Ttk Healthcare demonstrated fast growth in recent years. Will the growth continue?
28-05-2015 • About Ttk Healthcare (
$TTKHEALTH) • By InTwits
Ttk Healthcare is an attractive growth stock in Pharmaceuticals industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Ttk Healthcare showed fast growth in the last financial year. The company's revenue surged on 16.2% in FY2015. At the same time the company well managed its profitability and showed even faster growth in EBITDA of 50.4% for the same period.
If we look for the longer period Ttk Healthcare showed fast revenue growth of 10.9% from FY2012 to FY2015 annually. EBITDA surged on 7.50% from FY2012 to FY2015 annually.
Ttk Healthcare ($TTKHEALTH) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 3,109 | 3,537 | 3,823 | 4,156 | 4,829 |
|---|
| Revenue growth, % | | 13.8% | 8.1% | 8.7% | 16.2% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 220 | 243 | 206 | 201 | 302 |
|---|
| EBITDA growth, % | | 10.5% | -15.2% | -2.5% | 50.4% |
|---|
| EBITDA margin, % | 7.08% | 6.88% | 5.40% | 4.84% | 6.26% |
|---|
| Net Income | 147 | 156 | 142 | 124 | 162 |
|---|
| Net Income margin, % | 4.73% | 4.42% | 3.72% | 2.98% | 3.35% |
|---|
| |
| CAPEX | 92 | 44 | 77 | 154 | 492 |
|---|
| CAPEX/Revenue, % | 2.97% | 1.24% | 2.00% | 3.72% | 10.2% |
|---|
| Debt | 133 | 182 | 224 | 311 | 413 |
|---|
| Cash | 123 | 121 | 124 | 138 | 203 |
|---|
| Net Debt/EBITDA | 0.0x | 0.3x | 0.5x | 0.9x | 0.7x |
|---|
| |
| ROIC, % | 19.9% | 19.7% | 15.5% | 12.8% | 15.9% |
|---|
| ROE, % | 21.0% | 19.1% | 15.3% | 12.1% | 14.3% |
|---|
Profitability and return on investment
EBITDA growth was supported by margin expansion. Ttk Healthcare's EBITDA margin surged on 1.50 pp from 4.80% to 6.30% in FY2015. If we look for the longer period the company's EBITDA margin decreased on 0.600 pp from 6.90% in FY2012 to 6.30% in FY2015.
We call Ttk Healthcare an attractive growth stock as together with the growth it delivers high ROIC at 15.9%. During the last three years it dropped - it was 19.7% in FY2012. Average ROIC for the last three years was 14.7%.
Ttk Healthcare's Net Income margin surged on 0.300 pp from 3% to 3.30% in FY2015. In the longer period Ttk Healthcare's Net Income margin dropped on 1.10 pp from 4.40% in FY2012 to 3.30% in FY2015.
Ttk Healthcare operates at ROE of 14.3%. It's average ROE for the last three years was 13.9%.
Capital expenditures (CAPEX)
To this fast growth the company had to invest in CAPEX.In FY2015 the company had CAPEX/Revenue of 10.2%. The company showed fast CAPEX/Revenue growth of 8.95 pp from 1.24% in FY2012 to 10.2% in FY2015. It's average level of CAPEX/Revenue for the last three years was 5.30%.
Leverage (Debt)
The company has low debt level at 0.7x Net Debt/EBITDA - at the same time with high growth. In the longer period the company showed fast leverage growth of 0.44x from 0.25x in FY2012 to 0.69x in FY2015.
Valuation vs. comparable companies
The company trades at 25.3x EV/EBITDA which is not surprisingly 42.1% higher than 17.8x Pharmaceuticals industry avearge calculated based on 266 companies. The company trades at 46.0x P/E which is 14.8% lower than 54.1x Pharmaceuticals industry avearge calculated based on 22 companies.
Peers in Pharmaceuticals
Below you can find Ttk Healthcare benchmarking vs. other companies in Pharmaceuticals 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, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Granules India ($GRANULES) | | 37.6% | 16.9% | 43.4% | 18.1% |
| Marksans Pharma ($MARKSANS) | -66.6% | 16.7% | 23.3% | 43.3% | |
| Sun Pharmaceutical Industries ($SUNPHARMA) | -87.8% | 39.9% | 40.4% | 42.4% | |
| Torrent Pharmaceuticals ($TORNTPHARM) | | 22.7% | 17.7% | 32.2% | 13.6% |
| Abbott India ($ABBOTINDIA) | -46.4% | 8.2% | 8.7% | 27.3% | |
| |
|---|
| Median (41 companies) | -47.3% | 16.7% | 14.9% | 13.7% | 9.2% |
|---|
| Ttk Healthcare ($TTKHEALTH) | | 13.8% | 8.1% | 8.7% | 16.2% |
Top companies by Gross margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Dr.Reddy'S Laboratories ($DRREDDY) | | | 52.1% | 57.4% | 57.6% |
| Omega Laboratories ($OMEGALAB) | | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (2 companies) | | 46.9% | 26.1% | 28.7% | 28.8% |
|---|
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Sun Pharmaceutical Industries ($SUNPHARMA) | 34.3% | 40.8% | 44.3% | 44.9% | |
| Divi'S Laboratories ($DIVISLAB) | 38.1% | 37.2% | 38.2% | 40.2% | |
| Venus Remedies ($VENUSREM) | 24.9% | 25.2% | 25.6% | 25.5% | |
| Dr.Reddy'S Laboratories ($DRREDDY) | 21.7% | 25.8% | 22.9% | 25.1% | 23.2% |
| Natco Pharma ($NATCOPHARM) | 21.3% | 21.5% | 23.2% | 24.9% | |
| |
|---|
| Median (36 companies) | 16.5% | 12.9% | 13.4% | 15.0% | 15.7% |
|---|
| Ttk Healthcare ($TTKHEALTH) | 7.1% | 6.9% | 5.4% | 4.8% | 6.3% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Granules India ($GRANULES) | 5.3% | 8.8% | 15.2% | 24.3% | 11.4% |
| Dishman Pharmaceuticals & Chemicals ($DISHMAN) | 24.3% | 8.4% | 10.9% | 21.6% | |
| Venus Remedies ($VENUSREM) | 26.6% | 23.2% | 22.2% | 17.5% | |
| Shasun Pharmaceuticals ($SHASUNPHAR) | 4.3% | 10.4% | 15.2% | 15.8% | 11.3% |
| Natco Pharma ($NATCOPHARM) | 20.0% | 24.4% | 16.3% | 14.4% | |
| |
|---|
| Median (28 companies) | 7.4% | 8.2% | 8.3% | 5.8% | 6.0% |
|---|
| Ttk Healthcare ($TTKHEALTH) | 3.0% | 1.2% | 2.0% | 3.7% | 10.2% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Alembic Pharmaceuticals ($APLLTD) | | 27.5% | 29.1% | 41.5% | 35.7% |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 18.9% | 24.8% | 31.1% | 35.0% | |
| Marksans Pharma ($MARKSANS) | -25.8% | -142.4% | 34.9% | 33.8% | |
| Torrent Pharmaceuticals ($TORNTPHARM) | 22.3% | 26.4% | 30.5% | 33.2% | 19.7% |
| Jenburkt Pharmaceuticals ($JENBURPH) | 43.6% | 34.1% | 29.0% | 32.4% | 35.3% |
| |
|---|
| Median (63 companies) | 13.5% | 13.7% | 13.2% | 15.6% | 14.9% |
|---|
| Ttk Healthcare ($TTKHEALTH) | 19.9% | 19.7% | 15.5% | 12.8% | 15.9% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Ind-Swift Laboratories ($INDSWFTLAB) | 4.6x | 5.5x | 16.1x | 19.5x | 0.0x |
| Shasun Pharmaceuticals ($SHASUNPHAR) | 4.5x | 2.8x | 4.5x | 6.0x | 6.2x |
| Sharon Bio-Medicine ($SHARONBIO) | 4.6x | 4.7x | 5.3x | 4.5x | |
| Jubilant Life Sciences Limited ($JUBILANT) | 5.3x | 4.0x | 3.5x | 3.5x | 6.4x |
| Kopran ($KOPRAN) | 6.0x | 4.5x | 3.0x | 3.0x | |
| |
|---|
| Median (50 companies) | 1.6x | 1.6x | 1.4x | 0.3x | 1.1x |
|---|
| Ttk Healthcare ($TTKHEALTH) | 0.0x | 0.3x | 0.5x | 0.9x | 0.7x |
