Monsanto India reports 433% Net Income growth and 13.6 pp EBITDA Margin growth from 7.3% to 20.9%
14-05-2015 • About Monsanto India (
$MONSANTO) • By InTwits
Monsanto India reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Monsanto India is a company in decline: FY2015 revenue growth was -4.6%, 5 years revenue CAGR was -4.1%
- Monsanto India has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.4%. At the same time it's a lot of higher than industry average of 1.6%.
- CAPEX is quite volatile: 282 in FY2015, 363 in FY2014, 212 in FY2013, 144 in FY2012, 129 in FY2011
- The company has highly profitable business model: ROIC is at 29.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Monsanto India ($MONSANTO) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 3,634 | 3,738 | 4,365 | 5,831 | 5,564 | -4.6% |
| EBITDA | 665 | 564 | 716 | 423 | 1,163 | 174.8% |
| Net Income | 428 | 502 | 673 | 199 | 1,063 | 433.1% |
Balance Sheet
|
|---|
| Cash | 57 | 38 | 27 | 75 | 56 | -26.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | 0 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 121 | 123 | 86 | 114 | 94 | -17.8% |
Ratios
|
|---|
| Revenue growth | -46.9% | 2.9% | 16.8% | 33.6% | -4.6% | |
| EBITDA growth | 5.4% | -15.1% | 26.9% | -40.9% | 174.8% | |
| EBITDA Margin | 18.3% | 15.1% | 16.4% | 7.3% | 20.9% | 13.6% |
| Net Income Margin | 11.8% | 13.4% | 15.4% | 3.4% | 19.1% | 15.7% |
| CAPEX, % of revenue | 3.3% | 3.3% | 2.0% | 1.9% | 1.7% | -0.3% |
| ROIC | 15.1% | 12.4% | 15.3% | 7.8% | 29.2% | 21.3% |
| ROE | 11.8% | 13.2% | 17.0% | 5.2% | 28.9% | 23.7% |
| Net Debt/EBITDA | -0.1x | -0.1x | -0.0x | -0.2x | -0.0x | 0.1x |
Revenue and profitability
Monsanto India's Revenue decreased on 4.6% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 13.6 pp from 7.3% to 20.9% in FY2015.
Net Income marign jumped on 15.7 pp from 3.4% to 19.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Monsanto India had CAPEX/Revenue of 1.7%. The company showed small CAPEX/Revenue decline of 1.6 pp from 3.3% in FY2012 to 1.7% in FY2015. Average CAPEX/Revenue for the last three years was 1.9%.
Return on investment
The company operates at high and attractive ROIC (29.17%) and ROE (28.88%). ROIC jumped on 21.3 pp from 7.8% to 29.2% in FY2015. ROE jumped on 23.7 pp from 5.2% to 28.9% in FY2015.
Leverage (Debt)
The company has no debt. Cash dropped on 26% in FY2015.
Valuation
Monsanto India's trades at EV/EBITDA 42.9x and P/E 47.0x while industy averages are 10.5x and 26.1x. Monsanto India's EV/(EBITDA-CAPEX) is 46.7x with the industry average at 4.7x.
Appendix 1: Peers in Agrochemicals
Below you can find Monsanto India benchmarking vs. other companies in Agrochemicals 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 |
|---|
| Insecticides (India) ($INSECTICID) | -59.4% | 15.9% | 18.2% | 40.1% | |
| P.I.Industries ($PIIND) | -69.9% | 22.2% | 31.0% | 38.9% | |
| Rallis India ($RALLIS) | | 17.4% | 14.4% | 19.8% | 4.3% |
| Astec Lifesciences Limited ($ASTEC) | -65.8% | 2.6% | 55.7% | 18.4% | |
| Bhagiradha Chemicals & Industries ($BHAGCHEM) | -76.4% | 15.2% | 113.6% | 18.4% | |
| |
|---|
| Median (7 companies) | -65.8% | 15.9% | 21.7% | 18.4% | -1.2% |
|---|
| Monsanto India ($MONSANTO) | | 2.9% | 16.8% | 33.6% | -4.6% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| P.I.Industries ($PIIND) | 15.5% | 17.0% | 15.8% | 18.4% | |
| Astec Lifesciences Limited ($ASTEC) | 14.5% | 15.5% | 16.7% | 17.1% | |
| Rallis India ($RALLIS) | 18.2% | 16.2% | 14.7% | 15.2% | 15.4% |
| Insecticides (India) ($INSECTICID) | 9.9% | 11.0% | 11.3% | 10.6% | |
| Excel Industries ($EXCELINDUS) | 12.6% | 8.5% | 10.9% | 9.8% | |
| |
|---|
| Median (6 companies) | 12.6% | 11.0% | 11.3% | 12.9% | 15.4% |
|---|
| Monsanto India ($MONSANTO) | 18.3% | 15.1% | 16.4% | 7.3% | 20.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Astec Lifesciences Limited ($ASTEC) | 32.6% | 41.7% | 14.9% | 9.2% | |
| Excel Industries ($EXCELINDUS) | 3.7% | 7.6% | 5.7% | 8.5% | |
| P.I.Industries ($PIIND) | 13.5% | 13.4% | 13.2% | 4.0% | |
| Insecticides (India) ($INSECTICID) | 13.3% | 10.7% | 8.1% | 3.9% | |
| Rallis India ($RALLIS) | 12.1% | 4.5% | 3.2% | 3.4% | 3.3% |
| |
|---|
| Median (5 companies) | 12.1% | 9.1% | 8.1% | 4.0% | 3.0% |
|---|
| Monsanto India ($MONSANTO) | 3.3% | 3.3% | 2.0% | 1.9% | 1.7% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| P.I.Industries ($PIIND) | 22.4% | 23.9% | 22.5% | 31.3% | |
| Rallis India ($RALLIS) | 32.6% | 26.3% | 25.3% | 28.3% | 25.4% |
| Insecticides (India) ($INSECTICID) | 23.5% | 19.2% | 15.6% | 15.7% | |
| Excel Industries ($EXCELINDUS) | 13.8% | 8.5% | 14.2% | 11.9% | |
| Astec Lifesciences Limited ($ASTEC) | 7.2% | 5.6% | 9.7% | 10.7% | |
| |
|---|
| Median (9 companies) | 13.8% | 6.4% | 9.7% | 15.7% | 25.4% |
|---|
| Monsanto India ($MONSANTO) | 15.1% | 12.4% | 15.3% | 7.8% | 29.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Insecticides (India) ($INSECTICID) | 0.8x | 2.7x | 3.0x | 2.7x | |
| Excel Industries ($EXCELINDUS) | 1.4x | 2.7x | 1.6x | 2.3x | |
| Astec Lifesciences Limited ($ASTEC) | 2.7x | 4.1x | 2.4x | 2.3x | |
| P.I.Industries ($PIIND) | 2.1x | 1.6x | 1.2x | 0.3x | |
| Rallis India ($RALLIS) | 0.5x | 0.7x | 0.1x | 0.2x | 0.4x |
| |
|---|
| Median (7 companies) | 1.6x | 3.4x | 3.0x | 0.3x | 1.5x |
|---|
| Monsanto India ($MONSANTO) | -0.1x | -0.1x | -0.0x | -0.2x | -0.0x |
