Amarjothi Spinning Mills reports 34.9% Net Income decline in 2016 and 3.6% Revenue decline

27-05-2016 • About Amarjothi Spinning Mills ($AMARJOTHI) • By InTwits

Amarjothi Spinning Mills reported FY2016 financial results today. Here are the key drivers of the company's long term financial model: It operates with high leverage: Net Debt/EBITDA is 4.8x while industry average is 4.5x.

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Amarjothi Spinning Mills's Revenue decreased on 3.6%. During FY2012-FY2016 Revenue growth topped in FY2014 at 26.2% and was decelerating since that time.

Net Income margin decreased on 2.1 pp from 6.6% to 4.4% in FY2016. During FY2012-FY2016 Net Income margin topped in FY2014 at 10.2% and was declining since that time.

Financial and operational results

Amarjothi Spinning Mills ($AMARJOTHI) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	1,296	1,558	1,967	2,015	1,941	-3.6%
EBITDA	283	244		450
Net Income	33	40	201	132	86	-34.9%
Balance Sheet
Cash	4	12
Short Term Debt	423	200
Long Term Debt	374	621
Cash flow
Capex	72
Ratios
Revenue growth	4.5%	20.3%	26.2%	2.4%	-3.6%
EBITDA growth	-18.9%	-13.6%

EBITDA Margin	21.8%	15.7%		22.3%
Net Income Margin	2.5%	2.6%	10.2%	6.6%	4.4%	-2.1%
CAPEX, % of revenue	5.5%

ROIC	9.4%	7.7%
ROE	7.4%	8.6%
Net Debt/EBITDA	2.8x	3.3x		0.0x

Peers in Textiles

Below we provide Amarjothi Spinning Mills benchmarking against other companies in Textiles 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
Olympia Industries ($OLYMPTX)	-58.0%	-96.6%	74,809.1%	1,749.9%	-
Shri Dinesh Mills ($SHRIDINE)	5.0%	5.1%	-76.5%	304.9%	-
Santaram Spinners ($SANTASPN)	6.0%	60.7%	-40.9%	112.0%	-
Asahi Industries ($ASAHIIND)	-	23.0%	24.4%	103.9%	-47.3%
Blue Chip Tex Industries ($BLUECHIPT)	-	12.9%	29.9%	56.1%	23.7%
Median (74 companies)	4.7%	8.9%	14.3%	-0.3%	-3.4%
Amarjothi Spinning Mills ($AMARJOTHI)	-	20.3%	26.2%	2.4%	-3.6%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Sil Investments ($SILINV)	-	-	-	93.8%	-
Swadeshi Polytex ($SWADPOL)	-	-	-	64.4%	-
Binny ($BINNY)	-	-	-	60.9%	-
Ruby Mills ($RUBYMILLS)	28.3%	25.1%	28.6%	29.3%	-
Premier Synthetics ($PREMSYN)	-	-	-	25.9%	-
Median (85 companies)	6.2%	9.3%	9.5%	7.0%	8.9%
Amarjothi Spinning Mills ($AMARJOTHI)	21.8%	15.7%	-	22.3%	-

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Nitin Spinners ($NITINSPIN)	1.9%	2.6%	8.0%	42.3%	4.7%
Maharaja Shree Umaid Mills ($MAHASHR)	18.6%	24.1%	6.8%	16.8%	-
Jindal Worldwide ($JINDWORLD)	3.0%	10.5%	20.7%	11.6%	-
SRF ($SRF)	0.0%	18.7%	20.0%	11.4%	13.0%
Welspun India ($WELSPUNIND)	5.6%	7.8%	16.4%	10.9%	17.7%
Median (21 companies)	3.2%	5.6%	6.8%	6.7%	5.4%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Welspun India ($WELSPUNIND)	9.3%	15.6%	8.5%	21.9%	25.2%
Maharaja Shree Umaid Mills ($MAHASHR)	-0.5%	9.2%	8.3%	20.4%	-
Nitin Spinners ($NITINSPIN)	6.0%	19.5%	21.5%	17.5%	17.8%
Sutlej Textiles & Industries ($SUTLEJTEX)	9.5%	13.6%	19.8%	14.6%	14.4%
Arvind ($ARVIND)	11.3%	11.2%	13.7%	13.2%	13.1%
Median (127 companies)	3.5%	9.2%	8.9%	9.5%	12.3%
Amarjothi Spinning Mills ($AMARJOTHI)	9.4%	7.7%	-	-	-

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Bombay Rayon Fashions ($BRFL)	4.9x	4.9x	11.6x	10.0x	7.3x
Ruby Mills ($RUBYMILLS)	12.6x	15.3x	10.8x	8.6x	-
Dcm ($DCM)	13.5x	3.5x	3.7x	5.5x	-
Nahar Spinning Mills ($NAHARSPING)	70.8x	3.8x	3.2x	4.9x	-
Rai Saheb Rekhchand Mohota Spg.& Wvg.Mills ($RAIREKMOH)	10.0x	0.0x	0.0x	4.6x	-
Median (70 companies)	3.8x	3.2x	0.0x	0.0x	0.0x
Amarjothi Spinning Mills ($AMARJOTHI)	2.8x	3.3x	-	0.0x	-

Amarjothi Spinning Mills stock price chart

Amarjothi Spinning Mills financials

mln.	FY2010	FY2011	FY2012

Revenue	2,340	1,240	1,296
EBITDA	247.3	348.7	282.9
Net income	94.862	98.032	33.008
CAPEX	112.4	248.9	71.870
Debt	716.6	1,146	797.1
Cash	0.793	1.576	3.592

About Amarjothi Spinning Mills

Amarjothi Spinning Mills Limited manufactures and markets m?lange yarn in India and internationally. It is involved in dyeing fibers, such as cotton, organic cotton, viscose, modal, polyester, excel, bamboo, and acrylic fibers; and yarns comprising cotton, organic cotton, cotton/viscose, cotton/modal, viscose, modal, cotton/polyester, polyester, excel, cotton/excel, bamboo, and cotton/bamboo yarns, as well as specialized yarn dyeing suitable for discharge printing, and for post mercerizing and bleaching. The company also offers blended and non-blended m?lange yarns, and novel yarns. Amarjothi Spinning Mills Limited was incorporated in 1987 and is based in Tirupur, India.