P.I.Industries reports 90.1% CAPEX growth in 2016 and 8.1% Revenue growth
24-05-2016 • About P.I.Industries (
$PIIND) • By InTwits
P.I.Industries reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- P.I.Industries is a fast growth stock: FY2016 revenue growth was 8.1%, 5 year revenue CAGR was 23.9% at FY2016 ROIC 31.0%
- EBITDA Margin is expanding: 20.8% in FY2016 vs. 19.6% in FY2015 vs. 17.0% in FY2012
- P.I.Industries has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.9%. At the same time it's a lot of higher than industry average of 6.2%.
- CAPEX is quite volatile: ₹3,215m in FY2016, ₹1,692m in FY2015, ₹645m in FY2014, ₹1,510m in FY2013, ₹1,178m in FY2012
- The company has highly profitable business model: ROIC is 31.0%
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 8.1%. During FY2012-FY2016 Revenue growth topped in FY2014 at 38.9% and was decelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 10.2% to 11.1% in FY2016. EBITDA Margin followed a growing trend at 1.1 pp per annum in the last 5 years.
Net Income margin increased on 2.4 pp from 12.7% to 15.0% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2013 at 8.5% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 15.3% in FY2016. CAPEX/Revenue increased on 2.2 pp from 13.2% in FY2013 to 15.3% in FY2016. For the last three years the average CAPEX/Revenue was 9.4%. P.I.Industries maintained rich investment policy and has spent a big chunk of EBITDA (73.7%) to CAPEX. During the last 5 years CAPEX as a % of Revenue bottomed in FY2014 at 4.0% and was growing since that time.
Return on investment
The company operates at high and attractive ROIC (31.0%) and ROE (30.5%). ROIC decreased on 3.1 pp from 34.0% to 31.0% in FY2016. ROE showed almost no change in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.2x and Debt / EBITDA is 0.3x. Net Debt / EBITDA increased slightly on 0.0051x from 0.2x to 0.2x in FY2016. Debt surged on 32.6% while cash surged on 94.4%. Net Debt/EBITDA stuck to a declining trend at -0.4x per annum in FY2012-FY2016.
P.I.Industries has no short term refinancing risk: cash is higher than short term debt (152.7%).
Valuation and dividends
P.I.Industries's trades at EV/EBITDA 19.1x and P/E 26.0x while industy averages are 17.8x and 21.9x. P.I.Industries's EV/(EBITDA-CAPEX) is 72.4x with the industry average at 22.8x.
Management team
The company's CEO is Mayank Singhal. Mayank Singhal has 10 years tenure with the company. P.I.Industries's CFO is Jayashree Satagopan. Jayashree Satagopan has 5 years tenure at the company.
Financial and operational results
P.I.Industries ($PIIND) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 8,770 | 11,484 | 15,955 | 19,403 | 20,968 | 8.1% |
| SG&A | | | | | 330 | |
| EBITDA | 1,493 | 1,814 | 2,942 | 3,803 | 4,363 | 14.7% |
| Net Income | 1,036 | 973 | 1,880 | 2,459 | 3,153 | 28.2% |
Balance Sheet
|
|---|
| Cash | 57 | 82 | 350 | 229 | 445 | 94.4% |
| Short Term Debt | 1,277 | 1,321 | 722 | 981 | 291 | -70.3% |
| Long Term Debt | 1,191 | 851 | 501 | 167 | 1,230 | 638.3% |
Cash flow
|
|---|
| Capex | 1,178 | 1,510 | 645 | 1,692 | 3,215 | 90.1% |
Ratios
|
|---|
| Revenue growth | 22.2% | 31.0% | 38.9% | 21.6% | 8.1% | |
| EBITDA growth | 33.9% | 21.5% | 62.2% | 29.3% | 14.7% | |
|
|---|
| EBITDA Margin | 17.0% | 15.8% | 18.4% | 19.6% | 20.8% | 1.2% |
| SG&A, % of revenue | | | | | 1.6% | |
| Net Income Margin | 11.8% | 8.5% | 11.8% | 12.7% | 15.0% | 2.4% |
| CAPEX, % of revenue | 13.4% | 13.2% | 4.0% | 8.7% | 15.3% | 6.6% |
|
|---|
| ROIC | 23.9% | 22.5% | 31.3% | 34.0% | 31.0% | -3.1% |
| ROE | 39.0% | 22.7% | 30.7% | 30.9% | 30.5% | -0.4% |
| Net Debt/EBITDA | 1.6x | 1.2x | 0.3x | 0.2x | 0.2x | 0.0x |
Peers in Agrochemicals
Below we provide P.I.Industries benchmarking against other companies in Agrochemicals 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 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Astec Lifesciences Limited ($ASTEC) | - | 55.7% | 18.4% | 28.9% | -2.8% |
| Bhagiradha Chemicals & Industries ($BHAGCHEM) | 15.2% | 113.6% | 18.4% | 25.9% | - |
| Excel Industries ($EXCELINDUS) | 14.7% | 21.7% | 8.3% | 15.8% | - |
| Insecticides (India) ($INSECTICID) | 15.9% | 18.2% | 40.1% | 11.6% | - |
| Rallis India ($RALLIS) | - | 14.4% | 19.8% | 4.3% | -10.6% |
| |
|---|
| Median (7 companies) | 15.0% | 18.2% | 18.4% | 11.6% | -10.6% |
|---|
| P.I.Industries ($PIIND) | - | 31.0% | 38.9% | 21.6% | 8.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Monsanto India ($MONSANTO) | 15.1% | 16.4% | 7.3% | 20.9% | - |
| Astec Lifesciences Limited ($ASTEC) | 15.5% | 16.7% | 17.1% | 20.3% | 9.1% |
| Rallis India ($RALLIS) | 16.2% | 14.7% | 15.2% | 15.4% | 14.9% |
| Jubilant Industries ($JUBLINDS) | 1.8% | 1.6% | - | 15.3% | 20.5% |
| Excel Industries ($EXCELINDUS) | 8.5% | 10.9% | 9.8% | 15.0% | - |
| |
|---|
| Median (8 companies) | 11.0% | 11.3% | 10.2% | 15.2% | 14.9% |
|---|
| P.I.Industries ($PIIND) | 17.0% | 15.8% | 18.4% | 19.6% | 20.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Astec Lifesciences Limited ($ASTEC) | 41.7% | 14.9% | 9.2% | 7.5% | 10.0% |
| Excel Industries ($EXCELINDUS) | 7.6% | 5.7% | 8.5% | 6.8% | - |
| Insecticides (India) ($INSECTICID) | 10.7% | 8.1% | 3.9% | 3.5% | - |
| Rallis India ($RALLIS) | 4.5% | 3.2% | 3.4% | 3.3% | 4.6% |
| Jubilant Industries ($JUBLINDS) | 1.7% | - | - | 2.6% | 1.6% |
| |
|---|
| Median (6 companies) | 6.0% | 5.7% | 3.9% | 3.4% | 4.6% |
|---|
| P.I.Industries ($PIIND) | 13.4% | 13.2% | 4.0% | 8.7% | 15.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Monsanto India ($MONSANTO) | 12.4% | 15.3% | 7.8% | 29.2% | - |
| Rallis India ($RALLIS) | 26.3% | 25.3% | 28.3% | 25.4% | 19.6% |
| Excel Industries ($EXCELINDUS) | 8.5% | 14.2% | 11.9% | 20.3% | - |
| Astec Lifesciences Limited ($ASTEC) | 5.6% | 9.7% | 10.7% | 19.1% | 4.0% |
| Insecticides (India) ($INSECTICID) | 19.2% | 15.6% | 15.7% | 16.8% | - |
| |
|---|
| Median (9 companies) | 6.4% | 9.7% | 11.9% | 20.3% | 19.6% |
|---|
| P.I.Industries ($PIIND) | 23.9% | 22.5% | 31.3% | 34.0% | 31.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Insecticides (India) ($INSECTICID) | 2.7x | 3.0x | 2.7x | 2.8x | - |
| Jubilant Industries ($JUBLINDS) | 12.1x | 11.5x | - | 2.5x | 2.2x |
| Astec Lifesciences Limited ($ASTEC) | 4.1x | 2.4x | 2.3x | 1.7x | 5.3x |
| Excel Industries ($EXCELINDUS) | 2.7x | 1.6x | 2.3x | 1.3x | - |
| Rallis India ($RALLIS) | 0.7x | 0.1x | 0.2x | 0.4x | 0.3x |
| |
|---|
| Median (8 companies) | 3.4x | 3.0x | 0.2x | 0.8x | 1.2x |
|---|
| P.I.Industries ($PIIND) | 1.6x | 1.2x | 0.3x | 0.2x | 0.2x |
