Kg Petrochem's growth is outstanding: revenue grew 20.3% and EBITDA 29.9% annually over the last three years
10-06-2014 • About Kg Petrochem (
$KGPETRO) • By InTwits
Have you thought about Kg Petrochem as a growth stock? Its revenue performance, profitability and financial model stands it out vs. other public companies on the market.
Growth story
Kg Petrochem showed fast growth in the last financial year. Kg Petrochem's revenue surged on 20.9% in FY2014. In addition to revenue Kg Petrochem also keeps delivering EBITDA growth. It was 38.2% in FY2014
In the last 3 years Kg Petrochem showed fast revenue growth of 20.3% from FY2011 to FY2014 annually. EBITDA surged on 29.9% from FY2011 to FY2014 annually.
Kg Petrochem ($KGPETRO) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 1,958 | 798 | 926 | 1,149 | 1,389 |
|---|
| Revenue growth, % | | -59.3% | 16.1% | 24.0% | 20.9% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 78 | 93 | 149 | 147 | 204 |
|---|
| EBITDA growth, % | | 19.5% | 60.0% | -0.8% | 38.2% |
|---|
| EBITDA margin, % | 3.97% | 11.6% | 16.0% | 12.8% | 14.7% |
|---|
| Net Income | 10 | 7 | 25 | 33 | 69 |
|---|
| Net Income margin, % | 0.503% | 0.824% | 2.71% | 2.90% | 4.93% |
|---|
| |
| CAPEX | 322 | 160 | 0 | 0 | 0 |
|---|
| CAPEX/Revenue, % | 16.5% | 20.1% | 0% | 0% | 0% |
|---|
| Debt | 437 | 583 | 497 | 539 | 706 |
|---|
| Cash | 0 | 3 | 2 | 3 | 18 |
|---|
| Net Debt/EBITDA | 5.6x | 6.2x | 3.3x | 3.6x | 3.4x |
|---|
| |
| ROIC, % | 6.5% | 5.0% | 10.8% | 10.1% | 14.3% |
|---|
| ROE, % | 6.0% | 3.8% | 13.0% | 14.9% | 24.9% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. EBITDA margin surged on 1.90 pp from 12.8% to 14.7% in FY2014. In the last 3 years EBITDA margin surged on 3.10 pp from 11.6% in FY2011 to 14.7% in FY2014.
Kg Petrochem shows attractive ROIC at 14.3% for the last 12 months which assumes stable development model. During the last three years it surged - it was 5.05% in FY2011. It's average level of ROIC for the last three years was 11.7%.
Kg Petrochem's Net Income margin surged on 2 pp from 2.90% to 4.90% in FY2014. In the last 3 years Kg Petrochem's Net Income margin surged on 4.10 pp from 0.800% in FY2011 to 4.90% in FY2014.
Kg Petrochem operates at ROE of 24.9%. It's average level of ROE for the last three years was 17.6%.
Capital expenditures (CAPEX)
In FY2014 the company had CAPEX/Revenue of 0%. Kg Petrochem's CAPEX/Revenue dropped on 20.1 pp from 20.1% in FY2011 to 0% in FY2014.
Leverage (Debt)
Having such a fast growth profile the company keeps medium debt level at 3.4x Net Debt/EBITDA. In the last 3 years leverage dropped on 2.87x from 6.25x in FY2011 to 3.38x in FY2014.
Valuation vs. comparable companies
The company trades at 4.4x EV/EBITDA which is 72.3% lower than 16.0x Containers & Packaging industry avearge calculated based on 86 companies. The market closed today at 3.1x P/E for Kg Petrochem which is 76.4% lower than 13.2x Containers & Packaging peer group avearge calculated on the basis of 13 companies.
Peers in Containers & Packaging
Below we provide Kg Petrochem benchmarking against other companies in Containers & Packaging 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, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Neo Corp International ($NEOCORP) | | -63.2% | 36.7% | 45.2% | 56.4% |
| Gopala Polyplast ($GOPALA) | | -42.9% | -1.7% | 17.0% | 29.6% |
| Shree Rama Multi-Tech ($SHREERAMA) | | -18.3% | -25.0% | 18.2% | 23.3% |
| Shri Jagdamba Polymers ($SHRJAGP) | | -66.8% | 35.5% | 38.3% | 21.7% |
| Time Technoplast ($TIMETECHNO) | | -58.8% | 19.8% | 17.6% | 21.6% |
| |
|---|
| Median (19 companies) | | -46.5% | 16.6% | 15.3% | 13.9% |
|---|
| Kg Petrochem ($KGPETRO) | | -59.3% | 16.1% | 24.0% | 20.9% |
Top companies by EBITDA margin, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Control Print ($CONTROLPR) | | | 13.9% | 19.2% | 22.5% |
| Piramal Glass ($PIRAMGLAS) | 10.0% | 24.4% | 23.7% | 18.9% | 15.5% |
| Essel Propack ($ESSELPRO) | | 17.8% | 17.0% | 17.4% | 16.9% |
| Manaksia ($MANAKSIA) | 19.2% | 16.5% | 14.4% | 17.4% | 20.3% |
| Time Technoplast ($TIMETECHNO) | 6.3% | 18.5% | 15.9% | 16.2% | 14.1% |
| |
|---|
| Median (19 companies) | 3.7% | 12.5% | 12.9% | 10.6% | 11.4% |
|---|
| Kg Petrochem ($KGPETRO) | 4.0% | 11.6% | 16.0% | 12.8% | 14.7% |
Top companies by CAPEX/Revenue, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Essel Propack ($ESSELPRO) | | 7.9% | 10.0% | 6.7% | 8.5% |
| Piramal Glass ($PIRAMGLAS) | 1.0% | 12.6% | 20.7% | 6.0% | 7.7% |
| Control Print ($CONTROLPR) | | | 3.0% | 5.0% | 7.5% |
| Hindusthan National Glass & Industries ($HINDNATGLS) | 8.6% | 21.7% | 75.5% | 25.0% | 6.7% |
| Time Technoplast ($TIMETECHNO) | 5.0% | 18.5% | 17.9% | 11.1% | 6.2% |
| |
|---|
| Median (7 companies) | 2.9% | 9.0% | 8.9% | 6.7% | 6.7% |
|---|
Top companies by ROIC, %
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Control Print ($CONTROLPR) | | | | 19.7% | 22.2% |
| Manaksia ($MANAKSIA) | 15.0% | 12.7% | 12.9% | 15.5% | 16.0% |
| Neo Corp International ($NEOCORP) | 16.2% | 17.4% | 14.9% | 13.7% | 15.7% |
| Hitech Plast ($HITECHPLAS) | 21.1% | 18.1% | 13.8% | 12.6% | 14.0% |
| Essel Propack ($ESSELPRO) | | | 8.6% | 9.9% | 12.5% |
| |
|---|
| Median (30 companies) | 9.0% | 9.0% | 9.3% | 9.9% | 11.2% |
|---|
| Kg Petrochem ($KGPETRO) | 6.5% | 5.0% | 10.8% | 10.1% | 14.3% |
Top companies by Net Debt / EBITDA
| FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Top 5 |
|---|
| Hindusthan National Glass & Industries ($HINDNATGLS) | 2.0x | 2.1x | 7.4x | 15.8x | 11.2x |
| Shree Rama Multi-Tech ($SHREERAMA) | 66.8x | 23.2x | 117.6x | 15.7x | |
| Union Quality Plastics ($UNQTYMI) | | | | 14.9x | 12.9x |
| Salguti Industries ($SALGUTI) | 6.0x | | 6.0x | 6.0x | |
| Rishi Techtex ($RISHITECH) | 5.4x | 3.3x | 0.0x | 5.9x | 2.6x |
| |
|---|
| Median (26 companies) | 3.3x | 3.0x | 3.1x | 3.3x | 0.9x |
|---|
| Kg Petrochem ($KGPETRO) | 5.6x | 6.2x | 3.3x | 3.6x | 3.4x |
