Over the last few years Granules India showed solid growth in fundamentals
04-05-2015 • About Granules India (
$GRANULES) • By InTwits
Granules India is a fast-growing stock in Pharmaceuticals industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Granules India showed fast growth in the last financial year. The company's revenue surged on 18.1% in FY2015. At the same time Granules India well managed its profitability and showed even faster growth in EBITDA of 32.1% for the same period.
In the last 3 years Granules India showed fast revenue growth of 25.5% from FY2012 to FY2015 annually. EBITDA surged on 33.3% from FY2012 to FY2015 annually.
Granules India ($GRANULES) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 4,752 | 6,540 | 7,644 | 10,959 | 12,937 |
|---|
| Revenue growth, % | | 37.6% | 16.9% | 43.4% | 18.1% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 649 | 885 | 979 | 1,587 | 2,096 |
|---|
| EBITDA growth, % | | 36.2% | 10.7% | 62.0% | 32.1% |
|---|
| EBITDA margin, % | 13.7% | 13.5% | 12.8% | 14.5% | 16.2% |
|---|
| Net Income | 209 | 300 | 326 | 752 | 909 |
|---|
| Net Income margin, % | 4.40% | 4.58% | 4.26% | 6.87% | 7.03% |
|---|
| |
| CAPEX | 250 | 578 | 1,164 | 2,667 | 1,481 |
|---|
| CAPEX/Revenue, % | 5.26% | 8.84% | 15.2% | 24.3% | 11.4% |
|---|
| Debt | 1,374 | 2,152 | 2,705 | 4,417 | 4,822 |
|---|
| Cash | 53 | 225 | 327 | 160 | 524 |
|---|
| Net Debt/EBITDA | 2.0x | 2.2x | 2.4x | 2.7x | 2.1x |
|---|
| |
| ROIC, % | 12.8% | 15.8% | 14.2% | 18.4% | 17.4% |
|---|
| ROE, % | 9.9% | 12.9% | 12.5% | 23.9% | 23.1% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. The company showed fast EBITDA margin growth of 1.70 pp from 14.5% to 16.2% in FY2015. If we look for the longer period the company's EBITDA margin surged on 2.70 pp from 13.5% in FY2012 to 16.2% in FY2015.
We call Granules India an attractive growth stock as together with the growth it delivers high ROIC at 17.4%. Three years ago it was a bit lower at 15.8%. For the last three years the average ROIC was 16.7%.
The company's Net Income margin increased slightly on 0.100 pp from 6.90% to 7% in FY2015. If we look for the longer period Net Income margin surged on 2.40 pp from 4.60% in FY2012 to 7% in FY2015.
Granules India operates at ROE of 23.1%. It's average level of ROE for the last three years was 19.8%.
Capital expenditures (CAPEX)
To fuel this fast growth the company had to invest in CAPEX.In FY2015 the company had CAPEX/Revenue of 11.4%. CAPEX/Revenue surged on 2.61 pp from 8.84% in FY2012 to 11.4% in FY2015. Average CAPEX/Revenue for the last three years was 17.0%.
Leverage (Debt)
Granules India has medium debt level at 2.1x Net Debt/EBITDA to maintain high growth. In the longer period Granules India's leverage decreased on 0.13x from 2.18x in FY2012 to 2.05x in FY2015.
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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| 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 |
