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Iol Chemicals & Pharmaceuticals EBITDA surged on 357% and Revenue surged on 49.1%

02-05-2016 • About Iol Chemicals & Pharmaceuticals ($IOLCP) • By InTwits

Iol Chemicals & Pharmaceuticals reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is quite volatile: 9.0% in FY2016, 2.9% in FY2015, 17.0% in FY2014, 18.5% in FY2013, 14.6% in FY2012
  • Iol Chemicals & Pharmaceuticals has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.3%. At the same time it's in pair with industry average of 5.9%
  • CAPEX is quite volatile: ₹267m in FY2016, ₹59m in FY2015, ₹137m in FY2014, ₹190m in FY2013, ₹887m in FY2012
  • The company has potentially unprofitable business model: ROIC is 3.5%
  • It operates with high leverage: Net Debt/EBITDA is 8.8x while industry average is 2.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


Iol Chemicals & Pharmaceuticals's Revenue surged on 49.1%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 6.0 pp from 2.9% to 9.0% in FY2016.

Net Income margin surged on 10.3 pp from -17.3% to -7.0% in FY2016.

Investments (CAPEX, working capital and M&A)


The company's CAPEX/Revenue was 4.7% in FY2016. CAPEX/Revenue increased slightly on 0.71 pp from 3.9% in FY2013 to 4.7% in FY2016. For the last three years the average CAPEX/Revenue was 2.9%. Iol Chemicals & Pharmaceuticals invested a big chunk of EBITDA (51.8%) to CAPEX to fuel its growth. During the last 5 years CAPEX as a % of Revenue bottomed in FY2015 at 1.5%.

Return on investment


The company operates at low but positive ROIC (3.5%) and negative ROE (-20.4%). ROIC increased on 6.5 pp from -3.0% to 3.5% in FY2016. ROE jumped on 13.2 pp from -33.6% to -20.4% in FY2016.

Leverage (Debt)


Debt level is 8.8x Net Debt / EBITDA and 8.8x Debt / EBITDA. Net Debt / EBITDA dropped on 26.7x from 35.4x to 8.8x in FY2016. Debt jumped on 13.0% while cash dropped on 29.0%.

Iol Chemicals & Pharmaceuticals has short term refinancing risk: cash is only 0.7% of short term debt.

Management team


Iol Chemicals & Pharmaceuticals's CFO Pardeep Kumar Khanna has spent 5 years with the company.

Financial and operational results


Iol Chemicals & Pharmaceuticals ($IOLCP) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue4,7074,8155,6353,8475,73549.1%
EBITDA689891958113514356.8%
Net Income481633-667-400
Balance Sheet
Cash41681410-29.0%
Short Term Debt1,2461,1331,3661,2341,50722.2%
Long Term Debt2,7472,8682,2042,7713,0198.9%
Cash flow
Capex88719013759267351.4%
Ratios
Revenue growth20.9%2.3%17.0%-31.7%49.1%
EBITDA growth1.7%29.3%7.5%-88.2%356.8%
EBITDA Margin14.6%18.5%17.0%2.9%9.0%6.0%
Net Income Margin1.0%0.3%0.6%-17.3%-7.0%10.3%
CAPEX, % of revenue18.8%3.9%2.4%1.5%4.7%3.1%
ROIC8.1%9.9%11.0%-3.0%3.5%6.5%
ROE2.8%0.9%1.8%-33.6%-20.4%13.2%
Net Debt/EBITDA5.8x4.5x3.7x35.4x8.8x-26.7x

Peers in Commodity Chemicals


Below we provide Iol Chemicals & Pharmaceuticals benchmarking against other companies in Commodity Chemicals 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
Tuticorin Alkali Chemicals & Fertilisers ($TUTIALKA)354.1%-27.9%-83.3%408.0%-
Jayshree Chemicals ($JAYCH)288.9%17.5%-75.2%262.3%-
Jagran Production ($JAGPRO)589.4%4.4%514.9%192.3%-
Shree Hari Chemicals Export ($SHHARICH)-2.5%-78.0%299.5%111.6%-
Jindal Poly Films ($JINDPOLBBPH)-17.2%-6.3%131.7%46.9%-
 
Median (37 companies)19.0%11.2%10.6%6.3%-29.1%
Iol Chemicals & Pharmaceuticals ($IOLCP)-2.3%17.0%-31.7%49.1%


Top companies by EBITDA margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Riddhi Siddhi Gluco Biols ($RIDDHI)---104.7%-
Mysore Petro Chemicals ($MYSORPETRO)---47.1%-
Aditya Birla Chemicals (India) ($ABCIL)26.8%27.1%23.6%21.9%-
Indo Borax & Chemicals ($INDOBORAX)---21.3%-
Chemfab Alkalis ($CHEMFALKAL)22.3%32.9%24.2%19.8%-
 
Median (50 companies)9.6%8.3%8.5%6.6%2.6%
Iol Chemicals & Pharmaceuticals ($IOLCP)14.6%18.5%17.0%2.9%9.0%


Top companies by CAPEX/Revenue, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Kanoria Chemicals & Industries ($KANORICHEM)25.1%6.0%13.4%40.3%-
Aditya Birla Chemicals (India) ($ABCIL)136.9%24.2%30.8%15.0%-
Aarti Industries ($AARTIIND)8.0%11.2%11.0%10.4%-
Alkyl Amines Chemicals ($ALKYLAMINE)5.1%6.6%5.9%8.6%-
Sukhjit Starch & Chemicals ($SUKHJITS)15.7%9.4%5.4%5.4%-
 
Median (21 companies)5.2%7.2%5.9%3.3%-
Iol Chemicals & Pharmaceuticals ($IOLCP)18.8%3.9%2.4%1.5%4.7%


Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Bodal Chemicals ($BODALCHEM)-1.3%3.3%39.0%38.3%-
Elantas Beck India ($ELANTAS)20.4%33.9%31.0%36.6%-
Alkyl Amines Chemicals ($ALKYLAMINE)16.0%18.7%25.0%23.7%-
Aarti Industries ($AARTIIND)15.9%19.1%17.2%17.9%-
Transpek Industry ($TRANSPEK)-1.7%14.2%11.0%17.8%-
 
Median (60 companies)9.2%9.5%8.9%9.6%-
Iol Chemicals & Pharmaceuticals ($IOLCP)8.1%9.9%11.0%-3.0%3.5%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
India Glycols ($INDIAGLYCO)4.8x3.7x8.5x14.2x-
Godrej Industries ($GODREJIND)9.9x5.7x7.9x10.7x-
Kanoria Chemicals & Industries ($KANORICHEM)5.2x9.6x3.5x9.4x-
Garware Polyester ($GARWARPOLY)2.2x3.8x4.0x5.2x-
Polyplex Corporation ($POLYPLEX)0.9x6.8x7.1x4.7x-
 
Median (37 companies)2.6x3.0x0.8x0.9x0.0x
Iol Chemicals & Pharmaceuticals ($IOLCP)5.8x4.5x3.7x35.4x8.8x


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