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India Glycols Debt dropped on 44.5% and Revenue decreased on 9.8%

26-05-2016 • About India Glycols ($INDIAGLYCO) • By InTwits

India Glycols reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • India Glycols has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 18.0%.
  • CAPEX is quite volatile: ₹264m in FY2016, ₹524m in FY2015, ₹269m in FY2014, ₹210m in FY2013, ₹323m in FY2012
  • The company has potentially unprofitable business model: ROIC is 6.0%
  • It operates with high leverage: Net Debt/EBITDA is 6.7x while industry average is 2.0x
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 decreased on 9.8%. Revenue decline was accelerating on average at -17.0 pp per annum in the last 5 years. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.1 pp from 5.7% to 7.8% in FY2016. During the last 5 years EBITDA Margin bottomed in FY2015 at 5.7%.

Net Income margin increased slightly on 1.3 pp from -3.4% to -2.1% in FY2016.

Investments (CAPEX, working capital and M&A)


In FY2016 the company had CAPEX/Revenue of 4.6%. The company's CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 3.7%. Battling declining revenue India Glycols invested a large share of EBITDA (58.9%) to CAPEX but that didn't help at least in this year.

Return on investment


The company operates at low but positive ROIC (6.0%) and negative ROE (-17.8%). ROIC increased on 3.7 pp from 2.3% to 6.0% in FY2016. ROE increased on 8.7 pp from -26.5% to -17.8% in FY2016.

Leverage (Debt)


Company's Net Debt / EBITDA is 6.7x and Debt / EBITDA is 6.9x. Net Debt / EBITDA dropped on 7.5x from 14.2x to 6.7x in FY2016. Debt dropped on 44.5% while cash dropped on 72.1%.

India Glycols has short term refinancing risk: cash is only 4.3% of short term debt.

Financial and operational results


India Glycols ($INDIAGLYCO) key annual financial indicators

mln. INR201220132014201520162016/2015
P&L
Revenue27,57834,22629,76625,79523,258-9.8%
SG&A197
EBITDA3,3953,7992,2281,4811,81822.7%
Net Income674955-1,614-886-491
Balance Sheet
Cash3,0351,3291,6331,608449-72.1%
Short Term Debt12,0368,40113,43518,63810,411-44.1%
Long Term Debt7,1607,1717,0934,0072,147-46.4%
Cash flow
Capex1,1481,6831,1507121,07050.4%
Ratios
Revenue growth56.5%24.1%-13.0%-13.3%-9.8%
EBITDA growth85.0%11.9%-41.4%-33.5%22.7%
EBITDA Margin12.3%11.1%7.5%5.7%7.8%2.1%
SG&A, % of revenue0.8%
Net Income Margin2.4%2.8%-5.4%-3.4%-2.1%1.3%
CAPEX, % of revenue4.2%4.9%3.9%2.8%4.6%1.8%
ROIC11.0%12.3%5.5%2.3%6.0%3.7%
ROE16.9%20.1%-35.5%-26.5%-17.8%8.7%
Net Debt/EBITDA4.8x3.7x8.5x14.2x6.7x-7.5x

Peers in Commodity Chemicals


Below we provide India Glycols benchmarking against other companies in Commodity Chemicals 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
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)19.0%9.7%11.5%6.3%1.5%
India Glycols ($INDIAGLYCO)-24.1%-13.0%-13.3%-9.8%


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%8.6%6.6%11.2%
India Glycols ($INDIAGLYCO)12.3%11.1%7.5%5.7%7.8%


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%
Sukhjit Starch & Chemicals ($SUKHJITS)15.7%9.4%5.4%5.4%3.6%
 
Median (21 companies)5.3%7.2%5.9%3.3%4.2%
India Glycols ($INDIAGLYCO)4.2%4.9%3.9%2.8%4.6%


Top companies by ROIC, %

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Bodal Chemicals ($BODALCHEM)-1.3%3.3%39.0%38.3%33.1%
Elantas Beck India ($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%9.9%9.6%18.6%
India Glycols ($INDIAGLYCO)11.0%12.3%5.5%2.3%6.0%


Top companies by Net Debt / EBITDA

Top 5 FY2012 FY2013 FY2014 FY2015 FY2016
Iol Chemicals & Pharmaceuticals ($IOLCP)5.8x4.5x3.7x35.4x8.8x
Godrej Industries ($GODREJIND)9.9x5.7x7.9x10.7x10.0x
Kanoria Chemicals & Industries ($KANORICHEM)5.2x9.6x3.5x9.4x-
Garware Polyester ($GARWARPOLY)2.2x3.8x4.0x5.2x3.1x
Polyplex Corporation ($POLYPLEX)0.9x6.8x7.1x4.7x-
 
Median (37 companies)2.6x3.0x0.8x0.9x1.0x
India Glycols ($INDIAGLYCO)4.8x3.7x8.5x14.2x6.7x


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