Venky'S (India) revenue growth accelerated from 0.27% in FY2015 to 21.3% in FY2016
27-05-2016 • About Venky'S (India) (
$VENKYS) • By InTwits
Venky'S (India) reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Venky'S (India) is a fast growth stock: FY2016 revenue growth was 22.6%, 5 year revenue CAGR was 21.3% at FY2016 ROIC 9.4%
- Venky'S (India) has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.9%. At the same time it's a lot of higher than industry average of 2.2%.
- CAPEX is quite volatile: ₹229m in FY2016, ₹1,340m in FY2015, ₹1,801m in FY2014, ₹920m in FY2013, ₹844m in FY2012
- The company has business model with low profitability: ROIC is 9.4%
- It operates with high leverage: Net Debt/EBITDA is 3.6x while industry average is 0.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Venky'S (India)'s Revenue surged on 22.6%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.3 pp from 7.8% to 6.5% in FY2016.
Net Income margin showed almost no change in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 1.1%. CAPEX/Revenue decreased on 5.5 pp from 6.6% in FY2013 to 1.1% in FY2016. It's average level of CAPEX/Revenue for the last three years was 6.4%.
Return on investment
The company operates at low ROIC (9.4%) and ROE (7.8%). ROIC showed almost no change in FY2016. ROE increased on 2.8 pp from 5.1% to 7.8% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.6x and Debt / EBITDA is 5.0x. Net Debt / EBITDA dropped on 0.3x from 3.9x to 3.6x in FY2016. Debt decreased on 3.1% while cash increased on 9.0%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2014 at 6.7x and was declining since that time.
Venky'S (India) has short term refinancing risk: cash is only 46.1% of short term debt.
Valuation and dividends
Venky'S (India)'s trades at EV/EBITDA 7.7x and P/E 19.2x while industy averages are 17.8x and 21.9x. Venky'S (India)'s EV/(EBITDA-CAPEX) is 9.3x with the industry average at 22.8x.
Financial and operational results
Venky'S (India) ($VENKYS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 9,523 | 13,906 | 17,361 | 17,308 | 21,219 | 22.6% |
| EBITDA | 686 | 608 | 676 | 1,354 | 1,377 | 1.7% |
| Net Income | 411 | 248 | 340 | 187 | 299 | 59.7% |
Balance Sheet
|
|---|
| Cash | 151 | 1,435 | 1,743 | 1,858 | 2,026 | 9.0% |
| Short Term Debt | 943 | 1,686 | 3,939 | 4,694 | 4,392 | -6.4% |
| Long Term Debt | 986 | 1,465 | 2,317 | 2,461 | 2,543 | 3.3% |
Cash flow
|
|---|
| Capex | 844 | 920 | 1,801 | 1,340 | 229 | -82.9% |
Ratios
|
|---|
| Revenue growth | 18.0% | 46.0% | 24.8% | -0.3% | 22.6% | |
| EBITDA growth | -39.7% | -11.3% | 11.2% | 100.3% | 1.7% | |
|
|---|
| EBITDA Margin | 7.2% | 4.4% | 3.9% | 7.8% | 6.5% | -1.3% |
| Net Income Margin | 4.3% | 1.8% | 2.0% | 1.1% | 1.4% | 0.3% |
| CAPEX, % of revenue | 8.9% | 6.6% | 10.4% | 7.7% | 1.1% | -6.7% |
|
|---|
| ROIC | 12.1% | 7.5% | 5.7% | 9.7% | 9.4% | -0.3% |
| ROE | 13.9% | 7.6% | 9.7% | 5.1% | 7.8% | 2.8% |
| Net Debt/EBITDA | 2.6x | 2.8x | 6.7x | 3.9x | 3.6x | -0.3x |
Peers in Packaged Foods
Below you can find Venky'S (India) benchmarking vs. other companies in Packaged Foods 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 |
|---|
| Simran Farms ($SIMRAN) | 38.4% | 23.8% | 27.5% | 23.4% | - |
| Heritage Foods ($HERITGFOOD) | - | 15.0% | 7.5% | 20.4% | 14.8% |
| Rcl Foods ($RCLFOODS) | -56.8% | -34.2% | 18.2% | 17.8% | - |
| Kwality ($KWALITY) | - | 62.6% | 27.5% | 17.3% | 9.1% |
| Umang Dairies ($UMANGDAIR) | - | 15.7% | 24.5% | 16.1% | -24.8% |
| |
|---|
| Median (18 companies) | 10.8% | 15.0% | 15.7% | 9.1% | 5.9% |
|---|
| Venky'S (India) ($VENKYS) | - | 46.0% | 24.8% | -0.3% | 22.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Zydus Wellness ($ZYDUSWELL) | 23.1% | 25.4% | 22.6% | 23.8% | 21.3% |
| Nestle India ($NESTLEIND) | 22.0% | 21.7% | 20.9% | 19.7% | - |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 18.6% | 17.8% | 22.5% | 17.2% | 19.4% |
| Sampre Nutritions ($SAMPRE) | - | - | - | 16.8% | - |
| Krbl ($KRBL) | 14.1% | 14.2% | 15.1% | 15.4% | 15.8% |
| |
|---|
| Median (20 companies) | 8.0% | 8.7% | 8.8% | 6.6% | 14.3% |
|---|
| Venky'S (India) ($VENKYS) | 7.2% | 4.4% | 3.9% | 7.8% | 6.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Krbl ($KRBL) | 4.1% | 4.0% | 6.1% | 7.3% | 5.1% |
| Umang Dairies ($UMANGDAIR) | 2.0% | 4.4% | 2.7% | 3.2% | - |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 2.7% | - | 4.3% | 2.5% | 1.4% |
| Heritage Foods ($HERITGFOOD) | 2.1% | 1.9% | 3.7% | 2.5% | 2.9% |
| Vadilal Industries ($VADILALIND) | 12.2% | 9.4% | 5.9% | 2.2% | - |
| |
|---|
| Median (10 companies) | 3.3% | 3.7% | 3.2% | 2.0% | 2.9% |
|---|
| Venky'S (India) ($VENKYS) | 8.9% | 6.6% | 10.4% | 7.7% | 1.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kse ($KSE) | 27.7% | 14.1% | 36.9% | 69.0% | - |
| Britannia Industries ($BRITANNIA) | 24.6% | 33.7% | 54.0% | 59.4% | 66.7% |
| Nestle India ($NESTLEIND) | 57.7% | 47.9% | 49.6% | 40.2% | - |
| Glaxosmithkline Consumer Healthcare ($GSKCONS) | 44.6% | - | - | 36.2% | 35.7% |
| Umang Dairies ($UMANGDAIR) | 93.5% | 55.6% | 22.3% | 28.4% | - |
| |
|---|
| Median (22 companies) | 12.2% | 14.5% | 22.3% | 24.5% | 22.4% |
|---|
| Venky'S (India) ($VENKYS) | 12.1% | 7.5% | 5.7% | 9.7% | 9.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kwality ($KWALITY) | 3.9x | 3.9x | 3.6x | 8.1x | 3.6x |
| Vadilal Industries ($VADILALIND) | 2.6x | 4.5x | 3.9x | 4.0x | - |
| Bambino Agro Industries ($BAMBINO) | 3.2x | - | 3.2x | 2.9x | - |
| Krbl ($KRBL) | 4.1x | 2.9x | 3.0x | 2.7x | 2.1x |
| Heritage Foods ($HERITGFOOD) | 2.2x | 0.9x | 1.0x | 1.4x | 0.5x |
| |
|---|
| Median (18 companies) | 1.7x | 0.8x | 1.0x | 0.0x | 0.0x |
|---|
| Venky'S (India) ($VENKYS) | 2.6x | 2.8x | 6.7x | 3.9x | 3.6x |
