Sukhjit Starch & Chemicals reports 6.5% EBITDA decline in 2016 while 6.2% Revenue growth
25-05-2016 • About Sukhjit Starch & Chemicals (
$SUKHJITS) • By InTwits
Sukhjit Starch & Chemicals reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Sukhjit Starch & Chemicals is a growth stock: FY2016 revenue growth was 6.2%, 5 year revenue CAGR was 10.4% at FY2016 ROIC 12.7%
- Sukhjit Starch & Chemicals has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.9%. At the same time it's a lot of higher than industry average of 6.2%.
- CAPEX is quite volatile: ₹202m in FY2016, ₹287m in FY2015, ₹276m in FY2014, ₹397m in FY2013, ₹563m in FY2012
- The company has highly profitable business model: ROIC is 12.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.9x while industry average is 2.2x
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 6.2%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.3 pp from 7.2% to 11.5% in FY2016.
Net Income margin showed almost no change in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 3.6%. The company showed decline in CAPEX/Revenue of 5.9 pp from 9.4% in FY2013 to 3.6% in FY2016. It's average CAPEX/Revenue for the last three years was 4.8%. CAPEX as a % of Revenue followed a declining trend at -2.8 pp per annum in the last 5 years.
Return on investment
The company operates at good ROIC (12.7%) while ROE is low (10.9%). ROIC decreased slightly on 0.79 pp from 13.5% to 12.7% in FY2016. ROE decreased slightly on 1.4 pp from 12.3% to 10.9% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.9x and Debt / EBITDA is 2.1x. Net Debt / EBITDA dropped on 0.4x from 2.3x to 1.9x in FY2016. Debt dropped on 23.0% while cash dropped on 18.0%. During the last 5 years Net Debt/EBITDA topped in FY2014 at 3.4x and was declining since that time.
Sukhjit Starch & Chemicals has short term refinancing risk: cash is only 22.7% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 4.9x and P/E 8.1x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 7.3x with the industry average at 22.8x.
Financial and operational results
Sukhjit Starch & Chemicals ($SUKHJITS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,586 | 4,223 | 5,084 | 5,331 | 5,664 | 6.2% |
| EBITDA | 436 | 498 | 489 | 641 | 599 | -6.5% |
| Net Income | 209 | 208 | 159 | 229 | 225 | -2.0% |
Balance Sheet
|
|---|
| Cash | 5 | 21 | 79 | 197 | 161 | -18.0% |
| Short Term Debt | 542 | 853 | 1,042 | 1,022 | 712 | -30.4% |
| Long Term Debt | 556 | 741 | 718 | 628 | 558 | -11.1% |
Cash flow
|
|---|
| Capex | 563 | 397 | 276 | 287 | 202 | -29.7% |
Ratios
|
|---|
| Revenue growth | 4.0% | 17.8% | 20.4% | 4.9% | 6.2% | |
| EBITDA growth | -29.6% | 14.2% | -1.7% | 31.0% | -6.5% | |
|
|---|
| EBITDA Margin | 12.2% | 11.8% | 9.6% | 12.0% | 10.6% | -1.4% |
| Net Income Margin | 5.8% | 4.9% | 3.1% | 4.3% | 4.0% | -0.3% |
| CAPEX, % of revenue | 15.7% | 9.4% | 5.4% | 5.4% | 3.6% | -1.8% |
|
|---|
| ROIC | 14.0% | 13.6% | 10.4% | 13.5% | 12.7% | -0.8% |
| ROE | 15.1% | 13.4% | 9.3% | 12.3% | 10.9% | -1.4% |
| Net Debt/EBITDA | 2.5x | 3.2x | 3.4x | 2.3x | 1.9x | -0.4x |
Peers in Commodity Chemicals
Below you can find Sukhjit Starch & Chemicals benchmarking vs. other companies in Commodity 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 |
|---|
| Tuticorin Alkali Chemicals & Fertilisers ($TUTIALKA) | - | -27.9% | -83.3% | 408.0% | 18.3% |
| Jayshree Chemicals ($JAYCH) | 288.9% | 17.5% | -75.2% | 262.3% | - |
| Jagran Production ($JAGPRO) | 589.4% | 4.4% | 514.9% | 192.3% | - |
| Shree Hari Chemicals Export ($SHHARICH) | -2.5% | -78.0% | 299.5% | 111.6% | - |
| Jindal Poly Films ($JINDPOLBBPH) | -17.2% | -6.3% | 131.7% | 46.9% | - |
| |
|---|
| Median (37 companies) | 23.5% | 9.7% | 10.6% | 6.3% | 1.5% |
|---|
| Sukhjit Starch & Chemicals ($SUKHJITS) | - | 17.8% | 20.4% | 4.9% | 6.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Riddhi Siddhi Gluco Biols ($RIDDHI) | - | - | - | 104.7% | - |
| Mysore Petro Chemicals ($MYSORPETRO) | - | - | - | 47.1% | - |
| Aditya Birla Chemicals (India) ($ABCIL) | 26.8% | 27.1% | 23.6% | 21.9% | - |
| Indo Borax & Chemicals ($INDOBORAX) | - | - | - | 21.3% | - |
| Chemfab Alkalis ($CHEMFALKAL) | 22.3% | 32.9% | 24.2% | 19.8% | 23.2% |
| |
|---|
| Median (50 companies) | 9.6% | 8.3% | 8.5% | 6.6% | 10.8% |
|---|
| Sukhjit Starch & Chemicals ($SUKHJITS) | 12.2% | 11.8% | 9.6% | 12.0% | 10.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 25.1% | 6.0% | 13.4% | 40.3% | - |
| Aditya Birla Chemicals (India) ($ABCIL) | 136.9% | 24.2% | 30.8% | 15.0% | - |
| Aarti Industries ($AARTIIND) | 8.0% | 11.2% | 11.0% | 10.4% | 16.8% |
| Alkyl Amines Chemicals ($ALKYLAMINE) | 5.1% | 6.6% | 5.9% | 8.6% | 7.3% |
| Godrej Industries ($GODREJIND) | 1.5% | 9.9% | 5.4% | 5.4% | 3.7% |
| |
|---|
| Median (21 companies) | 5.2% | 6.3% | 5.9% | 3.2% | 5.0% |
|---|
| Sukhjit Starch & Chemicals ($SUKHJITS) | 15.7% | 9.4% | 5.4% | 5.4% | 3.6% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Bodal Chemicals ($BODALCHEM) | -1.3% | 3.3% | 39.0% | 38.3% | - |
| Elantas Beck India ($ELANTAS) | 20.4% | 33.9% | 31.0% | 36.6% | - |
| Alkyl Amines Chemicals ($ALKYLAMINE) | 16.0% | 18.7% | 25.0% | 23.7% | 24.7% |
| Aarti Industries ($AARTIIND) | 15.9% | 19.1% | 17.2% | 17.9% | 19.3% |
| Transpek Industry ($TRANSPEK) | -1.7% | 14.2% | 11.0% | 17.8% | 26.9% |
| |
|---|
| Median (60 companies) | 9.0% | 9.5% | 8.9% | 7.9% | 19.3% |
|---|
| Sukhjit Starch & Chemicals ($SUKHJITS) | 14.0% | 13.6% | 10.4% | 13.5% | 12.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Iol Chemicals & Pharmaceuticals ($IOLCP) | 5.8x | 4.5x | 3.7x | 35.4x | 8.8x |
| India Glycols ($INDIAGLYCO) | 4.8x | 3.7x | 8.5x | 14.2x | - |
| Godrej Industries ($GODREJIND) | 9.9x | 5.7x | 7.9x | 10.7x | 10.0x |
| Kanoria Chemicals & Industries ($KANORICHEM) | 5.2x | 9.6x | 3.5x | 9.4x | - |
| Garware Polyester ($GARWARPOLY) | 2.2x | 3.8x | 4.0x | 5.2x | 3.1x |
| |
|---|
| Median (37 companies) | 2.6x | 3.0x | 0.8x | 0.9x | 1.0x |
|---|
| Sukhjit Starch & Chemicals ($SUKHJITS) | 2.5x | 3.2x | 3.4x | 2.3x | 1.9x |
