Zodiac Clothing Co EBITDA dropped on 76.8% and EBITDA Margin decreased on 3.9 pp from 5.2% to 1.3%
26-05-2016 • About Zodiac Clothing Co (
$ZODIACLOTH) • By InTwits
Zodiac Clothing Co reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 1.3% in FY2016, 5.2% in FY2015, 10.8% in FY2014, 8.8% in FY2013, 9.3% in FY2012
- Zodiac Clothing Co has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's a lot of higher than industry average of 1.5%.
- CAPEX is quite volatile: ₹329m in FY2016, ₹42m in FY2015, ₹54m in FY2014, ₹34m in FY2013, ₹155m in FY2012
- The company has unprofitable business model: ROIC is -2.0%
- It operates with high leverage: Net Debt/EBITDA is 12.6x while industry average is 2.8x
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 dropped on 10.6%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.9 pp from 5.2% to 1.3% in FY2016.
Net Income margin decreased on 4.6 pp from 2.3% to -2.3% in FY2016.
Investments (CAPEX, working capital and M&A)
Zodiac Clothing Co's CAPEX/Revenue was 7.0% in FY2016. Zodiac Clothing Co showed CAPEX/Revenue growth of 3.1 pp from 3.9% in FY2013 to 7.0% in FY2016. It's average CAPEX/Revenue for the last three years was 5.3%. Battling declining revenue Zodiac Clothing Co made large investments to CAPEX (516% of EBITDA) but that didn't help at least in this year. During FY2012-FY2016 CAPEX as a % of Revenue bottomed in FY2013 at 3.9% and was growing since that time.
Return on investment
The company operates at negative ROIC (-2.0%) and ROE (-3.1%). ROIC decreased on 5.0 pp from 3.1% to -2.0% in FY2016. ROE decreased on 6.5 pp from 3.4% to -3.1% in FY2016.
Leverage (Debt)
Debt level is 12.6x Net Debt / EBITDA and 14.9x Debt / EBITDA. Net Debt / EBITDA jumped on 10.8x from 1.8x to 12.6x in FY2016. Debt jumped on 22.5% while cash dropped on 47.7%.
Zodiac Clothing Co has short term refinancing risk: cash is only 17.7% of short term debt.
Financial and operational results
Zodiac Clothing Co ($ZODIACLOTH) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,775 | 3,600 | 4,106 | 3,940 | 3,524 | -10.6% |
| EBITDA | 352 | 315 | 443 | 205 | 48 | -76.8% |
| Net Income | 177 | 140 | 220 | 90 | -82 | -191.1% |
Balance Sheet
|
|---|
| Cash | 148 | 138 | 243 | 216 | 113 | -47.7% |
| Short Term Debt | 487 | 509 | 458 | 506 | 638 | 25.9% |
| Long Term Debt | 76 | 64 | 65 | 73 | 72 | -1.4% |
Cash flow
|
|---|
| Capex | 215 | 139 | 163 | 196 | 245 | 24.9% |
Ratios
|
|---|
| Revenue growth | 5.7% | -4.7% | 14.1% | -4.0% | -10.6% | |
| EBITDA growth | -10.6% | -10.5% | 40.5% | -53.8% | -76.8% | |
|
|---|
| EBITDA Margin | 9.3% | 8.8% | 10.8% | 5.2% | 1.3% | -3.9% |
| Net Income Margin | 4.7% | 3.9% | 5.4% | 2.3% | -2.3% | -4.6% |
| CAPEX, % of revenue | 5.7% | 3.9% | 4.0% | 5.0% | 7.0% | 2.0% |
|
|---|
| ROIC | 9.8% | 7.2% | 10.8% | 3.1% | -2.0% | -5.0% |
| ROE | 8.0% | 5.9% | 8.8% | 3.4% | -3.1% | -6.5% |
| Net Debt/EBITDA | 1.2x | 1.4x | 0.6x | 1.8x | 12.6x | 10.8x |
Peers in Other Apparels & Accessories
Below we provide Zodiac Clothing Co benchmarking against other companies in Other Apparels & Accessories 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 |
|---|
| 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 ($THANGAMAYL) | - | 34.6% | -21.8% | 19.3% | -10.5% |
| |
|---|
| Median (23 companies) | 3.4% | 19.5% | 15.3% | 2.4% | 3.8% |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | - | -4.7% | 14.1% | -4.0% | -10.6% |
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 ($RUPA) | 12.7% | 15.0% | 15.3% | 14.5% | - |
| |
|---|
| Median (31 companies) | 7.5% | 5.5% | 5.4% | 4.8% | 3.8% |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | 9.3% | 8.8% | 10.8% | 5.2% | 1.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Page Industries ($PAGEIND) | 4.0% | 5.2% | 4.4% | 3.6% | 1.5% |
| Pearl Global Industries ($PGIL) | 0.9% | 0.7% | 1.3% | 3.1% | 1.7% |
| 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 ($ASTAR) | 0.5% | 1.0% | 0.9% | 0.7% | 0.3% |
| |
|---|
| Median (10 companies) | 1.5% | 1.3% | 1.1% | 0.7% | 0.6% |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | 5.7% | 3.9% | 4.0% | 5.0% | 7.0% |
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 ($BIL) | 13.0% | 10.6% | 11.2% | 12.8% | 11.4% |
| |
|---|
| Median (40 companies) | 9.6% | 7.2% | 11.0% | 8.2% | 9.6% |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | 9.8% | 7.2% | 10.8% | 3.1% | -2.0% |
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 ($ASTAR) | 7.1x | 7.1x | 5.9x | 4.8x | 5.2x |
| |
|---|
| Median (24 companies) | 2.3x | 2.9x | 0.0x | 0.2x | 1.2x |
|---|
| Zodiac Clothing Co ($ZODIACLOTH) | 1.2x | 1.4x | 0.6x | 1.8x | 12.6x |
