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Jk Paper Net Debt / EBITDA dropped on 5.4x from 14.1x to 8.6x in 2015 while Revenue surged on 24.3%

18-05-2015 • About Jk Paper ($JKPAPER) • By InTwits

Jk Paper reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is quite volatile: 11.4% in FY2015, 9.3% in FY2014, 9.5% in FY2013, 12.1% in FY2012, 21.1% in FY2011
  • Jk Paper has high CAPEX intensity: 5 year average CAPEX/Revenue was 27.5%. At the same time it's in pair with industry average of 27.5%.
  • CAPEX is quite volatile: 908 in FY2015, 2,731 in FY2014, 8,645 in FY2013, 6,321 in FY2012, 1,242 in FY2011
  • The company has potentially unprofitable business model: ROIC is at 4.3%
  • It operates with high leverage: Net Debt/EBITDA is 8.6x while industry average is 1.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Jk Paper ($JKPAPER) key annual financial indicators

mln. INR201120122013201420152015/2014
P&L
Revenue12,30713,28314,53217,21421,39824.3%
EBITDA2,5921,6071,3851,5942,43052.5%
Net Income1,065485380-747-184
Balance Sheet
Cash278852847910329.3%
Short Term Debt2,4702,4802,7025,0844,916-3.3%
Long Term Debt2,9148,45615,14017,39316,127-7.3%
Cash flow
Capex1,2426,3218,6452,731908-66.7%
Ratios
Revenue growth-53.4%7.9%9.4%18.5%24.3%
EBITDA growth6.1%-38.0%-13.8%15.1%52.5%
EBITDA Margin21.1%12.1%9.5%9.3%11.4%2.1%
Net Income Margin8.7%3.7%2.6%-4.3%-0.9%3.5%
CAPEX, % of revenue10.1%47.6%59.5%15.9%4.2%-11.6%
ROIC15.4%5.2%2.7%1.1%4.3%3.2%
ROE20.0%6.7%4.4%-8.9%-2.3%6.6%
Net Debt/EBITDA2.0x6.8x12.7x14.1x8.6x-5.4x

Revenue and profitability


The company's Revenue jumped on 24.3% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.1 pp from 9.3% to 11.4% in FY2015.

Net Income marign increased on 3.5 pp from -4.3% to -0.86% in FY2015.

Capital expenditures (CAPEX) and working capital investments


In FY2015 Jk Paper had CAPEX/Revenue of 4.2%. The company showed big decline in CAPEX/Revenue of 43.3 pp from 47.6% in FY2012 to 4.2% in FY2015. It's average level of CAPEX/Revenue for the last three years was 26.5%.

Return on investment


The company operates at low but positive ROIC (4.30%) and negative ROE (-2.33%). ROIC increased on 3.2 pp from 1.1% to 4.3% in FY2015. ROE increased on 6.6 pp from -8.9% to -2.3% in FY2015.

Leverage (Debt)


Company's Net Debt / EBITDA is 8.6x and Debt / EBITDA is 8.7x. Net Debt / EBITDA dropped on 5.4x from 14.1x to 8.6x in FY2015. Debt decreased on 6.4% in FY2015 while cash jumped on 29.3% in FY2015.

Appendix 1: Peers in Paper & Paper Products


Below we provide Jk Paper benchmarking against other companies in Paper & Paper 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
Yash Papers ($YASHPPR)9.0%-3.6%39.5%17.3%
Tamil Nadu Newsprint & Papers ($TNPL)-54.0%26.0%22.2%22.8%
Malu Paper Mills ($MALUPAPER)-36.5%0.3%4.9%22.6%
Shreyans Industries ($SHREYANIND)-41.7%7.8%24.4%17.3%
Kuantum Papers ($KUANTUM)-47.9%22.1%11.9%14.4%
 
Median (14 companies)-39.1%9.5%4.7%7.5%6.4%
Jk Paper ($JKPAPER)7.9%9.4%18.5%24.3%


Top companies by EBITDA margin, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Tamil Nadu Newsprint & Papers ($TNPL)26.2%21.0%22.2%22.5%
Yash Papers ($YASHPPR)15.6%15.7%16.8%16.0%15.7%
Kuantum Papers ($KUANTUM)15.1%11.2%14.2%15.9%
Tcpl Packaging ($TCPLPACK)14.7%16.1%14.9%15.7%
Ruchira Papers ($RUCHIRA)13.1%14.7%17.1%15.2%
 
Median (10 companies)12.1%11.7%14.4%14.9%11.4%
Jk Paper ($JKPAPER)21.1%12.1%9.5%9.3%11.4%


Top companies by CAPEX/Revenue, %

Top  FY2011 FY2012 FY2013 FY2014 FY2015
Emami Paper Mills ($EMAMIPAP)5.0%24.4%7.3%19.2%89.3%
Tcpl Packaging ($TCPLPACK)12.1%18.3%8.6%11.1%
Tamil Nadu Newsprint & Papers ($TNPL)23.6%18.9%10.4%5.5%
 
Median (3 companies)5.3%11.3%8.6%11.1%89.3%
Jk Paper ($JKPAPER)10.1%47.6%59.5%15.9%4.2%


Top companies by ROIC, %

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Tcpl Packaging ($TCPLPACK)13.3%15.4%17.4%16.9%
Yash Papers ($YASHPPR)7.3%8.3%8.3%11.5%
Tamil Nadu Newsprint & Papers ($TNPL)7.6%5.3%8.2%11.1%
Emami Paper Mills ($EMAMIPAP)5.8%5.9%5.4%3.0%
Rama Pulp & Papers ($RAMAPULP)10.8%
 
Median (21 companies)6.8%8.3%9.4%11.3%3.0%
Jk Paper ($JKPAPER)15.4%5.2%2.7%1.1%4.3%


Top companies by Net Debt / EBITDA

Top 5 FY2011 FY2012 FY2013 FY2014 FY2015
Emami Paper Mills ($EMAMIPAP)5.9x7.4x5.3x5.0x11.2x
Yash Papers ($YASHPPR)5.7x5.2x5.5x4.5x0.0x
Tamil Nadu Newsprint & Papers ($TNPL)4.7x5.4x3.6x2.8x
Tcpl Packaging ($TCPLPACK)2.6x2.6x2.3x2.2x
Rama Pulp & Papers ($RAMAPULP)0.1x0.8x1.1x0.0x
 
Median (14 companies)4.3x3.2x2.7x0.0x5.6x
Jk Paper ($JKPAPER)2.0x6.8x12.7x14.1x8.6x


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