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Vinati Organics CAPEX jumped on 34.8% while Revenue dropped on 18.2%

14-05-2016 • About Vinati Organics ($VINATIORGA) • By InTwits

Vinati Organics reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
  • EBITDA Margin is expanding: 32.8% in FY2016 vs. 24.9% in FY2015 vs. 21.7% in FY2012
  • Vinati Organics has high CAPEX intensity: 5 year average CAPEX/Revenue was 13.1%. At the same time it's a lot of higher than industry average of 6.1%.
  • CAPEX is quite volatile: ₹766m in FY2016, ₹568m in FY2015, ₹294m in FY2014, ₹1,558m in FY2013, ₹609m in FY2012
  • The company has highly profitable business model: ROIC is 32.2%
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 18.2%. Revenue decline was accelerating on average at -12.7 pp per annum in FY2012-FY2016. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 7.9 pp from 24.9% to 32.8% in FY2016. EBITDA Margin followed a growing trend in FY2012-FY2016.

Net Income margin increased on 5.8 pp from 15.0% to 20.9% in FY2016.

Investments (CAPEX, working capital and M&A)


The company's CAPEX/Revenue was 12.1% in FY2016. Vinati Organics's CAPEX/Revenue dropped on 16.0 pp from 28.2% in FY2013 to 12.1% in FY2016. Average CAPEX/Revenue for the last three years was 7.9%.

Return on investment


The company operates at high and attractive ROIC (32.2%) and ROE (27.0%). ROIC decreased on 2.6 pp from 34.8% to 32.2% in FY2016. ROE decreased on 4.1 pp from 31.1% to 27.0% in FY2016. ROE followed a declining trend at -1.3 pp per annum in FY2012-FY2016.

Leverage (Debt)


Company's Net Debt / EBITDA is -0.1x and Debt / EBITDA is 0.2x. Debt dropped on 35.6% while cash surged on 171%.

Vinati Organics has no short term refinancing risk: cash is higher than short term debt (242.6%).

Financial and operational results


Vinati Organics ($VINATIORGA) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue4,4755,5296,9617,7176,309-18.2%
EBITDA9711,2031,5791,9212,0687.7%
Net Income5486878621,1581,31613.6%
Balance Sheet
Cash304307417258699170.7%
Short Term Debt8141,0175162812882.7%
Long Term Debt9131,3551,100372133-64.4%
Cash flow
Capex6091,55829456876634.8%
Ratios
Revenue growth38.7%23.6%25.9%10.9%-18.2%
EBITDA growth38.8%23.9%31.2%21.6%7.7%
EBITDA Margin21.7%21.8%22.7%24.9%32.8%7.9%
Net Income Margin12.2%12.4%12.4%15.0%20.9%5.8%
CAPEX, % of revenue13.6%28.2%4.2%7.4%12.1%4.8%
ROIC29.6%26.2%30.6%34.8%32.2%-2.6%
ROE33.1%32.1%31.3%31.1%27.0%-4.1%
Net Debt/EBITDA1.5x1.7x0.8x0.2x-0.1x-0.3x

Peers in Specialty Chemicals


Below we provide Vinati Organics benchmarking against other companies in Specialty 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
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 ($KELENRG)60.2%-13.4%-0.4%24.4%-
Dai-Ichi Karkaria ($DAICHI)-31.4%45.4%22.8%-36.4%
Nitta Gelatin India ($NITTAGELA)-27.8%-5.5%21.2%-0.5%
 
Median (27 companies)18.5%11.4%11.3%9.8%-1.6%
Vinati Organics ($VINATIORGA)-23.6%25.9%10.9%-18.2%


Top companies by EBITDA margin, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
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%-
Camlin Fine Sciences ($CAMLINFIN)9.1%12.8%12.8%16.7%-
 
Median (32 companies)10.6%11.2%10.6%10.5%10.2%
Vinati Organics ($VINATIORGA)21.7%21.8%22.7%24.9%32.8%


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)4.9%4.5%4.5%4.9%5.5%
Vinati Organics ($VINATIORGA)13.6%28.2%4.2%7.4%12.1%


Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
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%-
Plastiblends India ($PLASTIBLEN)18.3%15.8%24.0%24.5%-
 
Median (35 companies)14.7%14.8%11.2%16.7%16.4%
Vinati Organics ($VINATIORGA)29.6%26.2%30.6%34.8%32.2%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Kiri Industries ($KIRIINDUS)8.2x31.3x10.6x7.7x-
Jayant Agro-Organics ($JAYAGROGN)2.8x3.1x4.6x6.5x3.4x
Anil ($ANILLTD)2.2x3.4x3.8x4.0x-
Oricon Enterprises ($ORICON)1.2x1.0x1.7x3.2x-
Sudarshan Chemical Industries ($SUDARSCHEM)2.4x5.1x3.2x3.2x-
 
Median (30 companies)1.5x1.5x1.7x0.0x0.0x
Vinati Organics ($VINATIORGA)1.5x1.7x0.8x0.2x-0.1x


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