Solar Industries India reports 14.0% EBITDA growth in 2016 and almost no change in EBITDA Margin of 19.3%
16-05-2016 • About Solar Industries India (
$SOLARINDS) • By InTwits
Solar Industries India reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Solar Industries India is a fast growth stock: FY2016 revenue growth was 13.8%, 5 year revenue CAGR was 17.7% at FY2016 ROIC 20.6%
- EBITDA Margin is relatively stable: 19.3% in FY2016 vs. 19.3% in FY2015 vs. 18.5% in FY2012
- Solar Industries India has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.0%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: ₹337m in FY2016, ₹584m in FY2015, ₹874m in FY2014, ₹1,593m in FY2013, ₹545m in FY2012
- The company has highly profitable business model: ROIC is 20.6%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.2x while industry average is 1.0x
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 surged on 13.8%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.6 pp from 10.9% to 13.6% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2013 at 17.5% and was growing since that time.
Net Income margin showed almost no change in FY2016.
Investments (CAPEX, working capital and M&A)
Solar Industries India's CAPEX/Revenue was 9.6% in FY2016. Solar Industries India showed almost no change in CAPEX/Revenue from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 10.7%.
Return on investment
The company operates at high and attractive ROIC (20.6%) and ROE (20.2%). ROIC increased on 2.2 pp from 18.4% to 20.6% in FY2016. ROE showed almost no change in FY2016. During the last 5 years ROIC bottomed in FY2014 at 16.3% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.2x and Debt / EBITDA is 1.3x. Net Debt / EBITDA surged on 0.1x from 1.1x to 1.2x in FY2016. Debt surged on 21.9% while cash decreased slightly on 0.63%.
Solar Industries India has short term refinancing risk: cash is only 13.9% of short term debt.
Financial and operational results
Solar Industries India ($SOLARINDS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 9,676 | 11,218 | 11,330 | 13,519 | 15,382 | 13.8% |
| EBITDA | 1,786 | 1,960 | 2,030 | 2,609 | 2,975 | 14.0% |
| Net Income | 1,012 | 1,163 | 1,184 | 1,474 | 1,661 | 12.7% |
Balance Sheet
|
|---|
| Cash | 138 | 515 | 1,330 | 373 | 370 | -0.6% |
| Short Term Debt | 2,137 | 3,048 | 3,312 | 1,725 | 2,656 | 53.9% |
| Long Term Debt | 826 | 673 | 1,524 | 1,559 | 1,347 | -13.6% |
Cash flow
|
|---|
| Capex | 1,261 | 1,112 | 1,389 | 1,395 | 1,484 | 6.4% |
Ratios
|
|---|
| Revenue growth | 42.1% | 15.9% | 1.0% | 19.3% | 13.8% | |
| EBITDA growth | 44.7% | 9.8% | 3.6% | 28.6% | 14.0% | |
|
|---|
| EBITDA Margin | 18.5% | 17.5% | 17.9% | 19.3% | 19.3% | 0.0% |
| Net Income Margin | 10.5% | 10.4% | 10.5% | 10.9% | 10.8% | -0.1% |
| CAPEX, % of revenue | 13.0% | 9.9% | 12.3% | 10.3% | 9.6% | -0.7% |
|
|---|
| ROIC | 25.9% | 20.3% | 16.3% | 18.4% | 20.6% | 2.2% |
| ROE | 28.1% | 23.8% | 19.2% | 20.5% | 20.2% | -0.3% |
| Net Debt/EBITDA | 1.6x | 1.6x | 1.7x | 1.1x | 1.2x | 0.1x |
Peers in Specialty Chemicals
Below you can find Solar Industries India 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 ($KELENRG) | 60.2% | -13.4% | -0.4% | 24.4% | - |
| Dai-Ichi Karkaria ($DAICHI) | - | 31.4% | 45.4% | 22.8% | -36.4% |
| Nitta Gelatin India ($NITTAGELA) | - | 27.8% | -5.5% | 21.2% | -0.5% |
| |
|---|
| Median (27 companies) | 18.0% | 11.4% | 13.7% | 9.8% | -6.6% |
|---|
| Solar Industries India ($SOLARINDS) | - | 15.9% | 1.0% | 19.3% | 13.8% |
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% | - |
| Anil ($ANILLTD) | 18.1% | 16.9% | 17.1% | 17.4% | - |
| Ultramarine & Pigments ($ULTRAMAR) | 18.0% | 15.5% | 17.4% | 17.2% | - |
| Camlin Fine Sciences ($CAMLINFIN) | 9.1% | 12.8% | 12.8% | 16.7% | - |
| |
|---|
| Median (32 companies) | 10.6% | 11.2% | 10.6% | 10.5% | 12.7% |
|---|
| Solar Industries India ($SOLARINDS) | 18.5% | 17.5% | 17.9% | 19.3% | 19.3% |
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% | - |
| Pidilite Industries ($PIDILITIND) | 5.2% | 2.9% | 4.4% | 8.5% | - |
| Oricon Enterprises ($ORICON) | 10.2% | 6.2% | 4.7% | 7.9% | - |
| Vinati Organics ($VINATIORGA) | 13.6% | 28.2% | 4.2% | 7.4% | 12.1% |
| |
|---|
| Median (16 companies) | 4.9% | 4.5% | 4.3% | 4.9% | 9.0% |
|---|
| Solar Industries India ($SOLARINDS) | 13.0% | 9.9% | 12.3% | 10.3% | 9.6% |
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 ($ULTRAMAR) | 20.0% | 16.3% | 20.8% | 25.7% | - |
| |
|---|
| Median (35 companies) | 14.7% | 14.8% | 11.2% | 16.7% | 20.6% |
|---|
| Solar Industries India ($SOLARINDS) | 25.9% | 20.3% | 16.3% | 18.4% | 20.6% |
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 ($SUDARSCHEM) | 2.4x | 5.1x | 3.2x | 3.2x | - |
| |
|---|
| Median (30 companies) | 1.4x | 1.5x | 1.7x | 0.0x | 0.0x |
|---|
| Solar Industries India ($SOLARINDS) | 1.6x | 1.6x | 1.7x | 1.1x | 1.2x |
