Company Overview. Financial Performance

Transcription

1 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Superior Industrial Enterprises Limited CMP: 19.6 December 24, 215 Stock Details BSE code BSE ID SIEL Face value ( ) 1 No of shares (m) 13.9 Market cap ( m) days avg. daily vol 129,159 Free float ( m) 153 Dividend yield FY15 (%) Stock performance (%) Absolute Rel. to Sensex nm 1M 3M 12M 35.% 38.1% -14.7% 34.% 37.4% -1.4% Shareholding Pattern* (%) Promoters FIIs DIIs Others 43.8%.%.% 56.92% *As of September 215 Relative Chart Company Overview Superior Industrial Enterprises Limited is an independent manufacturer and supplier of corrugated boxes, with registered office in New Delhi and has a manufacturing facility in Ghaziabad, Uttar Pradesh. Industry Overview The corrugated box industry is a part of manufacturing sector. Corrugated boxes are used in packaging for finished goods transportation and handling. Indian corrugated Industry has faced a number of challenges due to the presence of a large number of small players in the market catering towards the needs of domestic players. After liberalization, the industry witnessed green shots in demand from big foreign players. Financial Performance The company reported a drop in revenue for FY15 to 79.1 million from million in FY 14. Although the EBITDA for the FY 15 was down to 12 million from 14.5 million in FY14 but margins improved significantly from 5% to 15%. The Company reported a profit of.5 million for FY 15. Earnings per share was down by 33% YoY in FY15 to.8. Superior Industries (LHS) Sensex , 3, 29, 28, 27, 26, 25, 24, 23, 22, Table1: Key Financials (Y/e March) Sales ( m) YoY Growth (%) 8% 229% -74% EBITDA ( m) Source: Bloomberg EBITDA Margin 1% 5% 15% PAT ( m) EPS ( ) YoY Growth (%) 233% -2% -33% Source: Company, Karvy Investment Advisory 1

2 Background and Business Description SIEL was established in 1991 with a name Superior Udyog Limited with an objective to deal in all kinds of vanaspati and refined oils. The name of Superior Udyog Limited was changed to Superior Vanaspati Limited in 1992 and further changed to Superior Industrial Enterprises Limited (SIEL) in 23. Since inception, the company is involved in serving food and beverage industry. Now SIEL is an independent manufacturer and supplier of corrugated boxes, with registered office in New Delhi and has a manufacturing facility in Ghaziabad, Uttar Pradesh. The corrugated boxes manufactured by SIEL are used in packaging of bottles of mineral water and soft drinks. The company s product has been approved by one the largest nonalcoholic beverage manufacturer of the world, Coca Cola. SIEL is manufacturing corrugated boxes for the bottlers of Coca Cola in India since its first year of commercial production. Key Strengths SIEL key strengths comprise of its fully automatic manufacturing facility with labour dependence only limited to carrying out ancillary activities. Being well equipped with all the requisite machines and latest technologies enables it to fabricate flawless range of products. The Company will continue with its expansions plans by raising capital through corporate restructuring, acquisition, investment and other mode of expansion. Risks & Concerns The revenue stream of the company is exposed to price fluctuation in its business. All major raw materials as well as finished goods being agro based are subject to market price variations. The company is facing price war from its peers and other small players which is leading to decrease in the operating profit margin of the company. The company is also exposed to other traditional risks, like client risk, industry segment risk and economic risk. Board of Directors Table 2: Composition of Board Name Kamal Agarwal Krishna Kumar Agarwal Vijay Kumar Gupta Divya Mehrotra Jagdish Persad Suri Source: Company Relation with Company Managing Director Non- Executive Director Independent Director Independent Director Independent Director 2

3 Industry Overview The corrugated box industry is a part of manufacturing sector. Corrugated boxes are used in packaging for finished goods transportation and handling. Indian corrugated Industry has faced number of challenges due to presence of large number of small players in the market catering to the needs of domestic players. Liberalization and globalization has brought new technologies that turned into completely automatic lines capable of faster, quality driven and economical production. The technology shift helped big players to differentiate them from small player on the basis of quality and efficiency. Corrugated boxes are used frequently in many industries to contain the product from manufacturing through distribution to sale and sometimes end-use. Corrugated boxes provide product protection by themselves but often require inner components such as cushioning, bracing and blocking to help protect fragile contents. The shipping hazards depend largely upon the particular logistics system being employed. For example, boxes unitized into a unit load on a pallet do not encounter individual handling while boxes sorted and shipped through part of their distribution cycle as mixed loads or express carriers can receive severe shocks, kicks, etc. In the last decade, corrugated box industry witnessed significant growth in consumption from following industries: Processed food industry Fruits & Vegetables Electronics industry Competition analysis Superior Industrial Enterprises Limited operates in a highly competitive market and competes with small as well as big players. Here is the list of few listed competitors of SIEL. Company CMP ( ) Mcap ( m) Rev ( m) OPM (%) EPS ( ) PE (x) SIEL % RUCHISOYA %.87 nm RASOI % Source: BSE 3

4 Financial Analysis SIEL reported a drop in top line from 299.6m in FY 14to 79.1m in FY 15. Other income increased by 3% YoY in FY 15 to.9m. Long term liabilities increased to 1.5m in FY 15 from 1.4m a year ago. Book value per share was flat YoY at 31.7 in FY15. Return of equity and return on capital employed was at.1% and 2.6% respectively. The liquidity ratios were at the comfortable levels with current ratio at 8.3x. Year end March Income statement ( million) Revenue % growth 8% 229% -74% EBITDA % EBITDA margin 1% 5% 15% Depreciation and amortization EBIT Interest PBT Tax Net profit % growth net profit 2% -45% -61% Balance sheet ( million) Shareholder fund Long term liabilities Current liab Fixed assets Current assets Cash & cash equivalents Cash flow statement Cash flow operations Cash flow from investing Cash flow from financing Per share data EPS ( ) DPS ( ) na na na BVPS ( ) Financial Ratios % ROE.6%.3%.1% ROCE 1.9% 3.4% 2.6% Interest coverage ratio Current ratio Cash ratio Source: Company, Karvy Investment Advisory 4

5 Financial Snapshot Revenue growth (%) EBITDA margin (%) % 2% 15% 1% 5% % -5% -1% % 15% 1% 5% % Revenue ( m) % growth EBITDA ( m) % EBITDA margin Net Profit Margin (%) Net Profit ( m) % net profit margin 3% 2% 2% 1% 1% % BVS & EPS Book value per share ( ) EPS diluted ( ) Liquidity ratios Profitability ratios % 3.5% 3.% 2.5% 2.% 1.5% 1.%.5%.% Current ratio Cash ratio ROE ROCE Source: Karvy Investment Advisory 5

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