United Spirits reports 150% Net Income growth in 2016 and 0.88% Revenue growth
26-05-2016 • About United Spirits (
$UNITDSPR) • By InTwits
United Spirits reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 10.5% in FY2016, 6.1% in FY2015, -1.3% in FY2014, 12.6% in FY2013, 12.2% in FY2012
- United Spirits has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.4%. At the same time it's in pair with industry average of 6.2%
- CAPEX is quite volatile: ₹2,596m in FY2016, ₹1,643m in FY2015, ₹2,325m in FY2014, ₹2,902m in FY2013, ₹6,831m in FY2012
- The company has highly profitable business model: ROIC is 12.8%
- It operates with high leverage: Net Debt/EBITDA is 4.2x while industry average is 2.1x
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 increased slightly on 0.88%. During FY2012-FY2016 Revenue growth bottomed in FY2015 at -12.8%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.6 pp from 23.5% to 29.1% in FY2016.
Net Income margin jumped on 31.5 pp from -21.1% to 10.5% in FY2016. During the last 5 years Net Income margin bottomed in FY2015 at -21.1%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.8% in FY2016. The company's CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 2.3%. During the last 5 years CAPEX as a % of Revenue bottomed in FY2015 at 1.8%.
Return on investment
The company operates at high and attractive ROE (79.1%) while ROIC is a bit lower (12.8%). ROIC increased on 9.2 pp from 3.7% to 12.8% in FY2016. ROE jumped on 184 pp from -105% to 79.1% in FY2016. During the last 5 years ROE bottomed in FY2015 at -105%.
Leverage (Debt)
Debt level is 4.2x Net Debt / EBITDA and 4.4x Debt / EBITDA. Net Debt / EBITDA dropped on 4.2x from 8.4x to 4.2x in FY2016. Debt dropped on 14.8% while cash dropped on 44.8%.
United Spirits has short term refinancing risk: cash is only 4.6% of short term debt.
Management team
United Spirits's CEO Anand Kripalu has spent 6 years with the company. The company's CFO is Sanjeev Churiwala. Sanjeev Churiwala has 4 years tenure at the company.
Financial and operational results
United Spirits ($UNITDSPR) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 91,865 | 104,115 | 105,009 | 91,594 | 92,401 | 0.9% |
| EBITDA | 11,181 | 13,169 | -1,375 | 5,569 | 9,726 | 74.7% |
| Net Income | 1,879 | -3,301 | -14,413 | -19,299 | 9,677 | |
Balance Sheet
|
|---|
| Cash | 3,133 | 1,851 | 6,154 | 2,906 | 1,603 | -44.8% |
| Short Term Debt | 30,485 | 35,669 | 73,104 | 38,695 | 35,136 | -9.2% |
| Long Term Debt | 53,960 | 46,755 | 9,967 | 11,173 | 7,344 | -34.3% |
Cash flow
|
|---|
| Capex | 6,831 | 2,902 | 2,325 | 1,643 | 2,596 | 58.0% |
Ratios
|
|---|
| Revenue growth | 24.5% | 13.3% | 0.9% | -12.8% | 0.9% | |
| EBITDA growth | -2.3% | 17.8% | -110.4% | -504.9% | 74.7% | |
|
|---|
| EBITDA Margin | 12.2% | 12.6% | -1.3% | 6.1% | 10.5% | 4.4% |
| Net Income Margin | 2.0% | -3.2% | -13.7% | -21.1% | 10.5% | 31.5% |
| CAPEX, % of revenue | 7.4% | 2.8% | 2.2% | 1.8% | 2.8% | 1.0% |
|
|---|
| ROIC | 8.1% | 8.7% | -2.7% | 3.7% | 12.8% | 9.2% |
| ROE | 4.3% | -7.0% | -36.9% | -104.5% | 79.1% | 183.6% |
| Net Debt/EBITDA | 7.3x | 6.1x | | 8.4x | 4.2x | -4.2x |
Peers in Breweries & Distilleries
Below you can find United Spirits benchmarking vs. other companies in Breweries & Distilleries 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 |
|---|
| Ifb Agro Industries ($IFBAGRO) | - | 5.4% | 8.4% | 19.2% | 4.8% |
| Pioneer Distilleries ($PIONDIST) | - | -0.9% | 25.1% | 17.0% | -5.3% |
| United Breweries ($UBL) | - | 9.5% | 8.5% | 10.8% | 8.3% |
| Som Distilleries & Breweries ($SDBL) | - | 5.0% | -6.5% | 8.3% | 6.7% |
| G.M.Breweries ($GMBREW) | - | 12.0% | 0.3% | 6.5% | 17.0% |
| |
|---|
| Median (7 companies) | 18.4% | 5.4% | 8.5% | 8.3% | 6.7% |
|---|
| United Spirits ($UNITDSPR) | - | 13.3% | 0.9% | -12.8% | 0.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pioneer Distilleries ($PIONDIST) | -3.0% | -7.5% | 6.6% | 19.5% | 56.5% |
| Tilaknagar Industries ($TI) | 26.2% | 22.7% | 21.0% | 15.0% | - |
| Som Distilleries & Breweries ($SDBL) | 14.4% | 15.0% | 15.0% | 14.9% | 14.8% |
| United Breweries ($UBL) | 11.6% | 12.3% | 10.3% | 13.3% | 14.4% |
| G.M.Breweries ($GMBREW) | 10.0% | 9.1% | 13.7% | 11.5% | 23.8% |
| |
|---|
| Median (10 companies) | 11.6% | 10.8% | 13.7% | 8.3% | 14.8% |
|---|
| United Spirits ($UNITDSPR) | 12.2% | 12.6% | -1.3% | 6.1% | 10.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tilaknagar Industries ($TI) | 20.6% | 10.0% | 14.8% | 13.7% | - |
| Pioneer Distilleries ($PIONDIST) | 29.8% | 35.0% | 30.0% | 12.3% | - |
| United Breweries ($UBL) | 10.7% | 9.8% | 5.0% | 8.7% | 4.8% |
| Ifb Agro Industries ($IFBAGRO) | 4.6% | 1.8% | 9.8% | 4.5% | 7.4% |
| Som Distilleries & Breweries ($SDBL) | 12.3% | 3.3% | 0.9% | 1.5% | 1.1% |
| |
|---|
| Median (6 companies) | 10.7% | 6.7% | 7.4% | 6.6% | 3.0% |
|---|
| United Spirits ($UNITDSPR) | 7.4% | 2.8% | 2.2% | 1.8% | 2.8% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pioneer Distilleries ($PIONDIST) | -12.3% | -17.4% | -3.3% | 70.5% | - |
| G.M.Breweries ($GMBREW) | 18.4% | 17.0% | 21.9% | 18.0% | 46.7% |
| Som Distilleries & Breweries ($SDBL) | 23.3% | 22.2% | 19.2% | 16.5% | 13.3% |
| United Breweries ($UBL) | 11.5% | 11.6% | 8.1% | 14.3% | 17.1% |
| Ifb Agro Industries ($IFBAGRO) | 33.3% | 26.7% | 18.8% | 4.8% | 8.0% |
| |
|---|
| Median (11 companies) | 15.0% | 11.6% | 10.7% | 15.4% | 15.2% |
|---|
| United Spirits ($UNITDSPR) | 8.1% | 8.7% | -2.7% | 3.7% | 12.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tilaknagar Industries ($TI) | 4.3x | 3.8x | 4.8x | 8.4x | - |
| Pioneer Distilleries ($PIONDIST) | - | - | 10.4x | 2.1x | 0.3x |
| United Breweries ($UBL) | 2.0x | 2.5x | 2.7x | 1.3x | 0.9x |
| Som Distilleries & Breweries ($SDBL) | 0.5x | -0.1x | -0.0x | 0.7x | 2.2x |
| G.M.Breweries ($GMBREW) | 0.9x | 0.7x | 0.6x | 0.5x | -0.4x |
| |
|---|
| Median (7 companies) | 2.0x | 1.1x | 0.9x | 0.7x | 0.8x |
|---|
| United Spirits ($UNITDSPR) | 7.3x | 6.1x | - | 8.4x | 4.2x |
