Pidilite Industries EBITDA surged on 52.4% and EBITDA Margin increased on 6.0 pp from 15.9% to 21.9%

19-05-2016 • About Pidilite Industries ($PIDILITIND) • By InTwits

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

Pidilite Industries is a fast growth stock: FY2016 revenue growth was 10.8%, 5 year revenue CAGR was 15.2% at FY2016 ROIC 38.3%
Pidilite Industries has low CAPEX intensity: 5 year average CAPEX/Revenue was 5.0%. At the same time it's in pair with industry average of 5.8%
CAPEX is quite volatile: ₹2,043m in FY2016, ₹4,099m in FY2015, ₹1,895m in FY2014, ₹1,081m in FY2013, ₹1,630m in FY2012
The company has highly profitable business model: ROIC is 38.3%

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 10.8%. Revenue decline was accelerating on average at -1.9 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 2.7 pp from 15.1% to 17.8% in FY2016.

SG&A as a % of Revenue showed almost no change in FY2016.

Net Income margin increased on 3.5 pp from 10.6% to 14.1% in FY2016.

Investments (CAPEX, working capital and M&A)

In FY2016 Pidilite Industries had CAPEX/Revenue of 3.8%. CAPEX/Revenue increased slightly on 0.87 pp from 2.9% in FY2013 to 3.8% in FY2016. It's average CAPEX/Revenue for the last three years was 5.6%.

Return on investment

The company operates at high and attractive ROIC (38.3%) and ROE (29.9%). ROIC increased on 9.3 pp from 29.0% to 38.3% in FY2016. ROE increased on 5.6 pp from 24.3% to 29.9% in FY2016.

Leverage (Debt)

Company's Net Debt / EBITDA is -0.0x and Debt / EBITDA is 0.1x. Debt surged on 45.1% while cash surged on 73.5%.

Pidilite Industries has no short term refinancing risk: cash is higher than short term debt (172.1%).

Management team

Pidilite Industries's CFO is Pradeep Jain. Pradeep Jain has 4 years tenure at the company.

Financial and operational results

Pidilite Industries ($PIDILITIND) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	31,097	36,781	42,832	48,441	53,694	10.8%
SG&A				1,915	1,932	0.9%
EBITDA	4,997	5,935	6,718	7,722	11,766	52.4%
Net Income	3,244	4,240	4,498	5,126	7,556	47.4%
Balance Sheet
Cash	768	1,495	1,760	748	1,298	73.5%
Short Term Debt	2,290	1,112	459	579	754	30.2%
Long Term Debt	923	0	0	5	94	1,772.2%
Cash flow
Capex	1,630	1,081	1,895	4,099	2,043	-50.2%
Ratios
Revenue growth	17.6%	18.3%	16.5%	13.1%	10.8%
EBITDA growth	5.1%	18.8%	13.2%	15.0%	52.4%

EBITDA Margin	16.1%	16.1%	15.7%	15.9%	21.9%	6.0%
SG&A, % of revenue				4.0%	3.6%	-0.4%
Net Income Margin	10.4%	11.5%	10.5%	10.6%	14.1%	3.5%
CAPEX, % of revenue	5.2%	2.9%	4.4%	8.5%	3.8%	-4.7%

ROIC	27.4%	29.3%	29.8%	29.0%	38.3%	9.3%
ROE	27.0%	28.5%	25.0%	24.3%	29.9%	5.6%
Net Debt/EBITDA	0.5x	-0.1x	-0.2x	-0.0x	-0.0x	-0.0x

Peers in Specialty Chemicals

Below you can find Pidilite Industries 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 ($NITTAGELA)	-	27.8%	-5.5%	21.2%	-0.5%
Median (27 companies)	17.9%	11.4%	11.3%	9.8%	-1.0%
Pidilite Industries ($PIDILITIND)	-	18.3%	16.5%	13.1%	10.8%

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%	-
Solar Industries India ($SOLARINDS)	18.5%	17.5%	17.9%	19.3%	19.3%
Anil ($ANILLTD)	18.1%	16.9%	17.1%	17.4%	-
Ultramarine & Pigments ($ULTRAMAR)	18.0%	15.5%	17.4%	17.2%	-
Median (32 companies)	10.6%	11.2%	10.6%	10.5%	12.7%
Pidilite Industries ($PIDILITIND)	16.1%	16.1%	15.7%	15.9%	21.9%

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 ($SOLARINDS)	13.0%	9.9%	12.3%	10.3%	9.6%
Oricon Enterprises ($ORICON)	10.2%	6.2%	4.7%	7.9%	-
Vinati Organics ($VINATIORGA)	13.6%	28.2%	4.2%	7.4%	12.1%
Median (16 companies)	4.9%	4.7%	4.4%	4.9%	9.3%
Pidilite Industries ($PIDILITIND)	5.2%	2.9%	4.4%	8.5%	3.8%

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%	-
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 ($PLASTIBLEN)	18.3%	15.8%	24.0%	24.5%	-
Median (35 companies)	14.7%	14.8%	11.2%	16.7%	20.6%
Pidilite Industries ($PIDILITIND)	27.4%	29.3%	29.8%	29.0%	38.3%

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 ($SUDARSCHEM)	2.4x	5.1x	3.2x	3.2x	-
Median (30 companies)	1.5x	1.7x	1.7x	0.0x	0.0x
Pidilite Industries ($PIDILITIND)	0.5x	-0.1x	-0.2x	-0.0x	-0.0x

Pidilite Industries stock price chart

Pidilite Industries financials

mln.	FY2010	FY2011	FY2012

Revenue	58,262	26,439	31,097
EBITDA	4,006	4,754	4,997
Net income	2,770	3,100	3,244
CAPEX	790.1	1,275	1,630
Debt	4,381	3,360	3,213
Cash	443.9	834.2	768.2

About Pidilite Industries

Pidilite Industries Limited, together with its subsidiaries, manufactures and sells consumer and specialty chemicals in India. The company operates through three segments: Consumer & Bazaar Products, Industrial Products, and Others. It offers adhesives, sealants, art materials, and construction and paint chemicals for use by carpenters, painters, plumbers, mechanics, households, students, offices, etc. The company also provides wood finishes and paints, art material and stationery, automotive, and fabric care products; and industrial adhesives, synthetic resins, organic pigments, pigment preparations, surfactants, and others for use in various industries, including packaging, textiles, paints, printing inks, paper, leather, etc. Pidilite Industries Limited sells its products primarily under the Fevicol, Dr. Fixit, Fevikwik, M-Seal, Fevistik, Hobby Ideas, and Moto Max brands. The company was founded in 1959 and is headquartered in Mumbai, India.