V-Mart Retail reports 26.1% Net Income decline in 2016 and 1.2 pp EBITDA Margin decline from 8.9% to 7.7%
28-05-2016 • About V-Mart Retail (
$VMART) • By InTwits
V-Mart Retail reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- V-Mart Retail is a fast growth stock: FY2016 revenue growth was 12.4%, 5 year revenue CAGR was 30.5% at FY2016 ROIC 17.4%
- EBITDA Margin is declining: 7.7% in FY2016 vs. 8.9% in FY2015 vs. 10.3% in FY2012
- V-Mart Retail has low CAPEX intensity: 5 year average CAPEX/Revenue was 5.0%. At the same time it's a lot of higher than industry average of 6.6%.
- CAPEX is quite volatile: ₹868m in FY2016, ₹4,419m in FY2015, ₹189m in FY2014, ₹533m in FY2013, ₹89m in FY2012
- The company has highly profitable business model: ROIC is 17.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
V-Mart Retail's Revenue surged on 12.4%. During the last 5 years Revenue growth topped in FY2014 at 49.9% and was decelerating since that time. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.2 pp from 8.9% to 7.7% in FY2016. EBITDA Margin declined at -0.69 pp per annum in the last 5 years.
Net Income margin decreased slightly on 1.8 pp from 5.2% to 3.4% in FY2016.
Investments (CAPEX, working capital and M&A)
V-Mart Retail's CAPEX/Revenue was 3.9% in FY2016. V-Mart Retail showed small CAPEX/Revenue decline of 1.9 pp from 5.8% in FY2013 to 3.9% in FY2016. Average CAPEX/Revenue for the last three years was 4.8%. To deliver its fast growth the company invested a large share of EBITDA (50.4%) to CAPEX. During FY2012-FY2016 CAPEX as a % of Revenue topped in FY2014 at 5.8% and was declining since that time.
Return on investment
The company operates at good ROIC (17.4%) and ROE (12.7%). ROIC decreased on 8.8 pp from 26.3% to 17.4% in FY2016. ROE decreased on 7.2 pp from 19.9% to 12.7% in FY2016.
Leverage (Debt)
Debt level is 0.4x Net Debt / EBITDA and 0.4x Debt / EBITDA. Net Debt / EBITDA decreased on 0.032x from 0.4x to 0.4x in FY2016. Debt dropped on 10.8% while cash dropped on 20.7%.
V-Mart Retail has short term refinancing risk: cash is only 8.3% of short term debt.
Financial and operational results
V-Mart Retail ($VMART) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,819 | 3,835 | 5,750 | 7,202 | 8,094 | 12.4% |
| EBITDA | 291 | 402 | 542 | 637 | 622 | -2.4% |
| Net Income | 105 | 180 | 252 | 374 | 276 | -26.1% |
Balance Sheet
|
|---|
| Cash | 11 | 153 | 16 | 28 | 22 | -20.7% |
| Short Term Debt | 380 | 333 | 436 | 286 | 269 | -6.0% |
| Long Term Debt | 22 | 20 | 2 | 15 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 136 | 222 | 333 | 335 | 313 | -6.7% |
Ratios
|
|---|
| Revenue growth | 31.7% | 36.0% | 49.9% | 25.3% | 12.4% | |
| EBITDA growth | 50.3% | 38.1% | 34.8% | 17.6% | -2.4% | |
|
|---|
| EBITDA Margin | 10.3% | 10.5% | 9.4% | 8.9% | 7.7% | -1.2% |
| Net Income Margin | 3.7% | 4.7% | 4.4% | 5.2% | 3.4% | -1.8% |
| CAPEX, % of revenue | 4.8% | 5.8% | 5.8% | 4.7% | 3.9% | -0.8% |
|
|---|
| ROIC | 26.3% | 23.5% | 21.9% | 26.3% | 17.4% | -8.8% |
| ROE | 21.3% | 17.8% | 15.8% | 19.9% | 12.7% | -7.2% |
| Net Debt/EBITDA | 1.3x | 0.5x | 0.8x | 0.4x | 0.4x | -0.0x |
Peers in Department Stores
Below we provide V-Mart Retail benchmarking against other companies in Department Stores 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pantaloons Fashion & Retail ($PFRL) | - | 7,273.1% | 29.3% | 11.4% | 227.4% |
| Store One Retail India ($STOREONE) | - | - | - | - | 93.1% |
| Trent ($TRENT) | - | 15.6% | 9.4% | -2.1% | 4.9% |
| Future Market Networks ($FMNL) | - | -3.8% | 1.1% | -2.4% | -30.4% |
| |
|---|
| Median (4 companies) | - | 15.6% | 9.4% | -2.1% | 49.0% |
|---|
| V-Mart Retail ($VMART) | - | 36.0% | 49.9% | 25.3% | 12.4% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Store One Retail India ($STOREONE) | - | - | - | 31.2% | 31.0% |
| Pantaloons Fashion & Retail ($PFRL) | 2.5% | 5.5% | 2.1% | 4.0% | 6.6% |
| Trent ($TRENT) | -2.3% | -0.4% | 0.7% | 3.3% | 5.9% |
| |
|---|
| Median (3 companies) | 2.5% | 2.6% | 2.1% | 3.6% | 6.6% |
|---|
| V-Mart Retail ($VMART) | 10.3% | 10.5% | 9.4% | 8.9% | 7.7% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pantaloons Fashion & Retail ($PFRL) | 0.0% | 2.3% | 5.7% | 6.3% | 18.3% |
| Trent ($TRENT) | 8.8% | 5.4% | 5.8% | 6.9% | 7.0% |
| |
|---|
| Median (2 companies) | 8.8% | 3.9% | 5.8% | 6.6% | 12.7% |
|---|
| V-Mart Retail ($VMART) | 4.8% | 5.8% | 5.8% | 4.7% | 3.9% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Trent ($TRENT) | -6.2% | -3.5% | -2.6% | 0.1% | 4.3% |
| Pantaloons Fashion & Retail ($PFRL) | 33.2% | 1.3% | -3.6% | -6.8% | 3.0% |
| Store One Retail India ($STOREONE) | - | - | - | - | - |
| Future Market Networks ($FMNL) | 2.5% | - | - | - | - |
| |
|---|
| Median (4 companies) | 1.8% | -3.4% | -3.1% | -3.3% | 3.7% |
|---|
| V-Mart Retail ($VMART) | 26.3% | 23.5% | 21.9% | 26.3% | 17.4% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pantaloons Fashion & Retail ($PFRL) | -0.1x | 23.9x | 30.0x | 17.8x | 4.6x |
| Trent ($TRENT) | - | - | 16.6x | 0.9x | 2.4x |
| Store One Retail India ($STOREONE) | - | - | - | 0.0x | 0.0x |
| |
|---|
| Median (3 companies) | -0.1x | 11.8x | 30.0x | 0.9x | 2.4x |
|---|
| V-Mart Retail ($VMART) | 1.3x | 0.5x | 0.8x | 0.4x | 0.4x |
