Biocon Net Income surged on 80.2% and EBITDA Margin increased slightly on 1.0 pp from 23.6% to 24.6%
26-04-2016 • About Biocon (
$BIOCON) • By InTwits
Biocon reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Biocon is a growth stock: FY2016 revenue growth was 12.8%, 5 year revenue CAGR was 14.3% at FY2016 ROIC 10.9%
- Biocon has high CAPEX intensity: 5 year average CAPEX/Revenue was 21.1%. At the same time it's a lot of higher than industry average of 12.2%.
- CAPEX is quite volatile: ₹8,106m in FY2016, ₹8,381m in FY2015, ₹7,885m in FY2014, ₹3,586m in FY2013, ₹2,745m in FY2012
- The company has business model with average profitability: ROIC is 10.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Biocon's Revenue surged on 12.8%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 3.3 pp from 17.1% to 13.8% in FY2016.
Net Income margin increased on 9.6 pp from 16.1% to 25.7% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Biocon had CAPEX/Revenue of 23.3%. Biocon's CAPEX/Revenue increased on 8.8 pp from 14.4% in FY2013 to 23.3% in FY2016. For the last three years the average CAPEX/Revenue was 25.9%. To maintain its fast growth the company invested a large share of EBITDA (94.4%) to CAPEX. During the last 5 years CAPEX as a % of Revenue topped in FY2014 at 27.4% and was declining since that time.
Return on investment
The company operates at good ROE (24.5%) while ROIC is low (10.9%). ROIC decreased slightly on 1.3 pp from 12.2% to 10.9% in FY2016. ROE increased on 8.7 pp from 15.8% to 24.5% in FY2016. During the last 5 years ROIC topped in FY2014 at 15.4% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.7x and Debt / EBITDA is 2.9x. Net Debt / EBITDA surged on 0.6x from 0.1x to 0.7x in FY2016. Debt surged on 143% while cash jumped on 105%.
Biocon has no short term refinancing risk: cash is higher than short term debt (445.7%).
Management team
The company's CEO Arun Suresh Chandavarkar has spent 6 years with the company. Biocon's CFO Siddharth Mittal has spent 6 years with the company.
Financial and operational results
Biocon ($BIOCON) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 20,490 | 24,853 | 28,773 | 30,898 | 34,854 | 12.8% |
| SG&A | | | | | 1,139 | |
| EBITDA | 5,187 | 5,701 | 7,398 | 7,300 | 8,584 | 17.6% |
| Net Income | 3,384 | 5,089 | 4,287 | 4,974 | 8,961 | 80.2% |
Balance Sheet
|
|---|
| Cash | 2,836 | 4,735 | 5,564 | 9,366 | 19,200 | 105.0% |
| Short Term Debt | 1,873 | 1,033 | 2,435 | 2,610 | 4,308 | 65.1% |
| Long Term Debt | 698 | 1,640 | 6,062 | 7,696 | 20,724 | 169.3% |
Cash flow
|
|---|
| Capex | 2,745 | 3,586 | 7,885 | 8,381 | 8,106 | -3.3% |
Ratios
|
|---|
| Revenue growth | 14.5% | 21.3% | 15.8% | 7.4% | 12.8% | |
| EBITDA growth | -1.6% | 9.9% | 29.8% | -1.3% | 17.6% | |
|
|---|
| EBITDA Margin | 25.3% | 22.9% | 25.7% | 23.6% | 24.6% | 1.0% |
| SG&A, % of revenue | | | | | 3.3% | |
| Net Income Margin | 16.5% | 20.5% | 14.9% | 16.1% | 25.7% | 9.6% |
| CAPEX, % of revenue | 13.4% | 14.4% | 27.4% | 27.1% | 23.3% | -3.9% |
|
|---|
| ROIC | 13.5% | 13.9% | 15.4% | 12.2% | 10.9% | -1.3% |
| ROE | 15.7% | 20.5% | 15.0% | 15.8% | 24.5% | 8.7% |
| Net Debt/EBITDA | -0.1x | -0.4x | 0.4x | 0.1x | 0.7x | 0.6x |
Peers in Biotechnology
Below you can find Biocon benchmarking vs. other companies in Biotechnology 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Panacea Biotec ($PANACEABIO) | -39.0% | -22.2% | -6.1% | 34.7% | - |
| |
|---|
| Median (1 company) | -39.0% | -22.2% | -6.1% | 34.7% | - |
|---|
| Biocon ($BIOCON) | - | 21.3% | 15.8% | 7.4% | 12.8% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Panacea Biotec ($PANACEABIO) | -7.1% | -9.1% | -13.6% | 10.4% | - |
| Alpa Laboratories ($ALPA) | - | - | - | 6.0% | - |
| |
|---|
| Median (2 companies) | -7.1% | -9.1% | -13.6% | 8.2% | - |
|---|
| Biocon ($BIOCON) | 25.3% | 22.9% | 25.7% | 23.6% | 24.6% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Panacea Biotec ($PANACEABIO) | 19.3% | 14.7% | 11.0% | 1.1% | - |
| |
|---|
| Median (1 company) | 19.3% | 14.7% | 11.0% | 1.1% | - |
|---|
| Biocon ($BIOCON) | 13.4% | 14.4% | 27.4% | 27.1% | 23.3% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Panacea Biotec ($PANACEABIO) | -7.5% | -8.0% | -8.7% | 0.3% | - |
| Vivo Bio Tech ($VIVOBIOT) | 11.4% | 4.0% | - | - | - |
| Alpa Laboratories ($ALPA) | 1.9% | -1.6% | - | - | - |
| Saamya Biotech (India) ($SAAMYABIO) | 1.6% | -1.1% | - | - | - |
| |
|---|
| Median (4 companies) | 1.7% | -1.4% | -8.7% | 0.3% | - |
|---|
| Biocon ($BIOCON) | 13.5% | 13.9% | 15.4% | 12.2% | 10.9% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Panacea Biotec ($PANACEABIO) | - | - | - | 15.0x | - |
| Alpa Laboratories ($ALPA) | 3.4x | 4.6x | 0.0x | 0.0x | - |
| |
|---|
| Median (2 companies) | 3.4x | 0.9x | 0.0x | 7.5x | - |
|---|
| Biocon ($BIOCON) | -0.1x | -0.4x | 0.4x | 0.1x | 0.7x |
