Dai-Ichi Karkaria EBITDA dropped on 313% and EBITDA Margin dropped on 53.5 pp from 12.3% to -41.2%

14-05-2016 • About Dai-Ichi Karkaria ($DAICHI) • By InTwits

Dai-Ichi Karkaria reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

Dai-Ichi Karkaria motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0% while average EBITDA Margin was -0.0% for the sames years
The company has unprofitable business model: ROIC is -42.5%

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Dai-Ichi Karkaria's Revenue dropped on 36.4%. During FY2012-FY2016 Revenue growth topped in FY2014 at 45.4% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 53.5 pp from 12.3% to -41.2% in FY2016.

Net Income margin increased on 6.1 pp from 12.9% to 19.0% in FY2016. Net Income margin followed a growing trend at 3.3 pp per annum in FY2012-FY2016.

Investments (CAPEX, working capital and M&A)

Dai-Ichi Karkaria's CAPEX/Revenue was 10.3% in FY2016. Dai-Ichi Karkaria's CAPEX/Revenue surged on 10.3 pp from in FY2013 to 10.3% in FY2016.

Return on investment

The company operates at negative ROIC (-42.5%) and low but positive ROE (18.6%).

Leverage (Debt)

Debt level is 0.1x Net Debt / EBITDA and Debt / EBITDA. Debt surged on 22.8% while cash dropped on 44.5%.

Dai-Ichi Karkaria has no short term refinancing risk: cash is higher than short term debt (1,450.8%).

Financial and operational results

Dai-Ichi Karkaria ($DAICHI) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	772	1,014	1,474	1,810	1,151	-36.4%
EBITDA	66	59	126	223	-474	-313.0%
Net Income	42	66	156	233	219	-6.1%
Balance Sheet
Cash	108	110		94	52	-44.5%
Short Term Debt		0		3	4	14.4%
Long Term Debt	11	11		8	10	26.3%
Cash flow
Capex	25			29	118	308.6%
Ratios
Revenue growth	20.7%	31.4%	45.4%	22.8%	-36.4%
EBITDA growth	-11.0%	-11.1%	114.9%	77.2%	-313.0%

EBITDA Margin	8.5%	5.8%	8.5%	12.3%	-41.2%	-53.5%
Net Income Margin	5.5%	6.5%	10.6%	12.9%	19.0%	6.1%
CAPEX, % of revenue	3.2%			1.6%	10.3%	8.7%

ROIC	7.7%	5.8%			-42.5%
ROE	6.2%	9.2%			18.6%
Net Debt/EBITDA	-1.5x	-1.7x	0.0x	-0.4x

Peers in Specialty Chemicals

Below you can find Dai-Ichi Karkaria benchmarking vs. other companies in Specialty Chemicals 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, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Kiri Industries ($KIRIINDUS)	7.9%	-86.5%	24.8%	34.7%	-
Vidhi Dyestuffs Manufacturing ($VIDHIDYE)	14.1%	4.7%	19.5%	30.0%	-
Keltech Energies ($KELENRG)	60.2%	-13.4%	-0.4%	24.4%	-
Nitta Gelatin India ($NITTAGELA)	-	27.8%	-5.5%	21.2%	-0.5%
Nocil ($NOCIL)	-	1.8%	22.3%	21.1%	-1.6%
Median (27 companies)	18.5%	11.4%	11.3%	9.8%	-1.6%
Dai-Ichi Karkaria ($DAICHI)	-	31.4%	45.4%	22.8%	-36.4%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Vinati Organics ($VINATIORGA)	21.7%	21.8%	22.7%	24.9%	32.8%
Indian Toners & Developers ($INDTONER)	-	-	-	22.6%	-
Solar Industries India ($SOLARINDS)	18.5%	17.5%	17.9%	19.3%	-
Anil ($ANILLTD)	18.1%	16.9%	17.1%	17.4%	-
Ultramarine & Pigments ($ULTRAMAR)	18.0%	15.5%	17.4%	17.2%	-
Median (32 companies)	10.7%	12.8%	10.6%	10.5%	15.3%
Dai-Ichi Karkaria ($DAICHI)	8.5%	5.8%	8.5%	12.3%	-41.2%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Adi Finechem ($ADIFINCHM)	7.3%	4.8%	12.6%	16.9%	9.0%
Anil ($ANILLTD)	-	6.7%	5.2%	11.5%	-
Solar Industries India ($SOLARINDS)	13.0%	9.9%	12.3%	10.3%	-
Pidilite Industries ($PIDILITIND)	5.2%	2.9%	4.4%	8.5%	-
Oricon Enterprises ($ORICON)	10.2%	6.2%	4.7%	7.9%	-
Median (16 companies)	5.2%	4.6%	4.4%	5.2%	5.5%
Dai-Ichi Karkaria ($DAICHI)	3.2%	-	-	1.6%	10.3%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Vinati Organics ($VINATIORGA)	29.6%	26.2%	30.6%	34.8%	32.2%
Camlin Fine Sciences ($CAMLINFIN)	11.1%	17.8%	24.2%	29.5%	-
Pidilite Industries ($PIDILITIND)	27.4%	29.3%	29.8%	29.0%	-
Adi Finechem ($ADIFINCHM)	30.6%	29.8%	46.4%	26.3%	20.6%
Ultramarine & Pigments ($ULTRAMAR)	20.0%	16.3%	20.8%	25.7%	-
Median (35 companies)	15.3%	15.0%	11.4%	17.1%	21.2%
Dai-Ichi Karkaria ($DAICHI)	7.7%	5.8%	-	-	-42.5%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Kiri Industries ($KIRIINDUS)	8.2x	31.3x	10.6x	7.7x	-
Jayant Agro-Organics ($JAYAGROGN)	2.8x	3.1x	4.6x	6.5x	3.4x
Anil ($ANILLTD)	2.2x	3.4x	3.8x	4.0x	-
Oricon Enterprises ($ORICON)	1.2x	1.0x	1.7x	3.2x	-
Sudarshan Chemical Industries ($SUDARSCHEM)	2.4x	5.1x	3.2x	3.2x	-
Median (30 companies)	1.5x	1.7x	1.7x	0.0x	0.0x
Dai-Ichi Karkaria ($DAICHI)	-1.5x	-1.7x	0.0x	-0.4x	-

Dai-Ichi Karkaria stock price chart

Dai-Ichi Karkaria financials

mln.	FY2010	FY2011	FY2012

Revenue	2,049	639.5	771.7
EBITDA	46.717	73.952	65.837
Net income	57.006	44.519	42.348
CAPEX	9.570	15.130	24.796
Debt	13.589	12.237	11.422
Cash	21.116	97.974	108.1

About Dai-Ichi Karkaria

Dai-ichi Karkaria Limited manufactures and sells specialty chemicals in India. It offers colorants, such as dispersing, deflocculating, emulsifying, penetrating, and surface treatment agents, as well as pigment loading and tone improvers; construction chemicals, including grouting agents for construction of dam and cannel, workability improvers for cement, emulsifiers for bitumen and asphalt emulsion, foaming agents for cement bricks, dispersing agents for cement paints, and defoamers for cement paints; and emulsifiers for cosmetics and pharma industries. The company also provides CFC/ethane substitute waterborne/non water borne washing agents and electro conducting agents for electronic and electrical industries; leather chemicals, such as penetrating, softening, finishing, and washing agents; metal treatment chemicals, including cleaning agents, emulsifying agents for electroplating bath, and defoaming and degreasing agents; and oil field chemicals, such as flow improvers/pour point depressants, demulsifier and desalting agents, acid corrosion inhibitors, bactericides, emulsifiers and mud surfactants, and dispersants for oil spills. In addition, it offers defoaming, de-inking, fixing, penetrating/wettign, and washing agents for the paper and pulp industry; pesticide and weedicide formulations; chemicals for the plastic and PVC industry; polymers and adhesive lattices; additives, chelating agents, finishing agents, rayon filaments, and viscose modifiers, as well as pulp and spin bath additives for the rayon industry; acrylic sizing, afterwatering, and antistatic agent, as well as lubricants for sizing; spin finishes; pretreatment, coloration, and finishing chemicals for the textiles industry; and flocculants and chelating agents used in water treatment and related industries. The company was incorporated in 1960 and is based in Mumbai, India.