Aditya Birla Chemicals (India) reports 48.7% CAPEX decline while 5.6% Revenue growth
13-05-2015 • About Aditya Birla Chemicals (India) (
$ABCIL) • By InTwits
Aditya Birla Chemicals (India) reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Aditya Birla Chemicals (India) has high CAPEX intensity: 5 year average CAPEX/Revenue was 42.6%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: 1,685 in FY2015, 3,286 in FY2014, 1,827 in FY2013, 8,337 in FY2012, 140 in FY2011
- The company has business model with average profitability: ROIC is at 11.6%
- It operates with high leverage: Net Debt/EBITDA is 4.3x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Aditya Birla Chemicals (India) ($ABCIL) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 2,362 | 6,091 | 7,552 | 10,662 | 11,257 | 5.6% |
| EBITDA | 793 | 1,631 | 2,049 | 2,514 | 2,462 | -2.0% |
| Net Income | 623 | 43 | 196 | 497 | 373 | -25.0% |
Balance Sheet
|
|---|
| Cash | 100 | 12 | 177 | 31 | 17 | -44.6% |
| Short Term Debt | 124 | 1,068 | 2,299 | 2,710 | 3,815 | 40.8% |
| Long Term Debt | 138 | 6,823 | 5,859 | 7,332 | 6,703 | -8.6% |
Cash flow
|
|---|
| Capex | 140 | 8,337 | 1,827 | 3,286 | 1,685 | -48.7% |
Ratios
|
|---|
| Revenue growth | -82.2% | 157.8% | 24.0% | 41.2% | 5.6% | |
| EBITDA growth | 4.2% | 105.7% | 25.7% | 22.7% | -2.0% | |
| EBITDA Margin | 33.6% | 26.8% | 27.1% | 23.6% | 21.9% | -1.7% |
| Net Income Margin | 26.4% | 0.7% | 2.6% | 4.7% | 3.3% | -1.4% |
| CAPEX, % of revenue | 5.9% | 136.9% | 24.2% | 30.8% | 15.0% | -15.9% |
| ROIC | 15.0% | 13.5% | 11.7% | 12.5% | 11.6% | -0.9% |
| ROE | 19.4% | 1.2% | 5.3% | 12.4% | 8.6% | -3.9% |
| Net Debt/EBITDA | 0.2x | 4.8x | 3.9x | 4.0x | 4.3x | 0.3x |
Revenue and profitability
Aditya Birla Chemicals (India)'s Revenue increased on 5.6% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.7 pp from 23.6% to 21.9% in FY2015.
Net Income marign decreased slightly on 1.4 pp from 4.7% to 3.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 15.0% in FY2015. Aditya Birla Chemicals (India)'s CAPEX/Revenue dropped on 122 pp from 137% in FY2012 to 15.0% in FY2015. Average CAPEX/Revenue for the last three years was 23.3%.Aditya Birla Chemicals (India) maintained rich investment policy and has spent a big chunk of EBITDA (68.4%) to CAPEX.
Return on investment
The company operates at low ROIC (11.60%) and ROE (8.58%). ROIC decreased slightly on 0.89 pp from 12.5% to 11.6% in FY2015. ROE decreased on 3.9 pp from 12.4% to 8.6% in FY2015.
Leverage (Debt)
Debt level is 4.3x Net Debt / EBITDA and 4.3x Debt / EBITDA. Net Debt / EBITDA jumped on 0.3x from 4.0x to 4.3x in FY2015. Debt increased on 4.7% in FY2015 while cash dropped on 44.6% in FY2015.
Valuation
The company's trades at EV/EBITDA 6.3x and P/E 13.1x while industy averages are 10.5x and 26.1x. The company's EV/(EBITDA-CAPEX) is 19.8x with the industry average at 4.7x.
Appendix 1: Peers in Commodity Chemicals
Below you can find Aditya Birla Chemicals (India) benchmarking vs. other companies in Commodity Chemicals industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shree Hari Chemicals Export ($SHHARICH) | -52.2% | -2.5% | -78.0% | 299.5% | |
| Jindal Poly Films ($JINDPOLBBPH) | -66.5% | -17.2% | -6.3% | 131.7% | |
| Bodal Chemicals ($BODALCHEM) | -51.3% | 5.4% | -12.6% | 80.0% | |
| Kanoria Chemicals & Industries ($KANORICHEM) | -22.3% | -40.7% | 27.2% | 47.9% | |
| Camphor & Allied Products ($CAMPHOR) | -49.0% | -6.7% | 7.2% | 42.7% | |
| |
|---|
| Median (35 companies) | -42.0% | 15.5% | 10.9% | 10.6% | 4.2% |
|---|
| Aditya Birla Chemicals (India) ($ABCIL) | | 157.8% | 24.0% | 41.2% | 5.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shree Hari Chemicals Export ($SHHARICH) | 8.3% | 1.8% | -19.4% | 29.4% | |
| Chemfab Alkalis ($CHEMFALKAL) | 19.0% | 22.3% | 32.9% | 24.2% | 19.8% |
| Bodal Chemicals ($BODALCHEM) | 10.6% | 1.8% | 5.6% | 20.4% | |
| Alkyl Amines Chemicals ($ALKYLAMINE) | 13.3% | 15.9% | 16.0% | 19.0% | |
| Iol Chemicals & Pharmaceuticals ($IOLCP) | 17.4% | 14.6% | 18.5% | 17.0% | |
| |
|---|
| Median (31 companies) | 12.1% | 10.9% | 8.3% | 8.5% | 6.1% |
|---|
| Aditya Birla Chemicals (India) ($ABCIL) | 33.6% | 26.8% | 27.1% | 23.6% | 21.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chemfab Alkalis ($CHEMFALKAL) | 5.1% | 2.2% | 15.8% | 55.6% | |
| Jindal Poly Films ($JINDPOLBBPH) | 2.9% | 6.9% | 2.1% | 27.5% | |
| Polyplex Corporation ($POLYPLEX) | 6.0% | 10.7% | 41.3% | 19.2% | |
| Kanoria Chemicals & Industries ($KANORICHEM) | 12.9% | 25.1% | 6.0% | 13.4% | |
| Aarti Industries ($AARTIIND) | 4.8% | 8.0% | 11.2% | 11.0% | 10.4% |
| |
|---|
| Median (19 companies) | 5.6% | 5.2% | 6.3% | 5.4% | 6.2% |
|---|
| Aditya Birla Chemicals (India) ($ABCIL) | 5.9% | 136.9% | 24.2% | 30.8% | 15.0% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Riddhi Siddhi Gluco Biols ($RIDDHI) | -0.2% | -1.3% | -0.6% | 61.1% | |
| Bodal Chemicals ($BODALCHEM) | | -1.3% | 3.3% | 39.0% | |
| Elantas Beck India ($ELANTAS) | 17.5% | 20.4% | 33.9% | 31.0% | |
| Alkyl Amines Chemicals ($ALKYLAMINE) | 10.3% | 16.0% | 18.7% | 25.0% | |
| Aarti Industries ($AARTIIND) | 13.1% | 15.9% | 19.1% | 17.2% | 17.9% |
| |
|---|
| Median (59 companies) | 10.5% | 9.0% | 9.5% | 8.9% | 11.6% |
|---|
| Aditya Birla Chemicals (India) ($ABCIL) | 15.0% | 13.5% | 11.7% | 12.5% | 11.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| India Glycols ($INDIAGLYCO) | 8.2x | 4.8x | 3.7x | 8.5x | |
| Godrej Industries ($GODREJIND) | 6.8x | 9.9x | 5.7x | 7.9x | |
| Polyplex Corporation ($POLYPLEX) | 0.6x | 0.9x | 6.8x | 7.1x | |
| Link Pharma Chem ($LINKPH) | 71.1x | 3.4x | 4.1x | 6.2x | |
| Refnol Resins & Chemicals ($REFNOL) | | | 4.1x | 5.6x | 0.0x |
| |
|---|
| Median (41 companies) | 2.5x | 2.6x | 3.0x | 0.8x | 0.0x |
|---|
| Aditya Birla Chemicals (India) ($ABCIL) | 0.2x | 4.8x | 3.9x | 4.0x | 4.3x |
