Granules India CAPEX dropped on 44.5% in 2015 while Revenue surged on 18.1%
27-04-2015 • About Granules India (
$GRANULES) • By InTwits
Granules India reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Granules India has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.0%. At the same time it's a lot of higher than industry average of 7.2%.
- CAPEX is quite volatile: 1,481 in FY2015, 2,667 in FY2014, 1,164 in FY2013, 578 in FY2012, 250 in FY2011
- The company has highly profitable business model: ROIC is at 17.4%
- It operates with high leverage: Net Debt/EBITDA is 2.1x while industry average is 1.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Granules India ($GRANULES) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 4,752 | 6,540 | 7,644 | 10,959 | 12,937 | 18.1% |
| EBITDA | 649 | 885 | 979 | 1,587 | 2,096 | 32.1% |
| Net Income | 209 | 300 | 326 | 752 | 909 | 20.8% |
Balance Sheet
|
|---|
| Cash | 53 | 225 | 327 | 160 | 524 | 227.1% |
| Short Term Debt | 996 | 1,271 | 950 | 1,325 | 1,790 | 35.1% |
| Long Term Debt | 378 | 881 | 1,755 | 3,092 | 3,032 | -2.0% |
Cash flow
|
|---|
| Capex | 250 | 578 | 1,164 | 2,667 | 1,481 | -44.5% |
Ratios
|
|---|
| Revenue growth | -68.4% | 37.6% | 16.9% | 43.4% | 18.1% | |
| EBITDA growth | 4.4% | 36.2% | 10.7% | 62.0% | 32.1% | |
| EBITDA Margin | 13.7% | 13.5% | 12.8% | 14.5% | 16.2% | 1.7% |
| Net Income Margin | 4.4% | 4.6% | 4.3% | 6.9% | 7.0% | 0.2% |
| CAPEX, % of revenue | 5.3% | 8.8% | 15.2% | 24.3% | 11.4% | -12.9% |
| ROIC | 12.8% | 15.8% | 14.2% | 18.4% | 17.4% | -1.0% |
| ROE | 9.9% | 12.9% | 12.5% | 23.9% | 23.1% | -0.8% |
| Net Debt/EBITDA | 2.0x | 2.2x | 2.4x | 2.7x | 2.1x | -0.6x |
Revenue and profitability
The company's Revenue jumped on 18.1% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.9 pp from 6.8% to 14.6% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 11.4%. CAPEX/Revenue increased on 2.6 pp from 8.8% in FY2012 to 11.4% in FY2015. Average CAPEX/Revenue for the last three years was 17.0%.To secure this fast growth Granules India invested a large share of EBITDA (70.7%) to CAPEX.
Return on investment
The company operates at high and attractive ROE (23.10%) while ROIC is a bit lower (17.44%). ROIC decreased slightly on 1.00 pp from 18.4% to 17.4% in FY2015. ROE decreased slightly on 0.75 pp from 23.9% to 23.1% in FY2015.
Leverage (Debt)
Debt level is 2.1x Net Debt / EBITDA and 2.3x Debt / EBITDA. Net Debt / EBITDA dropped on 0.6x from 2.7x to 2.1x in FY2015. Debt increased on 9.2% in FY2015 while cash jumped on 227% in FY2015.
Appendix 1: Peers in Pharmaceuticals
Below we provide Granules India benchmarking against other companies in Pharmaceuticals 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 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Marksans Pharma ($MARKSANS) | -66.6% | 16.7% | 23.3% | 43.3% | |
| Sun Pharmaceutical Industries ($SUNPHARMA) | -87.8% | 39.9% | 40.4% | 42.4% | |
| Torrent Pharmaceuticals ($TORNTPHARM) | -63.5% | 22.7% | 17.7% | 32.2% | |
| Abbott India ($ABBOTINDIA) | -46.4% | 8.2% | 8.7% | 27.3% | |
| Sharon Bio-Medicine ($SHARONBIO) | -37.2% | 28.3% | 33.5% | 23.4% | |
| |
|---|
| Median (41 companies) | -45.7% | 16.6% | 14.7% | 12.6% | -3.5% |
|---|
| Granules India ($GRANULES) | | 37.6% | 16.9% | 43.4% | 18.1% |
Top companies by Gross margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dr.Reddy'S Laboratories ($DRREDDY) | | | 52.1% | 57.4% | |
| Omega Laboratories ($OMEGALAB) | | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (2 companies) | | 46.9% | 26.1% | 28.7% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Sun Pharmaceutical Industries ($SUNPHARMA) | 34.3% | 40.8% | 44.3% | 44.9% | |
| Divi'S Laboratories ($DIVISLAB) | 38.1% | 37.2% | 38.2% | 40.2% | |
| Venus Remedies ($VENUSREM) | 24.9% | 25.2% | 25.6% | 25.5% | |
| Dr.Reddy'S Laboratories ($DRREDDY) | 21.7% | 25.8% | 22.9% | 25.1% | |
| Natco Pharma ($NATCOPHARM) | 21.3% | 21.5% | 23.2% | 24.9% | |
| |
|---|
| Median (36 companies) | 16.5% | 12.7% | 13.4% | 14.8% | 19.6% |
|---|
| Granules India ($GRANULES) | 13.7% | 13.5% | 12.8% | 14.5% | 16.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dishman Pharmaceuticals & Chemicals ($DISHMAN) | 24.3% | 8.4% | 10.9% | 21.6% | |
| Venus Remedies ($VENUSREM) | 26.6% | 23.2% | 22.2% | 17.5% | |
| Shasun Pharmaceuticals ($SHASUNPHAR) | 4.3% | 10.4% | 15.2% | 15.8% | |
| Natco Pharma ($NATCOPHARM) | 20.0% | 24.4% | 16.3% | 14.4% | |
| Ipca Laboratories ($IPCALAB) | 10.3% | 11.2% | 8.3% | 11.6% | |
| |
|---|
| Median (28 companies) | 7.4% | 7.7% | 7.5% | 5.7% | 10.9% |
|---|
| Granules India ($GRANULES) | 5.3% | 8.8% | 15.2% | 24.3% | 11.4% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Alembic Pharmaceuticals ($APLLTD) | | 27.5% | 29.1% | 41.5% | 35.7% |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 18.9% | 24.8% | 31.1% | 35.0% | |
| Marksans Pharma ($MARKSANS) | -25.8% | -142.4% | 34.9% | 33.8% | |
| Torrent Pharmaceuticals ($TORNTPHARM) | 22.3% | 26.4% | 30.5% | 33.2% | |
| Jenburkt Pharmaceuticals ($JENBURPH) | 43.6% | 34.1% | 29.0% | 32.4% | |
| |
|---|
| Median (63 companies) | 14.0% | 13.7% | 13.2% | 14.4% | 17.9% |
|---|
| Granules India ($GRANULES) | 12.8% | 15.8% | 14.2% | 18.4% | 17.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Ind-Swift Laboratories ($INDSWFTLAB) | 4.6x | 5.5x | 16.1x | 19.5x | |
| Shasun Pharmaceuticals ($SHASUNPHAR) | 4.5x | 2.8x | 4.5x | 6.0x | |
| Sharon Bio-Medicine ($SHARONBIO) | 4.6x | 4.7x | 5.3x | 4.5x | |
| Jubilant Life Sciences Limited ($JUBILANT) | 5.3x | 4.0x | 3.5x | 3.5x | |
| Kopran ($KOPRAN) | 6.0x | 4.5x | 3.0x | 3.0x | |
| |
|---|
| Median (50 companies) | 1.5x | 1.4x | 1.2x | 0.3x | 0.6x |
|---|
| Granules India ($GRANULES) | 2.0x | 2.2x | 2.4x | 2.7x | 2.1x |
