Asian Paints Net Income jumped on 14.5% in 2015 and Revenue jumped on 11.3%
18-05-2015 • About Asian Paints (
$ASIANPAINT) • By InTwits
Asian Paints reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is relatively stable: 16.0% in FY2015 vs. 16.0% in FY2014 vs. 17.3% in FY2011
- Asian Paints has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.8%. At the same time it's a lot of higher than industry average of 11.1%.
- CAPEX is quite volatile: 4,538 in FY2015, 2,510 in FY2014, 6,438 in FY2013, 5,464 in FY2012, 1,561 in FY2011
- The company has highly profitable business model: ROIC is at 37.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Asian Paints ($ASIANPAINT) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 76,910 | 95,983 | 108,744 | 125,816 | 140,053 | 11.3% |
| EBITDA | 13,281 | 15,384 | 17,379 | 20,170 | 22,378 | 10.9% |
| Net Income | 8,432 | 9,887 | 11,139 | 12,188 | 13,952 | 14.5% |
Balance Sheet
|
|---|
| Cash | 1,433 | 2,283 | 2,535 | 2,290 | 2,044 | -10.7% |
| Short Term Debt | 1,753 | 2,858 | 2,037 | 2,078 | 3,399 | 63.6% |
| Long Term Debt | 581 | 553 | 473 | 414 | 783 | 89.1% |
Cash flow
|
|---|
| Capex | 1,561 | 5,464 | 6,438 | 2,510 | 4,538 | 80.8% |
Ratios
|
|---|
| Revenue growth | -62.1% | 24.8% | 13.3% | 15.7% | 11.3% | |
| EBITDA growth | 8.2% | 15.8% | 13.0% | 16.1% | 10.9% | |
| EBITDA Margin | 17.3% | 16.0% | 16.0% | 16.0% | 16.0% | -0.1% |
| Net Income Margin | 11.0% | 10.3% | 10.2% | 9.7% | 10.0% | 0.3% |
| CAPEX, % of revenue | 2.0% | 5.7% | 5.9% | 2.0% | 3.2% | 1.2% |
| ROIC | 50.4% | 47.1% | 43.0% | 39.8% | 37.1% | -2.7% |
| ROE | 43.3% | 40.1% | 36.3% | 32.8% | 31.8% | -1.1% |
| Net Debt/EBITDA | 0.1x | 0.1x | -0.0x | 0.0x | 0.1x | 0.1x |
Revenue and profitability
The company's Revenue surged on 11.3% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.89 pp from 32.4% to 31.5% in FY2015.
Net Income marign showed almost no change in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 3.2%. CAPEX/Revenue decreased on 2.5 pp from 5.7% in FY2012 to 3.2% in FY2015. Average CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at high and attractive ROIC (37.12%) and ROE (31.77%). ROIC decreased on 2.7 pp from 39.8% to 37.1% in FY2015. ROE decreased slightly on 1.1 pp from 32.8% to 31.8% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is 0.2x. Net Debt / EBITDA increased on 0.1x from 0.0100x to 0.1x in FY2015. Debt surged on 67.8% in FY2015 while cash dropped on 10.7% in FY2015.
Valuation
The company's trades at EV/EBITDA 33.0x and P/E 52.7x while industy averages are 10.5x and 26.1x. Asian Paints's EV/(EBITDA-CAPEX) is 41.3x with the industry average at 4.7x.
Management team
The company's CEO is K B S Anand. K B S Anand has 6 years tenure at the company.
Appendix 1: Peers in Furniture-Furnishing-Paints
Below we provide Asian Paints benchmarking against other companies in Furniture-Furnishing-Paints 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 |
|---|
| Kajaria Ceramics ($KAJARIACER) | | 37.7% | 22.8% | 13.9% | 19.1% |
| Murudeshwar Ceramics ($MURUDCERA) | 10.1% | 3.6% | -19.5% | 1.3% | |
| Nitco ($NITCO) | -33.7% | 31.0% | -8.1% | 0.1% | |
| Shalimar Paints ($SHALPAINTS) | -21.8% | 19.5% | 2.5% | -3.2% | |
| Hanung Toys & Textiles ($HANUNG) | 630.6% | 24.6% | 27.6% | -73.8% | |
| |
|---|
| Median (5 companies) | -5.8% | 24.6% | 2.5% | 0.1% | 19.1% |
|---|
| Asian Paints ($ASIANPAINT) | | 24.8% | 13.3% | 15.7% | 11.3% |
Top companies by EBITDA margin, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Murudeshwar Ceramics ($MURUDCERA) | 30.6% | 23.6% | 21.8% | 21.6% | |
| Kajaria Ceramics ($KAJARIACER) | 15.8% | 15.8% | 15.3% | 15.6% | 16.3% |
| Shalimar Paints ($SHALPAINTS) | 7.2% | 7.8% | 7.6% | 3.0% | |
| Hanung Toys & Textiles ($HANUNG) | 21.2% | 21.7% | 20.0% | -83.2% | |
| |
|---|
| Median (4 companies) | 15.8% | 15.8% | 15.3% | 9.3% | 16.3% |
|---|
| Asian Paints ($ASIANPAINT) | 17.3% | 16.0% | 16.0% | 16.0% | 16.0% |
Top companies by CAPEX/Revenue, %
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kajaria Ceramics ($KAJARIACER) | 17.5% | 5.7% | 9.6% | 8.5% | 12.3% |
| Shalimar Paints ($SHALPAINTS) | 1.3% | 0.7% | 2.1% | 2.8% | |
| |
|---|
| Median (2 companies) | 13.3% | 5.7% | 7.6% | 5.7% | 12.3% |
|---|
| Asian Paints ($ASIANPAINT) | 2.0% | 5.7% | 5.9% | 2.0% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kajaria Ceramics ($KAJARIACER) | | 27.9% | 28.6% | 28.8% | 29.8% |
| Shalimar Paints ($SHALPAINTS) | 23.6% | 25.9% | 22.2% | 6.2% | |
| Hanung Toys & Textiles ($HANUNG) | 17.2% | 15.6% | 13.6% | -18.4% | |
| Bil Continental ($BILCONTI) | | | 4.4% | | |
| Neycer India ($NEYCERI) | | | -6.5% | | |
| |
|---|
| Median (10 companies) | 12.7% | 10.7% | 4.7% | 6.2% | 29.8% |
|---|
| Asian Paints ($ASIANPAINT) | 50.4% | 47.1% | 43.0% | 39.8% | 37.1% |
Top companies by Net Debt / EBITDA
| Top | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Shalimar Paints ($SHALPAINTS) | 1.7x | 1.5x | 1.9x | 7.3x | |
| Kajaria Ceramics ($KAJARIACER) | 1.9x | 1.3x | 1.3x | 0.8x | 0.7x |
| Bil Continental ($BILCONTI) | | 7.9x | 7.0x | 0.0x | |
| Murudeshwar Ceramics ($MURUDCERA) | 2.6x | 3.2x | 4.1x | 0.0x | |
| |
|---|
| Median (4 companies) | 3.3x | 6.2x | 4.3x | 0.4x | 0.7x |
|---|
| Asian Paints ($ASIANPAINT) | 0.1x | 0.1x | -0.0x | 0.0x | 0.1x |
