Jay Shree Tea & Industries reports 71.3% CAPEX growth in 2017 while 1.2% Revenue decline
08-05-2017 • About Jay Shree Tea & Industries (
$JAYSHREETEA) • By InTwits
Jay Shree Tea & Industries reported FY2017 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 6.4% in FY2017, 5.5% in FY2016, 2.9% in FY2015, 7.5% in FY2014, 13.7% in FY2013
- Jay Shree Tea & Industries has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's in pair with industry average of 12.1%
- CAPEX is quite volatile: ₹325m in FY2017, ₹128m in FY2016, ₹9m in FY2015, ₹3m in FY2014, ₹11m in FY2013
- The company has potentially unprofitable business model: ROIC is 4.1%
- It operates with high leverage: Net Debt/EBITDA is 6.9x while industry average is 1.9x
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 decreased slightly on 1.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 0.94 pp from 5.5% to 6.4% in FY2017. During the last 5 years EBITDA Margin bottomed in FY2015 at 2.9% and was growing since that time.
Net Income margin increased on 3.4 pp from -1.1% to 2.3% in FY2017. During FY2013-FY2017 Net Income margin bottomed in FY2015 at -3.2% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 5.3% in FY2017. The company showed small CAPEX/Revenue decline of 1.1 pp from 6.4% in FY2014 to 5.3% in FY2017. For the last three years the average CAPEX/Revenue was 4.0%. The company invested a big chunk of EBITDA (82.6%) to CAPEX which didn't stop revenue from falling.
Return on investment
The company operates at low ROIC (4.1%) and ROE (4.9%). ROIC increased slightly on 1.7 pp from 2.4% to 4.1% in FY2017. ROE increased on 6.8 pp from -2.0% to 4.9% in FY2017. During FY2013-FY2017 ROIC bottomed in FY2015 at 0.52% and was growing since that time. During FY2013-FY2017 ROE bottomed in FY2015 at -5.2% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 6.9x and Debt / EBITDA is 7.7x. Net Debt / EBITDA dropped on 3.3x from 10.2x to 6.9x in FY2017. Debt dropped on 16.0% while cash surged on 127%. During the last 5 years Net Debt/EBITDA topped in FY2015 at 19.5x and was declining since that time.
Jay Shree Tea & Industries has short term refinancing risk: cash is only 15.9% of short term debt.
Financial and operational results
FY ended 31-03-2017
Jay Shree Tea & Industries ($JAYSHREETEA) key annual financial indicators| mln. INR | 2013 | 2014 | 2015 | 2016 | 2017 | 2017/2016 |
|---|
P&L
|
|---|
| Revenue | 7,097 | 7,450 | 7,208 | 7,440 | 7,351 | -1.2% |
| EBITDA | 974 | 558 | 212 | 406 | 471 | 15.8% |
| Net Income | 444 | 48 | -229 | -81 | 170 | |
Balance Sheet
|
|---|
| Cash | 600 | 1,146 | 840 | 152 | 344 | 126.6% |
| Short Term Debt | 3,945 | 4,033 | 3,574 | 2,875 | 2,167 | -24.6% |
| Long Term Debt | 1,022 | 1,681 | 1,400 | 1,416 | 1,437 | 1.5% |
Cash flow
|
|---|
| Capex | 262 | 477 | 256 | 227 | 389 | 71.3% |
Ratios
|
|---|
| Revenue growth | 7.0% | 5.0% | -3.3% | 3.2% | -1.2% | |
| EBITDA growth | 75.6% | -42.7% | -62.1% | 92.0% | 15.8% | |
|
|---|
| EBITDA Margin | 13.7% | 7.5% | 2.9% | 5.5% | 6.4% | 0.9% |
| Net Income Margin | 6.3% | 0.7% | -3.2% | -1.1% | 2.3% | 3.4% |
| CAPEX, % of revenue | 3.7% | 6.4% | 3.5% | 3.0% | 5.3% | 2.2% |
|
|---|
| ROIC | 7.9% | 2.3% | 0.5% | 2.4% | 4.1% | 1.7% |
| ROE | 10.4% | 1.1% | -5.2% | -2.0% | 4.9% | 6.8% |
| Net Debt/EBITDA | 4.5x | 8.2x | 19.5x | 10.2x | 6.9x | -3.3x |
Peers in Tea & Coffee
Below we provide Jay Shree Tea & Industries benchmarking against other companies in Tea & Coffee 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 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Mcleod Russel India ($MCLEODRUSS) | 15.4% | 7.2% | -8.0% | 17.0% | - |
| Rossell India ($ROSSELLIND) | 27.9% | 33.6% | -0.3% | 14.2% | - |
| Bombay Burmah Trading Corp ($BBTC) | 10.0% | 11.5% | 12.7% | 10.3% | - |
| Ccl Products (India) ($CCL) | 29.6% | 10.2% | 22.8% | 5.9% | - |
| Warren Tea ($WARRENTEA) | -44.0% | 17.7% | -7.5% | 5.7% | - |
| |
|---|
| Median (9 companies) | 10.0% | 9.9% | 4.9% | 5.7% | - |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | - | - | -1.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Ccl Products (India) ($CCL) | 20.1% | 21.5% | 20.6% | 22.0% | - |
| Tata Coffee ($TATACOFFEE) | 19.2% | 19.9% | 20.2% | 17.7% | - |
| Rossell India ($ROSSELLIND) | 27.5% | 26.5% | 14.7% | 14.7% | - |
| Bombay Burmah Trading Corp ($BBTC) | 6.8% | 8.6% | 10.5% | 13.4% | - |
| Tata Global Beverages ($TATAGLOBAL) | 10.6% | 9.9% | 9.7% | 10.0% | - |
| |
|---|
| Median (8 companies) | 17.1% | 17.1% | 10.1% | 11.7% | - |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | - | 5.5% | 6.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Rossell India ($ROSSELLIND) | 6.7% | 14.8% | 11.1% | 15.8% | - |
| Ccl Products (India) ($CCL) | 5.8% | 8.3% | 2.4% | 9.4% | - |
| Mcleod Russel India ($MCLEODRUSS) | 6.0% | 9.4% | 9.8% | 6.7% | - |
| Tata Coffee ($TATACOFFEE) | 4.3% | 4.0% | 3.6% | 3.6% | - |
| Bombay Burmah Trading Corp ($BBTC) | 3.6% | 2.3% | 1.6% | 3.1% | - |
| |
|---|
| Median (7 companies) | 3.6% | 2.7% | 2.9% | 3.6% | - |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | - | 3.0% | 5.3% |
Top companies by ROIC, %
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Bombay Burmah Trading Corp ($BBTC) | 13.9% | 20.6% | 23.7% | 31.0% | - |
| Ccl Products (India) ($CCL) | 18.0% | 19.7% | 23.0% | 25.7% | - |
| Tata Coffee ($TATACOFFEE) | 16.2% | 14.0% | 14.0% | 11.5% | - |
| Tata Global Beverages ($TATAGLOBAL) | 9.6% | 8.1% | 8.0% | 6.5% | - |
| Rossell India ($ROSSELLIND) | 12.1% | 12.7% | 4.1% | 5.0% | - |
| |
|---|
| Median (13 companies) | 13.9% | 14.0% | 8.0% | 6.5% | - |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | - | 2.4% | 4.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2013 | FY2014 | FY2015 | FY2016 | FY2017 |
|---|
| Andrew Yule & Company ($ANDREWYU) | 5.4x | 1.9x | 1.7x | 4.7x | - |
| Mcleod Russel India ($MCLEODRUSS) | 0.5x | 0.7x | 4.2x | 4.7x | - |
| Rossell India ($ROSSELLIND) | 1.9x | 1.5x | 2.6x | 2.9x | - |
| Tata Coffee ($TATACOFFEE) | 2.6x | 2.7x | 2.5x | 2.7x | - |
| Tata Global Beverages ($TATAGLOBAL) | 1.5x | 1.0x | 1.0x | 1.3x | - |
| |
|---|
| Median (8 companies) | 1.8x | 0.7x | 1.1x | 2.0x | - |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | - | 10.2x | 6.9x |
