Tata Chemicals Debt jumped on 18.0% while EBITDA decreased on 8.1%
26-05-2016 • About Tata Chemicals (
$TATACHEM) • By InTwits
Tata Chemicals reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Tata Chemicals has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.4%. At the same time it's in pair with industry average of 1.5%
- CAPEX is quite volatile: ₹7,828m in FY2016, ₹2,436m in FY2015, ₹1,713m in FY2014, ₹1,948m in FY2013, ₹1,571m in FY2012
- The company has business model with average profitability: ROIC is 11.8%
- It operates with high leverage: Net Debt/EBITDA is 3.2x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Tata Chemicals's Revenue increased on 2.9%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 6.1 pp from 20.4% to 26.5% in FY2016.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income margin increased slightly on 0.94 pp from 3.5% to 4.4% in FY2016. During the last 5 years Net Income margin bottomed in FY2014 at -6.5% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 3.8%. Tata Chemicals's CAPEX/Revenue showed almost no change from FY2013 to FY2016. Average CAPEX/Revenue for the last three years was 3.9%.
Return on investment
The company operates at good ROE (13.2%) while ROIC is low (11.8%). ROIC decreased slightly on 1.6 pp from 13.4% to 11.8% in FY2016. ROE increased on 2.4 pp from 10.7% to 13.2% in FY2016. During FY2012-FY2016 ROE bottomed in FY2014 at -17.2% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.2x and Debt / EBITDA is 3.8x. Net Debt / EBITDA jumped on 0.8x from 2.3x to 3.2x in FY2016. Debt surged on 18.0% while cash decreased on 6.4%.
Tata Chemicals has short term refinancing risk: cash is only 90.2% of short term debt.
Financial and operational results
Tata Chemicals ($TATACHEM) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 136,590 | 147,110 | 158,854 | 172,045 | 177,081 | 2.9% |
| SG&A | | | | 2,936 | 3,134 | 6.7% |
| EBITDA | 23,758 | 21,629 | 18,140 | 23,612 | 21,711 | -8.1% |
| Net Income | 8,376 | 4,004 | -10,320 | 5,965 | 7,802 | 30.8% |
Balance Sheet
|
|---|
| Cash | 6,903 | 18,414 | 17,530 | 14,643 | 13,705 | -6.4% |
| Short Term Debt | 15,677 | 14,897 | 14,865 | 12,932 | 15,202 | 17.6% |
| Long Term Debt | 54,845 | 54,610 | 68,831 | 57,083 | 67,435 | 18.1% |
Cash flow
|
|---|
| Capex | 7,948 | 6,257 | 7,026 | 6,056 | 6,647 | 9.8% |
Ratios
|
|---|
| Revenue growth | 23.5% | 7.7% | 8.0% | 8.3% | 2.9% | |
| EBITDA growth | 26.5% | -9.0% | -16.1% | 30.2% | -8.1% | |
|
|---|
| EBITDA Margin | 17.4% | 14.7% | 11.4% | 13.7% | 12.3% | -1.5% |
| SG&A, % of revenue | | | | 1.7% | 1.8% | 0.1% |
| Net Income Margin | 6.1% | 2.7% | -6.5% | 3.5% | 4.4% | 0.9% |
| CAPEX, % of revenue | 5.8% | 4.3% | 4.4% | 3.5% | 3.8% | 0.2% |
|
|---|
| ROIC | 15.0% | 11.7% | 9.3% | 13.4% | 11.8% | -1.6% |
| ROE | 14.2% | 6.3% | -17.2% | 10.7% | 13.2% | 2.4% |
| Net Debt/EBITDA | 2.7x | 2.4x | 3.6x | 2.3x | 3.2x | 0.8x |
Peers in Commodity Chemicals
Below you can find Tata 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 ($JINDPOLBBPH) | -17.2% | -6.3% | 131.7% | 46.9% | - |
| |
|---|
| Median (37 companies) | 19.0% | 11.2% | 11.5% | 5.6% | 0.0% |
|---|
| Tata Chemicals ($TATACHEM) | - | 7.7% | 8.0% | 8.3% | 2.9% |
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 ($CHEMFALKAL) | 22.3% | 32.9% | 24.2% | 19.8% | 23.2% |
| |
|---|
| Median (50 companies) | 9.6% | 8.3% | 8.5% | 6.6% | 10.2% |
|---|
| Tata Chemicals ($TATACHEM) | 17.4% | 14.7% | 11.4% | 13.7% | 12.3% |
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 ($SUKHJITS) | 15.7% | 9.4% | 5.4% | 5.4% | 3.6% |
| |
|---|
| Median (21 companies) | 5.2% | 7.2% | 5.9% | 3.2% | 4.6% |
|---|
| Tata Chemicals ($TATACHEM) | 5.8% | 4.3% | 4.4% | 3.5% | 3.8% |
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 ($TRANSPEK) | -1.7% | 14.2% | 11.0% | 17.8% | 26.9% |
| |
|---|
| Median (60 companies) | 9.0% | 9.5% | 9.4% | 7.9% | 18.6% |
|---|
| Tata Chemicals ($TATACHEM) | 15.0% | 11.7% | 9.3% | 13.4% | 11.8% |
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 | 6.7x |
| 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 ($GARWARPOLY) | 2.2x | 3.8x | 4.0x | 5.2x | 3.1x |
| |
|---|
| Median (37 companies) | 2.6x | 3.2x | 0.8x | 0.9x | 1.0x |
|---|
| Tata Chemicals ($TATACHEM) | 2.7x | 2.4x | 3.6x | 2.3x | 3.2x |
