Ruby Mills Debt dropped on 27.8% while EBITDA surged on 29.9%
31-05-2016 • About Ruby Mills (
$RUBYMILLS) • By InTwits
Ruby Mills reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is expanding: 35.4% in FY2016 vs. 29.3% in FY2015 vs. 28.3% in FY2012
- Ruby Mills has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.8%. At the same time it's in pair with industry average of 5.4%
- CAPEX is quite volatile: ₹36m in FY2016, ₹55m in FY2015, ₹165m in FY2014, ₹84m in FY2013, ₹177m in FY2012
- The company has business model with low profitability: ROIC is 7.1%
- It operates with high leverage: Net Debt/EBITDA is 4.8x while industry average is 4.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Ruby Mills's Revenue increased on 7.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.9 pp from -3.8% to 2.1% in FY2016. During the last 5 years EBITDA Margin bottomed in FY2013 at 25.1% and was growing since that time.
Net Income margin decreased on 8.1 pp from 27.3% to 19.2% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 1.7%. CAPEX/Revenue decreased on 3.6 pp from 5.3% in FY2013 to 1.7% in FY2016. It's average CAPEX/Revenue for the last three years was 4.4%.
Return on investment
The company operates at low ROIC (7.1%) and ROE (11.7%). ROIC increased on 2.4 pp from 4.6% to 7.1% in FY2016. ROE decreased on 6.0 pp from 17.7% to 11.7% in FY2016. During the last 5 years ROIC bottomed in FY2013 at 1.8% and was growing since that time.
Leverage (Debt)
Debt level is 4.8x Net Debt / EBITDA and 4.8x Debt / EBITDA. Net Debt / EBITDA dropped on 3.8x from 8.6x to 4.8x in FY2016. Debt dropped on 27.8% while cash decreased on 4.5%. Net Debt/EBITDA declined at -2.2x per annum in the last 5 years.
Ruby Mills has short term refinancing risk: cash is only 2.9% of short term debt.
Valuation and dividends
Ruby Mills's trades at EV/EBITDA 13.1x and P/E 15.3x while industy averages are 17.8x and 21.9x. Ruby Mills's EV/(EBITDA-CAPEX) is 13.7x with the industry average at 22.8x.
Financial and operational results
Ruby Mills ($RUBYMILLS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,676 | 1,584 | 1,876 | 1,977 | 2,126 | 7.5% |
| EBITDA | 475 | 397 | 537 | 579 | 752 | 29.9% |
| Net Income | 582 | 305 | 449 | 539 | 408 | -24.4% |
Balance Sheet
|
|---|
| Cash | 181 | 49 | 14 | 14 | 13 | -4.5% |
| Short Term Debt | 1,251 | 1,288 | 2,457 | 2,055 | 451 | -78.1% |
| Long Term Debt | 4,912 | 4,818 | 3,336 | 2,926 | 3,147 | 7.5% |
Cash flow
|
|---|
| Capex | 177 | 84 | 165 | 55 | 36 | -34.2% |
Ratios
|
|---|
| Revenue growth | 24.2% | -5.5% | 18.5% | 5.4% | 7.5% | |
| EBITDA growth | 39.6% | -16.4% | 35.2% | 7.9% | 29.9% | |
|
|---|
| EBITDA Margin | 28.3% | 25.1% | 28.6% | 29.3% | 35.4% | 6.1% |
| Net Income Margin | 34.8% | 19.2% | 23.9% | 27.3% | 19.2% | -8.1% |
| CAPEX, % of revenue | 10.6% | 5.3% | 8.8% | 2.8% | 1.7% | -1.1% |
|
|---|
| ROIC | 3.1% | 1.8% | 3.7% | 4.6% | 7.1% | 2.4% |
| ROE | 32.3% | 13.7% | 17.4% | 17.7% | 11.7% | -6.0% |
| Net Debt/EBITDA | 12.6x | 15.3x | 10.8x | 8.6x | 4.8x | -3.8x |
Peers in Textiles
Below you can find Ruby Mills benchmarking vs. other companies in Textiles 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 |
|---|
| Raj Rayon Industries ($RAJRAYON) | - | 3.8% | -33.7% | -61.0% | 146.1% |
| Rajvir Industries ($RAJVIR) | - | -5.7% | -30.9% | -49.2% | 71.3% |
| Olympia Industries ($OLYMPTX) | - | -96.6% | 74,809.1% | 1,749.9% | 50.5% |
| Prag Bosimi Synthetics ($PRAGBOS) | - | - | - | - | 34.5% |
| Nitin Spinners ($NITINSPIN) | - | 4.1% | 9.5% | 26.2% | 24.4% |
| |
|---|
| Median (70 companies) | -1.0% | 10.0% | 14.4% | -0.5% | -4.0% |
|---|
| Ruby Mills ($RUBYMILLS) | - | -5.5% | 18.5% | 5.4% | 7.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Sil Investments ($SILINV) | - | - | - | 93.8% | - |
| Swadeshi Polytex ($SWADPOL) | - | - | - | 64.4% | - |
| Binny ($BINNY) | - | - | - | 60.9% | - |
| Premier Synthetics ($PREMSYN) | - | - | - | 25.9% | - |
| Maharaja Shree Umaid Mills ($MAHASHR) | 2.0% | 15.4% | 14.0% | 25.1% | - |
| |
|---|
| Median (86 companies) | 6.2% | 9.5% | 9.5% | 6.9% | 8.7% |
|---|
| Ruby Mills ($RUBYMILLS) | 28.3% | 25.1% | 28.6% | 29.3% | 35.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Welspun India ($WELSPUNIND) | 5.6% | 7.8% | 16.4% | 10.9% | 17.7% |
| SRF ($SRF) | 0.0% | 18.7% | 20.0% | 11.4% | 13.0% |
| Grasim Industries ($GRASIM) | 17.7% | 21.7% | 11.6% | 10.2% | 7.7% |
| Arvind ($ARVIND) | 9.4% | 7.0% | 6.5% | 7.2% | 7.3% |
| Sutlej Textiles & Industries ($SUTLEJTEX) | 3.4% | 1.8% | 5.6% | 10.7% | 7.1% |
| |
|---|
| Median (16 companies) | 3.2% | 5.9% | 6.7% | 6.7% | 4.7% |
|---|
| Ruby Mills ($RUBYMILLS) | 10.6% | 5.3% | 8.8% | 2.8% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Welspun India ($WELSPUNIND) | 9.3% | 15.6% | 8.5% | 21.9% | 25.2% |
| Jindal Worldwide ($JINDWORLD) | 14.5% | 15.2% | 13.7% | 11.0% | 18.0% |
| Nitin Spinners ($NITINSPIN) | 6.0% | 19.5% | 21.5% | 17.5% | 17.8% |
| Sangam (India) ($SANGAMIND) | 9.8% | 14.7% | 12.2% | 12.8% | 15.0% |
| Sutlej Textiles & Industries ($SUTLEJTEX) | 9.5% | 13.6% | 19.8% | 14.6% | 14.4% |
| |
|---|
| Median (115 companies) | 3.6% | 9.2% | 9.2% | 9.6% | 10.7% |
|---|
| Ruby Mills ($RUBYMILLS) | 3.1% | 1.8% | 3.7% | 4.6% | 7.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jaybharat Textiles & Real Estate ($JAYTEX) | 10.9x | 53.6x | 23.8x | - | 247.8x |
| Bombay Rayon Fashions ($BRFL) | 4.9x | 4.9x | 11.6x | 10.0x | 7.3x |
| Filatex India ($FILATEX) | 8.0x | 6.5x | 0.0x | 0.0x | 4.9x |
| Raymond ($RAYMOND) | 3.7x | 4.6x | 3.7x | 4.1x | 4.5x |
| Nahar Spinning Mills ($NAHARSPING) | 70.8x | 3.8x | 3.2x | 4.9x | 4.0x |
| |
|---|
| Median (65 companies) | 3.8x | 3.2x | 0.0x | 0.0x | 0.0x |
|---|
| Ruby Mills ($RUBYMILLS) | 12.6x | 15.3x | 10.8x | 8.6x | 4.8x |
