Granules India EBITDA jumped on 33.0% and Revenue jumped on 10.6%
28-04-2016 • About Granules India (
$GRANULES) • By InTwits
Granules India reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Granules India is a fast growth stock: FY2016 revenue growth was 10.6%, 5 year revenue CAGR was 24.7% at FY2016 ROIC 19.8%
- EBITDA Margin is expanding: 19.5% in FY2016 vs. 16.2% in FY2015 vs. 13.5% in FY2012
- Granules India has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.9%. At the same time it's a lot of higher than industry average of 10.1%.
- CAPEX is quite volatile: ₹1,347m in FY2016, ₹1,481m in FY2015, ₹2,667m in FY2014, ₹1,164m in FY2013, ₹578m in FY2012
- The company has highly profitable business model: ROIC is 19.8%
- It operates with high leverage: Net Debt/EBITDA is 1.2x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 10.6%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.8 pp from 0.23% to 9.1% in FY2016. EBITDA Margin stuck to a growing trend at 1.5 pp per annum in the last 5 years.
Net Income margin increased slightly on 1.3 pp from 7.0% to 8.3% in FY2016. Net Income margin followed a growing trend at 1.0 pp per annum in FY2012-FY2016.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 9.4% in FY2016. The company's CAPEX/Revenue decreased on 5.8 pp from 15.2% in FY2013 to 9.4% in FY2016. For the last three years the average CAPEX/Revenue was 15.1%. During the last 5 years CAPEX as a % of Revenue topped in FY2014 at 24.3% and was declining since that time.
Return on investment
The company operates at high and attractive ROE (21.6%) while ROIC is a bit lower (19.8%). ROIC increased on 2.4 pp from 17.4% to 19.8% in FY2016. ROE decreased slightly on 1.5 pp from 23.1% to 21.6% in FY2016.
Leverage (Debt)
Debt level is 1.2x Net Debt / EBITDA and 1.7x Debt / EBITDA. Net Debt / EBITDA dropped on 0.8x from 2.1x to 1.2x in FY2016. Debt decreased slightly on 1.7% while cash jumped on 154%. During the last 5 years Net Debt/EBITDA topped in FY2014 at 2.7x and was declining since that time.
Granules India has short term refinancing risk: cash is only 58.5% of short term debt.
Management team
V V S Murthy is a Granules India's CFO. V V S Murthy has spent 8 years at the company.
Financial and operational results
Granules India ($GRANULES) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6,540 | 7,644 | 10,959 | 12,937 | 14,312 | 10.6% |
| EBITDA | 885 | 979 | 1,587 | 2,096 | 2,787 | 33.0% |
| Net Income | 300 | 326 | 752 | 909 | 1,185 | 30.3% |
Balance Sheet
|
|---|
| Cash | 225 | 327 | 160 | 524 | 1,332 | 154.2% |
| Short Term Debt | 1,271 | 950 | 1,325 | 1,790 | 2,277 | 27.2% |
| Long Term Debt | 881 | 1,755 | 3,092 | 3,032 | 2,464 | -18.7% |
Cash flow
|
|---|
| Capex | 578 | 1,164 | 2,667 | 1,481 | 1,347 | -9.1% |
Ratios
|
|---|
| Revenue growth | 37.6% | 16.9% | 43.4% | 18.1% | 10.6% | |
| EBITDA growth | 36.2% | 10.7% | 62.0% | 32.1% | 33.0% | |
|
|---|
| EBITDA Margin | 13.5% | 12.8% | 14.5% | 16.2% | 19.5% | 3.3% |
| Net Income Margin | 4.6% | 4.3% | 6.9% | 7.0% | 8.3% | 1.3% |
| CAPEX, % of revenue | 8.8% | 15.2% | 24.3% | 11.4% | 9.4% | -2.0% |
|
|---|
| ROIC | 15.8% | 14.2% | 18.4% | 17.4% | 19.8% | 2.4% |
| ROE | 12.9% | 12.5% | 23.9% | 23.1% | 21.6% | -1.5% |
| Net Debt/EBITDA | 2.2x | 2.4x | 2.7x | 2.1x | 1.2x | -0.8x |
Peers in Pharmaceuticals
Below you can find Granules India benchmarking vs. other companies in Pharmaceuticals 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mangalam Drugs & Organics ($MANGALAM) | 16.6% | -18.2% | -2.1% | 79.8% | - |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 39.9% | 40.4% | 42.4% | 70.2% | - |
| Lyka Labs ($LYKALABS) | 41.9% | -25.7% | -22.6% | 68.7% | - |
| Marksans Pharma ($MARKSANS) | 16.7% | 23.3% | 43.3% | 26.8% | - |
| Torrent Cables ($TORRCABS) | 27.5% | 17.4% | -42.9% | 26.5% | - |
| |
|---|
| Median (41 companies) | 15.3% | 14.7% | 12.6% | 8.6% | 53.1% |
|---|
| Granules India ($GRANULES) | - | 16.9% | 43.4% | 18.1% | 10.6% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dr.Reddy'S Laboratories ($DRREDDY) | - | 52.1% | 57.4% | 57.6% | - |
| Omega Laboratories ($OMEGALAB) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (2 companies) | 46.9% | 26.1% | 28.7% | 28.8% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Divi'S Laboratories ($DIVISLAB) | 37.2% | 38.2% | 40.2% | 37.4% | - |
| Hester Biosciences ($HESTERBIO) | - | - | - | 32.9% | - |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 40.8% | 44.3% | 44.9% | 29.2% | - |
| Natco Pharma ($NATCOPHARM) | 21.5% | 23.2% | 24.9% | 26.2% | - |
| Dr.Reddy'S Laboratories ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | - |
| |
|---|
| Median (53 companies) | 12.7% | 13.4% | 14.8% | 12.0% | 31.9% |
|---|
| Granules India ($GRANULES) | 13.5% | 12.8% | 14.5% | 16.2% | 19.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Claris Lifesciences ($CLARIS) | 58.1% | 42.9% | - | 103.1% | - |
| Wintac ($WINTAC) | - | - | - | 22.8% | - |
| Hester Biosciences ($HESTERBIO) | - | - | - | 21.5% | - |
| Ipca Laboratories ($IPCALAB) | 11.2% | 8.3% | 11.6% | 17.8% | - |
| Natco Pharma ($NATCOPHARM) | 24.4% | 16.3% | 14.4% | 14.1% | - |
| |
|---|
| Median (31 companies) | 7.7% | 7.5% | 5.7% | 6.0% | 9.6% |
|---|
| Granules India ($GRANULES) | 8.8% | 15.2% | 24.3% | 11.4% | 9.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Marksans Pharma ($MARKSANS) | -142.4% | 34.9% | 33.8% | 41.2% | - |
| Alembic Pharmaceuticals ($APLLTD) | 27.5% | 29.1% | 41.5% | 35.7% | 62.1% |
| Jenburkt Pharmaceuticals ($JENBURPH) | 34.1% | 29.0% | 32.4% | 35.3% | - |
| Abbott India ($ABBOTINDIA) | 29.6% | 26.9% | 30.5% | 34.2% | - |
| Divi'S Laboratories ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | - |
| |
|---|
| Median (63 companies) | 13.7% | 13.2% | 14.4% | 13.0% | 31.0% |
|---|
| Granules India ($GRANULES) | 15.8% | 14.2% | 18.4% | 17.4% | 19.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Life Sciences Limited ($JUBILANT) | 4.0x | 3.5x | 3.5x | 6.4x | - |
| Shasun Pharmaceuticals ($SHASUNPHAR) | 2.8x | 4.5x | 6.0x | 6.2x | - |
| Claris Lifesciences ($CLARIS) | 1.9x | 1.1x | 1.8x | 3.2x | - |
| Dishman Pharmaceuticals & Chemicals ($DISHMAN) | 3.6x | 2.6x | 2.3x | 2.9x | - |
| Neuland Laboratories ($NEULANDLAB) | 4.2x | 3.5x | 2.6x | 2.6x | - |
| |
|---|
| Median (48 companies) | 1.4x | 1.2x | 0.3x | 0.0x | -0.3x |
|---|
| Granules India ($GRANULES) | 2.2x | 2.4x | 2.7x | 2.1x | 1.2x |
