Is Tcpl Packaging a solid growth stock? - The numbers tells it is
05-06-2015 • About Tcpl Packaging (
$TCPLPACK) • By InTwits
Tcpl Packaging is a fast-growing stock in Paper & Paper Products industry. Its revenue performance, profitability and healthy financial model stands it out vs. other public companies on the market.
Growth story
Tcpl Packaging showed fast growth in the last financial year. Tcpl Packaging's revenue surged on 26.1% in FY2015. EBITDA also increased considerably: 32.5% for the same period.
In the longer period Tcpl Packaging showed fast revenue growth of 21.3% from FY2012 to FY2015 annually. EBITDA surged on 22.4% from FY2012 to FY2015 annually.
Tcpl Packaging ($TCPLPACK) financials for the last 5 years
| mln. INR | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Revenue | 2,370 | 2,792 | 3,733 | 3,949 | 4,978 |
|---|
| Revenue growth, % | | 17.8% | 33.7% | 5.8% | 26.1% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 348 | 449 | 556 | 622 | 824 |
|---|
| EBITDA growth, % | | 28.9% | 23.9% | 11.8% | 32.5% |
|---|
| EBITDA margin, % | 14.7% | 16.1% | 14.9% | 15.7% | 16.5% |
|---|
| Net Income | 63 | 77 | 135 | 125 | 322 |
|---|
| Net Income margin, % | 2.65% | 2.76% | 3.62% | 3.17% | 6.47% |
|---|
| |
| CAPEX | 287 | 511 | 321 | 439 | 600 |
|---|
| CAPEX/Revenue, % | 12.1% | 18.3% | 8.59% | 11.1% | 12.1% |
|---|
| Debt | 903 | 1,145 | 1,255 | 1,401 | 1,564 |
|---|
| Cash | 1 | 1 | 1 | 5 | 23 |
|---|
| Net Debt/EBITDA | 2.6x | 2.6x | 2.3x | 2.2x | 1.9x |
|---|
| |
| ROIC, % | 13.3% | 15.4% | 17.4% | 16.9% | 23.1% |
|---|
| ROE, % | 11.1% | 12.1% | 18.6% | 15.1% | 31.9% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. EBITDA margin increased on 0.800 pp from 15.7% to 16.5% in FY2015. If we look for the longer period the company's EBITDA margin increased slightly on 0.400 pp from 16.1% in FY2012 to 16.5% in FY2015.
We call Tcpl Packaging an attractive growth stock as together with the growth it delivers high ROIC at 23.1%. During the last three years it surged - it was 15.4% in FY2012. It's average ROIC for the last three years was 19.2%.
Net Income margin surged on 3.30 pp from 3.20% to 6.50% in FY2015. In the last 3 years Net Income margin surged on 3.70 pp from 2.80% in FY2012 to 6.50% in FY2015.
Tcpl Packaging operates at ROE of 31.9%. It's average ROE for the last three years was 21.9%.
Capital expenditures (CAPEX)
To this fast growth the company had to invest in CAPEX.In FY2015 the company had CAPEX/Revenue of 12.1%. Tcpl Packaging showed big decline in CAPEX/Revenue of 6.25 pp from 18.3% in FY2012 to 12.1% in FY2015. Average CAPEX/Revenue for the last three years was 10.6%.
Leverage (Debt)
Tcpl Packaging has medium debt level at 1.9x Net Debt/EBITDA to maintain high growth. In the last 3 years the company's leverage dropped on 0.68x from 2.55x in FY2012 to 1.87x in FY2015.
Valuation vs. comparable companies
At the end of trading day today Tcpl Packaging traded at 6.5x EV/EBITDA which is 53.4% lower than 13.9x Paper & Paper Products peer group avearge calculated on the basis of 80 companies. The market closed today at 11.8x P/E for Tcpl Packaging which is 98% lower than 603.2x Paper & Paper Products peer group avearge calculated on the basis of 8 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The market closed today at 23.9x EV/(EBITDA-CAPEX) for Tcpl Packaging which is 196% higher than 8.1x Paper & Paper Products peer group avearge calculated on the basis of 4 companies.
Peers in Paper & Paper Products
Below you can find Tcpl Packaging benchmarking vs. other companies in Paper & Paper Products 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 |
|---|
| Yash Papers ($YASHPPR) | | 9.0% | -3.6% | 39.5% | 17.3% |
| Tamil Nadu Newsprint & Papers ($TNPL) | | 26.0% | 22.2% | 22.8% | -6.5% |
| Malu Paper Mills ($MALUPAPER) | | 0.3% | 4.9% | 22.6% | 6.0% |
| Jk Paper ($JKPAPER) | | 7.9% | 9.4% | 18.5% | 24.3% |
| Shreyans Industries ($SHREYANIND) | | 7.8% | 24.4% | 17.3% | -8.8% |
| |
|---|
| Median (14 companies) | -38.1% | 8.6% | 4.7% | 8.4% | -0.3% |
|---|
| Tcpl Packaging ($TCPLPACK) | | 17.8% | 33.7% | 5.8% | 26.1% |
Top companies by EBITDA margin, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Tamil Nadu Newsprint & Papers ($TNPL) | 26.2% | 21.0% | 22.2% | 22.5% | 24.0% |
| South India Paper Mills ($STHINPA) | 14.9% | 13.5% | 16.1% | 10.2% | 15.8% |
| Yash Papers ($YASHPPR) | 15.6% | 15.7% | 16.8% | 16.0% | 15.7% |
| Kuantum Papers ($KUANTUM) | 15.1% | 11.2% | 14.2% | 15.9% | 12.7% |
| Emami Paper Mills ($EMAMIPAP) | 15.1% | 13.3% | 15.0% | 14.5% | 11.4% |
| |
|---|
| Median (10 companies) | 12.1% | 11.6% | 11.8% | 13.2% | 11.4% |
|---|
| Tcpl Packaging ($TCPLPACK) | 14.7% | 16.1% | 14.9% | 15.7% | 16.5% |
Top companies by CAPEX/Revenue, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top |
|---|
| Emami Paper Mills ($EMAMIPAP) | 5.0% | 24.4% | 7.3% | 19.2% | 89.3% |
| Tamil Nadu Newsprint & Papers ($TNPL) | 23.6% | 18.9% | 10.4% | 5.5% | 35.2% |
| Jk Paper ($JKPAPER) | 10.1% | 47.6% | 59.5% | 15.9% | 4.2% |
| |
|---|
| Median (3 companies) | 5.3% | 11.3% | 10.4% | 15.9% | 35.2% |
|---|
| Tcpl Packaging ($TCPLPACK) | 12.1% | 18.3% | 8.6% | 11.1% | 12.1% |
Top companies by ROIC, %
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Yash Papers ($YASHPPR) | 7.3% | 8.3% | 8.3% | 11.5% | |
| Tamil Nadu Newsprint & Papers ($TNPL) | 7.6% | 5.3% | 8.2% | 11.1% | 12.7% |
| Emami Paper Mills ($EMAMIPAP) | | 5.8% | 5.9% | 5.4% | 3.0% |
| Jk Paper ($JKPAPER) | 15.4% | 5.2% | 2.7% | 1.1% | 4.3% |
| Rama Pulp & Papers ($RAMAPULP) | | | 10.8% | | |
| |
|---|
| Median (21 companies) | 6.8% | 7.9% | 8.2% | 8.3% | 4.3% |
|---|
| Tcpl Packaging ($TCPLPACK) | 13.3% | 15.4% | 17.4% | 16.9% | 23.1% |
Top companies by Net Debt / EBITDA
| FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Top 5 |
|---|
| Jk Paper ($JKPAPER) | 2.0x | 6.8x | 12.7x | 14.1x | 8.6x |
| Emami Paper Mills ($EMAMIPAP) | 5.9x | 7.4x | 5.3x | 5.0x | 11.2x |
| Yash Papers ($YASHPPR) | 5.7x | 5.2x | 5.5x | 4.5x | 0.0x |
| Tamil Nadu Newsprint & Papers ($TNPL) | 4.7x | 5.4x | 3.6x | 2.8x | 4.0x |
| Rama Pulp & Papers ($RAMAPULP) | 0.1x | 0.8x | 1.1x | 0.0x | |
| |
|---|
| Median (14 companies) | 4.3x | 3.6x | 3.3x | 0.0x | 0.0x |
|---|
| Tcpl Packaging ($TCPLPACK) | 2.6x | 2.6x | 2.3x | 2.2x | 1.9x |
