Kiri Industries reports 1,731% Net Income growth and almost no change in EBITDA Margin of 10.9%
29-05-2015 • About Kiri Industries (
$KIRIINDUS) • By InTwits
Kiri Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 10.9% in FY2015, 10.6% in FY2014, 4.2% in FY2013, 4.1% in FY2012, 8.0% in FY2011
- Kiri Industries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.2%. At the same time it's in pair with industry average of 4.9%.
- CAPEX is quite volatile: 496 in FY2015, 384 in FY2014, 249 in FY2013, 2,236 in FY2012, 2,012 in FY2011
- The company has potentially unprofitable business model: ROIC is at 6.5%
- It operates with high leverage: Net Debt/EBITDA is 7.7x while industry average is 1.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Kiri Industries ($KIRIINDUS) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 38,067 | 41,088 | 5,540 | 6,912 | 9,308 | 34.7% |
| EBITDA | 3,045 | 1,683 | 233 | 730 | 1,018 | 39.4% |
| Net Income | -2,777 | -687 | -1,995 | 99 | 1,815 | 1,731.2% |
Balance Sheet
|
|---|
| Cash | 1,195 | 2,436 | 66 | 101 | 44 | -56.3% |
| Short Term Debt | 3,025 | 13,077 | 2,386 | 2,864 | 524 | -81.7% |
| Long Term Debt | 10,091 | 3,114 | 4,964 | 4,956 | 7,346 | 48.2% |
Cash flow
|
|---|
| Capex | 2,012 | 2,236 | 249 | 384 | 496 | 29.2% |
Ratios
|
|---|
| Revenue growth | 244.4% | 7.9% | -86.5% | 24.8% | 34.7% | |
| EBITDA growth | 356.3% | -44.7% | -86.2% | 213.7% | 39.4% | |
| EBITDA Margin | 8.0% | 4.1% | 4.2% | 10.6% | 10.9% | 0.4% |
| Net Income Margin | -7.3% | -1.7% | -36.0% | 1.4% | 19.5% | 18.1% |
| CAPEX, % of revenue | 5.3% | 5.4% | 4.5% | 5.6% | 5.3% | -0.2% |
| ROIC | 9.2% | 2.2% | -0.7% | 3.8% | 6.5% | 2.8% |
| ROE | -28.2% | -7.3% | -36.1% | 5.4% | 58.3% | 52.9% |
| Net Debt/EBITDA | 3.9x | 8.2x | 31.3x | 10.6x | 7.7x | -2.9x |
Revenue and profitability
Kiri Industries's Revenue surged on 34.7% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.4 pp from 1.4% to 4.8% in FY2015.
Net Income marign jumped on 18.1 pp from 1.4% to 19.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 5.3% in FY2015. Kiri Industries's CAPEX/Revenue showed almost no change from FY2012 to FY2015. For the last three years the average CAPEX/Revenue was 5.1%.
Return on investment
The company operates at good ROE (58.29%) while ROIC is low (6.51%). ROIC increased on 2.8 pp from 3.8% to 6.5% in FY2015. ROE jumped on 52.9 pp from 5.4% to 58.3% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 7.7x and Debt / EBITDA is 7.7x. Net Debt / EBITDA dropped on 2.9x from 10.6x to 7.7x in FY2015. Debt increased slightly on 0.65% in FY2015 while cash dropped on 56.3% in FY2015.
Valuation
The company's trades at EV/EBITDA 10.0x and P/E 1.3x while industy averages are 10.5x and 26.1x. Kiri Industries's EV/(EBITDA-CAPEX) is 19.5x with the industry average at 4.7x.
Appendix 1: Peers in Specialty Chemicals
Below you can find Kiri Industries 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 ($VINATIORGA) | | 38.7% | 23.6% | 25.9% | 10.9% |
| |
|---|
| Median (27 companies) | -52.7% | 20.9% | 14.1% | 11.3% | 9.8% |
|---|
| Kiri Industries ($KIRIINDUS) | | 7.9% | -86.5% | 24.8% | 34.7% |
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 ($CAMLINFIN) | 9.1% | 9.1% | 12.8% | 12.8% | 16.7% |
| |
|---|
| Median (23 companies) | 11.7% | 10.7% | 12.8% | 10.6% | 12.3% |
|---|
| Kiri Industries ($KIRIINDUS) | 8.0% | 4.1% | 4.2% | 10.6% | 10.9% |
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 ($CAMLINFIN) | 7.5% | 4.3% | 5.7% | 7.1% | 5.1% |
| |
|---|
| Median (18 companies) | 7.3% | 4.9% | 4.7% | 4.3% | 4.7% |
|---|
| Kiri Industries ($KIRIINDUS) | 5.3% | 5.4% | 4.5% | 5.6% | 5.3% |
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 ($PLASTIBLEN) | 19.4% | 18.3% | 15.8% | 24.0% | 24.5% |
| |
|---|
| Median (35 companies) | 15.5% | 15.3% | 15.0% | 12.3% | 21.4% |
|---|
| Kiri Industries ($KIRIINDUS) | 9.2% | 2.2% | -0.7% | 3.8% | 6.5% |
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 |
| 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 |
| Meghmani Organics ($MEGH) | 4.8x | 4.2x | 3.7x | 4.3x | 3.1x |
| |
|---|
| Median (28 companies) | 1.3x | 1.4x | 1.5x | 1.7x | 0.0x |
|---|
| Kiri Industries ($KIRIINDUS) | 3.9x | 8.2x | 31.3x | 10.6x | 7.7x |
