Edible Oils l BSE Research Kriti Nutrients Ltd. CMP: INR20.90 Stock data BSE code 533210 BSE ID KRITINUT Face value (INR) 1 No of shares (m) 50.1 Market cap (INRm) 1,047.2 3m avg. daily vol (No) 23,990.3 Free float (INRm) 355.4 Dividend yield FY15 (%) 0.5 Company Overview Kriti Nutrients Ltd. is part of Kriti Group. The Company is engaged in the solvent extraction of soya beans. It has a state of the art manufacturing setup, which includes solvent extraction plants, vegetable oil refinery, lecithin plant, effluent treatment plant, fluidized bed boilers and an inhouse tin and jar manufacturing facility. Kriti s production facilities are ISO9001: 2001 certified. The company was listed on 29 Jun 2010 FY15 and recent performance S&P BSE Sensex 26,145.7 Stock performance (%) 52week H/L 22.5/4.0 1M 3M 12M Absolute (%) 30.6 90.0 291.4 Relative (%) 32.2 88.3 299.8 Shareholding pattern (%) Promoters FIIs DIIs Others 66.06% 0.00% 0.01% 33.94% Relative stock movement Net sales in FY15 increased by 7.6% YoY to INR3,104m. EBITDA also increased to INR139.9m in FY15 as against INR120.9m in FY14. It was mainly due to higher sales. Kriti Nutrients Ltd reported net profit of INR57.6m in FY15 compared to INR35.6m in FY14. Kriti Nutrients declared dividend of INR0.1/ per share. In balance sheet, net block assets increased from INR345.4m in FY14 to INR348.6m in FY15. Loans and advance and cash and cash bank balance was reported at INR30.5m and INR18.6m in FY15 respectively compared to INR29.6m and INR15.0m in FY14 respectively. Reserves & Surplus increased from INR166.1m in FY14 to INR216.1m in FY15. Trade payables increased from INR148.3m in FY14 to INR192.9m in FY15. In Q2FY16, revenue has increased by 18% YoY to INR801.8m. Kriti Nutrients Ltd. earned EBITDA of INR30.9m during the said period. Sales growth and decline in non operating income has led to eventual PAT of INR11.2m, YoY increase by 4.6 times. Table 1: Key financials Source: BSE (Y/e March) FY13 FY14 FY15 Sales (INRm) 4,663.1 2,884.7 3,104.0 YoY Growth (%) 2.1 38.1 7.6 EBITDA (INRm) 101.2 120.9 139.9 EBITDA Margin (%) 2.2 4.2 4.5 PAT (INRm) 10.5 35.6 57.6 Dec 2015 EPS (INR) 0.2 0.7 0.1 YoY Growth (%) 73.5 238.8 61.6 RoE (%) 5.9 17.8 23.9 P / E (x) 99.5 29.4 18.2
Industry Overview The business of the company is processing of soyabean seeds, refining of oil for edible use and production of soya based value added products. The most popular and the largest produced oil seed in the world is soya bean. The contribution of soya oil to the world's total oil consumption has gradually increased over the years. Soyabean being cash crop is an important contributor to the Indian GDP. Madhya Pradesh leads among the soyabean producing states in India followed by Maharashtra and Rajasthan. Board of Director Table 2: Composition of Board Name Director type Business relationship with company Shri Shiv Singh Mehta Director Managing Director Shri Saurabh Singh Mehta Director Executive Director Smt. Punima Mehta Director Director CA Manoj Fadnis Director Independent Director Shri Rakesh Kalra Director Independent Director Dr. Somnath Ghosh Director Independent Director Shri Bhuwnesh Shastri Director Independent Director Source: Company Key Strength and growth drivers Enhanced brand value due to marketing initiatives Introduction of new value added products Successful enhancement of its refining capacity to 6000mt per month Introduction of sunflower oil Expanding geographical presence and sales team and product portfolio by introducing sunflower oil and value added soya products. Leveraging core strength of manufacturing and brand building activities. Risk and concern Production of Soyabean is highly dependent on the vagaries of monsoon The large crushing capacity and new entrants with government incentives creates unhealthy competition Further, on international currencies front, volatility of exchange rate can cause concern because significant sales are in the form of exports. Interim Performance During Q2FY16, revenue increased by 18.0% YoY to INR801.8m. On operational front, in Q2FY16, EBITDA has increased by 77.2% on YoY basis to INR30.9m. PAT increased by 4.6 times on YoY basis in Q2FY16 to INR11.2m against INR2.0m during Q2FY15. Table 3: Summary of year to date performance (INRm) Q2 FY16 Q2FY15 YoY % Q1FY16 QoQ% H1FY16 H1FY15 YoY % Revenue 801.7 679.3 18.0 951.2 15.7 1,752.9 1,502.6 16.7 EBITDA 30.9 17.4 77.2 43.6 29.2 74.5 42.8 74.0 EBITDA Margin (%) 3.9 2.6 1.3 4.6 0.7 4.3 2.9 1.4 PAT 11.2 2.0 464.8 20.1 44.6 31.3 11.1 181.4 2
Competition analysis Table 4: Peer comparison CMP Mcap Rev (INR) (INRm) (INRm) NPM (%) EPS(INR) PE(x) Kriti Nutrients Ltd 20.9 1,047.2 3,104.0 1.9 1.1 18.2 Ruchi Soya Industries Ltd 29.9 9,989.6 283,090.8 0.2 1.8 16.4 BCL Ind and Infrastructures Ltd 35.1 496.7 6,768.9 1.0 4.9 7.2 Poona Dal & Oil Industries Ltd 19.5 111.3 1,859.5 0.4 1.3 14.9 Source: BSE Financial snapshot Chart 1: Sales trend Chart 2: Margin trend 5,000 4,000 3,000 2,000 1,000 Sales (INRm) Sales (% YoY, RHS) 10 (10) (20) (30) (40) 150 100 50 EBITDA (INRm) EBITDA mgn (%, RHS) 5.0 4.0 3.0 2.0 1.0 (50) Chart 3: EPS trend Chart4: Working Capital Profile EPS (INR) EPS Growth(% YoY, RHS) Debtors TO Stock TO Creditors TO 1.4 1.2 1.0 0.8 0.6 0.4 0.2 300 250 200 150 100 50 (50) (100) 30 25 20 15 10 5 3
Financial Summary Profit and loss (INR m) Balance sheet (INR m) Year ending 31 March FY13 FY14 FY15 Year ending 31 March FY13 FY14 FY15 Revenue 4,663.1 2,884.7 3,104.0 Net Block 358.9 345.4 348.6 Direct Expense 4,143.5 2,505.2 2,681.4 Investments 0.8 0.8 0.8 Staff Cost 47.9 49.6 55.4 Cash and Banks Balance 22.7 15.0 18.6 Other Expenditure 370.4 208.9 227.3 Inventory 183.1 198.7 264.3 Total Cost 4,561.9 2,763.8 2,964.1 Sundry Debtors 46.6 36.4 65.3 EBITDA 101.2 120.9 139.9 Loans and Advances 38.5 29.6 30.5 EBITDA margin (%) 2.2 4.2 4.5 Other Current Assets 25.3 29.1 45.6 Depreciation 26.4 25.7 22.3 Other 0.0 0.0 0.0 EBIT 74.8 95.2 117.6 Total Assets 675.9 655.0 773.7 Interest Expenses 64.6 48.6 46.8 Gross Debt 121.4 150.4 165.4 Nonoperating Income 10.8 9.2 16.9 Trade Payables 226.0 148.3 192.9 PBT 21.0 55.9 87.7 Provisions & other curr 76.4 75.0 81.0 lia Provision for Tax 10.5 20.2 30.1 Others 67.9 65.0 68.2 PAT 10.5 35.6 57.6 Equity Capital 50.1 50.1 50.1 Growth % 73.5 238.8 61.6 Reserves & Surplus 134.1 166.1 216.1 PAT margin (%) 0.2 1.2 1.9 Share Application money 0.0 0.0 0.0 Minority Interest 0.0 0.0 0.0 Minority Interest 0.0 0.0 0.0 Extra Ordinary 0.0 0.0 0.0 Shareholders' funds 184.2 216.3 266.2 PAT (Reported) 10.5 35.6 57.6 Total Liabilities 675.9 655.0 773.7 Cash Flow Metrics Ratios, growth and per share analysis FY13 FY14 FY15 YoY % change FY13 FY14 FY15 Net Profit before tax 21.0 55.9 87.7 Revenue 2.1 38.1 7.6 Operating Cash Flow 67.9 44.2 58.5 EBITDA 40.6 19.5 15.7 Investing Cash Flow 38.7 2.8 13.0 Recurring EPS 73.5 238.8 61.6 Financing Cash Flow 29.2 47.3 45.8 Ratios (%) Net Change in Cash 0.0 0.3 0.3 ROE 5.9 17.8 23.9 Op.cash and Equivalent 1.0 1.0 0.8 ROCE 27.5 25.1 26.2 Cl.cash and Equivalent 1.0 0.8 0.4 EBITDA Margin 2.2 4.2 4.5 Ratio Du Pont Analysis Net Debt/Equity (x) 53.2 62.2 54.8 FY13 FY14 FY15 Net Debt/ EBITDA (x) 1.0 1.1 1.0 Net Profit Margins (%) 0.2 1.2 1.9 Inventory days 11.0 24.2 27.2 Total Assets Turnover 13.5 7.2 6.7 Debtors days 3.1 5.3 6.0 Leverage Multiplier 1.9 2.0 1.9 Payables day 15.3 23.7 20.1 ROAE (%) 5.9 17.8 23.9 Total Asset TO ratio 13.5 7.2 6.7 Valuation Fixed Asset TO Ratio 13.7 8.2 8.9 FY13 FY14 FY15 Per share data (INR) EV/Sales 0.2 0.4 0.4 EPS reported (diluted) 0.2 0.7 1.1 EV/EBITDA 11.3 9.8 8.5 Recurring EPS (diluted) 0.2 0.7 1.1 P/E (x) 99.5 29.4 18.2 DPS 0.1 0.1 0.1 P/B(x) 5.0 4.5 3.7 Book Value(basic) 4.1 4.6 5.6 Dividend yield (%) 0.3 0.5 0.5 Wtd avg ord shares (m) 50.1 50.1 50.1 FCF yield (%) 165.6 32.8 31.7 Wtd avg dil shares (m) 50.1 50.1 50.1 Source: BSE, Company, Varhad research 4
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