Jain Irrigation Systems Debt increased on 6.8% in 2015 and EBITDA increased on 4.4%

07-05-2015 • About Jain Irrigation Systems ($JISLJALEQS) • By InTwits

Jain Irrigation Systems reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Jain Irrigation Systems has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.7%. At the same time it's in pair with industry average of 7.7%.
CAPEX is quite volatile: 2,205 in FY2015, 3,322 in FY2014, 3,000 in FY2013, 5,387 in FY2012, 4,952 in FY2011
The company has business model with low profitability: ROIC is at 8.6%
It operates with high leverage: Net Debt/EBITDA is 4.8x while industry average is 1.3x

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Jain Irrigation Systems ($JISLJALEQS) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	40,711	49,206	50,217	58,281	61,527	5.6%
SG&A				307	387	25.9%
EBITDA	7,578	8,167	6,332	7,327	7,650	4.4%
Net Income	2,807	2,235	31	-398	554
Balance Sheet
Cash	4,110	3,293	2,337	1,940	3,010	55.2%
Short Term Debt	19,677	21,950	20,041	21,889	22,401	2.3%
Long Term Debt	10,175	12,326	14,329	14,977	16,957	13.2%
Cash flow
Capex	4,952	5,387	3,000	3,322	2,205	-33.6%
Ratios
Revenue growth	20.2%	20.9%	2.1%	16.1%	5.6%
EBITDA growth	27.9%	7.8%	-22.5%	15.7%	4.4%
EBITDA Margin	18.6%	16.6%	12.6%	12.6%	12.4%	-0.1%
Net Income Margin	6.9%	4.5%	0.1%	-0.7%	0.9%	1.6%
SG&A, % of revenue				0.5%	0.6%	0.1%
CAPEX, % of revenue	12.2%	10.9%	6.0%	5.7%	3.6%	-2.1%
ROIC	15.0%	13.4%	8.3%	9.0%	8.6%	-0.4%
ROE	20.3%	13.5%	0.2%	-1.8%	2.6%	4.4%
Net Debt/EBITDA	3.4x	3.8x	5.1x	4.8x	4.8x	-0.0x

Revenue and profitability

The company's Revenue increased on 5.6% in FY2015. EBITDA Margin showed almost no change in FY2015.

SG&A as a % of Revenue showed almost no change in FY2015.

Net Income marign increased slightly on 1.6 pp from -0.68% to 0.90% in FY2015.

Capital expenditures (CAPEX) and working capital investments

The company's CAPEX/Revenue was 3.6% in FY2015. Jain Irrigation Systems's CAPEX/Revenue decreased on 7.4 pp from 10.9% in FY2012 to 3.6% in FY2015. It's average level of CAPEX/Revenue for the last three years was 5.1%.

Return on investment

The company operates at low ROIC (8.60%) and ROE (2.57%). ROIC showed almost no change in FY2015. ROE increased on 4.4 pp from -1.8% to 2.6% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 4.8x and Debt / EBITDA is 5.1x. Net Debt / EBITDA decreased slightly on 0.016x from 4.8x to 4.8x in FY2015. Debt increased on 6.8% in FY2015 while cash surged on 55.2% in FY2015.

Valuation

The company's trades at EV/EBITDA 4.8x and P/E 1.2x while industy averages are 10.5x and 26.1x. Jain Irrigation Systems's EV/(EBITDA-CAPEX) is 6.8x with the industry average at 4.7x.

Appendix 1: Peers in Plastic Products

Below we provide Jain Irrigation Systems benchmarking against other companies in Plastic Products 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
Acrysil ($ACRYSIL)	-62.7%	11.3%	29.6%	33.8%
Astral Poly Technik ($ASTRAL)	41.6%	41.7%	41.6%	30.8%
Shaily Engineering Plastics ($SHAILY)	-37.7%	14.9%	-16.0%	23.3%
Wim Plast ($WIMPLAST)	-63.9%	27.5%	23.1%	19.5%
Responsive Industries ($RESPONIND)	-52.3%	42.7%	29.4%	15.5%
Median (11 companies)	-50.4%	15.3%	24.4%	12.6%
Jain Irrigation Systems ($JISLJALEQS)		20.9%	2.1%	16.1%	5.6%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Wim Plast ($WIMPLAST)	18.5%	18.1%	17.9%	18.1%
Acrysil ($ACRYSIL)	19.2%	12.4%	16.8%	17.5%
Shaily Engineering Plastics ($SHAILY)	11.5%	14.3%	13.9%	16.0%
Astral Poly Technik ($ASTRAL)	13.5%	14.2%	14.2%	14.8%
Flexituff International ($FLEXITUFF)	13.1%	15.1%	13.5%	11.1%
Median (9 companies)	11.1%	11.7%	11.2%	11.1%
Jain Irrigation Systems ($JISLJALEQS)	18.6%	16.6%	12.6%	12.6%	12.4%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Flexituff International ($FLEXITUFF)	11.0%	10.8%	10.3%	15.7%
Shaily Engineering Plastics ($SHAILY)	1.9%	3.7%		10.7%
Acrysil ($ACRYSIL)	21.2%	7.8%	11.0%	9.6%
Astral Poly Technik ($ASTRAL)	9.3%	11.9%	8.4%	8.6%
Responsive Industries ($RESPONIND)	18.7%	14.7%	10.3%	6.9%
Median (7 companies)	5.4%	7.8%	8.4%	8.6%
Jain Irrigation Systems ($JISLJALEQS)	12.2%	10.9%	6.0%	5.7%	3.6%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Astral Poly Technik ($ASTRAL)	22.6%	29.3%	31.1%	33.3%
Wim Plast ($WIMPLAST)	31.0%	31.8%	31.2%	31.0%
Acrysil ($ACRYSIL)		7.7%	16.2%	20.2%
Shaily Engineering Plastics ($SHAILY)	12.1%	19.5%	15.0%	19.3%
Flexituff International ($FLEXITUFF)	14.7%	18.6%	15.9%	11.0%
Median (21 companies)	12.1%	10.0%	11.8%	19.3%
Jain Irrigation Systems ($JISLJALEQS)	15.0%	13.4%	8.3%	9.0%	8.6%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Flexituff International ($FLEXITUFF)	3.5x	2.2x	3.1x	4.3x
Responsive Industries ($RESPONIND)	1.9x	3.3x	2.9x	2.4x
Acrysil ($ACRYSIL)	1.9x	2.9x	2.2x	2.0x
Shaily Engineering Plastics ($SHAILY)	4.0x	1.9x	1.8x	1.9x
Astral Poly Technik ($ASTRAL)	0.4x	1.0x	0.7x	0.9x
Median (12 companies)	2.2x	2.1x	2.2x	0.4x
Jain Irrigation Systems ($JISLJALEQS)	3.4x	3.8x	5.1x	4.8x	4.8x

Jain Irrigation Systems stock price chart

Jain Irrigation Systems financials

mln.	FY2010	FY2011	FY2012

Revenue	33,858	40,711	49,206
EBITDA	5,926	7,578	8,167
Net income	2,476	2,807	2,235
CAPEX	4,657	4,952	5,387
Debt	24,447	29,853	34,276
Cash	4,940	4,110	3,293

About Jain Irrigation Systems

Jain Irrigation Systems Limited, together with its subsidiaries, operates as an agri-business company in India, Europe, North America, and rest of the world. The company operates through Hi-Tech Agri Input Products, Industrial Products, and Non-Conventional Energy segments. It supplies agricultural inputs, such as drip irrigation systems, sprinkler irrigation systems, PVC piping systems, water well casing, screens and sure-loc pipes, HDPE and MDPE piping systems, spray pipes, tissue culture banana plants, and vermicompost; and processes agricultural produce, including onion and vegetable dehydration, banana, mango, and fruit processing, and jatropha cultivation. The company is also involved in the cultivation and supply of agricultural crops; and provision of agricultural and engineering consultancy, as well as agricultural services. In addition, it offers polyethylene piping systems; EX-CEL plastic sheets; pipe fittings; and protected cultivation products, including green houses, poly houses and tunnels, and net houses, as well as develops solar photovoltaic modules, solar water heaters, solar pumping systems, solar lighting and appliances, bio-energy products, and steam generation systems. The company offers its products for the urban household, urban housing, community development, mining, plant tissue culture, chemical, oil and gas exploration, optic fiber ducting, advertisement and signage, landscaping, water shed development, waste land development, fruit and vegetable processing, and farm production and management markets, as well as for small farmers, green houses, and sugar factories. Jain Irrigation Systems Limited also exports its products. The company was founded in 1963 and is headquartered in Jalgaon, India.