Tata Chemicals EBITDA surged on 30.2% in 2015 and EBITDA Margin increased on 2.3 pp from 11.4% to 13.7%
27-05-2015 • About Tata Chemicals (
$TATACHEM) • By InTwits
Tata Chemicals reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tata Chemicals has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.7%. At the same time it's in pair with industry average of 1.4%.
- CAPEX is quite volatile: 30,721 in FY2015, 61,687 in FY2014, 68,128 in FY2013, 104,110 in FY2012, 146,926 in FY2011
- The company has highly profitable business model: ROIC is at 13.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.3x while industry average is 2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Tata Chemicals ($TATACHEM) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 110,606 | 136,590 | 147,110 | 158,854 | 172,045 | 8.3% |
| SG&A | | | | | 2,936 | |
| EBITDA | 18,784 | 23,758 | 21,629 | 18,140 | 23,612 | 30.2% |
| Net Income | 6,535 | 8,376 | 4,004 | -10,320 | 5,965 | |
Balance Sheet
|
|---|
| Cash | 4,716 | 6,903 | 18,414 | 17,530 | 14,643 | -16.5% |
| Short Term Debt | 1,985 | 15,677 | 14,897 | 14,865 | 12,932 | -13.0% |
| Long Term Debt | 49,163 | 54,845 | 54,610 | 68,831 | 57,083 | -17.1% |
Cash flow
|
|---|
| Capex | 6,196 | 7,948 | 6,257 | 7,026 | 6,056 | -13.8% |
Ratios
|
|---|
| Revenue growth | -49.9% | 23.5% | 7.7% | 8.0% | 8.3% | |
| EBITDA growth | 15.2% | 26.5% | -9.0% | -16.1% | 30.2% | |
| EBITDA Margin | 17.0% | 17.4% | 14.7% | 11.4% | 13.7% | 2.3% |
| Net Income Margin | 5.9% | 6.1% | 2.7% | -6.5% | 3.5% | 10.0% |
| SG&A, % of revenue | | | | | 1.7% | 1.7% |
| CAPEX, % of revenue | 5.6% | 5.8% | 4.3% | 4.4% | 3.5% | -0.9% |
| ROIC | 13.3% | 15.0% | 11.7% | 9.3% | 13.4% | 4.1% |
| ROE | 12.9% | 14.2% | 6.3% | -17.2% | 10.7% | 28.0% |
| Net Debt/EBITDA | 2.5x | 2.7x | 2.4x | 3.6x | 2.3x | -1.3x |
Revenue and profitability
Tata Chemicals's Revenue increased on 8.3% in FY2015. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.3 pp from 11.4% to 13.7% in FY2015.
Net Income marign increased on 10.0 pp from -6.5% to 3.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 the company had CAPEX/Revenue of 3.5%. The company showed decline in CAPEX/Revenue of 2.3 pp from 5.8% in FY2012 to 3.5% in FY2015. Average CAPEX/Revenue for the last three years was 4.1%.
Return on investment
The company operates at good ROIC (13.42%) while ROE is low (10.73%). ROIC increased on 4.1 pp from 9.3% to 13.4% in FY2015. ROE jumped on 28.0 pp from -17.2% to 10.7% in FY2015.
Leverage (Debt)
Debt level is 2.3x Net Debt / EBITDA and 3.0x Debt / EBITDA. Net Debt / EBITDA dropped on 1.3x from 3.6x to 2.3x in FY2015. Debt dropped on 16.3% in FY2015 while cash dropped on 16.5% in FY2015.
Appendix 1: Peers in Commodity Chemicals
Below you can find Tata Chemicals benchmarking vs. other companies in Commodity 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 |
|---|
| 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 ($BODALCHEM) | -51.3% | 5.4% | -12.6% | 80.0% | |
| Kanoria Chemicals & Industries ($KANORICHEM) | | -40.7% | 27.2% | 47.9% | -1.9% |
| Camphor & Allied Products ($CAMPHOR) | -49.0% | -6.7% | 7.2% | 42.7% | |
| |
|---|
| Median (35 companies) | -37.6% | 15.5% | 11.4% | 10.7% | 1.4% |
|---|
| Tata Chemicals ($TATACHEM) | | 23.5% | 7.7% | 8.0% | 8.3% |
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 ($BALAMINES) | 18.3% | 17.6% | 15.5% | 14.3% | 16.4% |
| |
|---|
| Median (27 companies) | 12.1% | 10.9% | 8.3% | 8.5% | 6.6% |
|---|
| Tata Chemicals ($TATACHEM) | 17.0% | 17.4% | 14.7% | 11.4% | 13.7% |
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% | |
| Kanoria Chemicals & Industries ($KANORICHEM) | 12.9% | 25.1% | 6.0% | 13.4% | 40.3% |
| |
|---|
| Median (19 companies) | 5.9% | 5.2% | 7.2% | 5.9% | 4.7% |
|---|
| Tata Chemicals ($TATACHEM) | 5.6% | 5.8% | 4.3% | 4.4% | 3.5% |
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 ($AARTIIND) | 13.1% | 15.9% | 19.1% | 17.2% | 17.9% |
| |
|---|
| Median (59 companies) | 10.5% | 9.0% | 9.5% | 9.4% | 9.8% |
|---|
| Tata Chemicals ($TATACHEM) | 13.3% | 15.0% | 11.7% | 9.3% | 13.4% |
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 ($REFNOL) | | | 4.1x | 5.6x | 0.0x |
| |
|---|
| Median (41 companies) | 2.4x | 2.6x | 3.2x | 0.8x | 1.5x |
|---|
| Tata Chemicals ($TATACHEM) | 2.5x | 2.7x | 2.4x | 3.6x | 2.3x |
