Pearl Global Industries revenue returned to growth in FY2016: increased 36.1% vs. 78.2% decline a year earliner
25-05-2016 • About Pearl Global Industries (
$PGIL) • By InTwits
Pearl Global Industries reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 3.6% in FY2016, 4.8% in FY2015, 1.4% in FY2014, 2.4% in FY2013, 3.1% in FY2012
- Pearl Global Industries has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.5%. At the same time it's a lot of higher than industry average of 1.2%.
- CAPEX is quite volatile: ₹242m in FY2016, ₹314m in FY2015, ₹619m in FY2014, ₹257m in FY2013, ₹266m in FY2012
- The company has potentially unprofitable business model: ROIC is 6.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.2x while industry average is 2.5x
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 jumped on 36.1%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 6.2 pp from 3.6% to 9.8% in FY2016.
Net Income margin showed almost no change in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2013 at 0.62% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 1.7%. CAPEX/Revenue increased slightly on 1.1 pp from 0.67% in FY2013 to 1.7% in FY2016. For the last three years the average CAPEX/Revenue was 2.0%.
Return on investment
The company operates at low ROIC (6.4%) and ROE (11.1%). ROIC increased on 2.8 pp from 3.6% to 6.4% in FY2016. ROE increased on 6.1 pp from 5.0% to 11.1% in FY2016. During the last 5 years ROIC bottomed in FY2014 at 3.0% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 4.1x. Net Debt / EBITDA dropped on 0.6x from 2.7x to 2.2x in FY2016. Debt surged on 23.7% while cash surged on 213%. During the last 5 years Net Debt/EBITDA topped in FY2014 at 7.0x and was declining since that time.
Pearl Global Industries has short term refinancing risk: cash is only 51.1% of short term debt.
Financial and operational results
Pearl Global Industries ($PGIL) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 27,985 | 38,202 | 46,990 | 10,237 | 13,934 | 36.1% |
| EBITDA | 856 | 930 | 667 | 496 | 508 | 2.2% |
| Net Income | 315 | 238 | 386 | 251 | 367 | 46.3% |
Balance Sheet
|
|---|
| Cash | 683 | 688 | 1,402 | 305 | 955 | 213.0% |
| Short Term Debt | 3,982 | 4,520 | 5,397 | 1,528 | 1,868 | 22.3% |
| Long Term Debt | 533 | 542 | 657 | 139 | 193 | 39.1% |
Cash flow
|
|---|
| Capex | 266 | 257 | 619 | 314 | 242 | -23.0% |
Ratios
|
|---|
| Revenue growth | 24.3% | 36.5% | 23.0% | -78.2% | 36.1% | |
| EBITDA growth | 105.6% | 8.6% | -28.3% | -25.6% | 2.2% | |
|
|---|
| EBITDA Margin | 3.1% | 2.4% | 1.4% | 4.8% | 3.6% | -1.2% |
| Net Income Margin | 1.1% | 0.6% | 0.8% | 2.4% | 2.6% | 0.2% |
| CAPEX, % of revenue | 0.9% | 0.7% | 1.3% | 3.1% | 1.7% | -1.3% |
|
|---|
| ROIC | 6.1% | 6.0% | 3.0% | 3.6% | 6.4% | 2.8% |
| ROE | 6.2% | 4.1% | 5.9% | 5.0% | 11.1% | 6.1% |
| Net Debt/EBITDA | 4.5x | 4.7x | 7.0x | 2.7x | 2.2x | -0.6x |
Peers in Other Apparels & Accessories
Below you can find Pearl Global Industries benchmarking vs. other companies in Other Apparels & Accessories 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 |
|---|
| Bhartiya International ($BIL) | - | 20.9% | 36.7% | 34.7% | 12.1% |
| Page Industries ($PAGEIND) | - | 26.3% | 37.5% | 30.0% | 15.5% |
| 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 ($THANGAMAYL) | - | 34.6% | -21.8% | 19.3% | -10.5% |
| |
|---|
| Median (23 companies) | 5.0% | 19.1% | 14.1% | 2.4% | 3.1% |
|---|
| Pearl Global Industries ($PGIL) | - | 36.5% | 23.0% | -78.2% | 36.1% |
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 ($PAGEIND) | 21.1% | 20.5% | 21.5% | 20.7% | 21.2% |
| Banaras Beads ($BANARBEADS) | - | - | - | 17.9% | - |
| Rupa & Company ($RUPA) | 12.7% | 15.0% | 15.3% | 14.5% | - |
| |
|---|
| Median (31 companies) | 7.6% | 6.1% | 6.1% | 5.2% | 5.4% |
|---|
| Pearl Global Industries ($PGIL) | 3.1% | 2.4% | 1.4% | 4.8% | 3.6% |
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% | 1.5% |
| Rupa & Company ($RUPA) | 1.9% | 3.9% | 1.7% | 2.2% | - |
| Bhartiya International ($BIL) | 4.5% | 3.9% | 1.8% | 2.1% | 0.5% |
| Asian Star Co ($ASTAR) | 0.5% | 1.0% | 0.9% | 0.7% | 0.3% |
| |
|---|
| Median (10 companies) | 1.8% | 1.7% | 1.1% | 0.7% | 0.5% |
|---|
| Pearl Global Industries ($PGIL) | 0.9% | 0.7% | 1.3% | 3.1% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Page Industries ($PAGEIND) | 54.9% | 58.5% | 61.6% | 59.2% | 60.1% |
| Ashapura Intimates Fashion ($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% | 9.9% |
| Bhartiya International ($BIL) | 13.0% | 10.6% | 11.2% | 12.8% | 11.4% |
| |
|---|
| Median (40 companies) | 10.1% | 7.2% | 11.0% | 8.2% | 10.6% |
|---|
| Pearl Global Industries ($PGIL) | 6.1% | 6.0% | 3.0% | 3.6% | 6.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Thangamayil Jewellery ($THANGAMAYL) | 2.2x | 2.6x | 11.9x | 61.2x | 2.9x |
| Shrenuj & Co ($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 |
| Asian Star Co ($ASTAR) | 7.1x | 7.1x | 5.9x | 4.8x | 5.2x |
| |
|---|
| Median (24 companies) | 2.2x | 2.7x | 0.0x | 0.2x | 1.6x |
|---|
| Pearl Global Industries ($PGIL) | 4.5x | 4.7x | 7.0x | 2.7x | 2.2x |
