Vikas Globalone reports 562% Net Income growth in 2016 and 9.4 pp EBITDA Margin growth from 7.7% to 17.2%

23-05-2016 • About Vikas Globalone ($VIKASGLOB) • By InTwits

Vikas Globalone reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:

Vikas Globalone is a fast growth stock: FY2016 revenue growth was 36.6%, 5 year revenue CAGR was 20.3% at FY2016 ROIC
EBITDA Margin is expanding: 17.2% in FY2016 vs. 7.7% in FY2015 vs. 8.8% in FY2012
EBITDA Margin is quite volatile: 17.2% in FY2016, 7.7% in FY2015, 5.5% in FY2014, 4.9% in FY2013, 8.8% in FY2012
It operates with high leverage: Net Debt/EBITDA is 1.8x while industry average is 1.1x

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Vikas Globalone's Revenue surged on 36.6%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 9.4 pp from 7.7% to 17.2% in FY2016. During the last 5 years EBITDA Margin bottomed in FY2013 at 4.9% and was growing since that time.

Net Income margin increased on 6.6 pp from 1.7% to 8.3% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2014 at 1.4% and was growing since that time.

Investments (CAPEX, working capital and M&A)

In FY2016 the company had CAPEX/Revenue of 3.4%. CAPEX/Revenue increased on 2.7 pp from 0.76% in FY2013 to 3.4% in FY2016.

Leverage (Debt)

Debt level is 1.8x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA jumped1.8x from 0x to 1.8x in FY2016. Debt jumped while cash jumped.

Vikas Globalone has short term refinancing risk: cash is only 0.2% of short term debt.

Valuation and dividends

Vikas Globalone's trades at EV/EBITDA 10.4x and P/E 17.9x while industy averages are 17.8x and 21.9x.

Financial and operational results

Vikas Globalone ($VIKASGLOB) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	1,647	2,521	2,500	2,249	3,072	36.6%
EBITDA	145	123	137	174	528	203.0%
Net Income	90	37	36	39	255	561.6%
Balance Sheet
Cash	10	5	4		2
Short Term Debt	321	481	589		839
Long Term Debt	57	58	80		97
Cash flow
Capex	78	19	53		105
Ratios
Revenue growth	35.2%	53.0%	-0.9%	-10.0%	36.6%
EBITDA growth	10.8%	-15.4%	11.7%	27.2%	203.0%

EBITDA Margin	8.8%	4.9%	5.5%	7.7%	17.2%	9.4%
Net Income Margin	5.5%	1.5%	1.4%	1.7%	8.3%	6.6%
CAPEX, % of revenue	4.7%	0.8%	2.1%		3.4%

ROIC		12.5%	11.4%
ROE		10.2%	9.1%
Net Debt/EBITDA	2.5x	4.4x	4.9x	0.0x	1.8x

Peers in Specialty Chemicals

Below you can find Vikas Globalone 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
Black Rose Industries ($BLACKROSE)	-	30.6%	-5.6%	70.0%	-10.0%
Kiri Industries ($KIRIINDUS)	7.9%	-86.5%	24.8%	34.7%	-
Vidhi Dyestuffs Manufacturing ($VIDHIDYE)	14.1%	4.7%	19.5%	30.0%	-
Keltech Energies ($KELENRG)	-	-13.4%	-0.4%	24.4%	-6.3%
Dai-Ichi Karkaria ($DAICHI)	-	31.4%	45.4%	22.8%	-36.4%
Median (28 companies)	16.4%	12.8%	12.5%	11.3%	-1.6%
Vikas Globalone ($VIKASGLOB)	-	53.0%	-0.9%	-10.0%	36.6%

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%	16.2%
Ultramarine & Pigments ($ULTRAMAR)	18.0%	15.5%	17.4%	17.2%	-
Median (33 companies)	10.6%	12.0%	10.6%	10.7%	15.3%
Vikas Globalone ($VIKASGLOB)	8.8%	4.9%	5.5%	7.7%	17.2%

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%	8.5%
Solar Industries India ($SOLARINDS)	13.0%	9.9%	12.3%	10.3%	9.6%
Pidilite Industries ($PIDILITIND)	5.2%	2.9%	4.4%	8.5%	3.8%
Oricon Enterprises ($ORICON)	10.2%	6.2%	4.7%	7.9%	-
Median (17 companies)	5.3%	4.7%	4.5%	5.1%	8.7%

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%	23.3%
Pidilite Industries ($PIDILITIND)	27.4%	29.3%	29.8%	29.0%	38.3%
Adi Finechem ($ADIFINCHM)	30.6%	29.8%	46.4%	26.3%	20.6%
Ultramarine & Pigments ($ULTRAMAR)	20.0%	16.3%	20.8%	25.7%	-
Median (36 companies)	15.0%	14.9%	11.1%	17.1%	20.6%
Vikas Globalone ($VIKASGLOB)	-	12.5%	11.4%	-	-

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 ($ANILLTD)	2.2x	3.4x	3.8x	4.0x	4.2x
Oricon Enterprises ($ORICON)	1.2x	1.0x	1.7x	3.2x	-
Sudarshan Chemical Industries ($SUDARSCHEM)	2.4x	5.1x	3.2x	3.2x	-
Median (31 companies)	1.5x	1.6x	1.7x	0.0x	0.0x
Vikas Globalone ($VIKASGLOB)	2.5x	4.4x	4.9x	0.0x	1.8x

Vikas Globalone stock price chart

Vikas Globalone financials

mln.	FY2010	FY2011	FY2012

Revenue	2,605	1,218	1,647
EBITDA	0.000	130.8	144.9
Net income	0.000	65.131	89.938
CAPEX	0.000	0.000	77.555
Debt	0.000	0.000	378.3
Cash	0.000	0.000	9.668

About Vikas Globalone

Vikas Globalone Limited manufactures and distributes specialty polymers compounds and additives in India and internationally. It operates through Chemical and Real estate divisions. The company offers thermoplastic rubber compounds for use in footwear, casters, gaskets, sink mats, car mats, shower mats, bed holders, and pen grips applications; TPE compounds for use in tooth brushes, tool handles, medical tubings, pen grips, shower parts, auto parts, wire and cables, cable joints, electricals, mats/floorings, appliances, and mobile covers applications; and methyl tin mercaptide for use in PVC heat stabilizer application. It also provides epoxidized soyabean oil for use in PVC plasticizer and co-stabilizer applications; liquid mixed metal stabilizers for use as heat stabilizers for flexible PVC applications; chlorinated paraffins for use as plasticizers and flexibilizers for PVC applications; and CPVC compounds for producing pipes and fittings. In addition, the company offers PVC compounds that are used in cable insulation, sheathing, footwear, and medical applications; EVA compounds, which are used in injection molding and compression molding footwear applications; and PET compounds for use in moldable/extrudable upgraded-re-processed pet resins, as well as produces chlorinated polyethylene. Further, it trades in TAFMER/POE products, ACEOX products, CELLCOM products, processing aids, impact modifiers, PE wax, styrene butadiene styrene, styrene ethylene butylene styrene, styrene butadiene copolymer, styrene butadiene rubber, PVC resin, titanium dioxide, methanol, and carbon black. Vikas Globalone Limited was incorporated in 1984 and is based in New Delhi, India.