Rain Industries revenue dropped on 14.4% in 2015 while EBITDA Margin increased on 3.1 pp from 10.3% to 13.4%
19-02-2016 • About Rain Industries (
$RAIN) • By InTwits
Rain Industries reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Rain Industries is a company in decline: FY2015 revenue growth was -14.4%, 5 years revenue CAGR was -4.1%
- EBITDA Margin is quite volatile: 13.4% in FY2015, 10.3% in FY2014, 12.0% in FY2013, 20.8% in FY2012, 24.6% in FY2011
- Rain Industries has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.8%. At the same time it's in pair with industry average of 4.9%.
- CAPEX is quite volatile: 4,987 in FY2015, 3,986 in FY2014, 3,654 in FY2013, 5,284 in FY2012, 1,450 in FY2011
- The company has business model with low profitability: ROIC is at 9.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 4.9x while industry average is 4.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Rain Industries ($RAIN) key annual financial indicators
| mln. INR | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 56,395 | 53,444 | 115,039 | 119,370 | 102,185 | -14.4% |
| EBITDA | 13,877 | 11,117 | 13,755 | 12,265 | 13,693 | 11.6% |
| Net Income | 6,641 | 4,577 | 3,845 | 885 | 3,233 | 265.2% |
Balance Sheet
|
|---|
| Cash | 4,350 | 46,631 | 8,410 | 8,959 | 8,568 | -4.4% |
| Short Term Debt | 5,950 | 882 | 5,867 | 5,048 | 4,634 | -8.2% |
| Long Term Debt | 31,518 | 61,756 | 74,508 | 71,678 | 71,323 | -0.5% |
Cash flow
|
|---|
| Capex | 1,450 | 5,284 | 3,654 | 3,986 | 4,987 | 25.1% |
Ratios
|
|---|
| Revenue growth | -55.2% | -5.2% | 115.3% | 3.8% | -14.4% | |
| EBITDA growth | 86.9% | -19.9% | 23.7% | -10.8% | 11.6% | |
| EBITDA Margin | 24.6% | 20.8% | 12.0% | 10.3% | 13.4% | 3.1% |
| Net Income Margin | 11.8% | 8.6% | 3.3% | 0.7% | 3.2% | 2.4% |
| CAPEX, % of revenue | 2.6% | 9.9% | 3.2% | 3.3% | 4.9% | 1.5% |
| ROIC | 23.3% | 13.3% | 10.2% | 8.0% | 9.6% | 1.6% |
| ROE | 37.8% | 19.6% | 13.3% | 2.9% | 11.0% | 8.1% |
| Net Debt/EBITDA | 2.4x | 1.4x | 5.2x | 5.5x | 4.9x | -0.6x |
Revenue and profitability
Rain Industries's Revenue dropped on 14.4% in FY2015. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.1 pp from 10.3% to 13.4% in FY2015.
Net Income marign increased on 2.4 pp from 0.74% to 3.2% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Rain Industries had CAPEX/Revenue of 4.9%. Rain Industries's CAPEX/Revenue decreased on 5.0 pp from 9.9% in FY2012 to 4.9% in FY2015. Average CAPEX/Revenue for the last three years was 3.8%.
Return on investment
The company operates at low ROIC (9.61%) and ROE (10.99%). ROIC increased slightly on 1.6 pp from 8.0% to 9.6% in FY2015. ROE increased on 8.1 pp from 2.9% to 11.0% in FY2015.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.9x and Debt / EBITDA is 5.5x. Net Debt / EBITDA dropped on 0.6x from 5.5x to 4.9x in FY2015. Debt decreased slightly on 1.0% in FY2015 while cash decreased on 4.4% in FY2015.
Valuation
Rain Industries's trades at EV/EBITDA 5.7x and P/E 3.3x while industy averages are 10.5x and 26.1x. Rain Industries's EV/(EBITDA-CAPEX) is 9.0x with the industry average at 4.7x.
Appendix 1: Peers in Petrochemicals
Below you can find Rain Industries benchmarking vs. other companies in Petrochemicals 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.
