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Country Club (India) CAPEX jumped on 36.5% and Revenue increased on 4.7%

31-05-2016 • About Country Club (India) ($COUNCLB) • By InTwits

Country Club (India) reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is declining: 22.5% in FY2016 vs. 23.7% in FY2015 vs. 34.2% in FY2012
  • Country Club (India) has high CAPEX intensity: 5 year average CAPEX/Revenue was 42.1%. At the same time it's a lot of higher than industry average of 11.1%.
  • CAPEX is quite volatile: ₹858m in FY2016, ₹600m in FY2015, ₹439m in FY2014, ₹321m in FY2013, ₹511m in FY2012
  • The company has potentially unprofitable business model: ROIC is 4.8%
  • It operates with high leverage: Net Debt/EBITDA is 3.6x 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


Country Club (India)'s Revenue increased on 4.7%. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.2 pp from 23.7% to 22.5% in FY2016. EBITDA Margin followed a declining trend at -3.2 pp per annum in the last 5 years.

Net Income margin showed almost no change in FY2016.

Investments (CAPEX, working capital and M&A)


In FY2016 the company had CAPEX/Revenue of 37.1%. The company's CAPEX/Revenue increased slightly on 0.51 pp from 36.6% in FY2013 to 37.1% in FY2016. It's average level of CAPEX/Revenue for the last three years was 38.4%. The company maintained rich investment policy and has spent a lot to CAPEX (165% of EBITDA).

Return on investment


The company operates at low ROIC (4.8%) and ROE (2.7%). ROIC showed almost no change in FY2016. ROE showed almost no change in FY2016. ROIC stuck to a declining trend at -1.2 pp per annum in FY2012-FY2016.

Leverage (Debt)


Company's Net Debt / EBITDA is 3.6x and Debt / EBITDA is 3.8x. Net Debt / EBITDA surged on 0.2x from 3.5x to 3.6x in FY2016. Debt decreased on 2.1% while cash dropped on 57.7%. Net Debt/EBITDA followed a growing trend at 0.5x per annum in FY2012-FY2016.

Country Club (India) has short term refinancing risk: cash is only 23.7% of short term debt.

Valuation and dividends


Country Club (India)'s trades at EV/EBITDA 5.2x and P/E 6.8x while industy averages are 17.8x and 21.9x.

Financial and operational results


Country Club (India) ($COUNCLB) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue3,6924,7144,9584,9725,2064.7%
EBITDA1,2611,5211,1991,1791,170-0.8%
Net Income4965611722682783.8%
Balance Sheet
Cash287229241454192-57.7%
Short Term Debt4516741,02751580957.0%
Long Term Debt2,3882,3263,0024,0143,625-9.7%
Cash flow
Capex2,1661,7262,4581,4151,93336.5%
Ratios
Revenue growth14.6%27.7%5.2%0.3%4.7%
EBITDA growth23.3%20.6%-21.2%-1.7%-0.8%
EBITDA Margin34.2%32.3%24.2%23.7%22.5%-1.2%
Net Income Margin13.4%11.9%3.5%5.4%5.3%-0.0%
CAPEX, % of revenue58.7%36.6%49.6%28.5%37.1%8.7%
ROIC8.8%8.9%5.4%5.3%4.8%-0.5%
ROE6.0%6.2%1.8%2.7%2.7%0.0%
Net Debt/EBITDA2.0x1.8x3.2x3.5x3.6x0.2x

Peers in Hotels


Below we provide Country Club (India) benchmarking against other companies in Hotels 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
Mahindra Holidays & Resorts India ($MHRIL)-27.8%10.5%-8.0%97.2%
The Byke Hospitality ($THEBYKE)-105.7%54.3%16.5%27.6%
Sayaji Hotels ($SAYAJIHOTL)-24.5%29.4%-63.4%26.4%
Asian Hotels (West) ($AHLWEST)--0.2%3.1%96.5%16.3%
Kamat Hotels (India) ($KAMATHOTEL)-14.1%-4.9%-3.6%11.6%
 
Median (15 companies)69.9%8.6%5.9%3.4%3.8%
Country Club (India) ($COUNCLB)-27.7%5.2%0.3%4.7%


Top companies by EBITDA margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Jindal Hotels ($JINDHOT)---37.6%-
Benares Hotels ($BENARAS)---33.6%-
Fomento Resorts & Hotels ($FOMEHOT)---27.9%-
Advani Hotels & Resorts (India) ($ADVANIHOTR)---25.9%-
Asian Hotels (East) ($AHLEAST)31.5%23.7%21.8%23.5%28.2%
 
Median (20 companies)21.7%22.6%20.0%20.0%20.7%
Country Club (India) ($COUNCLB)34.2%32.3%24.2%23.7%22.5%


Top companies by CAPEX/Revenue, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Asian Hotels (North) ($ASIANHOTNR)30.8%60.2%37.2%36.1%26.8%
Sayaji Hotels ($SAYAJIHOTL)18.9%17.5%12.4%30.3%25.5%
Mahindra Holidays & Resorts India ($MHRIL)26.0%26.5%15.4%18.0%12.6%
The Byke Hospitality ($THEBYKE)33.3%15.7%5.8%4.9%7.9%
Oriental Hotels ($ORIENTHOT)24.3%17.7%13.1%7.5%6.5%
 
Median (11 companies)26.0%17.6%8.8%4.9%5.5%
Country Club (India) ($COUNCLB)58.7%36.6%49.6%28.5%37.1%


Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
The Byke Hospitality ($THEBYKE)5.3%14.5%22.6%24.1%32.0%
Advani Hotels & Resorts (India) ($ADVANIHOTR)---15.9%19.6%
Mahindra Holidays & Resorts India ($MHRIL)13.4%22.2%16.3%6.3%10.0%
Eih ($EIHOTEL)5.5%4.5%5.8%6.3%6.6%
Sayaji Hotels ($SAYAJIHOTL)13.1%9.4%14.2%1.3%3.6%
 
Median (27 companies)5.4%4.7%2.8%2.3%2.8%
Country Club (India) ($COUNCLB)8.8%8.9%5.4%5.3%4.8%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Hotel Leelaventure ($HOTELEELA)62.5x40.2x33.5x46.7x27.7x
Asian Hotels (North) ($ASIANHOTNR)28.4x11.0x15.4x24.8x15.9x
Oriental Hotels ($ORIENTHOT)4.3x4.6x6.0x5.5x6.5x
Tgb Banquets And Hotels ($TGBHOTELS)3.7x3.0x2.7x4.0x3.7x
Sayaji Hotels ($SAYAJIHOTL)2.8x1.6x1.6x3.3x3.0x
 
Median (18 companies)1.8x2.3x0.9x0.3x0.3x
Country Club (India) ($COUNCLB)2.0x1.8x3.2x3.5x3.6x


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