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Insecticides (India) demonstrates profitable growth

04-06-2014 • About Insecticides (India) ($INSECTICID) • By InTwits

Have you thought about Insecticides (India) as a growth stock? It showed noticeble revenue performance in the last years among with attractive profitability and financial model.

Growth story


Insecticides (India) showed growth in the last financial year. Insecticides (India)'s revenue surged on 40.1% in FY2014. Together with revenue growth Insecticides (India) also managed to keep EBITDA growth. EBITDA grew 31.2% for the same period.

In the longer period Insecticides (India) showed fast revenue growth of 24.3% from FY2011 to FY2014 annually. EBITDA surged on 27.0% from FY2011 to FY2014 annually.

Insecticides (India) ($INSECTICID) financials for the last 5 years

mln. INR FY2010 FY2011 FY2012 FY2013 FY2014
Revenue11,0784,5015,2186,1678,641
Revenue growth, %-59.4%15.9%18.2%40.1%
SG&A, %
EBITDA339445573695912
EBITDA growth, %31.5%28.6%21.4%31.2%
EBITDA margin, %3.06%9.90%11.0%11.3%10.6%
Net Income282322330353399
Net Income margin, % 2.55%7.16%6.33%5.73%4.62%
 
CAPEX90599556497335
CAPEX/Revenue, %0.812%13.3%10.7%8.07%3.87%
Debt2193801,5852,1132,580
Cash8737514790
Net Debt/EBITDA0.4x0.8x2.7x3.0x2.7x
 
ROIC, %23.2%23.5%19.2%15.6%15.7%
ROE, %24.9%22.9%19.6%17.9%17.4%

Profitability and return on investment


EBITDA margin declined slightly from 11.3% in FY2013 to 10.6% in FY2014. In the longer period EBITDA margin increased on 0.700 pp from 9.90% in FY2011 to 10.6% in FY2014.

We call Insecticides (India) an attractive growth stock as together with the growth it delivers high ROIC at 15.7%. During the last three years it dropped - it was 23.5% in FY2011. For the last three years the average ROIC was 16.8%.

The company's Net Income margin dropped on 1.10 pp from 5.70% to 4.60% in FY2014. In the last 3 years Net Income margin dropped on 2.60 pp from 7.20% in FY2011 to 4.60% in FY2014.

Insecticides (India) operates at ROE of 17.4%. It's average ROE for the last three years was 18.3%.

Capital expenditures (CAPEX)


In FY2014 the company had CAPEX/Revenue of 3.87%. The company's CAPEX/Revenue dropped on 9.43 pp from 13.3% in FY2011 to 3.87% in FY2014. It's average CAPEX/Revenue for the last three years was 7.54%.

Leverage (Debt)


Having such a fast growth profile the company keeps medium debt level at 2.7x Net Debt/EBITDA. If we look for the longer period the company's leverage surged on 1.96x from 0.77x in FY2011 to 2.73x in FY2014.

Valuation vs. comparable companies


At the end of trading day today Insecticides (India) traded at 7.2x EV/EBITDA which is 55.1% lower than 16.0x Agrochemicals peer group avearge calculated on the basis of 39 companies. The company trades at 10.2x P/E which is 67% lower than 30.8x Agrochemicals industry avearge calculated based on 9 companies.

For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 11.3x EV/(EBITDA-CAPEX) which is not surprisingly 144% higher than 4.7x Agrochemicals industry avearge calculated based on 6 companies.

Peers in Agrochemicals


Below you can find Insecticides (India) benchmarking vs. other companies in Agrochemicals industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.

Top companies by Revenue growth, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
P.I.Industries ($PIIND)-69.9%22.2%31.0%38.9%
Rallis India ($RALLIS)-52.0%17.4%14.4%19.8%
Bhagiradha Chemicals & Industries ($BHAGCHEM)-76.4%15.2%113.6%18.4%
Excel Industries ($EXCELINDUS)-51.0%14.7%21.7%8.3%
Jubilant Industries ($JUBLINDS)-48.6%85.2%0.3%-7.8%
 
Median (5 companies)-52.0%17.4%21.7%18.4%
Insecticides (India) ($INSECTICID)-59.4%15.9%18.2%40.1%


Top companies by EBITDA margin, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top
P.I.Industries ($PIIND)3.5%15.5%17.0%15.8%18.4%
Rallis India ($RALLIS)7.1%18.2%16.2%14.7%15.2%
Excel Industries ($EXCELINDUS)4.5%12.6%8.5%10.9%9.8%
Bhagiradha Chemicals & Industries ($BHAGCHEM)3.6%1.4%0.2%6.7%5.4%
 
Median (4 companies)4.5%12.6%8.5%10.9%12.5%
Insecticides (India) ($INSECTICID)3.1%9.9%11.0%11.3%10.6%


Top companies by CAPEX/Revenue, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top
Excel Industries ($EXCELINDUS)1.2%3.7%7.6%5.7%8.5%
P.I.Industries ($PIIND)1.5%13.5%13.4%13.2%4.0%
Rallis India ($RALLIS)4.5%12.1%4.5%3.2%3.4%
 
Median (3 companies)1.5%4.0%6.0%5.7%4.0%
Insecticides (India) ($INSECTICID)0.8%13.3%10.7%8.1%3.9%


Top companies by ROIC, %

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
P.I.Industries ($PIIND)20.2%22.4%23.9%22.5%31.3%
Rallis India ($RALLIS)29.5%32.6%26.3%25.3%28.3%
Excel Industries ($EXCELINDUS)7.9%13.8%8.5%14.2%11.9%
Adarsh Plant Protect ($ADARSHPL)4.8%-6.7%-24.8%3.8%
Jubilant Industries ($JUBLINDS)-3.1%-3.9%
 
Median (6 companies)8.3%13.8%2.7%10.9%28.3%
Insecticides (India) ($INSECTICID)23.2%23.5%19.2%15.6%15.7%


Top companies by Net Debt / EBITDA

 FY2010 FY2011 FY2012 FY2013 FY2014
Top 5
Excel Industries ($EXCELINDUS)2.5x1.4x2.7x1.6x2.3x
P.I.Industries ($PIIND)2.1x2.1x1.6x1.2x0.3x
Rallis India ($RALLIS)-0.0x0.5x0.7x0.1x0.2x
Adarsh Plant Protect ($ADARSHPL)6.1x5.2x0.0x
Bhagiradha Chemicals & Industries ($BHAGCHEM)1.5x13.9x163.2x3.6x0.0x
 
Median (5 companies)2.1x1.4x2.7x2.6x0.2x
Insecticides (India) ($INSECTICID)0.4x0.8x2.7x3.0x2.7x


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