Polyplex Corporation EBITDA jumped on 77.4% in 2015 and Revenue increased slightly on 1.1%

31-05-2015 • About Polyplex Corporation ($POLYPLEX) • By InTwits

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

Polyplex Corporation doesn't have a profitable business model yet: FY2015 ROIC is 1.5%
EBITDA Margin is quite volatile: 8.9% in FY2015, 5.1% in FY2014, 7.5% in FY2013, 17.0% in FY2012, 36.6% in FY2011
Polyplex Corporation has high CAPEX intensity: 5 year average CAPEX/Revenue was 16.4%. At the same time it's a lot of higher than industry average of 5.7%.
CAPEX is quite volatile: 1,569 in FY2015, 6,071 in FY2014, 10,457 in FY2013, 2,593 in FY2012, 1,457 in FY2011
The company has potentially unprofitable business model: ROIC is at 1.5%
It operates with high leverage: Net Debt/EBITDA is 4.7x while industry average is 3.1x

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

Polyplex Corporation ($POLYPLEX) key annual financial indicators

mln. INR	2011	2012	2013	2014	2015	2015/2014
P&L
Revenue	24,333	24,158	25,312	31,683	32,042	1.1%
EBITDA	8,916	4,095	1,888	1,610	2,857	77.4%
Net Income	10,556	940	212	-68	379
Balance Sheet
Cash	2,065	3,515	3,016	9,315	3,068	-67.1%
Short Term Debt	2,359	2,499	4,456	6,381	6,814	6.8%
Long Term Debt	4,924	4,733	11,342	14,419	9,731	-32.5%
Cash flow
Capex	1,457	2,593	10,457	6,071	1,569	-74.2%
Ratios
Revenue growth	-37.3%	-0.7%	4.8%	25.2%	1.1%
EBITDA growth	306.2%	-54.1%	-53.9%	-14.7%	77.4%
EBITDA Margin	36.6%	17.0%	7.5%	5.1%	8.9%	3.8%
Net Income Margin	43.4%	3.9%	0.8%	-0.2%	1.2%	1.4%
CAPEX, % of revenue	6.0%	10.7%	41.3%	19.2%	4.9%	-14.3%
ROIC	34.0%	8.9%	1.0%	-0.7%	1.5%	2.1%
ROE	93.0%	5.4%	1.1%	-0.3%	1.7%	2.1%
Net Debt/EBITDA	0.6x	0.9x	6.8x	7.1x	4.7x	-2.4x

Revenue and profitability

The company's Revenue increased slightly on 1.1% in FY2015. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 9.3 pp from 14.2% to 23.5% in FY2015.

Net Income marign increased slightly on 1.4 pp from -0.22% to 1.2% in FY2015.

Capital expenditures (CAPEX) and working capital investments

Polyplex Corporation's CAPEX/Revenue was 4.9% in FY2015. The company showed decline in CAPEX/Revenue of 5.8 pp from 10.7% in FY2012 to 4.9% in FY2015. For the last three years the average CAPEX/Revenue was 21.8%.Polyplex Corporation invested a large share of EBITDA (54.9%) to CAPEX.

Return on investment

The company operates at low ROIC (1.47%) and ROE (1.73%). ROIC increased on 2.1 pp from -0.68% to 1.5% in FY2015. ROE increased on 2.1 pp from -0.32% to 1.7% in FY2015.

Leverage (Debt)

Debt level is 4.7x Net Debt / EBITDA and 5.8x Debt / EBITDA. Net Debt / EBITDA dropped on 2.4x from 7.1x to 4.7x in FY2015. Debt dropped on 20.5% in FY2015 while cash dropped on 67.1% in FY2015.

Appendix 1: Peers in Commodity Chemicals

Below we provide Polyplex Corporation 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
Tuticorin Alkali Chemicals & Fertilisers ($TUTIALKA)		354.1%	-27.9%	-83.3%	408.0%
Jayshree Chemicals ($JAYCH)		288.9%	17.5%	-75.2%	262.3%
Shree Hari Chemicals Export ($SHHARICH)		-2.5%	-78.0%	299.5%	111.6%
Jindal Poly Films ($JINDPOLBBPH)		-17.2%	-6.3%	131.7%	46.9%
Southern Online Bio Technologies ($SBTL)		50.0%	56.8%	40.8%	22.6%
Median (34 companies)	-35.2%	19.0%	11.4%	10.6%	6.4%
Polyplex Corporation ($POLYPLEX)		-0.7%	4.8%	25.2%	1.1%

Top companies by EBITDA margin, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Riddhi Siddhi Gluco Biols ($RIDDHI)					104.7%
Mysore Petro Chemicals ($MYSORPETRO)					47.1%
Aditya Birla Chemicals (India) ($ABCIL)	33.6%	26.8%	27.1%	23.6%	21.9%
Indo Borax & Chemicals ($INDOBORAX)					21.3%
Chemfab Alkalis ($CHEMFALKAL)	19.0%	22.3%	32.9%	24.2%	19.8%
Median (46 companies)	12.1%	10.9%	8.4%	8.6%	6.6%
Polyplex Corporation ($POLYPLEX)	36.6%	17.0%	7.5%	5.1%	8.9%

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 ($SUKHJITS)	9.2%	15.7%	9.4%	5.4%	5.4%
Median (20 companies)	5.6%	5.2%	6.3%	5.4%	3.2%
Polyplex Corporation ($POLYPLEX)	6.0%	10.7%	41.3%	19.2%	4.9%

Top companies by ROIC, %


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Bodal Chemicals ($BODALCHEM)		-1.3%	3.3%	39.0%	38.3%
Alkyl Amines Chemicals ($ALKYLAMINE)	10.3%	16.0%	18.7%	25.0%	23.7%
Aarti Industries ($AARTIIND)	13.1%	15.9%	19.1%	17.2%	17.9%
Transpek Industry ($TRANSPEK)	15.7%	-1.7%	14.2%	11.0%	17.8%
Balaji Amines ($BALAMINES)	20.3%	19.3%	16.1%	15.6%	16.5%
Median (53 companies)	10.5%	9.2%	9.8%	9.9%	8.8%
Polyplex Corporation ($POLYPLEX)	34.0%	8.9%	1.0%	-0.7%	1.5%

Top companies by Net Debt / EBITDA


Top 5	FY2011	FY2012	FY2013	FY2014	FY2015
Iol Chemicals & Pharmaceuticals ($IOLCP)	5.0x	5.8x	4.5x	3.7x	35.4x
India Glycols ($INDIAGLYCO)	8.2x	4.8x	3.7x	8.5x	14.2x
Godrej Industries ($GODREJIND)	6.8x	9.9x	5.7x	7.9x	10.7x
Kanoria Chemicals & Industries ($KANORICHEM)	4.2x	5.2x	9.6x	3.5x	9.4x
Garware Polyester ($GARWARPOLY)	0.6x	2.2x	3.8x	4.0x	5.2x
Median (35 companies)	2.5x	2.6x	3.0x	0.8x	1.1x
Polyplex Corporation ($POLYPLEX)	0.6x	0.9x	6.8x	7.1x	4.7x

Polyplex Corporation stock price chart

Polyplex Corporation financials

mln.	FY2010	FY2011	FY2012

Revenue	38,812	24,333	24,158
EBITDA	2,195	8,916	4,095
Net income	939.9	10,556	939.8
CAPEX	5,478	1,457	2,593
Debt	8,540	7,283	7,232
Cash	1,284	2,065	3,515

About Polyplex Corporation

Polyplex Corporation Limited manufactures and sells thin and thick polyester (PET) films primarily for flexible packaging in India and internationally. The company offers sarafil base films, including BOPET films for use in packaging, electrical, and industrial applications; BOPP films, which are transparent bi-oriented polypropylene films for flexible packaging and other applications; CPP films that are transparent cast polypropylene films for flexible packaging and other applications; blown polypropylene films used in pressure sensitive applications; and sustainable films. It also provides saracote range of silicone coated polyester films, such as release liner-labels, release liner-specialty products, shingle roofing tapes, release film liners, and primer coated liners used in labels, tapes, roofing shingles, and peel and stick underlayments. In addition, the company offers saralam range of extrusion coated film products comprising reflective insulation, decorative lamination, polyester thermal lamination film-thin and thick gauge, polypropylene thermal lamination, MegaBond polyester and polypropylene thermal lamination, nylon thermal lamination, and Zafira UV polyester thermal lamination films for use in thermal lamination products, such as book covers, identity cards, etc., as well as in carton lamination, commercial films, etc. Further, it provides saraprint, a non tearable polyester film for various applications comprising photo albums, commercial printing, promotional and customized digital printing, and flexible packaging applications, as well as in durable displays, certificates, aadhar cards, product catalogues, company broachers, signage, posters, graphic industries, visiting cards, menu cards, and self adhesive labels application. Additionally, the company is involved in trading plastic products; and the wholesale trade of packaged beverages and food products. Polyplex Corporation Limited was incorporated in 1984 and is headquartered in Noida, India.