Max India EBITDA surged on 59.6% in 2015 and Revenue surged on 27.4%

27-05-2015 • About Max India ($MAX) • By InTwits

Max India reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

EBITDA Margin is quite volatile: 4.9% in FY2015, 3.9% in FY2014, 11.0% in FY2013, 4.8% in FY2012, 4.9% in FY2011
Max India has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.3%. At the same time it's in pair with industry average of 5.2%.
CAPEX is quite volatile: 2,509 in FY2015, 4,081 in FY2014, 6,492 in FY2013, 6,978 in FY2012, 3,526 in FY2011
The company has highly profitable business model: ROIC is at 12.7%

Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.

Max India ($MAX) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	66,675	85,369	105,620	116,263	148,154	27.4%
EBITDA	3,274	4,090	11,579	4,574	7,302	59.6%
Net Income	87	1,550	7,841	1,395	2,796	100.5%
Balance Sheet
Cash	2,164	4,694	3,374	3,790	2,499	-34.1%
Short Term Debt	6,427	1,532	2,981	2,664	1,405	-47.3%
Long Term Debt	3,913	3,975	3,782	4,353	4,030	-7.4%
Cash flow
Capex	3,408	3,316	2,587	3,072	3,265	6.3%
Ratios
Revenue growth	-68.8%	28.0%	23.7%	10.1%	27.4%
EBITDA growth	-117.2%	24.9%	183.1%	-60.5%	59.6%
EBITDA Margin	4.9%	4.8%	11.0%	3.9%	4.9%	1.0%
Net Income Margin	0.1%	1.8%	7.4%	1.2%	1.9%	0.7%
CAPEX, % of revenue	5.1%	3.9%	2.4%	2.6%	2.2%	-0.4%
ROIC	3.9%	8.9%	24.3%	7.0%	12.7%	5.6%
ROE	0.2%	7.8%	28.9%	4.7%	8.9%	4.2%
Net Debt/EBITDA	2.5x	0.2x	0.3x	0.7x	0.4x	-0.3x

Revenue and profitability

Max India's Revenue surged on 27.4% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.99 pp from 3.9% to 4.9% in FY2015.

Net Income marign increased slightly on 0.69 pp from 1.2% to 1.9% in FY2015.

Capital expenditures (CAPEX) and working capital investments

Max India's CAPEX/Revenue was 2.2% in FY2015. CAPEX/Revenue decreased slightly on 1.7 pp from 3.9% in FY2012 to 2.2% in FY2015. Average CAPEX/Revenue for the last three years was 2.4%.

Return on investment

The company operates at good ROIC (12.66%) while ROE is low (8.90%). ROIC increased on 5.6 pp from 7.0% to 12.7% in FY2015. ROE increased on 4.2 pp from 4.7% to 8.9% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 0.4x and Debt / EBITDA is 0.7x. Net Debt / EBITDA dropped on 0.3x from 0.7x to 0.4x in FY2015. Debt dropped on 22.5% in FY2015 while cash dropped on 34.1% in FY2015.

Valuation

Max India's trades at EV/EBITDA 14.3x and P/E 36.4x while industy averages are 10.5x and 26.1x. Max India's EV/(EBITDA-CAPEX) is 25.9x with the industry average at 4.7x.

Appendix 1: Peers in Plastic Products

Below we provide Max India benchmarking against other companies in Plastic 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
Acrysil ($ACRYSIL)		11.3%	29.6%	33.8%	19.4%
Astral Poly Technik ($ASTRAL)	41.6%	41.7%	41.6%	30.8%
Shaily Engineering Plastics ($SHAILY)		14.9%	-16.0%	23.3%	19.2%
Wim Plast ($WIMPLAST)		27.5%	23.1%	19.5%	23.5%
Jain Irrigation Systems ($JISLJALEQS)		20.9%	2.1%	16.1%	5.6%
Median (11 companies)	-18.6%	15.3%	24.1%	15.5%	7.1%
Max India ($MAX)		28.0%	23.7%	10.1%	27.4%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Acrysil ($ACRYSIL)	19.2%	12.4%	16.8%	17.5%	19.5%
Wim Plast ($WIMPLAST)	18.5%	18.1%	17.9%	18.1%	17.0%
Shaily Engineering Plastics ($SHAILY)	11.5%	14.3%	13.9%	16.0%	14.8%
Jain Irrigation Systems ($JISLJALEQS)	18.6%	16.6%	12.6%	12.6%	12.4%
Responsive Industries ($RESPONIND)	15.4%	13.4%	11.5%	10.3%	12.2%
Median (9 companies)	12.3%	12.9%	12.1%	12.6%	12.2%
Max India ($MAX)	4.9%	4.8%	11.0%	3.9%	4.9%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Flexituff International ($FLEXITUFF)	11.0%	10.8%	10.3%	15.7%
Shaily Engineering Plastics ($SHAILY)	1.9%	3.7%		10.7%	17.2%
Acrysil ($ACRYSIL)	21.2%	7.8%	11.0%	9.6%	9.3%
Astral Poly Technik ($ASTRAL)	9.3%	11.9%	8.4%	8.6%
Responsive Industries ($RESPONIND)	18.7%	14.7%	10.3%	6.9%	3.8%
Median (7 companies)	9.1%	10.8%	8.4%	8.6%	7.9%
Max India ($MAX)	5.1%	3.9%	2.4%	2.6%	2.2%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Astral Poly Technik ($ASTRAL)	22.6%	29.3%	31.1%	33.3%
Wim Plast ($WIMPLAST)	31.0%	31.8%	31.2%	31.0%	31.2%
Acrysil ($ACRYSIL)		7.7%	16.2%	20.2%	21.0%
Shaily Engineering Plastics ($SHAILY)	12.1%	19.5%	15.0%	19.3%	15.2%
Flexituff International ($FLEXITUFF)	14.7%	18.6%	15.9%	11.0%
Median (21 companies)	12.8%	10.2%	10.9%	19.3%	15.2%
Max India ($MAX)	3.9%	8.9%	24.3%	7.0%	12.7%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Jain Irrigation Systems ($JISLJALEQS)	3.4x	3.8x	5.1x	4.8x	4.8x
Flexituff International ($FLEXITUFF)	3.5x	2.2x	3.1x	4.3x
Responsive Industries ($RESPONIND)	1.9x	3.3x	2.9x	2.4x	1.9x
Acrysil ($ACRYSIL)	1.9x	2.9x	2.2x	2.0x	2.7x
Shaily Engineering Plastics ($SHAILY)	4.0x	1.9x	1.8x	1.9x	2.6x
Median (12 companies)	2.2x	2.2x	2.3x	0.4x	0.0x
Max India ($MAX)	2.5x	0.2x	0.3x	0.7x	0.4x

Max India stock price chart

Max India financials

mln.	FY2010	FY2011	FY2012

Revenue	213,468	66,675	85,369
EBITDA	-19,033.423	3,274	4,090
Net income	-715.751	86.764	1,550
CAPEX	1,774	3,408	3,316
Debt	9,615	10,340	5,507
Cash	2,043	2,164	4,694

About Max India

Max Financial Services Limited, through its subsidiaries, operates in the life and health insurance, clinical research, healthcare, and senior living businesses in India and internationally. It provides a range of life insurance and health insurance products. The company also offers healthcare services in Delhi and the National Capital Region through its primary and tertiary health care delivery centers in the areas of minimal access, metabolic and bariatric surgery, cardiology, aesthetic and reconstructive surgery, internal medicine, neuro sciences, orthopedics and joint replacement, obstetrics, and gynecology and pediatrics. In addition, it is involved in leasing of medical and other equipment; and the treasury investments business, as well as in the business of senior living. Further, the company offers clinical research services consisting of study management, project management, data base management, monitoring, and clinical trial pharmacy supply chain management services to the pharmaceutical, medical device, biotechnology, and contact research organizations worldwide. Additionally, it manufactures and sells specialty plastic products, such as packaging un-metalized bi-axially oriented polypropylene (BOPP) films and metalized BOPP films, including high barrier films, thermal lamination films, and leather finishing foils to packaging industries comprising food packaging, overwrapping, consumer products, labels, and textile industries; and a line of leather coating films. The company was formerly known as Max India Limited and changed in Max Financial Services Limited in January 2015. Max Financial Services Limited was incorporated in 1982 and is headquartered in New Delhi, India.