Iol Chemicals & Pharmaceuticals Net Debt / EBITDA jumped on 31.7x from 3.7x to 35.4x in 2015 and Debt surged on 12.2%

29-05-2015 • About Iol Chemicals & Pharmaceuticals ($IOLCP) • By InTwits

Iol Chemicals & Pharmaceuticals reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:

Iol Chemicals & Pharmaceuticals is a company in decline: FY2015 revenue growth was -31.7%, 5 years revenue CAGR was -3.1%
EBITDA Margin is quite volatile: 2.9% in FY2015, 17.0% in FY2014, 18.5% in FY2013, 14.6% in FY2012, 17.4% in FY2011
Iol Chemicals & Pharmaceuticals has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.0%. At the same time it's in pair with industry average of 7.7%.
CAPEX is quite volatile: 59.1 in FY2015, 137 in FY2014, 190 in FY2013, 887 in FY2012, 707 in FY2011
The company has unprofitable business model: ROIC is at -3.0%
It operates with high leverage: Net Debt/EBITDA is 35.4x while industry average is 3.3x

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

Iol Chemicals & Pharmaceuticals ($IOLCP) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	3,894	4,707	4,815	5,635	3,847	-31.7%
EBITDA	677	689	891	958	113	-88.2%
Net Income	62	48	16	33	-667	-2,120.1%
Balance Sheet
Cash	12	4	16	8	14	80.1%
Short Term Debt	1,023	1,246	1,133	1,366	1,234	-9.6%
Long Term Debt	2,352	2,747	2,868	2,204	2,771	25.7%
Cash flow
Capex	707	887	190	137	59	-56.7%
Ratios
Revenue growth	-13.4%	20.9%	2.3%	17.0%	-31.7%
EBITDA growth	75.3%	1.7%	29.3%	7.5%	-88.2%
EBITDA Margin	17.4%	14.6%	18.5%	17.0%	2.9%	-14.1%
Net Income Margin	1.6%	1.0%	0.3%	0.6%	-17.3%	-17.9%
CAPEX, % of revenue	18.2%	18.8%	3.9%	2.4%	1.5%	-0.9%
ROIC	9.3%	8.1%	9.9%	11.0%	-3.0%	-14.0%
ROE	4.0%	2.8%	0.9%	1.8%	-33.6%	-35.5%
Net Debt/EBITDA	5.0x	5.8x	4.5x	3.7x	35.4x	31.7x

Revenue and profitability

The company's Revenue dropped on 31.7% in FY2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 14.1 pp from 17.0% to 2.9% in FY2015.

Net Income marign dropped on 17.9 pp from 0.59% to -17.3% in FY2015.

Capital expenditures (CAPEX) and working capital investments

In FY2015 the company had CAPEX/Revenue of 1.5%. Iol Chemicals & Pharmaceuticals's CAPEX/Revenue dropped on 17.3 pp from 18.8% in FY2012 to 1.5% in FY2015. Average CAPEX/Revenue for the last three years was 2.6%.Battling declining revenue Iol Chemicals & Pharmaceuticals invested a large share of EBITDA (52.5%) to CAPEX but that didn't help at least in this year.

Return on investment

The company operates at negative ROIC (-2.97%) and ROE (-33.62%). ROIC dropped on 14.0 pp from 11.0% to -3.0% in FY2015. ROE dropped on 35.5 pp from 1.8% to -33.6% in FY2015.

Leverage (Debt)

Debt level is 35.4x Net Debt / EBITDA and 35.6x Debt / EBITDA. Net Debt / EBITDA surged on 31.7x from 3.7x to 35.4x in FY2015. Debt surged on 12.2% in FY2015 while cash jumped on 80.1% in FY2015.

Appendix 1: Peers in Commodity Chemicals

Below you can find Iol Chemicals & Pharmaceuticals 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 ($SHHARICH)		-2.5%	-78.0%	299.5%	111.6%
Jindal Poly Films ($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 ($CAMPHOR)		-6.7%	7.2%	42.7%	14.8%
Median (35 companies)	-36.2%	15.5%	11.4%	10.6%	5.6%
Iol Chemicals & Pharmaceuticals ($IOLCP)		20.9%	2.3%	17.0%	-31.7%

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 ($BALAMINES)	18.3%	17.6%	15.5%	14.3%	16.4%
Median (36 companies)	12.1%	10.9%	8.3%	8.5%	6.6%
Iol Chemicals & Pharmaceuticals ($IOLCP)	17.4%	14.6%	18.5%	17.0%	2.9%

Top companies by CAPEX/Revenue, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Kanoria Chemicals & Industries ($KANORICHEM)	12.9%	25.1%	6.0%	13.4%	40.3%
Aditya Birla Chemicals (India) ($ABCIL)	5.9%	136.9%	24.2%	30.8%	15.0%
Aarti Industries ($AARTIIND)	4.8%	8.0%	11.2%	11.0%	10.4%
Alkyl Amines Chemicals ($ALKYLAMINE)	8.0%	5.1%	6.6%	5.9%	8.6%
Sukhjit Starch & Chemicals ($SUKHJITS)	9.2%	15.7%	9.4%	5.4%	5.4%
Median (16 companies)	5.6%	5.2%	7.2%	5.9%	3.4%
Iol Chemicals & Pharmaceuticals ($IOLCP)	18.2%	18.8%	3.9%	2.4%	1.5%

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 ($AARTIIND)	13.1%	15.9%	19.1%	17.2%	17.9%
Median (59 companies)	10.7%	9.2%	9.5%	8.9%	9.8%
Iol Chemicals & Pharmaceuticals ($IOLCP)	9.3%	8.1%	9.9%	11.0%	-3.0%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
India Glycols ($INDIAGLYCO)	8.2x	4.8x	3.7x	8.5x	14.2x
Godrej Industries ($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 ($REFNOL)			4.1x	5.6x	0.0x
Median (41 companies)	2.4x	2.6x	3.0x	0.8x	1.8x
Iol Chemicals & Pharmaceuticals ($IOLCP)	5.0x	5.8x	4.5x	3.7x	35.4x

Iol Chemicals & Pharmaceuticals stock price chart

Iol Chemicals & Pharmaceuticals financials

mln.	FY2010	FY2011	FY2012

Revenue	4,497	3,894	4,707
EBITDA	386.3	677.1	688.6
Net income	100.2	61.792	47.533
CAPEX	731.0	707.5	886.7
Debt	2,691	3,375	3,993
Cash	4.494	12.487	4.397

About Iol Chemicals & Pharmaceuticals

IOL Chemicals and Pharmaceuticals Limited manufactures and sells industrial organic chemicals and bulk drugs worldwide. It operates through Chemicals and Drugs segments. The Chemicals segment offers ethyl acetate, acetic anhydride, acetyl chloride, mono chloro acetic acid, and Iso butyl benzene chemical products for use in flexible packaging, pharmaceuticals, textiles, food processing, pesticides, and paint industries. The Drugs segment provides various active pharmaceutical ingredients, such as ibuprofen, ibuprofen sodium, dex-ibuprofen, omeprazole, lansoprazole, metformin hydrochloride, lamotrigine, fenofibrate, losartan potassium, desloratadine, fluconazole, clopidogrel bi sulphate, tramadol hydrochloride, telmisartan, olmesartan, hydrochlorothiazide, rosuvastatin calcium, oxcarbazepine, and olanzapine for use in various therapeutic categories, including pain management, anti-diabetic, anti-hypertensive, anti-convulsants, anti-ulcer, anti-cholesterol, anti-histaminic, anti-fungal, anti-platlet, analgesic, and diuretic. The company was founded in 1986 and is headquartered in Ludhiana, India.