J.B.Chemicals & Pharmaceuticals reports 180% CAPEX growth in 2016 and 9.7% Revenue growth
20-05-2016 • About J.B.Chemicals & Pharmaceuticals (
$JBCHEPHARM) • By InTwits
J.B.Chemicals & Pharmaceuticals reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- J.B.Chemicals & Pharmaceuticals has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.8%. At the same time it's in pair with industry average of 7.5%
- CAPEX is quite volatile: ₹1,995m in FY2016, ₹712m in FY2015, ₹604m in FY2014, ₹492m in FY2013, ₹801m in FY2012
- The company has highly profitable business model: ROIC is 13.4%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.9x while industry average is 0.9x
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 increased on 9.7%. During the last 5 years Revenue growth topped in FY2014 at 18.3% and was decelerating since that time. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 0.63 pp from 15.7% to 16.4% in FY2016. During the last 5 years EBITDA Margin bottomed in FY2013 at 13.6% and was growing since that time.
Net Income margin increased on 4.1 pp from 8.8% to 12.9% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2014 at 6.1% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 15.9%. J.B.Chemicals & Pharmaceuticals showed fast CAPEX/Revenue growth of 10.1 pp from 5.8% in FY2013 to 15.9% in FY2016. Average CAPEX/Revenue for the last three years was 9.4%. J.B.Chemicals & Pharmaceuticals maintained rich investment policy and has spent a big chunk of EBITDA (97.1%) to CAPEX. During the last 5 years CAPEX as a % of Revenue bottomed in FY2013 at 5.8% and was growing since that time.
Return on investment
The company operates at good ROIC (13.4%) and ROE (15.5%). ROIC increased slightly on 1.1 pp from 12.3% to 13.4% in FY2016. ROE increased on 5.6 pp from 9.9% to 15.5% in FY2016. During FY2012-FY2016 ROIC bottomed in FY2013 at 8.4% and was growing since that time. During FY2012-FY2016 ROE bottomed in FY2014 at 6.0% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.9x and Debt / EBITDA is 0.9x. Net Debt / EBITDA surged on 0.3x from 0.6x to 0.9x in FY2016. Debt surged on 51.9% while cash dropped on 56.7%. Net Debt/EBITDA grew at 0.5x per annum in FY2012-FY2016.
J.B.Chemicals & Pharmaceuticals has short term refinancing risk: cash is only 5.2% of short term debt.
Financial and operational results
J.B.Chemicals & Pharmaceuticals ($JBCHEPHARM) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 8,019 | 8,458 | 10,006 | 11,442 | 12,551 | 9.7% |
| EBITDA | 1,295 | 1,150 | 1,546 | 1,801 | 2,055 | 14.1% |
| Net Income | 6,779 | 794 | 615 | 1,004 | 1,619 | 61.2% |
Balance Sheet
|
|---|
| Cash | 1,837 | 1,529 | 118 | 232 | 100 | -56.7% |
| Short Term Debt | 585 | 425 | 927 | 1,270 | 1,934 | 52.3% |
| Long Term Debt | 125 | 72 | 5 | 4 | 0 | -100.0% |
Cash flow
|
|---|
| Capex | 801 | 492 | 604 | 712 | 1,995 | 180.2% |
Ratios
|
|---|
| Revenue growth | -10.0% | 5.5% | 18.3% | 14.3% | 9.7% | |
| EBITDA growth | -33.3% | -11.2% | 34.5% | 16.5% | 14.1% | |
|
|---|
| EBITDA Margin | 16.1% | 13.6% | 15.5% | 15.7% | 16.4% | 0.6% |
| Net Income Margin | 84.5% | 9.4% | 6.1% | 8.8% | 12.9% | 4.1% |
| CAPEX, % of revenue | 10.0% | 5.8% | 6.0% | 6.2% | 15.9% | 9.7% |
|
|---|
| ROIC | 11.1% | 8.4% | 11.2% | 12.3% | 13.4% | 1.1% |
| ROE | 81.6% | 8.0% | 6.0% | 9.9% | 15.5% | 5.6% |
| Net Debt/EBITDA | -0.9x | -0.9x | 0.5x | 0.6x | 0.9x | 0.3x |
Peers in Pharmaceuticals
Below you can find J.B.Chemicals & Pharmaceuticals benchmarking vs. other companies in Pharmaceuticals 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 |
|---|
| Mangalam Drugs & Organics ($MANGALAM) | - | -18.2% | -2.1% | 79.8% | 33.7% |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 39.9% | 40.4% | 42.4% | 70.2% | - |
| Lyka Labs ($LYKALABS) | 41.9% | -25.7% | -22.6% | 68.7% | - |
| Marksans Pharma ($MARKSANS) | 16.7% | 23.3% | 43.3% | 26.8% | - |
| Torrent Cables ($TORRCABS) | 27.5% | 17.4% | -42.9% | 26.5% | - |
| |
|---|
| Median (41 companies) | 22.7% | 14.9% | 12.6% | 8.6% | 14.2% |
|---|
| J.B.Chemicals & Pharmaceuticals ($JBCHEPHARM) | - | 5.5% | 18.3% | 14.3% | 9.7% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dr.Reddy'S Laboratories ($DRREDDY) | - | 52.1% | 57.4% | 57.6% | 59.6% |
| Omega Laboratories ($OMEGALAB) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (2 companies) | 46.9% | 26.1% | 28.7% | 28.8% | 29.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Divi'S Laboratories ($DIVISLAB) | 37.2% | 38.2% | 40.2% | 37.4% | - |
| Hester Biosciences ($HESTERBIO) | - | - | - | 32.9% | - |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 40.8% | 44.3% | 44.9% | 29.2% | - |
| Natco Pharma ($NATCOPHARM) | 21.5% | 23.2% | 24.9% | 26.2% | - |
| Dr.Reddy'S Laboratories ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | 25.8% |
| |
|---|
| Median (53 companies) | 12.7% | 12.8% | 14.3% | 12.0% | 18.8% |
|---|
| J.B.Chemicals & Pharmaceuticals ($JBCHEPHARM) | 16.1% | 13.6% | 15.5% | 15.7% | 16.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Claris Lifesciences ($CLARIS) | 58.1% | 42.9% | - | 103.1% | 15.8% |
| Wintac ($WINTAC) | - | - | - | 22.8% | - |
| Hester Biosciences ($HESTERBIO) | - | - | - | 21.5% | - |
| Ipca Laboratories ($IPCALAB) | 11.2% | 8.3% | 11.6% | 17.8% | - |
| Natco Pharma ($NATCOPHARM) | 24.4% | 16.3% | 14.4% | 14.1% | - |
| |
|---|
| Median (31 companies) | 7.7% | 8.3% | 5.7% | 6.0% | 9.4% |
|---|
| J.B.Chemicals & Pharmaceuticals ($JBCHEPHARM) | 10.0% | 5.8% | 6.0% | 6.2% | 15.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Marksans Pharma ($MARKSANS) | -142.4% | 34.9% | 33.8% | 41.2% | - |
| Alembic Pharmaceuticals ($APLLTD) | 27.5% | 29.1% | 41.5% | 35.7% | 62.1% |
| Jenburkt Pharmaceuticals ($JENBURPH) | 34.1% | 29.0% | 32.4% | 35.3% | - |
| Abbott India ($ABBOTINDIA) | 29.6% | 26.9% | 30.5% | 34.2% | - |
| Divi'S Laboratories ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | - |
| |
|---|
| Median (63 companies) | 14.0% | 13.8% | 15.6% | 13.3% | 15.5% |
|---|
| J.B.Chemicals & Pharmaceuticals ($JBCHEPHARM) | 11.1% | 8.4% | 11.2% | 12.3% | 13.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Life Sciences Limited ($JUBILANT) | 4.0x | 3.5x | 3.5x | 6.4x | - |
| Shasun Pharmaceuticals ($SHASUNPHAR) | 2.8x | 4.5x | 6.0x | 6.2x | - |
| Claris Lifesciences ($CLARIS) | 1.9x | 1.1x | 1.8x | 3.2x | 2.9x |
| Dishman Pharmaceuticals & Chemicals ($DISHMAN) | 3.6x | 2.6x | 2.3x | 2.9x | 2.1x |
| Neuland Laboratories ($NEULANDLAB) | 4.2x | 3.5x | 2.6x | 2.6x | 2.0x |
| |
|---|
| Median (48 companies) | 1.6x | 1.4x | 0.3x | 0.0x | 0.8x |
|---|
| J.B.Chemicals & Pharmaceuticals ($JBCHEPHARM) | -0.9x | -0.9x | 0.5x | 0.6x | 0.9x |
