0% | |
|
|---|
| EBITDA Margin | 5.7% | 6.9% | 9.2% | 11.1% | 14.3% | 3.1% |
| Net Income Margin | 3.7% | 4.2% | 5.8% | 8.9% | 9.4% | 0.5% |
| CAPEX, % of revenue | 4.9% | 3.7% | 1.6% | 1.5% | 2.9% | 1.4% |
|
|---|
| ROIC | 24.6% | 33.7% | 54.0% | 59.4% | 66.7% | 7.3% |
| ROE | 54.3% | 53.7% | 58.3% | 67.4% | 53.5% | -13.9% |
| Net Debt/EBITDA | 1.8x | 0.7x | 0.1x | -0.1x | 0.0x | 0.1x |
Peers in Packaged Foods
Below we provide Britannia Industries benchmarking against other companies in Packaged Foods 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 |
|---|
| Simran Farms ($SIMRAN) | 38.4% | 23.8% | 27.5% | 23.4% | - |
| Heritage Foods ($HERITGFOOD) | 27.1% | 15.0% | 7.5% | 20.4% | - |
| Rcl Foods ($RCLFOODS) | -56.8% | -34.2% | 18.2% | 17.8% | - |
| Umang Dairies ($UMANGDAIR) | - | 15.7% | 24.5% | 16.1% | -24.8% |
| Kse ($KSE) | 19.5% | 28.6% | 15.7% | 11.6% | - |
| |
|---|
| Median (17 companies) | 10.8% | 15.2% | 15.8% | 4.5% | 0.0% |
|---|
| Britannia Industries ($BRITANNIA) | - | 12.4% | 11.3% | 13.8% | 10.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Zydus Wellness ($ZYDUSWELL) | 23.1% | 25.4% | 22.6% | 23.8% | 21.3% |
| Nestle India ($NESTLEIND) | 22.0% | 21.7% | 20.9% | 19.7% | - |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 18.6% | 17.8% | 22.5% | 17.2% | 19.4% |
| Sampre Nutritions ($SAMPRE) | - | - | - | 16.8% | - |
| Krbl ($KRBL) | 14.1% | 14.2% | 15.1% | 15.4% | - |
| |
|---|
| Median (19 companies) | 9.2% | 10.2% | 8.7% | 6.7% | 20.3% |
|---|
| Britannia Industries ($BRITANNIA) | 5.7% | 6.9% | 9.2% | 11.1% | 14.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Venky'S (India) ($VENKYS) | 8.9% | 6.6% | 10.4% | 7.7% | - |
| Krbl ($KRBL) | 4.1% | 4.0% | 6.1% | 7.3% | - |
| Umang Dairies ($UMANGDAIR) | 2.0% | 4.4% | 2.7% | 3.2% | - |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 2.7% | - | 4.3% | 2.5% | 1.4% |
| Heritage Foods ($HERITGFOOD) | 2.1% | 1.9% | 3.7% | 2.5% | - |
| |
|---|
| Median (9 companies) | 3.5% | 4.0% | 4.3% | 2.5% | 1.1% |
|---|
| Britannia Industries ($BRITANNIA) | 4.9% | 3.7% | 1.6% | 1.5% | 2.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kse ($KSE) | 27.7% | 14.1% | 36.9% | 69.0% | - |
| Nestle India ($NESTLEIND) | 57.7% | 47.9% | 49.6% | 40.2% | - |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 44.6% | - | - | 36.2% | 35.7% |
| Umang Dairies ($UMANGDAIR) | 93.5% | 55.6% | 22.3% | 28.4% | - |
| Zydus Wellness ($ZYDUSWELL) | - | 41.0% | 28.8% | 24.5% | 18.6% |
| |
|---|
| Median (21 companies) | 12.1% | 12.5% | 20.3% | 21.3% | 27.2% |
|---|
| Britannia Industries ($BRITANNIA) | 24.6% | 33.7% | 54.0% | 59.4% | 66.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vadilal Industries ($VADILALIND) | 2.6x | 4.5x | 3.9x | 4.0x | - |
| Venky'S (India) ($VENKYS) | 2.6x | 2.8x | 6.7x | 3.9x | - |
| Bambino Agro Industries ($BAMBINO) | 3.2x | - | 3.2x | 2.9x | - |
| Krbl ($KRBL) | 4.1x | 2.9x | 3.0x | 2.7x | - |
| Heritage Foods ($HERITGFOOD) | 2.2x | 0.9x | 1.0x | 1.4x | - |
| |
|---|
| Median (17 companies) | 1.6x | 0.9x | 1.1x | 0.0x | -3.3x |
|---|
| Britannia Industries ($BRITANNIA) | 1.8x | 0.7x | 0.1x | -0.1x | 0.0x |
