Looking for a profitable fast-growing stock? Look at Emami
20-05-2015 • About Emami (
$EMAMILTD) • By InTwits
Emami is a fast-growing stock in Personal Products industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Emami showed fast growth in the last financial year. The company's revenue surged on 21.8% in FY2015. The growth also happened in EBITDA of 25.4% for the same period.
In the last 3 years Emami showed fast revenue growth of 15.1% from FY2012 to FY2015 annually. EBITDA surged on 22.1% from FY2012 to FY2015 annually.
Emami ($EMAMILTD) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 12,471 | 14,535 | 16,991 | 18,208 | 22,172 |
|---|
| Revenue growth, % | | 16.6% | 16.9% | 7.2% | 21.8% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 2,715 | 3,042 | 3,492 | 4,421 | 5,543 |
|---|
| EBITDA growth, % | | 12.0% | 14.8% | 26.6% | 25.4% |
|---|
| EBITDA margin, % | 21.8% | 20.9% | 20.5% | 24.3% | 25.0% |
|---|
| Net Income | 2,287 | 2,588 | 3,147 | 4,025 | 4,856 |
|---|
| Net Income margin, % | 18.3% | 17.8% | 18.5% | 22.1% | 21.9% |
|---|
| |
| CAPEX | 493 | 1,156 | 852 | 654 | 1,098 |
|---|
| CAPEX/Revenue, % | 3.95% | 7.95% | 5.02% | 3.59% | 4.95% |
|---|
| Debt | 2,294 | 1,558 | 1,148 | 376 | 359 |
|---|
| Cash | 92 | 134 | 2,813 | 2,685 | 3,531 |
|---|
| Net Debt/EBITDA | 0.8x | 0.5x | -0.5x | -0.5x | -0.6x |
|---|
| |
| ROIC, % | 28.2% | 31.5% | 36.7% | 43.3% | 45.4% |
|---|
| ROE, % | 34.8% | 37.1% | 42.4% | 47.1% | 44.9% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. Emami's EBITDA margin increased slightly on 0.700 pp from 24.3% to 25% in FY2015. If we look for the longer period EBITDA margin surged on 4.10 pp from 20.9% in FY2012 to 25% in FY2015.
Emami shows attractive ROIC at 45.4% for the last 12 months which assumes stable development model. Three years ago it was considerably lower at 31.5%. It's average level of ROIC for the last three years was 41.8%.
Emami showed small Net Income margin decline of 0.200 pp from 22.1% to 21.9% in FY2015. If we look for the longer period Net Income margin surged on 4.10 pp from 17.8% in FY2012 to 21.9% in FY2015.
Emami operates at ROE of 44.9%. Average ROE for the last three years was 44.8%.
Capital expenditures (CAPEX)
The company's CAPEX/Revenue was 4.95% in FY2015. Emami showed big decline in CAPEX/Revenue of 3.00 pp from 7.95% in FY2012 to 4.95% in FY2015. It's average level of CAPEX/Revenue for the last three years was 4.52%.
Leverage (Debt)
The company has negative net debt at -0.6x Net Debt/EBITDA - at the same time with high growth. In the last 3 years leverage dropped on 1.04x from 0.47x in FY2012 to -0.57x in FY2015.
Valuation vs. comparable companies
The company trades at 41.5x EV/EBITDA which is not surprisingly 198% higher than 13.9x Personal Products industry avearge calculated based on 21 companies. The company trades at 48.0x P/E which is not surprisingly 28.1% higher than 37.4x Personal Products industry avearge calculated based on 4 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. At the end of trading day today Emami traded at 51.7x EV/(EBITDA-CAPEX) which is 7,420% higher than 0.7x Personal Products peer group avearge calculated on the basis of 4 companies.
Peers in Personal Products
Below you can find Emami benchmarking vs. other companies in Personal Products 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Procter & Gamble Hygiene & Health Care ($PGHH) | -65.3% | 29.4% | 29.9% | 21.5% | |
| Godrej Consumer Products ($GODREJCP) | | 32.0% | 31.7% | 18.6% | 8.7% |
| Dabur India ($DABUR) | | 29.3% | 16.3% | 15.0% | 10.3% |
| Colgate-Palmolive (India) ($COLPAL) | -55.8% | 17.8% | 17.5% | 13.1% | |
| Hindustan Unilever ($HINDUNILVR) | | 17.0% | 14.5% | 8.4% | 9.3% |
| |
|---|
| Median (7 companies) | -60.6% | 28.1% | 17.5% | 13.1% | 9.8% |
|---|
| Emami ($EMAMILTD) | | 16.6% | 16.9% | 7.2% | 21.8% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Bliss Gvs Pharma ($BLISSGVS) | | 27.2% | 28.1% | 20.9% | |
| Procter & Gamble Hygiene & Health Care ($PGHH) | 16.6% | 16.3% | 15.4% | 20.7% | |
| Colgate-Palmolive (India) ($COLPAL) | 22.6% | 21.7% | 21.0% | 18.6% | |
| Hindustan Unilever ($HINDUNILVR) | 14.0% | 15.2% | 16.0% | 16.6% | 17.4% |
| Dabur India ($DABUR) | 18.7% | 16.2% | 16.0% | 16.3% | 16.8% |
| |
|---|
| Median (7 companies) | 17.2% | 16.3% | 16.0% | 16.6% | 16.6% |
|---|
| Emami ($EMAMILTD) | 21.8% | 20.9% | 20.5% | 24.3% | 25.0% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Bliss Gvs Pharma ($BLISSGVS) | | 8.7% | 5.0% | 16.7% | |
| Colgate-Palmolive (India) ($COLPAL) | 1.8% | 3.8% | 4.9% | 9.0% | |
| Procter & Gamble Hygiene & Health Care ($PGHH) | 5.5% | 4.2% | 2.2% | 7.2% | |
| Dabur India ($DABUR) | 22.7% | 4.4% | 3.9% | 3.0% | 3.4% |
| Hindustan Unilever ($HINDUNILVR) | 1.7% | 1.2% | 1.7% | 2.1% | 1.9% |
| |
|---|
| Median (7 companies) | 5.7% | 3.8% | 4.1% | 3.0% | 2.3% |
|---|
| Emami ($EMAMILTD) | 4.0% | 8.0% | 5.0% | 3.6% | 5.0% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Hindustan Unilever ($HINDUNILVR) | 96.0% | 99.9% | 114.4% | 133.0% | 133.9% |
| Colgate-Palmolive (India) ($COLPAL) | 134.8% | 121.4% | 120.4% | 104.4% | |
| Procter & Gamble Hygiene & Health Care ($PGHH) | 25.2% | 28.1% | 30.3% | 43.2% | |
| Dabur India ($DABUR) | 36.5% | 29.4% | 28.7% | 30.8% | 31.3% |
| Marico ($MARICO) | 25.9% | 23.2% | 22.6% | 26.9% | 36.1% |
| |
|---|
| Median (9 companies) | 25.7% | 25.6% | 28.7% | 26.9% | 33.7% |
|---|
| Emami ($EMAMILTD) | 28.2% | 31.5% | 36.7% | 43.3% | 45.4% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Bliss Gvs Pharma ($BLISSGVS) | | 0.0x | 1.1x | 1.9x | |
| Godrej Consumer Products ($GODREJCP) | 2.7x | 1.6x | 1.7x | 1.5x | 1.7x |
| Cupid ($CUPID) | 2.2x | 1.7x | 0.5x | 1.4x | |
| Marico ($MARICO) | 1.4x | 1.5x | 1.3x | 0.9x | 0.3x |
| Dabur India ($DABUR) | 1.0x | 0.8x | 1.2x | 0.3x | 0.5x |
| |
|---|
| Median (8 companies) | 0.7x | 0.8x | 0.8x | 0.6x | 0.4x |
|---|
| Emami ($EMAMILTD) | 0.8x | 0.5x | -0.5x | -0.5x | -0.6x |
