Linc Pen & Plastics CAPEX jumped on 319% and Revenue increased on 8.5%
24-05-2016 • About Linc Pen & Plastics (
$LINCPENQ) • By InTwits
Linc Pen & Plastics reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 9.3% in FY2016 vs. 7.7% in FY2015 vs. 3.8% in FY2012
- Linc Pen & Plastics has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.0%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: ₹202m in FY2016, ₹48m in FY2015, ₹94m in FY2014, ₹65m in FY2013, ₹65m in FY2012
- The company has highly profitable business model: ROIC is 20.9%
- It operates with high leverage: Net Debt/EBITDA is 1.0x while industry average is 0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Linc Pen & Plastics's Revenue increased on 8.5%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.6 pp from 7.7% to 9.3% in FY2016. EBITDA Margin stuck to a growing trend at 1.3 pp per annum in FY2012-FY2016.
Net Income margin increased slightly on 0.82 pp from 4.6% to 5.4% in FY2016. Net Income margin grew at 1.2 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 6.0%. CAPEX/Revenue increased on 3.8 pp from 2.2% in FY2013 to 6.0% in FY2016. It's average CAPEX/Revenue for the last three years was 3.5%. Linc Pen & Plastics maintained rich investment policy and has spent a big chunk of EBITDA (64.7%) to CAPEX.
Return on investment
The company operates at high and attractive ROIC (20.9%) while ROE is a bit lower (19.4%). ROIC increased on 4.6 pp from 16.3% to 20.9% in FY2016. ROE increased on 2.2 pp from 17.2% to 19.4% in FY2016. ROIC followed a growing trend at 3.2 pp per annum in the last 5 years. ROE grew at 4.0 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is 1.0x Net Debt / EBITDA and 1.0x Debt / EBITDA. Net Debt / EBITDA jumped on 0.3x from 0.7x to 1.0x in FY2016. Debt jumped on 73.2% while cash dropped on 81.1%. Net Debt/EBITDA stuck to a declining trend at -0.7x per annum in FY2012-FY2016.
Linc Pen & Plastics has short term refinancing risk: cash is only 0.9% of short term debt.
Valuation and dividends
Linc Pen & Plastics's trades at EV/EBITDA 9.4x and P/E 14.5x while industy averages are 17.8x and 21.9x. Linc Pen & Plastics's EV/(EBITDA-CAPEX) is 26.7x with the industry average at 22.8x.
Financial and operational results
Linc Pen & Plastics ($LINCPENQ) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,710 | 2,997 | 3,089 | 3,109 | 3,373 | 8.5% |
| EBITDA | 104 | 168 | 232 | 240 | 313 | 30.6% |
| Net Income | 17 | 54 | 115 | 143 | 183 | 27.9% |
Balance Sheet
|
|---|
| Cash | 1 | 2 | 1 | 15 | 3 | -81.1% |
| Short Term Debt | 410 | 305 | 335 | 179 | 309 | 73.2% |
| Long Term Debt | 18 | 10 | 1 | 0 | 0 | |
Cash flow
|
|---|
| Capex | 65 | 65 | 94 | 48 | 202 | 319.1% |
Ratios
|
|---|
| Revenue growth | 9.2% | 10.6% | 3.1% | 0.6% | 8.5% | |
| EBITDA growth | -29.2% | 61.8% | 38.4% | 3.4% | 30.6% | |
|
|---|
| EBITDA Margin | 3.8% | 5.6% | 7.5% | 7.7% | 9.3% | 1.6% |
| Net Income Margin | 0.6% | 1.8% | 3.7% | 4.6% | 5.4% | 0.8% |
| CAPEX, % of revenue | 2.4% | 2.2% | 3.0% | 1.6% | 6.0% | 4.4% |
|
|---|
| ROIC | 6.6% | 12.5% | 16.6% | 16.3% | 20.9% | 4.6% |
| ROE | 3.6% | 9.2% | 15.4% | 17.2% | 19.4% | 2.2% |
| Net Debt/EBITDA | 4.1x | 1.9x | 1.4x | 0.7x | 1.0x | 0.3x |
Peers in Non-Durable Household Prod.
Below we provide Linc Pen & Plastics benchmarking against other companies in Non-Durable Household Prod. 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kokuyo Camlin ($KOKUYOCMLN) | - | 13.6% | 7.3% | 15.6% | 12.9% |
| Eveready Industries India ($EVEREADY) | - | -5.9% | 11.4% | 10.9% | 3.5% |
| Panasonic Energy India Company ($PANAENERG) | - | 11.4% | 8.9% | 6.2% | 1.2% |
| |
|---|
| Median (3 companies) | - | 11.4% | 8.9% | 10.9% | 3.5% |
|---|
| Linc Pen & Plastics ($LINCPENQ) | - | 10.6% | 3.1% | 0.6% | 8.5% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Panasonic Energy India Company ($PANAENERG) | 3.4% | 3.4% | 6.3% | 10.2% | 9.8% |
| Eveready Industries India ($EVEREADY) | 4.0% | 6.3% | 7.9% | 9.7% | 9.1% |
| Kokuyo Camlin ($KOKUYOCMLN) | 3.3% | -1.2% | 0.7% | 3.2% | 4.0% |
| |
|---|
| Median (3 companies) | 3.4% | 3.4% | 6.3% | 6.4% | 9.1% |
|---|
| Linc Pen & Plastics ($LINCPENQ) | 3.8% | 5.6% | 7.5% | 7.7% | 9.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kokuyo Camlin ($KOKUYOCMLN) | 2.6% | 3.2% | 8.3% | 3.5% | 6.7% |
| Panasonic Energy India Company ($PANAENERG) | 0.4% | 0.8% | 0.1% | 2.2% | 2.7% |
| Eveready Industries India ($EVEREADY) | 2.7% | 1.3% | 1.7% | 2.6% | 2.1% |
| |
|---|
| Median (3 companies) | 2.6% | 1.3% | 1.7% | 2.6% | 2.7% |
|---|
| Linc Pen & Plastics ($LINCPENQ) | 2.4% | 2.2% | 3.0% | 1.6% | 6.0% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Panasonic Energy India Company ($PANAENERG) | - | - | - | 27.2% | 23.4% |
| Eveready Industries India ($EVEREADY) | 1.6% | 3.5% | 5.7% | 10.8% | 10.4% |
| Kokuyo Camlin ($KOKUYOCMLN) | 3.6% | -7.6% | -2.4% | 2.3% | 4.3% |
| High Energy Batteries (India) ($HIGHENE) | 11.6% | 10.0% | -10.2% | - | - |
| Todays Writing Instruments ($TODAYS) | -111.5% | -39.0% | - | - | - |
| |
|---|
| Median (5 companies) | 2.6% | -2.0% | -2.4% | 10.8% | 10.4% |
|---|
| Linc Pen & Plastics ($LINCPENQ) | 6.6% | 12.5% | 16.6% | 16.3% | 20.9% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Eveready Industries India ($EVEREADY) | 8.2x | 4.1x | 2.5x | 1.8x | 1.6x |
| Kokuyo Camlin ($KOKUYOCMLN) | 2.1x | - | 2.8x | -0.1x | 1.3x |
| Panasonic Energy India Company ($PANAENERG) | -3.3x | -2.4x | -1.6x | -1.5x | -1.3x |
| |
|---|
| Median (3 companies) | 3.0x | 4.1x | 1.2x | -0.1x | 1.3x |
|---|
| Linc Pen & Plastics ($LINCPENQ) | 4.1x | 1.9x | 1.4x | 0.7x | 1.0x |
