Q2FY17 Result Review (Wholly owned subsidiary of Bank of Baroda)
Dis
BUY $CompanyN ame$
SECTOR: Plastic Products
Fiberweb (India) Ltd. (FIL)
17th October, 2016
Strong growth in PAT, margin expansion of 1,236 bps YoY: FIL enjoys tax benefit from BIFR till FY18. This helps to surge absolute PAT of the company to Rs. 28.2 mn vs Rs. 0.6 mn last year along with the better performance by the company. Also decrease in depreciation aided increase in PAT.
Rs.158
Up/Down (%) 26%
Bloomberg Code
Reuters Code
FWB IN
-
Share Holding (%)
As on June 2016
Promotor holding
55.5
Public
44.5
Stock Data Nifty
8,520
Sensex
27,530
52 week high/low
129/14.5
Maket Cap Full (Rs. bn)
1.6
Price performance (%)
1M
3M
6M
1Y
Absolute
25.1
65.8 271.7
291.1
Relative to Sensex
28.8
66.9 264.3
289.9
Relative Performance 450 350 250 150
BSE Sensex
Sep-16
Aug-16
Jul-16
Jun-16
May-16
Apr-16
Mar-16
Feb-16
50 Jan-16
EBITDA margins expanded by 877bps YoY: FIL posted EBITDA of Rs.36.3mn vs Rs.12 mn / Rs. 31mn, a growth of 203% / 16% YoY/ QoQ respectively. EBITDA margin expanded by 877 bps YoY and contracted by 744 bps QoQ to 16.4% led by fluctuation in crude oil prices. Other expenditure as percentage of sales has increased to more than double (149% YoY), however, reduction in staff cost as a percentage of net sales to 4.6% from 7.3% / 8% YoY/ QoQ respectively contributed to the margin expansion. The company expects to maintain EBITDA margin to 14-16% in FY17. We believe, FIL would be able to maintain its EBITDA margin in mid-teens. On a conservative basis we are expecting EBITDA margins to be at 15.1% in FY17e which would further expand to 19.2% in FY19e led by better capacity utilization and change in product mix.
Rs. 125
Dec-15
Revenues stood at Rs. 221 mn:- The revenue stood at Rs. 221 mn with strong growth of 41.3%/ 68% YoY/QoQ respectively led by increase in price realisation and new customers. FIL’s current order book is ~Rs. 730 mn till October 2016 and the management is expecting few more orders in November. Its current capacity utilization is 80% - 85%. In line with our expectation, FIL has expanded its current capacity from 5000 TPA to 7500 TPA through leasing out additional 2500 TPA machinery which would increase its current capacity by 50%. The new capacity will cater to the increasing demand from US which is a result of strong marketing strategy undertaken by the company. We expect the revenues to grow at a CAGR of 36% over FY16FY19e led by strong order book and capacity expansion. The management is expecting 18-20% revenue growth in FY17.
Price Target
Nov-15
Fiberweb (India) Ltd. reported robust results in Q2FY17 with a revenue of Rs. 221 mn and growth of ~41% / 68% from ~156 mn / Rs. 131 mn YoY / QoQ respectively. The EBITDA margin expanded by 877 bps / - 744 bps YoY/QoQ respectively to 16.4% (Rs.36.3 mn) led by change in raw material prices and decrease in operating expenses. Reported PAT stood at Rs. 28 mn with YoY/ QoQ growth of 4378%. /21.6%.
Price
Oct-15
Affirming expectations; Maintain BUY
Fiberweb India Ltd.
Source:-Bloomberg
Valuation: At CMP of Rs.125, the stock trades at PE of 20.5x/17.4x/14.3x of FY17e/18e/19e respectively. The increasing visibility in revenues led by order book of ~ Rs. 730 mn, high potential from newly launched products with better margin, capacity expansion and change in product mix, we expect revenue and earnings to grow at a CAGR of 36%/26% respectively over FY16-FY19e. We maintain our BUY rating with a price target of Rs. 158 with an upside of 26% (18x of FY19e).
Exhibit 1: Financial summary (Rs mn) Year end: March Net sales Growth (%) PAT Adjusted PAT EPS (Rs) Growth (%) P/E(x) ROE (%) ROCE (%) Net debt/equity (x) P/Bv (x)
FY14 640 26.4% -7 -8 -0.7 -676.0 -182.9 1.2 -1.0 -2.1 -2.3
FY15 681 6.5% 20 20 1.8 -370.3 67.7 -3.5 3.1 -2.1 -2.4
FY16 616 -9.7% 71 53 4.2 128.8 29.6 -15.9 7.8 -2.3 -3.5
FY17e 710 15.4% 77 77 6.1 44.3 20.5 8.4 4.5 0.9 1.7
FY18e 1,137 60.0% 118 118 7.2 18.0 17.4 11.0 7.6 0.7 1.9
FY19e 1,542 35.6% 144 144 8.8 21.8 14.3 11.8 11.7 0.7 1.7
Source: Company, BOBCAPSe
Padmaja Ambekar |
[email protected] | +91 22 6138 9381
Fiberweb (India) Ltd. | 17 October 2016
(Wholly owned subsidiary of Bank of Baroda)
Exhibit 2: Q2FY17 Financial Results (Rs Mn)
Q2FY17
Q2FY16
YoY (%)
Q1FY17
QoQ (%)
Net Sales
220.7
156.2
41.3
131
68.0
Raw material consumed
157.2
111.6
40.8
65
141.3
71.2
71.5
10.1
11.3
4.6
7.3
27.2
10.9
12.3
7.0
EBITDA
36.3
12.0
EBITDA Margin
16.4
7.7
8.1
11.2
28.2 0.0
(%) of net sales Staff cost (%) of net sales Other Expenses (%) of net sales
Depreciation EBIT Interest Other Income PBT Less: Taxation Tax / PBT Recurring PAT Exceptional items Reported PAT NPM (%)
50 -11.2
10
-0.7
8 148.7
35
-22.0
27 202.9
31
15.6
23.9 -27.8
8
-0.6
0.8
23
21.3
0.1
0.1
0.0
0.0
0.0
28.2
0.6
23
0.0
0.0
0
0.0
0.0
28.2 0.0 28.2 12.8
0.6 0.0 0.6 0.4
21.6
0.0 4378 4378
23 0 23 17.6
21.6 21.6
Source: Company, BOBCAPS
| Equity research |
2
Fiberweb (India) Ltd. | 17 October 2016
(Wholly owned subsidiary of Bank of Baroda)
Financials Exhibit 3: Income Statement Year end: March
FY14
FY15
FY16
FY17e
FY18e
FY19e
Net sales
640
681
616
710
1,137
1,542
Growth yoy (%)
26.4
6.5
(9.7)
15.4
60.0
35.6
Total income
642
683
617
713
1,140
1,545
Expenditure
630
663
541
606
952
1,248
EBITDA
12
20
76
107
187
297
(39.0)
69.9
280.7
40.9
74.5
58.3
EBITDA margin (%)
1.8
2.9
12.3
15.1
16.4
19.2
Depreciation
23
1
32
31
46
62
PBT
(7)
20
71
77
118
191
Tax
-
-
-
-
-
47.8
Effective rate (%)
-
-
-
-
-
25.0
Change (%)
PAT
(7)
20
71
77
118
144
Growth yoy (%)
(18.5)
(373.2)
249.4
8.3
53.2
21.8
PAT Margin (%)
(1.2)
3.0
11.5
10.8
10.3
9.3
FY14
FY15
FY16
FY17e
FY18e
FY19e
110
110
126
126
163
163
Reserves
(706)
(686)
(573)
788
906
1,050
Net worth
(596)
(576)
(447)
914
1,070
1,213
-
-
-
-
-
-
1,233
1,216
1,035
801
801
801
678
688
588
1,716
1,871
2,015
Net Fixed Assets
540
543
409
378
1,332
1,370
Capital WIP Curr.Assets, L & adv. Inventory
-
-
-
-
-
-
177
182
209
1,373
590
709
76
84
75
86
134
177
42
32
53
61
97
132
26
43
64
1,207
335
374
34
23
17
20
23
26
-
-
-
-
-
-
39
38
30
35
51
65
34
35
25
30
46
60
Exhibit 4: Balance Sheet Year end: March Sources of funds Share Capital
Net deferred tax Loans Capital employed Application of funds
Sundry Debtors Cash & Bank Balances Loans & advances Other current assets Current Liab. & Prov. Current liabilities Provisions Net Current Assets Application of Funds
5
3
4
5
5
5
138
144
179
1,338
539
644
678
688
588
1,716
1,871
2,015
Source: Company, BOBCAPSe
| Equity research |
3
Fiberweb (India) Ltd. | 17 October 2016
(Wholly owned subsidiary of Bank of Baroda)
Exhibit 5: Cash Flow Statement Year end: March
FY14
FY15
FY16
FY17e
FY18e
FY19e
-11
19
44
77
142
235
Interest/div. received
4
2
2
0
0
0
Depreciation & amort.
23
1
32
31
46
62
OP/(loss) before tax
Direct taxes paid
0
0
0
0
0
-48
(Inc)/dec in wkg. capital
74
12
-15
-16
-72
-67
CF from op. activity
92
39
17
92
115
182
(Inc)/dec in FA+CWIP
-5
-4
103
0
-1000
-100
CF from inv. activity
-5
-4
103
0
-1000
-100
Inc./(dec) in networth Inc/(dec) in debt Interest paid Dividends paid
0
0
58
1284
38
0
-87
-16
-181
-234
0
0
-1
-1
0
0
-24
-43
0
0
0
0
0
0
-88
-17
-124
1050
13
-43
Inc/(dec) in cash
-2
18
21
1142
-871
39
Add: beginning balance
28
26
43
64
1207
335
Closing balance
26
43
64
1207
335
374
FY14
FY15
FY16
FY17e
FY18e
FY19e
-0.7
1.8
4.2
6.1
7.2
8.8
CF from fin. activity
Exhibit 6: Key ratios Year end: March Per share data (Rs.) EPS Cash EPS Book Value per share DPS
1.4
2.0
8.2
8.5
10.0
12.6
-0.5
-0.5
-0.4
0.7
0.7
0.7
0.0
0.0
0.0
0.0
0.0
0.0
-182.9
67.7
29.6
20.5
17.4
14.3
Valuation (x) P/E (diluted) Cash P/E
90.2
64.0
15.3
14.7
12.5
9.9
1269.4
745.5
219.5
142.9
111.6
70.4
EV/sales
23.4
21.9
27.2
21.6
18.4
13.5
Price to book value
-2.3
-2.4
-3.5
1.7
1.9
1.7
Dividend yield (%)
0.0
0.0
0.0
0.0
0.0
0.0
1.2
-3.5
-15.9
8.4
11.0
11.8
RoCE
-1.0
3.1
7.8
4.5
7.6
11.7
RoIC
1.7
3.1
13.1
20.8
18.3
18.7
-2.1
-2.1
-2.3
0.9
0.7
0.7
EV/EBITDA
Profitability ratios (%) RoE
Leverage ratio Debt/equity (x) Source: Company, BOBCAPSe
| Equity research |
4
Fiberweb (India) Ltd. | 17 October 2016
(Wholly owned subsidiary of Bank of Baroda)
Sales and Dealing Team Anil Pawar – Senior Manager – Dealing
+91-22-6138 9325
[email protected]
Sachin Sambare – Manager– Dealing
+91-22-61389331/33
[email protected]
Ashwin Patil – Executive – Dealing
+91-22-6138 9326
[email protected]
Research Team
Sectors
Vaishali Parkar Kumar – Analyst
Agri, Auto, Defence
+91-22-6138 9382
[email protected]
Padmaja Ambekar – Analyst
Auto Ancillary, Infra, Midcap
+91-22-6138 9381
[email protected]
Akanksha Tripathi – Analyst
Footwear, FMCG Textile, FMCG, Chemicals, Metals Bio Technology, Pharmaceuticals
+91-22-6138 9383
[email protected]
+91-22-6138 9384
[email protected]
+91-22-6138 9351
[email protected]
Kshitij Kelkar
+91-22-61389386
[email protected]
Kiran Sawardekar
+91-22-61389385
[email protected]
Nisha Rasal
+91-22-61389328
[email protected]
+91-22-61389336
[email protected]
Rishabh Mehta – Analyst Hareesha Kakkera – Associate Retail Dealing Team
Debt Dealing Team Minaxi Tiwari
UTI Tower, 3rd Floor, South Wing, Bandra-Kurla Complex, Bandra (E), Mumbai - 400 051. India. Ph.: +91.22.6138.9300 || Fax: +91.22.6671.8535 || Email:
[email protected]|| Web: www.bobcaps.in NSE SEBI No. (CASH): INB231304537 NSE SEBI No. (DERIVATIVES): INF231304537 BSE SEBI No. : INB011304533 SEBI Registered Research Analysts: INH000000040 valid till 03rd February, 2020
Disclaimer BUY. We expect the stock to deliver >15% absolute returns. HOLD. We expect the stock to deliver 5-15% absolute returns. SELL. We expect the stock to deliver