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Pantaloons Fashion & Retail reports 855% CAPEX growth in 2016 and 227% Revenue growth

25-05-2016 • About Pantaloons Fashion & Retail ($PFRL) • By InTwits

Pantaloons Fashion & Retail reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
  • Pantaloons Fashion & Retail is a fast growth stock: FY2016 revenue growth was 227%, 5 year revenue CAGR was 243% at FY2016 ROIC 3.0%
  • EBITDA Margin is quite volatile: 6.6% in FY2016, 4.0% in FY2015, 2.1% in FY2014, 5.5% in FY2013, 2.5% in FY2012
  • Pantaloons Fashion & Retail has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's in pair with industry average of 6.4%
  • CAPEX is quite volatile: ₹11,104m in FY2016, ₹1,163m in FY2015, ₹950m in FY2014, ₹300m in FY2013, ₹0m in FY2012
  • The company has potentially unprofitable business model: ROIC is 3.0%
  • It operates with high leverage: Net Debt/EBITDA is 4.6x while industry average is 1.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


Pantaloons Fashion & Retail's Revenue jumped on 227%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 10.2% to 11.1% in FY2016.

SG&A as a % of Revenue increased on 7.3 pp from 4.0% to 11.2% in FY2016.

Net Income margin jumped on 10.6 pp from -12.3% to -1.7% in FY2016. During the last 5 years Net Income margin bottomed in FY2015 at -12.3%.

Investments (CAPEX, working capital and M&A)


In FY2016 the company had CAPEX/Revenue of 18.3%. Pantaloons Fashion & Retail's CAPEX/Revenue surged on 16.0 pp from 2.3% in FY2013 to 18.3% in FY2016. It's average CAPEX/Revenue for the last three years was 10.1%. Pantaloons Fashion & Retail has spent a lot to CAPEX (279% of EBITDA) to secure its growth.

Return on investment


The company operates at low but positive ROIC (3.0%) and negative ROE (-16.2%). ROIC increased on 9.8 pp from -6.8% to 3.0% in FY2016. ROE surged on 33.2 pp from -49.4% to -16.2% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2015 at -6.8%. During FY2012-FY2016 ROE bottomed in FY2015 at -49.4%.

Leverage (Debt)


Debt level is 4.6x Net Debt / EBITDA and 4.6x Debt / EBITDA. Net Debt / EBITDA dropped on 13.2x from 17.8x to 4.6x in FY2016. Debt jumped on 41.1% while cash jumped on 182%. During the last 5 years Net Debt/EBITDA topped in FY2014 at 30.0x and was declining since that time.

Pantaloons Fashion & Retail has short term refinancing risk: cash is only 1.7% of short term debt.

Financial and operational results


Pantaloons Fashion & Retail ($PFRL) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue17412,85116,61218,50760,601227.4%
SG&A7336,800827.3%
EBITDA47133477333,977442.7%
Net Income12-689-1,877-2,281-1,041
Balance Sheet
Cash125310872203182.2%
Short Term Debt012,4583553,73111,727214.3%
Long Term Debt04,84910,1509,3756,766-27.8%
Cash flow
Capex03009501,16311,104854.8%
Ratios
Revenue growth36.3%7,273.1%29.3%11.4%227.4%
EBITDA growth246.0%16,102.3%-51.4%111.5%442.7%
EBITDA Margin2.5%5.5%2.1%4.0%6.6%2.6%
SG&A, % of revenue4.0%11.2%7.3%
Net Income Margin7.0%-5.4%-11.3%-12.3%-1.7%10.6%
CAPEX, % of revenue0.0%2.3%5.7%6.3%18.3%12.0%
ROIC33.2%1.3%-3.6%-6.8%3.0%9.8%
ROE126.7%-17.9%-27.9%-49.4%-16.2%33.2%
Net Debt/EBITDA-0.1x23.9x30.0x17.8x4.6x-13.2x

Peers in Department Stores


Below you can find Pantaloons Fashion & Retail benchmarking vs. other companies in Department Stores 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  FY2012 FY2013 FY2014 FY2015 FY2016
V-Mart Retail ($VMART)31.7%36.0%49.9%25.3%-
Trent ($TRENT)22.1%15.6%9.4%-2.1%-
Future Market Networks ($FMNL)58.6%-3.8%1.1%-2.4%-
 
Median (3 companies)31.7%15.6%9.4%-2.1%93.1%
Pantaloons Fashion & Retail ($PFRL)-7,273.1%29.3%11.4%227.4%


Top companies by EBITDA margin, %

Top  FY2012 FY2013 FY2014 FY2015 FY2016
Store One Retail India ($STOREONE)---31.2%31.0%
V-Mart Retail ($VMART)10.3%10.5%9.4%8.9%-
Trent ($TRENT)-2.3%-0.4%0.7%3.3%-
Rei Six Ten Retail ($REISIXTEN)----2.2%-
 
Median (4 companies)10.3%5.0%9.4%6.1%31.0%
Pantaloons Fashion & Retail ($PFRL)2.5%5.5%2.1%4.0%6.6%


Top companies by CAPEX/Revenue, %

Top  FY2012 FY2013 FY2014 FY2015 FY2016
Trent ($TRENT)8.8%5.4%5.8%6.9%-
V-Mart Retail ($VMART)4.8%5.8%5.8%4.7%-
 
Median (2 companies)8.8%5.6%5.8%5.8%-
Pantaloons Fashion & Retail ($PFRL)0.0%2.3%5.7%6.3%18.3%


Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
V-Mart Retail ($VMART)26.3%23.5%21.9%26.3%-
Trent ($TRENT)-6.2%-3.5%-2.6%0.1%-
Rei Six Ten Retail ($REISIXTEN)1.2%-3.4%---
Future Market Networks ($FMNL)2.5%----
Store One Retail India ($STOREONE)-----
 
Median (5 companies)1.8%-3.4%9.6%13.2%-
Pantaloons Fashion & Retail ($PFRL)33.2%1.3%-3.6%-6.8%3.0%


Top companies by Net Debt / EBITDA

Top  FY2012 FY2013 FY2014 FY2015 FY2016
Trent ($TRENT)--16.6x0.9x-
V-Mart Retail ($VMART)1.3x0.5x0.8x0.4x-
Store One Retail India ($STOREONE)---0.0x0.0x
 
Median (3 companies)1.3x0.1x16.6x0.4x0.0x
Pantaloons Fashion & Retail ($PFRL)-0.1x23.9x30.0x17.8x4.6x


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