Oricon Enterprises reports 99.2% CAPEX growth and 18.1% Revenue growth
27-05-2015 • About Oricon Enterprises (
$ORICON) • By InTwits
Oricon Enterprises reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Oricon Enterprises has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.5%. At the same time it's a lot of higher than industry average of 5.1%.
- CAPEX is quite volatile: 219 in FY2015, 339 in FY2014, 355 in FY2013, 651 in FY2012, 845 in FY2011
- The company has potentially unprofitable business model: ROIC is at 5.7%
- It operates with high leverage: Net Debt/EBITDA is 3.2x while industry average is 1.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Oricon Enterprises ($ORICON) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 8,216 | 9,732 | 9,920 | 8,871 | 10,478 | 18.1% |
| EBITDA | 763 | 1,048 | 1,312 | 1,014 | 1,027 | 1.3% |
| Net Income | 372 | 386 | 348 | 217 | 433 | 99.1% |
Balance Sheet
|
|---|
| Cash | 227 | 330 | 508 | 281 | 252 | -10.3% |
| Short Term Debt | 352 | 721 | 1,055 | 1,200 | 1,772 | 47.7% |
| Long Term Debt | 899 | 828 | 796 | 781 | 1,768 | 126.3% |
Cash flow
|
|---|
| Capex | 708 | 993 | 610 | 414 | 825 | 99.2% |
Ratios
|
|---|
| Revenue growth | -30.8% | 18.5% | 1.9% | -10.6% | 18.1% | |
| EBITDA growth | 75.5% | 37.4% | 25.2% | -22.7% | 1.3% | |
| EBITDA Margin | 9.3% | 10.8% | 13.2% | 11.4% | 9.8% | -1.6% |
| Net Income Margin | 4.5% | 4.0% | 3.5% | 2.4% | 4.1% | 1.7% |
| CAPEX, % of revenue | 8.6% | 10.2% | 6.2% | 4.7% | 7.9% | 3.2% |
| ROIC | 7.6% | 9.5% | 10.1% | 6.1% | 5.7% | -0.5% |
| ROE | 8.3% | 7.5% | 6.1% | 3.6% | 7.1% | 3.5% |
| Net Debt/EBITDA | 1.3x | 1.2x | 1.0x | 1.7x | 3.2x | 1.5x |
Revenue and profitability
The company's Revenue surged on 18.1% in FY2015. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased slightly on 1.6 pp from 11.4% to 9.8% in FY2015.
Net Income marign increased slightly on 1.7 pp from 2.4% to 4.1% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 7.9% in FY2015. Oricon Enterprises showed decline in CAPEX/Revenue of 2.3 pp from 10.2% in FY2012 to 7.9% in FY2015. For the last three years the average CAPEX/Revenue was 6.2%.To secure this fast growth the company invested a large share of EBITDA (80.3%) to CAPEX.
Return on investment
The company operates at low ROIC (5.68%) and ROE (7.11%). ROIC showed almost no change in FY2015. ROE increased on 3.5 pp from 3.6% to 7.1% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.2x and Debt / EBITDA is 3.4x. Net Debt / EBITDA surged on 1.5x from 1.7x to 3.2x in FY2015. Debt surged on 78.7% in FY2015 while cash dropped on 10.3% in FY2015.
Valuation
The company's trades at EV/EBITDA 10.0x and P/E 16.2x while industy averages are 10.5x and 26.1x. Oricon Enterprises's EV/(EBITDA-CAPEX) is 50.8x with the industry average at 4.7x.
Appendix 1: Peers in Specialty Chemicals
Below you can find Oricon Enterprises benchmarking vs. other companies in Specialty Chemicals 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, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Dai-Ichi Karkaria ($DAICHI) | | 20.7% | 31.4% | 45.4% | 22.8% |
| Dynemic Products ($DYNPRO) | -55.8% | 27.4% | -0.0% | 40.6% | |
| Camlin Fine Sciences ($CAMLINFIN) | | 95.3% | 11.4% | 36.1% | 9.8% |
| Sudarshan Chemical Industries ($SUDARSCHEM) | | 10.5% | 9.1% | 28.2% | 8.3% |
| Vinati Organics ($VINATIORGA) | | 38.7% | 23.6% | 25.9% | 10.9% |
| |
|---|
| Median (27 companies) | -51.4% | 20.9% | 14.1% | 13.7% | 9.8% |
|---|
| Oricon Enterprises ($ORICON) | | 18.5% | 1.9% | -10.6% | 18.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Vinati Organics ($VINATIORGA) | 21.7% | 21.7% | 21.8% | 22.7% | 24.9% |
| Indian Toners & Developers ($INDTONER) | | | | | 22.6% |
| Solar Industries India ($SOLARINDS) | 18.1% | 18.5% | 17.5% | 17.9% | 19.3% |
| Ultramarine & Pigments ($ULTRAMAR) | 20.1% | 18.0% | 15.5% | 17.4% | 17.2% |
| Camlin Fine Sciences ($CAMLINFIN) | 9.1% | 9.1% | 12.8% | 12.8% | 16.7% |
| |
|---|
| Median (20 companies) | 11.7% | 10.6% | 11.2% | 10.6% | 14.8% |
|---|
| Oricon Enterprises ($ORICON) | 9.3% | 10.8% | 13.2% | 11.4% | 9.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Adi Finechem ($ADIFINCHM) | 8.2% | 7.3% | 4.8% | 12.6% | 16.9% |
| Solar Industries India ($SOLARINDS) | 14.2% | 13.0% | 9.9% | 12.3% | 10.3% |
| Nitta Gelatin India ($NITTAGELA) | 21.3% | 8.8% | 4.6% | 8.5% | |
| Meghmani Organics ($MEGH) | 9.9% | 10.2% | 10.3% | 7.9% | 4.6% |
| Camlin Fine Sciences ($CAMLINFIN) | 7.5% | 4.3% | 5.7% | 7.1% | 5.1% |
| |
|---|
| Median (18 companies) | 7.0% | 4.9% | 4.5% | 4.3% | 4.7% |
|---|
| Oricon Enterprises ($ORICON) | 8.6% | 10.2% | 6.2% | 4.7% | 7.9% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Adi Finechem ($ADIFINCHM) | 27.6% | 30.6% | 29.8% | 46.4% | 26.3% |
| Vinati Organics ($VINATIORGA) | 31.4% | 29.6% | 26.2% | 30.6% | 34.8% |
| Pidilite Industries ($PIDILITIND) | 29.3% | 27.4% | 29.3% | 29.8% | 29.0% |
| Camlin Fine Sciences ($CAMLINFIN) | 9.9% | 11.1% | 17.8% | 24.2% | 29.5% |
| Plastiblends India ($PLASTIBLEN) | 19.4% | 18.3% | 15.8% | 24.0% | 24.5% |
| |
|---|
| Median (35 companies) | 15.5% | 15.3% | 15.0% | 12.3% | 24.5% |
|---|
| Oricon Enterprises ($ORICON) | 7.6% | 9.5% | 10.1% | 6.1% | 5.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Cochin Minerals & Rutile ($COCHINM) | 0.7x | -0.0x | -0.0x | 32.3x | |
| Alkali Metals ($ALKALI) | 4.3x | | 5.1x | 11.6x | 0.0x |
| Kiri Industries ($KIRIINDUS) | 3.9x | 8.2x | 31.3x | 10.6x | |
| Vikas Globalone ($VIKASGLOB) | 0.0x | 2.5x | 4.4x | 4.9x | |
| Jayant Agro-Organics ($JAYAGROGN) | 3.9x | 2.8x | 3.1x | 4.6x | 6.5x |
| |
|---|
| Median (28 companies) | 1.5x | 1.5x | 1.7x | 1.7x | 0.0x |
|---|
| Oricon Enterprises ($ORICON) | 1.3x | 1.2x | 1.0x | 1.7x | 3.2x |
