Thirumalai Chemicals reports 141% EBITDA growth in 2016 while 12.0% Revenue decline

14-05-2016 • About Thirumalai Chemicals ($TIRUMALCHM) • By InTwits

Thirumalai Chemicals reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:

EBITDA Margin is quite volatile: 9.8% in FY2016, 3.6% in FY2015, 6.4% in FY2014, 9.9% in FY2013, 7.0% in FY2012
The company has highly profitable business model: ROIC is 21.2%

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 dropped on 12.0%. Revenue decline was accelerating on average at -14.8 pp per annum in FY2012-FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.2 pp from 3.6% to 9.8% in FY2016.

Net Income margin increased on 4.7 pp from -1.3% to 3.4% in FY2016.

Investments (CAPEX, working capital and M&A)

In FY2016 the company had CAPEX/Revenue of 2.0%. Thirumalai Chemicals showed small growth in CAPEX/Revenue of 1.1 pp from 0.97% in FY2013 to 2.0% in FY2016.

Return on investment

The company operates at high and attractive ROIC (21.2%) while ROE is a bit lower (15.6%). ROIC surged on 15.9 pp from 5.3% to 21.2% in FY2016. ROE surged on 22.3 pp from -6.7% to 15.6% in FY2016.

Leverage (Debt)

Debt level is 1.0x Net Debt / EBITDA and 1.0x Debt / EBITDA. Net Debt / EBITDA dropped on 2.6x from 3.6x to 1.0x in FY2016. Debt dropped on 35.9% while cash dropped on 33.5%.

Thirumalai Chemicals has short term refinancing risk: cash is only 4.8% of short term debt.

Management team

C G Sethuram is a the company's CEO. C G Sethuram has spent 6 years with the company. Thirumalai Chemicals's CFO P Krishnamoorthy has spent 5 years with the company.

Financial and operational results

Thirumalai Chemicals ($TIRUMALCHM) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	10,540	13,715	12,689	10,654	9,372	-12.0%
EBITDA	736	1,362	818	381	916	140.7%
Net Income	9	438	119	-137	322
Balance Sheet
Cash	123	58	214	48	32	-33.5%
Short Term Debt	1,341	2,027	1,350	1,028	672	-34.6%
Long Term Debt	1,425	1,074	595	388	236	-39.1%
Cash flow
Capex	365	134		214	192	-10.4%
Ratios
Revenue growth	38.9%	30.1%	-7.5%	-16.0%	-12.0%
EBITDA growth	8.9%	85.1%	-40.0%	-53.5%	140.7%

EBITDA Margin	7.0%	9.9%	6.4%	3.6%	9.8%	6.2%
Net Income Margin	0.1%	3.2%	0.9%	-1.3%	3.4%	4.7%
CAPEX, % of revenue	3.5%	1.0%		2.0%	2.0%	0.0%

ROIC	13.0%	23.2%	12.5%	5.3%	21.2%	15.9%
ROE	0.7%	24.8%	5.7%	-6.7%	15.6%	22.3%
Net Debt/EBITDA	3.6x	2.2x	2.1x	3.6x	1.0x	-2.6x

Peers in Commodity Chemicals

Below you can find Thirumalai Chemicals benchmarking vs. other companies in Commodity 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
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 ($JINDPOLBBPH)	-17.2%	-6.3%	131.7%	46.9%	-
Median (37 companies)	20.6%	9.7%	11.5%	6.3%	2.5%
Thirumalai Chemicals ($TIRUMALCHM)	-	30.1%	-7.5%	-16.0%	-12.0%

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 ($CHEMFALKAL)	22.3%	32.9%	24.2%	19.8%	-
Median (50 companies)	11.3%	8.3%	8.6%	6.6%	11.8%
Thirumalai Chemicals ($TIRUMALCHM)	7.0%	9.9%	6.4%	3.6%	9.8%

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 ($SUKHJITS)	15.7%	9.4%	5.4%	5.4%	-
Median (21 companies)	5.3%	7.2%	5.7%	3.3%	5.4%
Thirumalai Chemicals ($TIRUMALCHM)	3.5%	1.0%	-	2.0%	2.0%

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 ($TRANSPEK)	-1.7%	14.2%	11.0%	17.8%	-
Median (60 companies)	9.0%	9.5%	8.9%	9.6%	17.9%
Thirumalai Chemicals ($TIRUMALCHM)	13.0%	23.2%	12.5%	5.3%	21.2%

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 ($GARWARPOLY)	2.2x	3.8x	4.0x	5.2x	-
Median (37 companies)	2.6x	3.2x	0.8x	0.9x	0.8x
Thirumalai Chemicals ($TIRUMALCHM)	3.6x	2.2x	2.1x	3.6x	1.0x

Thirumalai Chemicals stock price chart

Thirumalai Chemicals financials

mln.	FY2010	FY2011	FY2012

Revenue	12,147	7,586	10,540
EBITDA	0.000	675.6	736.0
Net income	0.000	179.4	9.182
CAPEX	0.000	1,499	364.8
Debt	0.000	1,829	2,766
Cash	0.000	13.606	122.9

About Thirumalai Chemicals

Thirumalai Chemicals Limited manufactures and sells industrial and specialty chemicals, and its intermediaries. The company operates through Chemicals and Power Generation segments. It offers phthalic anhydride, maleic anhydride, malic acid, fumaric acid, L(+) tartaric acid, diethyl phthalate, and various fine chemicals and derivatives, as well as specialty chemicals, including succinic acid, succinic anhydride, and maleic acid. The company is also involved in power generation from wind operated generators. It serves paper, polymer additives, powder coating, rubber chemicals, agrochemicals, leather chemicals, plasticizers, food, pharma intermediates, beverage and confectioneries, unsaturated polyester, bakery goods, resins, feed, esters, construction materials, paints, metal cleaning, textile and leather, electroplating, detergent, water treatment, bulk drugs, intermediates, personal care and cosmetics, flavors and fragrances, adhesives, and pigments and dyes industries. The company markets its products directly, and through a network of agents and distributors in India, Europe, North America, South America, the Middle East, Southeast Asia, Far East, and Australia. Thirumalai Chemicals Limited was incorporated in 1972 and is based in Mumbai, India.