Emami demonstrates fast growth in fundamentals
12-05-2016 • About Emami (
$EMAMILTD) • By InTwits
Have you thought about Emami as a growth stock? It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Emami showed fast growth in the last financial year. The company's revenue surged on 18.3% in FY2016. The growth also happened in EBITDA of 23.5% for the same period.
If we look for the longer period the company showed fast revenue growth of 15.6% from FY2013 to FY2016 annually. EBITDA surged on 25.2% from FY2013 to FY2016 annually.
Emami ($EMAMILTD) financials for the last 5 years
| mln. INR | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Revenue | 14,535 | 16,991 | 18,208 | 22,172 | 26,238 |
|---|
| Revenue growth, % | | 16.9% | 7.2% | 21.8% | 18.3% |
|---|
| SG&A, % | | | | | 20.2% |
|---|
| EBITDA | 3,042 | 3,492 | 4,421 | 5,543 | 6,847 |
|---|
| EBITDA growth, % | | 14.8% | 26.6% | 25.4% | 23.5% |
|---|
| EBITDA margin, % | 20.9% | 20.5% | 24.3% | 25.0% | 26.1% |
|---|
| Net Income | 2,588 | 3,147 | 4,025 | 4,856 | 3,591 |
|---|
| Net Income margin, % | 17.8% | 18.5% | 22.1% | 21.9% | 13.7% |
|---|
| |
| CAPEX | 1,156 | 852 | 654 | 1,098 | 18,171 |
|---|
| CAPEX/Revenue, % | 7.95% | 5.02% | 3.59% | 4.95% | 69.3% |
|---|
| Debt | 1,558 | 1,148 | 376 | 359 | 6,714 |
|---|
| Cash | 134 | 2,813 | 2,685 | 3,531 | 1,073 |
|---|
| Net Debt/EBITDA | 0.5x | -0.5x | -0.5x | -0.6x | 0.8x |
|---|
| |
| ROIC, % | 31.5% | 36.7% | 43.3% | 45.4% | 25.1% |
|---|
| ROE, % | 37.1% | 42.4% | 47.1% | 44.9% | 27.3% |
|---|
Profitability and return on investment
Margin expansion supported EBITDA growth. Emami showed small growth in EBITDA margin of 1.10 pp from 25% to 26.1% in FY2016. In the longer period EBITDA margin surged on 5.60 pp from 20.5% in FY2013 to 26.1% in FY2016.
Emami shows attractive ROIC at 25.1% for the last 12 months which assumes stable development model. During the last three years it dropped - it was 36.7% in FY2013. Average ROIC for the last three years was 37.9%.
Net Income margin dropped on 8.20 pp from 21.9% to 13.7% in FY2016. If we look for the longer period Net Income margin dropped on 4.80 pp from 18.5% in FY2013 to 13.7% in FY2016.
Emami operates at ROE of 27.3%. It's average level of ROE for the last three years was 39.8%.
Capital expenditures (CAPEX)
To this fast growth Emami had to invest in CAPEX.Emami's CAPEX/Revenue was 69.3% in FY2016. CAPEX/Revenue surged on 64.2 pp from 5.02% in FY2013 to 69.3% in FY2016. It's average level of CAPEX/Revenue for the last three years was 25.9%.
Leverage (Debt)
The company has low debt level at 0.8x Net Debt/EBITDA - at the same time with high growth. If we look for the longer period Emami's leverage surged on 1.30x from -0.48x in FY2013 to 0.82x in FY2016.
Valuation vs. comparable companies
The company trades at 36.3x EV/EBITDA which is not surprisingly 47.8% higher than 24.5x Personal Products industry avearge calculated based on 21 companies. The market closed today at 67.6x P/E for Emami which is 67.3% higher than 40.4x Personal Products peer group avearge calculated on the basis of 3 companies.
Peers in Personal Products
Below you can find Emami benchmarking vs. other companies in Personal Products 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, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Bajaj Corp ($BAJAJCORP) | | 28.2% | 10.7% | 22.9% | 6.2% |
| Marico ($MARICO) | | 15.5% | 2.0% | 22.3% | 7.0% |
| Bliss Gvs Pharma ($BLISSGVS) | | 48.5% | -13.1% | 17.0% | |
| Procter & Gamble Hygiene & Health Care ($PGHH) | 29.4% | 29.9% | 21.5% | 13.9% | |
| Colgate-Palmolive (India) ($COLPAL) | 17.8% | 17.5% | 13.1% | 11.3% | |
| |
|---|
| Median (8 companies) | 17.8% | 22.8% | 11.9% | 12.6% | 7.5% |
|---|
| Emami ($EMAMILTD) | | 16.9% | 7.2% | 21.8% | 18.3% |
Top companies by EBITDA margin, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Bajaj Corp ($BAJAJCORP) | 24.6% | 28.4% | 27.7% | 29.0% | 31.2% |
| Cupid ($CUPID) | | | | 28.9% | |
| Bliss Gvs Pharma ($BLISSGVS) | 27.2% | 28.1% | 20.9% | 25.7% | |
| Procter & Gamble Hygiene & Health Care ($PGHH) | 16.3% | 15.4% | 20.7% | 21.3% | |
| Colgate-Palmolive (India) ($COLPAL) | 21.7% | 21.0% | 18.6% | 20.7% | |
| |
|---|
| Median (10 companies) | 17.2% | 16.0% | 17.6% | 19.0% | 18.1% |
|---|
| Emami ($EMAMILTD) | 20.9% | 20.5% | 24.3% | 25.0% | 26.1% |
Top companies by CAPEX/Revenue, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Colgate-Palmolive (India) ($COLPAL) | 3.8% | 4.9% | 9.0% | 7.5% | |
| Bliss Gvs Pharma ($BLISSGVS) | 8.7% | 5.0% | 16.7% | 7.0% | |
| Dabur India ($DABUR) | 4.4% | 3.9% | 3.0% | 3.4% | 2.6% |
| Procter & Gamble Hygiene & Health Care ($PGHH) | 4.2% | 2.2% | 7.2% | 3.4% | |
| Cupid ($CUPID) | | | | 3.0% | |
| |
|---|
| Median (9 companies) | 4.0% | 4.0% | 5.1% | 3.0% | 2.1% |
|---|
| Emami ($EMAMILTD) | 8.0% | 5.0% | 3.6% | 5.0% | 69.3% |
Top companies by ROIC, %
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Hindustan Unilever ($HINDUNILVR) | 99.9% | 114.4% | 133.0% | 133.9% | |
| Colgate-Palmolive (India) ($COLPAL) | 121.4% | 120.4% | 104.4% | 99.9% | |
| Bajaj Corp ($BAJAJCORP) | | 36.9% | 36.2% | 46.5% | 54.8% |
| Procter & Gamble Hygiene & Health Care ($PGHH) | 28.1% | 30.3% | 43.2% | 40.1% | |
| Marico ($MARICO) | 23.2% | 22.6% | 26.9% | 36.1% | 40.6% |
| |
|---|
| Median (10 companies) | 25.6% | 29.5% | 28.9% | 36.1% | 35.0% |
|---|
| Emami ($EMAMILTD) | 31.5% | 36.7% | 43.3% | 45.4% | 25.1% |
Top companies by Net Debt / EBITDA
| FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Top 5 |
|---|
| Godrej Consumer Products ($GODREJCP) | 1.6x | 1.7x | 1.5x | 1.7x | 1.4x |
| Bliss Gvs Pharma ($BLISSGVS) | 0.0x | 1.1x | 1.9x | 1.4x | |
| Dabur India ($DABUR) | 0.8x | 1.2x | 0.3x | 0.5x | 0.4x |
| Marico ($MARICO) | 1.5x | 1.3x | 0.9x | 0.3x | 0.0x |
| Cupid ($CUPID) | 1.7x | 0.5x | 1.4x | -0.1x | |
| |
|---|
| Median (9 companies) | 0.4x | 0.5x | 0.3x | -0.1x | 0.2x |
|---|
| Emami ($EMAMILTD) | 0.5x | -0.5x | -0.5x | -0.6x | 0.8x |
