India Glycols Net Debt / EBITDA jumped on 5.7x from 8.5x to 14.2x in 2015 while EBITDA dropped on 33.5%

28-05-2015 • About India Glycols ($INDIAGLYCO) • By InTwits

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

India Glycols is a company in decline: FY2015 revenue growth was -13.3%, 5 years revenue CAGR was -3.8%
EBITDA Margin is declining: 5.7% in FY2015 vs. 7.5% in FY2014 vs. 10.4% in FY2011
India Glycols has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 14.3%.
CAPEX is quite volatile: 712 in FY2015, 1,150 in FY2014, 1,683 in FY2013, 1,148 in FY2012, 805 in FY2011
The company has potentially unprofitable business model: ROIC is at 2.3%
It operates with high leverage: Net Debt/EBITDA is 14.2x while industry average is 2.5x

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

India Glycols ($INDIAGLYCO) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	17,621	27,578	34,226	29,766	25,795	-13.3%
EBITDA	1,835	3,395	3,799	2,228	1,481	-33.5%
Net Income	-148	674	955	-1,614	-886
Balance Sheet
Cash	1,819	3,035	1,329	1,633	1,608	-1.5%
Short Term Debt	10,822	12,036	8,401	13,435	18,638	38.7%
Long Term Debt	6,077	7,160	7,171	7,093	4,007	-43.5%
Cash flow
Capex	805	1,148	1,683	1,150	712	-38.1%
Ratios
Revenue growth	-43.8%	56.5%	24.1%	-13.0%	-13.3%
EBITDA growth	118.0%	85.0%	11.9%	-41.4%	-33.5%
EBITDA Margin	10.4%	12.3%	11.1%	7.5%	5.7%	-1.7%
Net Income Margin	-0.8%	2.4%	2.8%	-5.4%	-3.4%	2.0%
CAPEX, % of revenue	4.6%	4.2%	4.9%	3.9%	2.8%	-1.1%
ROIC	5.4%	11.0%	12.3%	5.5%	2.3%	-3.2%
ROE	-3.8%	16.9%	20.1%	-35.5%	-26.5%	9.1%
Net Debt/EBITDA	8.2x	4.8x	3.7x	8.5x	14.2x	5.7x

Revenue and profitability

The company's Revenue dropped on 13.3% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.89 pp from 11.7% to 12.5% in FY2015.

Net Income marign increased slightly on 2.0 pp from -5.4% to -3.4% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 India Glycols had CAPEX/Revenue of 2.8%. India Glycols showed small CAPEX/Revenue decline of 1.4 pp from 4.2% in FY2012 to 2.8% in FY2015. For the last three years the average CAPEX/Revenue was 3.8%.

Return on investment

The company operates at low but positive ROIC (2.31%) and negative ROE (-26.48%). ROIC decreased on 3.2 pp from 5.5% to 2.3% in FY2015. ROE increased on 9.1 pp from -35.5% to -26.5% in FY2015.

Leverage (Debt)

Company's Net Debt / EBITDA is 14.2x and Debt / EBITDA is 15.3x. Net Debt / EBITDA surged on 5.7x from 8.5x to 14.2x in FY2015. Debt surged on 10.3% in FY2015 while cash decreased slightly on 1.5% in FY2015.

Appendix 1: Peers in Commodity Chemicals

Below we provide India Glycols 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 ($SHHARICH)		-2.5%	-78.0%	299.5%	111.6%
Jindal Poly Films ($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 ($CAMPHOR)		-6.7%	7.2%	42.7%	14.8%
Median (35 companies)	-33.1%	15.5%	10.9%	10.7%	5.2%
India Glycols ($INDIAGLYCO)		56.5%	24.1%	-13.0%	-13.3%

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 ($BALAMINES)	18.3%	17.6%	15.5%	14.3%	16.4%
Median (32 companies)	13.3%	10.9%	8.3%	8.6%	7.4%
India Glycols ($INDIAGLYCO)	10.4%	12.3%	11.1%	7.5%	5.7%

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 ($KANORICHEM)	12.9%	25.1%	6.0%	13.4%	40.3%
Median (19 companies)	5.9%	5.3%	7.2%	5.9%	3.8%
India Glycols ($INDIAGLYCO)	4.6%	4.2%	4.9%	3.9%	2.8%

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 ($AARTIIND)	13.1%	15.9%	19.1%	17.2%	17.9%
Median (59 companies)	10.7%	9.0%	9.5%	9.9%	12.5%
India Glycols ($INDIAGLYCO)	5.4%	11.0%	12.3%	5.5%	2.3%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
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
Cosmo Films ($COSMOFILMS)	4.0x	4.1x	4.8x	4.9x	3.6x
Median (41 companies)	2.4x	2.6x	3.0x	0.8x	1.5x
India Glycols ($INDIAGLYCO)	8.2x	4.8x	3.7x	8.5x	14.2x

India Glycols stock price chart

India Glycols financials

mln.	FY2010	FY2011	FY2012

Revenue	31,341	17,621	27,578
EBITDA	841.9	1,835	3,395
Net income	60.111	-148.042	674.1
CAPEX	1,193	804.6	1,148
Debt	13,395	16,900	19,196
Cash	45.905	1,819	3,035

About India Glycols

India Glycols Limited manufactures and sells chemicals and ethyl alcohol in India and internationally. The company operates in three segments: Industrial Chemical, Liquor, and Others. The company offers monoethylene, diethylene, and triethylene glycols; polyethylene glycols; fatty alcohol ethoxylates; fatty acid ethoxylates; fatty amine ethoxylates; alkyl phenol ethoxylates; castor/natural oil ethoxylates; ethoxylated and propoxylated co-polymers; polysorbates; glycol ethers and acetates; brake fluids and anti-freeze coolants; and performance chemicals. It also provides industrial gases comprising liquid oxygen, liquid argon, liquid nitrogen, liquid carbon dioxide, and IGL Steri-gas ethylene oxide and carbon dioxide gas mixtures; and natural active pharmaceutical ingredients, nutraceuticals, natural food colors, standardized herbal extracts, and spice extracts. In addition, the company offers natural gums; extra neutral alcohols/rectified spirits; Indian manufactured foreign liquor products; country liquor products; and sugar. India Glycols Limited also exports its products. It serves agrochemical, automotive, detergent, healthcare, food processing, mining, oil and gas, paints and emulsion polymerization, paper, personal care, pharmaceutical, textile, and other industries. The company was formerly known as UP Glycols Limited and changed its name to India Glycols Limited in August 1986. India Glycols Limited was founded in 1983 and is headquartered in Noida, India.