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Kajaria Ceramics EBITDA surged on 31.9% and Revenue jumped on 10.6%

28-04-2016 • About Kajaria Ceramics ($KAJARIACER) • By InTwits

Kajaria Ceramics reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • Kajaria Ceramics is a fast growth stock: FY2016 revenue growth was 10.6%, 5 year revenue CAGR was 20.5% at FY2016 ROIC 31.3%
  • EBITDA Margin is expanding: 19.4% in FY2016 vs. 16.3% in FY2015 vs. 15.8% in FY2012
  • Kajaria Ceramics has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.5%. At the same time it's a lot of higher than industry average of 7.0%.
  • CAPEX is quite volatile: ₹2,738m in FY2016, ₹2,696m in FY2015, ₹1,568m in FY2014, ₹1,543m in FY2013, ₹751m in FY2012
  • The company has highly profitable business model: ROIC is 31.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


Kajaria Ceramics's Revenue jumped on 10.6%. Revenue decline was accelerating on average at -5.8 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.2 pp from 17.2% to 19.4% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2013 at 15.3% and was growing since that time.

Net Income margin increased slightly on 1.4 pp from 8.0% to 9.5% in FY2016. Net Income margin grew at 0.82 pp per annum in the last 5 years.

Investments (CAPEX, working capital and M&A)


Kajaria Ceramics's CAPEX/Revenue was 11.3% in FY2016. Kajaria Ceramics's CAPEX/Revenue increased slightly on 1.7 pp from 9.6% in FY2013 to 11.3% in FY2016. For the last three years the average CAPEX/Revenue was 10.7%. To fuel its fast growth Kajaria Ceramics invested a large share of EBITDA (58.4%) to CAPEX.

Return on investment


The company operates at high and attractive ROIC (31.3%) and ROE (27.5%). ROIC increased slightly on 1.5 pp from 29.8% to 31.3% in FY2016. ROE showed almost no change in FY2016. ROIC stuck to a growing trend at 0.80 pp per annum in FY2012-FY2016. ROE followed a declining trend at -1.4 pp per annum in the last 5 years.

Leverage (Debt)


Debt level is 0.6x Net Debt / EBITDA and 0.6x Debt / EBITDA. Net Debt / EBITDA decreased on 0.1x from 0.7x to 0.6x in FY2016. Debt jumped on 21.7% while cash surged on 101%. Net Debt/EBITDA followed a declining trend at -0.2x per annum in FY2012-FY2016.

Kajaria Ceramics has short term refinancing risk: cash is only 13.0% of short term debt.

Management team


Kajaria Ceramics's CFO is Sanjeev Agarwal. Sanjeev Agarwal has 26 years tenure at the company.

Financial and operational results


Kajaria Ceramics ($KAJARIACER) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue13,13016,12018,36321,86924,18510.6%
SG&A741
EBITDA2,0812,4672,8623,5554,68931.9%
Net Income8091,0451,2421,7562,29230.5%
Balance Sheet
Cash865198197101.4%
Short Term Debt1,8652,3091,5131,4701,5143.0%
Long Term Debt9178938519641,44950.3%
Cash flow
Capex7511,5431,5682,6962,7381.6%
Ratios
Revenue growth37.7%22.8%13.9%19.1%10.6%
EBITDA growth38.6%18.5%16.0%24.2%31.9%
EBITDA Margin15.8%15.3%15.6%16.3%19.4%3.1%
SG&A, % of revenue3.1%
Net Income Margin6.2%6.5%6.8%8.0%9.5%1.4%
CAPEX, % of revenue5.7%9.6%8.5%12.3%11.3%-1.0%
ROIC27.9%28.6%28.8%29.8%31.3%1.5%
ROE32.1%32.5%27.9%27.6%27.5%-0.1%
Net Debt/EBITDA1.3x1.3x0.8x0.7x0.6x-0.1x

Peers in Furniture-Furnishing-Paints


Below we provide Kajaria Ceramics benchmarking against other companies in Furniture-Furnishing-Paints 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 FY2012 FY2013 FY2014 FY2015 FY2016
Asian Paints ($ASIANPAINT)24.8%13.3%15.7%11.3%-
Nitco ($NITCO)31.0%-8.1%0.1%7.7%-
Murudeshwar Ceramics ($MURUDCERA)3.6%-19.5%1.3%-5.5%-
Shalimar Paints ($SHALPAINTS)19.5%2.5%-3.2%-10.3%-
Hanung Toys & Textiles ($HANUNG)24.6%27.6%-73.8%-71.2%-
 
Median (5 companies)24.6%2.5%0.1%-5.5%-
Kajaria Ceramics ($KAJARIACER)-22.8%13.9%19.1%10.6%


Top companies by EBITDA margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Murudeshwar Ceramics ($MURUDCERA)23.6%21.8%21.6%23.5%-
Asian Paints ($ASIANPAINT)16.0%16.0%16.0%16.0%-
Neycer India ($NEYCERI)---9.3%-
Bil Continental ($BILCONTI)---2.9%-
Shalimar Paints ($SHALPAINTS)7.8%7.6%3.0%2.1%-
 
Median (6 companies)16.0%16.0%9.5%6.1%-
Kajaria Ceramics ($KAJARIACER)15.8%15.3%15.6%16.3%19.4%


Top companies by CAPEX/Revenue, %

Top  FY2012 FY2013 FY2014 FY2015 FY2016
Shalimar Paints ($SHALPAINTS)0.7%2.1%2.8%6.5%-
Asian Paints ($ASIANPAINT)5.7%5.9%2.0%3.2%-
 
Median (2 companies)5.7%5.8%2.4%4.9%-
Kajaria Ceramics ($KAJARIACER)5.7%9.6%8.5%12.3%11.3%


Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Asian Paints ($ASIANPAINT)47.1%43.0%39.8%37.1%-
Shalimar Paints ($SHALPAINTS)25.9%22.2%6.2%2.4%-
Euro Ceramics ($EUROCERA)-8.1%-11.2%---
Neycer India ($NEYCERI)--6.5%---
Bil Continental ($BILCONTI)-4.4%---
 
Median (10 companies)10.7%4.7%6.2%19.8%-
Kajaria Ceramics ($KAJARIACER)27.9%28.6%28.8%29.8%31.3%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Shalimar Paints ($SHALPAINTS)1.5x1.9x7.3x13.7x-
Asian Paints ($ASIANPAINT)0.1x-0.0x0.0x0.1x-
Neycer India ($NEYCERI)11.8x107.4x-0.0x-
Murudeshwar Ceramics ($MURUDCERA)3.2x4.1x0.0x0.0x-
Bil Continental ($BILCONTI)7.9x7.0x0.0x0.0x-
 
Median (5 companies)6.2x4.3x0.0x0.0x-
Kajaria Ceramics ($KAJARIACER)1.3x1.3x0.8x0.7x0.6x


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