Cosmo Films Net Income surged on 248% while Revenue decreased slightly on 1.6%
11-05-2016 • About Cosmo Films (
$COSMOFILMS) • By InTwits
Cosmo Films reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Cosmo Films has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's in pair with industry average of 6.3%
- CAPEX is quite volatile: ₹882m in FY2016, ₹477m in FY2015, ₹888m in FY2014, ₹1,658m in FY2013, ₹556m in FY2012
- The company has highly profitable business model: ROIC is 17.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Cosmo Films's Revenue decreased slightly on 1.6%. During FY2012-FY2016 Revenue growth topped in FY2014 at 16.0% and was decelerating since that time. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 5.2 pp from 6.6% to 11.8% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2015 at 6.6%.
Net Income margin increased on 4.3 pp from 1.7% to 5.9% in FY2016. During the last 5 years Net Income margin bottomed in FY2014 at -0.37% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 5.4%. CAPEX/Revenue decreased on 7.7 pp from 13.1% in FY2013 to 5.4% in FY2016. Average CAPEX/Revenue for the last three years was 4.8%.
Return on investment
The company operates at high and attractive ROE (23.0%) while ROIC is a bit lower (17.9%). ROIC surged on 10.0 pp from 7.9% to 17.9% in FY2016. ROE surged on 15.5 pp from 7.5% to 23.0% in FY2016. During the last 5 years ROIC bottomed in FY2014 at 6.7% and was growing since that time. During FY2012-FY2016 ROE bottomed in FY2014 at -1.6% and was growing since that time.
Leverage (Debt)
Debt level is 1.6x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA dropped on 2.0x from 3.6x to 1.6x in FY2016. Debt dropped on 16.5% while cash jumped on 29.3%. During the last 5 years Net Debt/EBITDA topped in FY2014 at 4.9x and was declining since that time.
Cosmo Films has short term refinancing risk: cash is only 26.8% of short term debt.
Valuation and dividends
Cosmo Films's trades at EV/EBITDA 5.2x and P/E 7.1x while industy averages are 17.8x and 21.9x. Cosmo Films's EV/(EBITDA-CAPEX) is 9.7x with the industry average at 22.8x.
Financial and operational results
Cosmo Films ($COSMOFILMS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 11,362 | 12,656 | 14,684 | 16,468 | 16,206 | -1.6% |
| EBITDA | 946 | 990 | 1,090 | 1,079 | 1,913 | 77.2% |
| Net Income | 315 | 113 | -55 | 277 | 962 | 247.9% |
Balance Sheet
|
|---|
| Cash | 414 | 324 | 550 | 250 | 324 | 29.3% |
| Short Term Debt | 2,522 | 2,604 | 2,693 | 1,732 | 1,209 | -30.2% |
| Long Term Debt | 1,770 | 2,487 | 3,176 | 2,386 | 2,230 | -6.5% |
Cash flow
|
|---|
| Capex | 556 | 1,658 | 888 | 477 | 882 | 85.0% |
Ratios
|
|---|
| Revenue growth | 0.1% | 11.4% | 16.0% | 12.2% | -1.6% | |
| EBITDA growth | 0.6% | 4.7% | 10.1% | -1.0% | 77.2% | |
|
|---|
| EBITDA Margin | 8.3% | 7.8% | 7.4% | 6.6% | 11.8% | 5.2% |
| Net Income Margin | 2.8% | 0.9% | -0.4% | 1.7% | 5.9% | 4.3% |
| CAPEX, % of revenue | 4.9% | 13.1% | 6.0% | 2.9% | 5.4% | 2.5% |
|
|---|
| ROIC | 7.3% | 6.9% | 6.7% | 7.9% | 17.9% | 10.0% |
| ROE | 9.6% | 3.3% | -1.6% | 7.5% | 23.0% | 15.5% |
| Net Debt/EBITDA | 4.1x | 4.8x | 4.9x | 3.6x | 1.6x | -2.0x |
Peers in Commodity Chemicals
Below we provide Cosmo Films 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 ($JINDPOLBBPH) | -17.2% | -6.3% | 131.7% | 46.9% | - |
| |
|---|
| Median (37 companies) | 22.1% | 9.7% | 10.6% | 5.6% | 6.5% |
|---|
| Cosmo Films ($COSMOFILMS) | - | 11.4% | 16.0% | 12.2% | -1.6% |
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 ($CHEMFALKAL) | 22.3% | 32.9% | 24.2% | 19.8% | - |
| |
|---|
| Median (50 companies) | 11.3% | 8.4% | 8.6% | 6.6% | 10.6% |
|---|
| Cosmo Films ($COSMOFILMS) | 8.3% | 7.8% | 7.4% | 6.6% | 11.8% |
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 ($AARTIIND) | 8.0% | 11.2% | 11.0% | 10.4% | 16.8% |
| Alkyl Amines Chemicals ($ALKYLAMINE) | 5.1% | 6.6% | 5.9% | 8.6% | - |
| Sukhjit Starch & Chemicals ($SUKHJITS) | 15.7% | 9.4% | 5.4% | 5.4% | - |
| |
|---|
| Median (21 companies) | 5.3% | 6.3% | 5.4% | 3.3% | 10.7% |
|---|
| Cosmo Films ($COSMOFILMS) | 4.9% | 13.1% | 6.0% | 2.9% | 5.4% |
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% | 19.3% |
| Transpek Industry ($TRANSPEK) | -1.7% | 14.2% | 11.0% | 17.8% | - |
| |
|---|
| Median (60 companies) | 9.2% | 9.8% | 9.9% | 9.6% | 11.4% |
|---|
| Cosmo Films ($COSMOFILMS) | 7.3% | 6.9% | 6.7% | 7.9% | 17.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Iol Chemicals & Pharmaceuticals ($IOLCP) | 5.8x | 4.5x | 3.7x | 35.4x | 8.8x |
| India Glycols ($INDIAGLYCO) | 4.8x | 3.7x | 8.5x | 14.2x | - |
| Godrej Industries ($GODREJIND) | 9.9x | 5.7x | 7.9x | 10.7x | - |
| Kanoria Chemicals & Industries ($KANORICHEM) | 5.2x | 9.6x | 3.5x | 9.4x | - |
| Garware Polyester ($GARWARPOLY) | 2.2x | 3.8x | 4.0x | 5.2x | - |
| |
|---|
| Median (37 companies) | 2.6x | 3.0x | 0.8x | 0.9x | 1.1x |
|---|
| Cosmo Films ($COSMOFILMS) | 4.1x | 4.8x | 4.9x | 3.6x | 1.6x |
