Tata Global Beverages reports 160% CAPEX growth in 2018 and almost no change in Revenue of 67,085
11-05-2018 • About Tata Global Beverages (
$TATAGLOBAL) • By InTwits
Tata Global Beverages reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- Tata Global Beverages has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's in pair with industry average of 1.6%
- CAPEX is quite volatile: ₹3,588m in FY2018, ₹1,382m in FY2017, ₹1,545m in FY2016, ₹1,792m in FY2015, ₹2,037m in FY2014
- The company has business model with low profitability: ROIC is 8.4%
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 showed almost no change in FY2018. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.66 pp from 11.8% to 12.5% in FY2018. EBITDA Margin stuck to a growing trend at 0.74 pp per annum in the last 5 years.
Net Income margin increased slightly on 1.6 pp from 5.8% to 7.4% in FY2018. During the last 5 years Net Income margin bottomed in FY2016 at -0.084% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 Tata Global Beverages had CAPEX/Revenue of 5.3%. The company showed CAPEX/Revenue growth of 3.1 pp from 2.2% in FY2015 to 5.3% in FY2018. It's average level of CAPEX/Revenue for the last three years was 3.3%.
Return on investment
The company operates at low ROIC (8.4%) and ROE (7.5%). ROIC showed almost no change in FY2018. ROE increased slightly on 1.2 pp from 6.2% to 7.5% in FY2018. During the last 5 years ROIC bottomed in FY2016 at 6.5% and was growing since that time. During FY2014-FY2018 ROE bottomed in FY2016 at -0.094% and was growing since that time.
Leverage (Debt)
Debt level is -0.2x Net Debt / EBITDA and 1.3x Debt / EBITDA. Debt jumped on 37.1% while cash jumped on 117%.
Tata Global Beverages has no short term refinancing risk: cash is higher than short term debt (307.0%).
Financial and operational results
FY ended 31-03-2018
Tata Global Beverages ($TATAGLOBAL) key annual financial indicators| mln. INR | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 76,220 | 79,934 | 65,329 | 66,806 | 67,085 | 0.4% |
| SG&A | | | 11,025 | | | |
| EBITDA | 7,521 | 7,759 | 6,543 | 7,911 | 8,389 | 6.0% |
| Net Income | 4,805 | 2,478 | -55 | 3,894 | 4,956 | 27.2% |
Balance Sheet
|
|---|
| Cash | 7,182 | 5,365 | 4,929 | 5,657 | 12,285 | 117.2% |
| Short Term Debt | 3,844 | 4,401 | 8,499 | 3,202 | 4,002 | 25.0% |
| Long Term Debt | 10,537 | 8,839 | 5,041 | 4,501 | 6,560 | 45.7% |
Cash flow
|
|---|
| Capex | 2,037 | 1,792 | 1,545 | 1,382 | 3,588 | 159.7% |
Ratios
|
|---|
| Revenue growth | 4.8% | 4.9% | -18.3% | 2.3% | 0.4% | |
| EBITDA growth | -2.4% | 3.2% | -15.7% | 20.9% | 6.0% | |
|
|---|
| EBITDA Margin | 9.9% | 9.7% | 10.0% | 11.8% | 12.5% | 0.7% |
| SG&A, % of revenue | | | 16.9% | | | |
| Net Income Margin | 6.3% | 3.1% | -0.1% | 5.8% | 7.4% | 1.6% |
| CAPEX, % of revenue | 2.7% | 2.2% | 2.4% | 2.1% | 5.3% | 3.3% |
|
|---|
| ROIC | 8.1% | 8.0% | 6.5% | 8.0% | 8.4% | 0.4% |
| ROE | 9.0% | 4.4% | -0.1% | 6.2% | 7.5% | 1.2% |
| Net Debt/EBITDA | 1.0x | 1.0x | 1.3x | 0.3x | -0.2x | -0.5x |
Peers in Tea & Coffee
Below we provide Tata Global Beverages 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | - | -1.2% | 3.1% |
| |
|---|
| Median (1 company) | 10.0% | 4.9% | 5.8% | -1.2% | 3.1% |
|---|
| Tata Global Beverages ($TATAGLOBAL) | - | 4.9% | -18.3% | 2.3% | 0.4% |
Top companies by EBITDA margin, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | 5.5% | 6.4% | 1.6% |
| |
|---|
| Median (1 company) | 18.5% | 10.5% | 11.1% | 6.4% | 1.6% |
|---|
| Tata Global Beverages ($TATAGLOBAL) | 9.9% | 9.7% | 10.0% | 11.8% | 12.5% |
Top companies by CAPEX/Revenue, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | 3.0% | 5.3% | 4.2% |
| |
|---|
| Median (1 company) | 3.2% | 3.3% | 3.6% | 5.3% | 4.2% |
|---|
| Tata Global Beverages ($TATAGLOBAL) | 2.7% | 2.2% | 2.4% | 2.1% | 5.3% |
Top companies by ROIC, %
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | 2.4% | 4.1% | -0.8% |
| |
|---|
| Median (1 company) | 15.4% | 9.1% | 5.0% | 4.1% | -0.8% |
|---|
| Tata Global Beverages ($TATAGLOBAL) | 8.1% | 8.0% | 6.5% | 8.0% | 8.4% |
Top companies by Net Debt / EBITDA
| Top | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Jay Shree Tea & Industries ($JAYSHREETEA) | - | - | 10.2x | 6.9x | 29.6x |
| |
|---|
| Median (1 company) | 0.4x | 1.1x | 2.8x | 6.9x | 29.6x |
|---|
| Tata Global Beverages ($TATAGLOBAL) | 1.0x | 1.0x | 1.3x | 0.3x | -0.2x |
