Over the last few years Alkyl Amines Chemicals showed solid growth in fundamentals

22-05-2014 • About Alkyl Amines Chemicals ($ALKYLAMINE) • By InTwits

Alkyl Amines Chemicals is a fast-growing stock in Commodity Chemicals industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.

Growth story

Alkyl Amines Chemicals showed fast growth in the last financial year. The company's revenue surged on 21.9% in FY2014. Together with revenue growth Alkyl Amines Chemicals also managed to keep EBITDA growth. EBITDA grew 45.1% for the same period.

If we look for the longer period Alkyl Amines Chemicals showed fast revenue growth of 23.7% from FY2011 to FY2014 annually. EBITDA surged on 39.5% from FY2011 to FY2014 annually.

Alkyl Amines Chemicals ($ALKYLAMINE) financials for the last 5 years

mln. INR	FY2010	FY2011	FY2012	FY2013	FY2014
Revenue	5,583	2,359	2,880	3,659	4,461
Revenue growth, %		-57.8%	22.1%	27.0%	21.9%
SG&A, %
EBITDA	352	313	457	585	849
EBITDA growth, %		-11.2%	46.1%	27.9%	45.1%
EBITDA margin, %	6.31%	13.3%	15.9%	16.0%	19.0%
Net Income	117	140	176	242	433
Net Income margin, %	2.10%	5.92%	6.11%	6.62%	9.70%

CAPEX	108	189	147	240	263
CAPEX/Revenue, %	1.93%	7.99%	5.12%	6.56%	5.88%
Debt	1,136	1,201	1,234	1,454	1,498
Cash	30	11	49	50	117
Net Debt/EBITDA	3.1x	3.8x	2.6x	2.4x	1.6x

ROIC, %	12.5%	10.3%	16.0%	18.7%	25.0%
ROE, %	16.8%	17.5%	19.2%	22.6%	32.5%

Profitability and return on investment

Margin expansion supported EBITDA growth. EBITDA margin surged on 3 pp from 16% to 19% in FY2014. In the longer period EBITDA margin surged on 5.70 pp from 13.3% in FY2011 to 19% in FY2014.

We call Alkyl Amines Chemicals an attractive growth stock as together with the growth it delivers high ROIC at 25.0%. During the last three years it surged - it was 10.3% in FY2011. For the last three years the average ROIC was 19.9%.

Alkyl Amines Chemicals's Net Income margin surged on 3.10 pp from 6.60% to 9.70% in FY2014. In the last 3 years the company showed fast Net Income margin growth of 3.80 pp from 5.90% in FY2011 to 9.70% in FY2014.

Alkyl Amines Chemicals operates at ROE of 32.5%. It's average level of ROE for the last three years was 24.8%.

Capital expenditures (CAPEX)

To fuel this fast growth Alkyl Amines Chemicals had to invest in CAPEX.In FY2014 the company had CAPEX/Revenue of 5.88%. The company's CAPEX/Revenue dropped on 2.11 pp from 7.99% in FY2011 to 5.88% in FY2014. It's average level of CAPEX/Revenue for the last three years was 5.85%.

Leverage (Debt)

Having such a fast growth profile Alkyl Amines Chemicals keeps medium debt level at 1.6x Net Debt/EBITDA. If we look for the longer period the company showed big decline in leverage of 2.18x from 3.80x in FY2011 to 1.63x in FY2014.

Valuation vs. comparable companies

The market closed today at 6.3x EV/EBITDA for Alkyl Amines Chemicals which is 60.3% lower than 16.0x Commodity Chemicals peer group avearge calculated on the basis of 186 companies. The market closed today at 9.3x P/E for Alkyl Amines Chemicals which is 87.2% lower than 72.6x Commodity Chemicals peer group avearge calculated on the basis of 22 companies.

For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 9.2x EV/(EBITDA-CAPEX) which is not surprisingly 49% higher than 6.2x Commodity Chemicals industry avearge calculated based on 13 companies.

Peers in Commodity Chemicals

Below we provide Alkyl Amines Chemicals benchmarking against other companies in Commodity Chemicals 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
	FY2010	FY2011	FY2012	FY2013	FY2014
Aditya Birla Chemicals (India) ($ABCIL)		-82.2%	157.8%	24.0%	41.2%
Balaji Amines ($BALAMINES)		-53.0%	29.6%	13.9%	19.2%
Mangalam Organics ($MANORG)		-29.6%	15.5%	-4.9%	10.6%
Xpro India ($XPROINDIA)		1.8%	-20.1%	-8.3%	7.6%
Chemfab Alkalis ($CHEMFALKAL)		-32.7%	-1.6%	46.3%	-2.8%

Median (7 companies)		-37.5%	29.6%	17.5%	7.6%
Alkyl Amines Chemicals ($ALKYLAMINE)		-57.8%	22.1%	27.0%	21.9%

Top companies by EBITDA margin, %

Top 5
	FY2010	FY2011	FY2012	FY2013	FY2014
Chemfab Alkalis ($CHEMFALKAL)	14.6%	19.0%	22.3%	32.9%	24.2%
Aditya Birla Chemicals (India) ($ABCIL)	5.7%	33.6%	26.8%	27.1%	23.6%
Balaji Amines ($BALAMINES)	6.4%	18.3%	17.6%	15.5%	14.3%
Mangalam Organics ($MANORG)	5.8%	12.1%	6.1%	6.5%	8.5%
Thirumalai Chemicals ($TIRUMALCHM)		8.9%	7.0%	9.9%	6.4%

Median (6 companies)	6.2%	12.1%	12.2%	15.5%	11.4%
Alkyl Amines Chemicals ($ALKYLAMINE)	6.3%	13.3%	15.9%	16.0%	19.0%

Top companies by CAPEX/Revenue, %

Top 5
	FY2010	FY2011	FY2012	FY2013	FY2014
Xpro India ($XPROINDIA)	3.2%	6.1%	7.9%	52.7%
Aditya Birla Chemicals (India) ($ABCIL)	0.5%	5.9%	136.9%	24.2%	30.8%
Balaji Amines ($BALAMINES)	2.3%	16.5%	13.2%	17.6%	8.7%
Chemfab Alkalis ($CHEMFALKAL)	8.2%	5.1%	2.2%	15.8%	55.6%
Jayshree Chemicals ($JAYCH)	23.0%	399.9%	12.0%	3.9%

Median (6 companies)	3.0%	6.1%	7.9%	16.7%	30.8%
Alkyl Amines Chemicals ($ALKYLAMINE)	1.9%	8.0%	5.1%	6.6%	5.9%

Top companies by ROIC, %

Top 5
	FY2010	FY2011	FY2012	FY2013	FY2014
Chemfab Alkalis ($CHEMFALKAL)	10.3%	8.3%	10.9%	29.9%	15.9%
Balaji Amines ($BALAMINES)	19.5%	20.3%	19.3%	16.1%	15.6%
Thirumalai Chemicals ($TIRUMALCHM)			13.0%	23.2%	12.5%
Aditya Birla Chemicals (India) ($ABCIL)	16.2%	15.0%	13.5%	11.7%	12.5%
Standard Industries ($SIL)		-9.6%	-13.1%	-19.0%	-23.0%

Median (12 companies)	16.2%	12.8%	10.2%	9.8%	12.5%
Alkyl Amines Chemicals ($ALKYLAMINE)	12.5%	10.3%	16.0%	18.7%	25.0%

Top companies by Net Debt / EBITDA

Top 5
	FY2010	FY2011	FY2012	FY2013	FY2014
Aditya Birla Chemicals (India) ($ABCIL)	-0.0x	0.2x	4.8x	3.9x	4.0x
Balaji Amines ($BALAMINES)	2.1x	2.6x	2.5x	2.6x	2.6x
Thirumalai Chemicals ($TIRUMALCHM)		2.7x	3.6x	2.2x	2.1x
Chemfab Alkalis ($CHEMFALKAL)	-0.1x	-0.0x	-0.2x	-0.1x	0.8x
Diamines & Chemicals ($DIAMINESQ)			2.1x	2.0x	0.0x

Median (9 companies)	0.1x	1.1x	3.0x	2.4x	0.0x
Alkyl Amines Chemicals ($ALKYLAMINE)	3.1x	3.8x	2.6x	2.4x	1.6x

Alkyl Amines Chemicals stock price chart

Alkyl Amines Chemicals financials

mln.	FY2010	FY2011	FY2012

Revenue	5,583	2,359	2,880
EBITDA	352.4	313.0	457.4
Net income	117.4	139.6	175.9
CAPEX	107.6	188.5	147.5
Debt	1,136	1,201	1,234
Cash	30.019	10.890	48.562

About Alkyl Amines Chemicals

Alkyl Amines Chemicals Limited manufactures and supplies amines and amine-based chemicals in India and internationally. It provides aliphatic amine products, including methylamine, ethylamine, isopropylamine, propylamine, butylamine, ethylhexylamine, and cyclohexylamine; amine derivatives comprising amides, hydrochlorides, and mixed amines; and fine chemicals. The company also provides contract services consisting of technology and product development, scale-up, and custom manufacturing support services. It serves pharmaceutical, agrochemical, rubber chemical, water treatment, and other industries. The company was incorporated in 1979 and is based in Navi Mumbai, India.