Rpg Life Sciences EBITDA surged on 65.7% and EBITDA Margin increased on 2.6 pp from 5.8% to 8.4%
29-04-2016 • About Rpg Life Sciences (
$RPGLIFE) • By InTwits
Rpg Life Sciences reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Rpg Life Sciences has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.2%. At the same time it's in pair with industry average of 4.1%
- CAPEX is quite volatile: ₹100m in FY2016, ₹111m in FY2015, ₹228m in FY2014, ₹30m in FY2013, ₹894m in FY2012
- The company has business model with low profitability: ROIC is 8.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.0x 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 jumped on 15.3%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.6 pp from 5.8% to 8.4% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2014 at 5.0% and was growing since that time.
Net Income margin increased on 3.7 pp from 0.41% to 4.2% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 5.5%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 5.2%. The company invested a big chunk of EBITDA (65.5%) to CAPEX to fuel its growth.
Return on investment
The company operates at low ROIC (8.4%) and ROE (9.0%). ROIC increased on 6.6 pp from 1.8% to 8.4% in FY2016. ROE increased on 8.2 pp from 0.80% to 9.0% in FY2016. During the last 5 years ROIC bottomed in FY2014 at 0.75% and was growing since that time.
Leverage (Debt)
Debt level is 1.0x Net Debt / EBITDA and 1.0x Debt / EBITDA. Net Debt / EBITDA dropped on 1.4x from 2.3x to 1.0x in FY2016. Debt dropped on 31.6% while cash decreased on 8%.
Rpg Life Sciences has short term refinancing risk: cash is only 1.0% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 19.3x and P/E 37.1x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 55.9x with the industry average at 22.8x.
Financial and operational results
Rpg Life Sciences ($RPGLIFE) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,928 | 2,216 | 2,356 | 2,423 | 2,793 | 15.3% |
| EBITDA | 185 | 161 | 117 | 142 | 235 | 65.7% |
| Net Income | 9 | 44 | 534 | 10 | 116 | 1,062.0% |
Balance Sheet
|
|---|
| Cash | 2 | 2 | 3 | 3 | 2 | -8.0% |
| Short Term Debt | 321 | 476 | 140 | 327 | 223 | -31.7% |
| Long Term Debt | 207 | 105 | 4 | 3 | 2 | -25.0% |
Cash flow
|
|---|
| Capex | 87 | 126 | 137 | 107 | 154 | 43.2% |
Ratios
|
|---|
| Revenue growth | 3.2% | 14.9% | 6.3% | 2.9% | 15.3% | |
| EBITDA growth | -43.6% | -12.9% | -27.3% | 21.0% | 65.7% | |
|
|---|
| EBITDA Margin | 9.6% | 7.3% | 5.0% | 5.8% | 8.4% | 2.6% |
| Net Income Margin | 0.4% | 2.0% | 22.7% | 0.4% | 4.2% | 3.7% |
| CAPEX, % of revenue | 4.5% | 5.7% | 5.8% | 4.4% | 5.5% | 1.1% |
|
|---|
| ROIC | 6.1% | 4.5% | 0.8% | 1.8% | 8.4% | 6.6% |
| ROE | 1.1% | 5.9% | 52.9% | 0.8% | 9.0% | 8.2% |
| Net Debt/EBITDA | 2.8x | 3.6x | 1.2x | 2.3x | 1.0x | -1.4x |
Peers in Pharmaceuticals
Below we provide Rpg Life Sciences benchmarking against other companies in Pharmaceuticals 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 |
|---|
| 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 ($TORRCABS) | 27.5% | 17.4% | -42.9% | 26.5% | - |
| |
|---|
| Median (41 companies) | 16.6% | 14.7% | 13.7% | 9.2% | 31.9% |
|---|
| Rpg Life Sciences ($RPGLIFE) | - | 14.9% | 6.3% | 2.9% | 15.3% |
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 ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | - |
| |
|---|
| Median (53 companies) | 12.9% | 13.4% | 15.0% | 12.1% | 25.7% |
|---|
| Rpg Life Sciences ($RPGLIFE) | 9.6% | 7.3% | 5.0% | 5.8% | 8.4% |
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 ($NATCOPHARM) | 24.4% | 16.3% | 14.4% | 14.1% | - |
| |
|---|
| Median (31 companies) | 8.2% | 8.3% | 5.7% | 6.2% | 9.5% |
|---|
| Rpg Life Sciences ($RPGLIFE) | 4.5% | 5.7% | 5.8% | 4.4% | 5.5% |
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 ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | - |
| |
|---|
| Median (63 companies) | 14.0% | 13.8% | 15.6% | 13.3% | 19.8% |
|---|
| Rpg Life Sciences ($RPGLIFE) | 6.1% | 4.5% | 0.8% | 1.8% | 8.4% |
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 ($NEULANDLAB) | 4.2x | 3.5x | 2.6x | 2.6x | - |
| |
|---|
| Median (48 companies) | 1.4x | 1.2x | 0.3x | 0.0x | 0.5x |
|---|
| Rpg Life Sciences ($RPGLIFE) | 2.8x | 3.6x | 1.2x | 2.3x | 1.0x |
