Kanoria Chemicals & Industries CAPEX surged on 196% in 2015 while Revenue decreased slightly on 1.9%
27-05-2015 • About Kanoria Chemicals & Industries (
$KANORICHEM) • By InTwits
Kanoria Chemicals & Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Kanoria Chemicals & Industries doesn't have a profitable business model yet: FY2015 ROIC is -0.2%
- EBITDA Margin is quite volatile: 6.0% in FY2015, 8.2% in FY2014, 4.6% in FY2013, 8.2% in FY2012, 18.4% in FY2011
- Kanoria Chemicals & Industries has high CAPEX intensity: 5 year average CAPEX/Revenue was 19.5%. At the same time it's a lot of higher than industry average of 8.1%.
- CAPEX is quite volatile: 2,141 in FY2015, 725 in FY2014, 221 in FY2013, 723 in FY2012, 626 in FY2011
- The company has unprofitable business model: ROIC is at -0.2%
- It operates with high leverage: Net Debt/EBITDA is 9.4x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kanoria Chemicals & Industries ($KANORICHEM) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 4,852 | 2,878 | 3,660 | 5,414 | 5,309 | -1.9% |
| EBITDA | 895 | 237 | 170 | 444 | 316 | -28.8% |
| Net Income | 174 | 3,057 | 79 | 337 | 123 | -63.5% |
Balance Sheet
|
|---|
| Cash | 45 | 29 | 92 | 71 | 343 | 385.1% |
| Short Term Debt | 1,270 | 613 | 862 | 752 | 1,482 | 97.2% |
| Long Term Debt | 2,516 | 641 | 856 | 861 | 1,831 | 112.8% |
Cash flow
|
|---|
| Capex | 626 | 723 | 221 | 725 | 2,141 | 195.5% |
Ratios
|
|---|
| Revenue growth | -22.3% | -40.7% | 27.2% | 47.9% | -1.9% | |
| EBITDA growth | 19.1% | -73.5% | -28.3% | 161.4% | -28.8% | |
| EBITDA Margin | 18.4% | 8.2% | 4.6% | 8.2% | 6.0% | -2.2% |
| Net Income Margin | 3.6% | 106.2% | 2.2% | 6.2% | 2.3% | -3.9% |
| CAPEX, % of revenue | 12.9% | 25.1% | 6.0% | 13.4% | 40.3% | 26.9% |
| ROIC | 7.6% | 1.2% | -0.3% | 3.0% | -0.2% | -3.2% |
| ROE | 7.4% | 82.1% | 1.6% | 7.0% | 2.5% | -4.5% |
| Net Debt/EBITDA | 4.2x | 5.2x | 9.6x | 3.5x | 9.4x | 5.9x |
Revenue and profitability
Kanoria Chemicals & Industries's Revenue decreased slightly on 1.9% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 13.6 pp from 7.3% to 20.9% in FY2015.
Net Income marign decreased on 3.9 pp from 6.2% to 2.3% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Kanoria Chemicals & Industries had CAPEX/Revenue of 40.3%. The company's CAPEX/Revenue jumped on 15.2 pp from 25.1% in FY2012 to 40.3% in FY2015. It's average CAPEX/Revenue for the last three years was 19.9%.Battling declining revenue Kanoria Chemicals & Industries made large investments to CAPEX (678% of EBITDA) but that didn't help at least in this year.
Return on investment
The company operates at negative ROIC (-0.20%) and low but positive ROE (2.49%). ROIC decreased on 3.2 pp from 3.0% to -0.20% in FY2015. ROE decreased on 4.5 pp from 7.0% to 2.5% in FY2015.
Leverage (Debt)
Debt level is 9.4x Net Debt / EBITDA and 10.5x Debt / EBITDA. Net Debt / EBITDA jumped on 5.9x from 3.5x to 9.4x in FY2015. Debt surged on 105% in FY2015 while cash jumped on 385% in FY2015.
Valuation
Kanoria Chemicals & Industries's trades at EV/EBITDA 15.2x and P/E 14.9x while industy averages are 10.5x and 26.1x.
Appendix 1: Peers in Commodity Chemicals
Below we provide Kanoria Chemicals & Industries benchmarking against other companies in Commodity Chemicals 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 |
|---|
| 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 ($BODALCHEM) | -51.3% | 5.4% | -12.6% | 80.0% | |
| Camphor & Allied Products ($CAMPHOR) | -49.0% | -6.7% | 7.2% | 42.7% | |
| Gayatri Bioorganics ($GAYATRIBI) | -71.2% | 48.9% | 17.4% | 41.4% | |
| |
|---|
| Median (35 companies) | -37.6% | 19.0% | 10.9% | 10.6% | 4.9% |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | | -40.7% | 27.2% | 47.9% | -1.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mysore Petro Chemicals ($MYSORPETRO) | | | | | 47.1% |
| Aditya Birla Chemicals (India) ($ABCIL) | 33.6% | 26.8% | 27.1% | 23.6% | 21.9% |
| Chemfab Alkalis ($CHEMFALKAL) | 19.0% | 22.3% | 32.9% | 24.2% | 19.8% |
| Alkyl Amines Chemicals ($ALKYLAMINE) | 13.3% | 15.9% | 16.0% | 19.0% | 18.3% |
| Balaji Amines ($BALAMINES) | 18.3% | 17.6% | 15.5% | 14.3% | 16.4% |
| |
|---|
| Median (27 companies) | 12.1% | 11.6% | 8.4% | 8.6% | 7.2% |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 18.4% | 8.2% | 4.6% | 8.2% | 6.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Chemfab Alkalis ($CHEMFALKAL) | 5.1% | 2.2% | 15.8% | 55.6% | |
| Aditya Birla Chemicals (India) ($ABCIL) | 5.9% | 136.9% | 24.2% | 30.8% | 15.0% |
| Jindal Poly Films ($JINDPOLBBPH) | 2.9% | 6.9% | 2.1% | 27.5% | |
| Polyplex Corporation ($POLYPLEX) | 6.0% | 10.7% | 41.3% | 19.2% | |
| Aarti Industries ($AARTIIND) | 4.8% | 8.0% | 11.2% | 11.0% | 10.4% |
| |
|---|
| Median (19 companies) | 5.6% | 5.2% | 7.2% | 5.4% | 3.8% |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 12.9% | 25.1% | 6.0% | 13.4% | 40.3% |
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% | 23.7% |
| Aarti Industries ($AARTIIND) | 13.1% | 15.9% | 19.1% | 17.2% | 17.9% |
| |
|---|
| Median (59 companies) | 10.7% | 9.2% | 9.8% | 9.9% | 12.5% |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 7.6% | 1.2% | -0.3% | 3.0% | -0.2% |
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 | 10.7x |
| 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 ($REFNOL) | | | 4.1x | 5.6x | 0.0x |
| |
|---|
| Median (41 companies) | 2.4x | 2.6x | 3.0x | 0.8x | 1.5x |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 4.2x | 5.2x | 9.6x | 3.5x | 9.4x |
