Redington (India) revenue growth continued to 12.3% in FY2016 vs. 12.9% a year earliner

24-05-2016 • About Redington (India) ($REDINGTON) • By InTwits

Redington (India) reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:

Redington (India) is a fast growth stock: FY2016 revenue growth was 12.3%, 5 year revenue CAGR was 15.2% at FY2016 ROIC 14.4%
EBITDA Margin is relatively stable: 2.2% in FY2016 vs. 2.2% in FY2015 vs. 2.9% in FY2012
Redington (India) has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
The company has highly profitable business model: ROIC is 14.4%
It operates with high leverage: Net Debt/EBITDA is 2.3x while industry average is 0.2x

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 12.3%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.2 pp from 17.7% to 14.6% in FY2016. EBITDA Margin stuck to a declining trend at -0.18 pp per annum in the last 5 years.

SG&A as a % of Revenue showed almost no change in FY2016.

Net Income margin showed almost no change in FY2016. Net Income margin was relatively stable in the last 5 years.

Investments (CAPEX, working capital and M&A)

Redington (India)'s CAPEX/Revenue was 0.16% in FY2016. Redington (India) showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 0.18%.

Return on investment

The company operates at good ROIC (14.4%) and ROE (16.5%). ROIC decreased slightly on 0.93 pp from 15.3% to 14.4% in FY2016. ROE decreased slightly on 1.1 pp from 17.6% to 16.5% in FY2016. ROIC declined at -0.63 pp per annum in the last 5 years. ROE declined at -1.8 pp per annum in FY2012-FY2016.

Leverage (Debt)

Company's Net Debt / EBITDA is 2.3x and Debt / EBITDA is 3.0x. Net Debt / EBITDA surged on 0.4x from 1.9x to 2.3x in FY2016. Debt surged on 25.8% while cash increased on 5.0%. During the last 5 years Net Debt/EBITDA bottomed in FY2014 at 1.7x and was growing since that time.

Redington (India) has short term refinancing risk: cash is only 23.1% of short term debt.

Valuation and dividends

The company's trades at EV/EBITDA 8.5x and P/E 11.1x while industy averages are 17.8x and 21.9x.

Financial and operational results

Redington (India) ($REDINGTON) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	211,930	241,647	279,449	315,592	354,296	12.3%
SG&A				1,379	1,234	-10.5%
EBITDA	6,046	6,434	6,928	6,984	7,709	10.4%
Net Income	2,927	3,231	3,366	3,865	4,257	10.1%
Balance Sheet
Cash	4,708	4,743	4,751	5,163	5,421	5.0%
Short Term Debt	15,482	17,646	14,549	16,529	23,491	42.1%
Long Term Debt	5,121	3,855	2,103	2,137	0	-100.0%
Cash flow
Capex	521	1,574	569	506	573	13.4%
Ratios
Revenue growth	21.4%	14.0%	15.6%	12.9%	12.3%
EBITDA growth	32.5%	6.4%	7.7%	0.8%	10.4%

EBITDA Margin	2.9%	2.7%	2.5%	2.2%	2.2%	-0.0%
SG&A, % of revenue				0.4%	0.3%	-0.1%
Net Income Margin	1.4%	1.3%	1.2%	1.2%	1.2%	-0.0%
CAPEX, % of revenue	0.2%	0.7%	0.2%	0.2%	0.2%	0.0%

ROIC	17.2%	16.0%	16.3%	15.3%	14.4%	-0.9%
ROE	23.3%	21.8%	18.4%	17.6%	16.5%	-1.1%
Net Debt/EBITDA	2.6x	2.6x	1.7x	1.9x	2.3x	0.4x

Peers in Comm.Trading & Distribution

Below you can find Redington (India) benchmarking vs. other companies in Comm.Trading & Distribution 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
Shri Krishna Prasadam ($SKP)	69.6%	57.3%	1,074.7%	148.2%	-
Sunil Industries ($SUNILTX)	15.9%	57.2%	12.1%	59.6%	-
Gagan Polycot India ($GAGANPO)	-59.4%	76.3%	18.2%	43.2%	-
Ptl Enterprises ($PTL)	-	12.6%	17.7%	35.1%	-2.4%
Parker Agrochem Exports ($PARKERAC)	-77.2%	1,542.3%	39.1%	33.1%	-
Median (19 companies)	1.2%	13.0%	12.9%	10.9%	0.5%
Redington (India) ($REDINGTON)	-	14.0%	15.6%	12.9%	12.3%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Hexa Tradex ($HEXATRADEX)	-	-	-	48.1%	-
Indiabulls Wholesale Services ($IBWSL)	30.8%	25.9%	19.4%	21.4%	27.6%
Bombay Cycle & Motor Agency ($BOMBCYC)	-	-	-	19.5%	-
Ptl Enterprises ($PTL)	26.6%	22.7%	21.6%	18.5%	20.9%
Remi Elektrotechnik ($REMIELEK)	-	-	-	15.1%	-
Median (37 companies)	3.1%	2.8%	2.0%	2.4%	11.6%
Redington (India) ($REDINGTON)	2.9%	2.7%	2.5%	2.2%	2.2%

Top companies by CAPEX/Revenue, %


Top	FY2012	FY2013	FY2014	FY2015	FY2016
Ptl Enterprises ($PTL)	5.0%	4.5%	2.4%	4.2%	5.8%
Maxwell Industries ($MAXWELL)	0.9%	1.9%	2.4%	1.8%	-
Mmtc ($MMTC)	0.0%	0.1%	0.1%	0.1%	-
Kothari Products ($KOTHARIPRO)	2.5%	0.1%	0.2%	0.0%	0.1%
Median (4 companies)	0.6%	0.1%	0.2%	0.9%	2.9%
Redington (India) ($REDINGTON)	0.2%	0.7%	0.2%	0.2%	0.2%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Ptl Enterprises ($PTL)	18.5%	19.5%	21.1%	22.1%	12.8%
Risa International ($RISAINTL)	-	-0.2%	14.8%	11.9%	-
Maxwell Industries ($MAXWELL)	9.0%	6.6%	9.6%	11.2%	-
Kothari Products ($KOTHARIPRO)	23.4%	20.0%	28.3%	10.6%	11.7%
Edynamics Solutions ($EDSL)	0.8%	0.9%	0.2%	0.2%	-
Median (52 companies)	4.5%	4.7%	8.2%	10.9%	12.2%
Redington (India) ($REDINGTON)	17.2%	16.0%	16.3%	15.3%	14.4%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Maxwell Industries ($MAXWELL)	3.7x	5.8x	3.5x	3.3x	-
Kothari Products ($KOTHARIPRO)	1.2x	0.6x	0.4x	1.4x	1.5x
Ptl Enterprises ($PTL)	2.2x	2.0x	2.0x	1.2x	0.5x
Rama Vision ($RAMAVISION)	-1.8x	0.3x	0.0x	0.0x	-
Ph Capital ($PHCAP)	-	-	18.4x	0.0x	-
Median (29 companies)	1.6x	1.7x	0.0x	0.0x	0.2x
Redington (India) ($REDINGTON)	2.6x	2.6x	1.7x	1.9x	2.3x

Redington (India) stock price chart

Redington (India) financials

mln.	FY2010	FY2011	FY2012

Revenue	548,844	174,585	211,930
EBITDA	3,473	4,564	6,046
Net income	1,843	2,260	2,927
CAPEX	348.7	564.4	521.2
Debt	11,486	15,897	20,603
Cash	5,826	4,806	4,708

About Redington (India)

Redington (India) Limited, together with its subsidiaries, provides end-to-end supply chain solutions for various categories of information technology (IT) products, and consumer and lifestyle products to approximately 100 international brands. The company distributes IT hardware and software products; and consumer and lifestyle products comprising digital lifestyle, smart communications, telecom, consumer electronics, and digital printing products. It also offers hardware support services, such as warranty and post-warranty services through a network of hardware support service centers, including 70 owned service centers and 292 franchise service centers. The hardware support services cover solution design and consulting, technical helpdesk, field engineering support, parts warehousing, forward and reverse logistics, imports and re-exports, and asset recovery. In addition, the company provides end-to-end logistics services ranging from import, warehousing, and stock movement across geographies, to packing/repacking, order processing, and delivery anywhere within its operating footprint. Its warehousing and logistics services include third party logistics, such as forward logistics and reverse logistics, as well as the operation of automated distribution centers and reverse logistics centers. The company has operations in India, the Middle East, Africa, Turkey, Sri Lanka, Bangladesh, and the CIS countries. Redington (India) Limited was incorporated in 1961 and is based in Chennai, India.