Dai-Ichi Karkaria reports 77.2% EBITDA growth and 22.8% Revenue growth

05-05-2015 • About Dai-Ichi Karkaria ($DAICHI) • By InTwits

Dai-Ichi Karkaria reported FY2015 financial results today. Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Dai-Ichi Karkaria ($DAICHI) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	639	772	1,014	1,474	1,810	22.8%
EBITDA	74	66	59	126	223	77.2%
Net Income	45	42	66	156	233	49.3%
Balance Sheet
Cash	98	108	110		94
Short Term Debt			0		3
Long Term Debt	12	11	11		8
Cash flow
Capex	15	25			29
Ratios
Revenue growth	-68.8%	20.7%	31.4%	45.4%	22.8%
EBITDA growth	58.3%	-11.0%	-11.1%	114.9%	77.2%
EBITDA Margin	11.6%	8.5%	5.8%	8.5%	12.3%	3.8%
Net Income Margin	7.0%	5.5%	6.5%	10.6%	12.9%	2.3%
CAPEX, % of revenue	2.4%	3.2%			1.6%	1.6%
ROIC	9.2%	7.7%	5.8%			0.0%
ROE	6.7%	6.2%	9.2%			0.0%
Net Debt/EBITDA	-1.2x	-1.5x	-1.7x	0.0x	-0.4x	-0.4x

Revenue and profitability

Dai-Ichi Karkaria's Revenue jumped on 22.8% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.8 pp from 8.5% to 12.3% in FY2015.

Net Income marign increased on 2.3 pp from 10.6% to 12.9% in FY2015.

Capital expenditures (CAPEX) and working capital investments

Dai-Ichi Karkaria's CAPEX/Revenue was 1.6% in FY2015. The company showed small CAPEX/Revenue decline of 1.6 pp from 3.2% in FY2012 to 1.6% in FY2015.

Leverage (Debt)

Debt level is -0.4x Net Debt / EBITDA and 0.0x Debt / EBITDA. Net Debt / EBITDA dropped0.4x from 0x to -0.4x in FY2015. Debt surged while cash surged.

Valuation

The company's trades at EV/EBITDA 6.2x and P/E 6.3x while industy averages are 10.5x and 26.1x.

Appendix 1: Peers in Specialty Chemicals

Below we provide Dai-Ichi Karkaria benchmarking against other companies in Specialty 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	FY2011	FY2012	FY2013	FY2014	FY2015
Dynemic Products ($DYNPRO)	-55.8%	27.4%	-0.0%	40.6%
Camlin Fine Sciences ($CAMLINFIN)	-75.1%	95.3%	11.4%	36.1%
Sudarshan Chemical Industries ($SUDARSCHEM)	-49.4%	10.5%	9.1%	28.2%
Vinati Organics ($VINATIORGA)	-63.9%	38.7%	23.6%	25.9%
Kiri Industries ($KIRIINDUS)	244.4%	7.9%	-86.5%	24.8%
Median (27 companies)	-50.1%	20.1%	11.4%	11.3%	-0.8%
Dai-Ichi Karkaria ($DAICHI)		20.7%	31.4%	45.4%	22.8%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Vinati Organics ($VINATIORGA)	21.7%	21.7%	21.8%	22.7%
Adi Finechem ($ADIFINCHM)	18.2%	15.1%	14.0%	22.1%	16.5%
Solar Industries India ($SOLARINDS)	18.1%	18.5%	17.5%	17.9%
Ultramarine & Pigments ($ULTRAMAR)	20.1%	18.0%	15.5%	17.4%
Anil ($ANILLTD)	17.4%	18.1%	16.9%	17.1%
Median (25 companies)	11.3%	10.7%	12.8%	10.6%	10.5%
Dai-Ichi Karkaria ($DAICHI)	11.6%	8.5%	5.8%	8.5%	12.3%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Adi Finechem ($ADIFINCHM)	8.2%	7.3%	4.8%	12.6%	16.9%
Solar Industries India ($SOLARINDS)	14.2%	13.0%	9.9%	12.3%
Nitta Gelatin India ($NITTAGELA)	21.3%	8.8%	4.6%	8.5%
Meghmani Organics ($MEGH)	9.9%	10.2%	10.3%	7.9%
Camlin Fine Sciences ($CAMLINFIN)	7.5%	4.3%	5.7%	7.1%
Median (19 companies)	7.3%	5.2%	4.6%	4.4%	9.1%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Adi Finechem ($ADIFINCHM)	27.6%	30.6%	29.8%	46.4%	26.3%
Vinati Organics ($VINATIORGA)	31.4%	29.6%	26.2%	30.6%
Pidilite Industries ($PIDILITIND)	29.3%	27.4%	29.3%	29.8%
Camlin Fine Sciences ($CAMLINFIN)	9.9%	11.1%	17.8%	24.2%
Plastiblends India ($PLASTIBLEN)	19.4%	18.3%	15.8%	24.0%
Median (35 companies)	15.5%	15.3%	15.0%	11.4%	21.7%
Dai-Ichi Karkaria ($DAICHI)	9.2%	7.7%	5.8%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Cochin Minerals & Rutile ($COCHINM)	0.7x	-0.0x	-0.0x	32.3x
Alkali Metals ($ALKALI)	4.3x		5.1x	11.6x
Kiri Industries ($KIRIINDUS)	3.9x	8.2x	31.3x	10.6x
Vikas Globalone ($VIKASGLOB)	0.0x	2.5x	4.4x	4.9x
Jayant Agro-Organics ($JAYAGROGN)	3.9x	2.8x	3.1x	4.6x
Median (28 companies)	1.5x	1.5x	1.7x	1.7x	1.1x
Dai-Ichi Karkaria ($DAICHI)	-1.2x	-1.5x	-1.7x	0.0x	-0.4x

Dai-Ichi Karkaria stock price chart

Dai-Ichi Karkaria financials

mln.	FY2010	FY2011	FY2012

Revenue	2,049	639.5	771.7
EBITDA	46.717	73.952	65.837
Net income	57.006	44.519	42.348
CAPEX	9.570	15.130	24.796
Debt	13.589	12.237	11.422
Cash	21.116	97.974	108.1

About Dai-Ichi Karkaria

Dai-ichi Karkaria Limited manufactures and sells specialty chemicals in India. It offers colorants, such as dispersing, deflocculating, emulsifying, penetrating, and surface treatment agents, as well as pigment loading and tone improvers; construction chemicals, including grouting agents for construction of dam and cannel, workability improvers for cement, emulsifiers for bitumen and asphalt emulsion, foaming agents for cement bricks, dispersing agents for cement paints, and defoamers for cement paints; and emulsifiers for cosmetics and pharma industries. The company also provides CFC/ethane substitute waterborne/non water borne washing agents and electro conducting agents for electronic and electrical industries; leather chemicals, such as penetrating, softening, finishing, and washing agents; metal treatment chemicals, including cleaning agents, emulsifying agents for electroplating bath, and defoaming and degreasing agents; and oil field chemicals, such as flow improvers/pour point depressants, demulsifier and desalting agents, acid corrosion inhibitors, bactericides, emulsifiers and mud surfactants, and dispersants for oil spills. In addition, it offers defoaming, de-inking, fixing, penetrating/wettign, and washing agents for the paper and pulp industry; pesticide and weedicide formulations; chemicals for the plastic and PVC industry; polymers and adhesive lattices; additives, chelating agents, finishing agents, rayon filaments, and viscose modifiers, as well as pulp and spin bath additives for the rayon industry; acrylic sizing, afterwatering, and antistatic agent, as well as lubricants for sizing; spin finishes; pretreatment, coloration, and finishing chemicals for the textiles industry; and flocculants and chelating agents used in water treatment and related industries. The company was incorporated in 1960 and is based in Mumbai, India.