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Tilaknagar Industries EBITDA dropped on 229% and EBITDA Margin dropped on 43.6 pp from 15.0% to -28.6%

09-06-2016 • About Tilaknagar Industries ($TI) • By InTwits

Tilaknagar Industries reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is declining: -28.6% in FY2016 vs. 15.0% in FY2015 vs. 26.2% in FY2012
  • EBITDA Margin is quite volatile: -28.6% in FY2016, 15.0% in FY2015, 21.0% in FY2014, 22.7% in FY2013, 26.2% in FY2012
  • Tilaknagar Industries has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.5%. At the same time it's a lot of higher than industry average of 3.2%.
  • CAPEX is quite volatile: ₹141m in FY2016, ₹859m in FY2015, ₹1,191m in FY2014, ₹739m in FY2013, ₹1,131m in FY2012
  • The company has unprofitable business model: ROIC is -12.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


Tilaknagar Industries's Revenue dropped on 31.9%. Revenue decline was accelerating on average at -15.5 pp per annum in the last 5 years. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 43.6 pp from 15.0% to -28.6% in FY2016. EBITDA Margin followed a declining trend in FY2012-FY2016.

Net Income margin dropped on 59.5 pp from -6.4% to -65.9% in FY2016. Net Income margin pursued a declining trend in the last 5 years.

Investments (CAPEX, working capital and M&A)


In FY2016 Tilaknagar Industries had CAPEX/Revenue of 3.3%. Tilaknagar Industries showed decline in CAPEX/Revenue of 6.7 pp from 10.0% in FY2013 to 3.3% in FY2016. It's average level of CAPEX/Revenue for the last three years was 10.6%.

Return on investment


The company operates at negative ROIC (-12.2%) and ROE (-70.6%). ROIC dropped on 16.8 pp from 4.6% to -12.2% in FY2016. ROE dropped on 63.5 pp from -7.1% to -70.6% in FY2016. During FY2012-FY2016 ROIC topped in FY2013 at 11.7% and was declining since that time. During the last 5 years ROE topped in FY2014 at 10.5% and was declining since that time.

Leverage (Debt)


Debt level is -1.8x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA dropped on 8.4x from 8.4x to in FY2016. Debt increased on 7.3% while cash dropped on 69.4%.

Tilaknagar Industries has short term refinancing risk: cash is only 1.5% of short term debt.

Management team


Tilaknagar Industries's CFO Srijit Mullick has spent 7 years with the company.

Financial and operational results


Tilaknagar Industries ($TI) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue5,4787,3758,0696,2774,274-31.9%
EBITDA1,4341,6731,697943-1,220-229.4%
Net Income430560583-402-2,817
Balance Sheet
Cash195233185332102-69.4%
Short Term Debt4,0714,5116,0626,1386,5897.3%
Long Term Debt2,2912,1122,2562,1122,2607.0%
Cash flow
Capex1,1317391,191859141-83.5%
Ratios
Revenue growth17.0%34.6%9.4%-22.2%-31.9%
EBITDA growth24.4%16.7%1.4%-44.4%-229.4%
EBITDA Margin26.2%22.7%21.0%15.0%-28.6%-43.6%
Net Income Margin7.8%7.6%7.2%-6.4%-65.9%-59.5%
CAPEX, % of revenue20.6%10.0%14.8%13.7%3.3%-10.4%
ROIC11.6%11.7%10.7%4.6%-12.2%-16.8%
ROE9.0%10.4%10.5%-7.1%-70.6%-63.5%
Net Debt/EBITDA4.3x3.8x4.8x8.4x

Peers in Breweries & Distilleries


Below we provide Tilaknagar Industries benchmarking against other companies in Breweries & Distilleries 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
G.M.Breweries ($GMBREW)-12.0%0.3%6.5%17.0%
United Breweries ($UBL)-9.5%8.5%10.8%8.3%
Som Distilleries & Breweries ($SDBL)-5.0%-6.5%8.3%6.7%
Ifb Agro Industries ($IFBAGRO)-5.4%8.4%19.2%4.8%
United Spirits ($UNITDSPR)-13.3%0.9%-12.8%0.9%
 
Median (6 companies)19.9%5.4%8.4%8.3%5.7%
Tilaknagar Industries ($TI)-34.6%9.4%-22.2%-31.9%


Top companies by EBITDA margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Pioneer Distilleries ($PIONDIST)-3.0%-7.5%6.6%19.5%56.5%
Som Distilleries & Breweries ($SDBL)14.4%15.0%15.0%14.9%14.8%
United Breweries ($UBL)11.6%12.3%10.3%13.3%14.4%
G.M.Breweries ($GMBREW)10.0%9.1%13.7%11.5%23.8%
United Spirits ($UNITDSPR)12.2%12.6%-1.3%6.1%10.5%
 
Median (10 companies)11.6%10.8%10.3%5.6%14.6%
Tilaknagar Industries ($TI)26.2%22.7%21.0%15.0%-28.6%


Top companies by CAPEX/Revenue, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Ifb Agro Industries ($IFBAGRO)4.6%1.8%9.8%4.5%7.4%
United Breweries ($UBL)10.7%9.8%5.0%8.7%4.8%
United Spirits ($UNITDSPR)7.4%2.8%2.2%1.8%2.8%
Som Distilleries & Breweries ($SDBL)12.3%3.3%0.9%1.5%1.1%
G.M.Breweries ($GMBREW)3.1%6.7%0.0%0.0%0.0%
 
Median (5 companies)7.4%4.5%3.6%3.1%2.8%
Tilaknagar Industries ($TI)20.6%10.0%14.8%13.7%3.3%


Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
G.M.Breweries ($GMBREW)18.4%17.0%21.9%18.0%46.7%
United Breweries ($UBL)11.5%11.6%8.1%14.3%17.1%
Som Distilleries & Breweries ($SDBL)23.3%22.2%19.2%16.5%13.3%
United Spirits ($UNITDSPR)8.1%8.7%-2.7%3.7%12.8%
Ifb Agro Industries ($IFBAGRO)33.3%26.7%18.8%4.8%8.0%
 
Median (9 companies)14.9%8.7%8.1%15.4%13.3%
Tilaknagar Industries ($TI)11.6%11.7%10.7%4.6%-12.2%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
United Spirits ($UNITDSPR)7.3x6.1x-8.4x4.2x
Pioneer Distilleries ($PIONDIST)--10.4x2.1x0.3x
United Breweries ($UBL)2.0x2.5x2.7x1.3x0.9x
Som Distilleries & Breweries ($SDBL)0.5x-0.1x-0.0x0.7x2.2x
G.M.Breweries ($GMBREW)0.9x0.7x0.6x0.5x-0.4x
 
Median (7 companies)2.0x1.1x0.6x0.7x0.9x
Tilaknagar Industries ($TI)4.3x3.8x4.8x8.4x-


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