Kse reports 70.5% EBITDA decline in 2016 and 4.8 pp EBITDA Margin decline from 6.7% to 1.9%
30-05-2016 • About Kse (
$KSE) • By InTwits
Kse reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 1.9% in FY2016, 6.7% in FY2015, 3.6% in FY2014, 2.0% in FY2013, 4.2% in FY2012
- Kse has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has highly profitable business model: ROIC is 16.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 2.8%. During the last 5 years Revenue growth topped in FY2013 at 28.6% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.0 pp from 13.8% to 14.8% in FY2016.
Net Income margin decreased on 4.0 pp from 4.8% to 0.82% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Kse had CAPEX/Revenue of 0.24%. CAPEX/Revenue decreased slightly on 0.88 pp from 1.1% in FY2013 to 0.24% in FY2016. For the last three years the average CAPEX/Revenue was 0.18%.
Return on investment
The company operates at good ROIC (16.0%) while ROE is low (10.6%). ROIC dropped on 53.0 pp from 69.0% to 16.0% in FY2016. ROE dropped on 61.9 pp from 72.5% to 10.6% in FY2016.
Leverage (Debt)
Debt level is -0.1x Net Debt / EBITDA and 0.5x Debt / EBITDA. Debt dropped on 50.4% while cash dropped on 72.4%.
Kse has no short term refinancing risk: cash is higher than short term debt (428.1%).
Valuation and dividends
The company's trades at EV/EBITDA 9.1x and P/E 21.5x while industy averages are 17.8x and 21.9x.
Financial and operational results
Kse ($KSE) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 5,422 | 6,972 | 8,063 | 8,997 | 9,249 | 2.8% |
| EBITDA | 227 | 140 | 289 | 602 | 178 | -70.5% |
| Net Income | 104 | 47 | 154 | 436 | 76 | -82.6% |
Balance Sheet
|
|---|
| Cash | 58 | 38 | 31 | 378 | 104 | -72.4% |
| Short Term Debt | 205 | 195 | 102 | 121 | 24 | -79.8% |
| Long Term Debt | 72 | 69 | 65 | 53 | 62 | 16.8% |
Cash flow
|
|---|
| Capex | 27 | 79 | 10 | 16 | 23 | 44.4% |
Ratios
|
|---|
| Revenue growth | 19.5% | 28.6% | 15.7% | 11.6% | 2.8% | |
| EBITDA growth | 64.9% | -38.3% | 106.0% | 108.7% | -70.5% | |
|
|---|
| EBITDA Margin | 4.2% | 2.0% | 3.6% | 6.7% | 1.9% | -4.8% |
| Net Income Margin | 1.9% | 0.7% | 1.9% | 4.8% | 0.8% | -4.0% |
| CAPEX, % of revenue | 0.5% | 1.1% | 0.1% | 0.2% | 0.2% | 0.1% |
|
|---|
| ROIC | 27.7% | 14.1% | 36.9% | 69.0% | 16.0% | -53.0% |
| ROE | 28.6% | 11.6% | 34.4% | 72.5% | 10.6% | -61.9% |
| Net Debt/EBITDA | 1.0x | 1.6x | 0.5x | -0.3x | -0.1x | 0.2x |
Peers in Packaged Foods
Below we provide Kse benchmarking against other companies in Packaged Foods 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 |
|---|
| 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 ($UMANGDAIR) | - | 15.7% | 24.5% | 16.1% | -24.8% |
| |
|---|
| Median (18 companies) | 0.5% | 15.0% | 16.0% | 6.5% | 8.0% |
|---|
| Kse ($KSE) | - | 28.6% | 15.7% | 11.6% | 2.8% |
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 ($KRBL) | 14.1% | 14.2% | 15.1% | 15.4% | 15.8% |
| |
|---|
| Median (20 companies) | 8.0% | 8.7% | 8.8% | 7.2% | 12.2% |
|---|
| Kse ($KSE) | 4.2% | 2.0% | 3.6% | 6.7% | 1.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Krbl ($KRBL) | 4.1% | 4.0% | 6.1% | 7.3% | 5.1% |
| Kwality ($KWALITY) | 1.3% | 0.7% | 1.2% | 1.9% | 3.5% |
| Britannia Industries ($BRITANNIA) | 4.9% | 3.7% | 1.6% | 1.5% | 2.9% |
| Heritage Foods ($HERITGFOOD) | 2.1% | 1.9% | 3.7% | 2.5% | 2.9% |
| Vadilal Industries ($VADILALIND) | 12.2% | 9.4% | 5.9% | 2.2% | 2.9% |
| |
|---|
| Median (8 companies) | 3.7% | 3.9% | 4.0% | 2.3% | 2.9% |
|---|
| Kse ($KSE) | 0.5% | 1.1% | 0.1% | 0.2% | 0.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% | - |
| Zydus Wellness ($ZYDUSWELL) | - | 41.0% | 28.8% | 24.5% | 18.6% |
| |
|---|
| Median (22 companies) | 12.1% | 14.5% | 19.8% | 18.1% | 18.1% |
|---|
| Kse ($KSE) | 27.7% | 14.1% | 36.9% | 69.0% | 16.0% |
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 | 2.1x |
| Venky'S (India) ($VENKYS) | 2.6x | 2.8x | 6.7x | 3.9x | 3.6x |
| Bambino Agro Industries ($BAMBINO) | 3.2x | - | 3.2x | 2.9x | - |
| Krbl ($KRBL) | 4.1x | 2.9x | 3.0x | 2.7x | 2.1x |
| |
|---|
| Median (18 companies) | 1.9x | 0.8x | 1.2x | 0.0x | 0.5x |
|---|
| Kse ($KSE) | 1.0x | 1.6x | 0.5x | -0.3x | -0.1x |
