Kanoria Chemicals & Industries reports 24.3% CAPEX decline in 2016 while 6.4% Revenue growth
27-05-2016 • About Kanoria Chemicals & Industries (
$KANORICHEM) • By InTwits
Kanoria Chemicals & Industries reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Kanoria Chemicals & Industries has high CAPEX intensity: 5 year average CAPEX/Revenue was 22.7%. At the same time it's a lot of higher than industry average of 5.9%.
- CAPEX is quite volatile: ₹1,622m in FY2016, ₹2,141m in FY2015, ₹725m in FY2014, ₹221m in FY2013, ₹723m in FY2012
- The company has potentially unprofitable business model: ROIC is 0.2%
- It operates with high leverage: Net Debt/EBITDA is 10.1x 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 increased on 6.4%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 22.5 pp from -7.8% to -30.3% in FY2016.
Net Income margin decreased on 2.8 pp from 2.3% to -0.45% in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 28.7%. The company's CAPEX/Revenue surged on 22.7 pp from 6.0% in FY2013 to 28.7% in FY2016. Average CAPEX/Revenue for the last three years was 27.5%. Kanoria Chemicals & Industries maintained rich investment policy and has spent a lot to CAPEX (487% of EBITDA).
Return on investment
The company operates at low but positive ROIC (0.2%) and negative ROE (-0.5%). ROIC showed almost no change in FY2016. ROE decreased on 3.0 pp from 2.5% to -0.52% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 10.1x and Debt / EBITDA is 11.7x. Net Debt / EBITDA surged on 0.7x from 9.4x to 10.1x in FY2016. Debt jumped on 18.2% while cash surged on 63.2%.
Kanoria Chemicals & Industries has short term refinancing risk: cash is only 44.2% of short term debt.
Management team
Kanoria Chemicals & Industries's CFO is N K Nolkha. N K Nolkha has 4 years tenure at the company.
Financial and operational results
Kanoria Chemicals & Industries ($KANORICHEM) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 2,878 | 3,660 | 5,414 | 5,309 | 5,651 | 6.4% |
| EBITDA | 237 | 170 | 444 | 316 | 333 | 5.5% |
| Net Income | 3,057 | 79 | 337 | 123 | -26 | -120.8% |
Balance Sheet
|
|---|
| Cash | 29 | 92 | 71 | 343 | 559 | 63.2% |
| Short Term Debt | 613 | 862 | 752 | 1,482 | 1,265 | -14.6% |
| Long Term Debt | 641 | 856 | 861 | 1,831 | 2,650 | 44.7% |
Cash flow
|
|---|
| Capex | 723 | 221 | 725 | 2,141 | 1,622 | -24.3% |
Ratios
|
|---|
| Revenue growth | -40.7% | 27.2% | 47.9% | -1.9% | 6.4% | |
| EBITDA growth | -73.5% | -28.3% | 161.4% | -28.8% | 5.5% | |
|
|---|
| EBITDA Margin | 8.2% | 4.6% | 8.2% | 6.0% | 5.9% | -0.1% |
| Net Income Margin | 106.2% | 2.2% | 6.2% | 2.3% | -0.5% | -2.8% |
| CAPEX, % of revenue | 25.1% | 6.0% | 13.4% | 40.3% | 28.7% | -11.6% |
|
|---|
| ROIC | 1.2% | -0.3% | 3.0% | -0.2% | 0.2% | 0.4% |
| ROE | 82.1% | 1.6% | 7.0% | 2.5% | -0.5% | -3.0% |
| Net Debt/EBITDA | 5.2x | 9.6x | 3.5x | 9.4x | 10.1x | 0.7x |
Peers in Commodity Chemicals
Below you can find Kanoria Chemicals & Industries 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 ($JAGPRO) | - | 4.4% | 514.9% | 192.3% | -32.9% |
| Shree Hari Chemicals Export ($SHHARICH) | -2.5% | -78.0% | 299.5% | 111.6% | - |
| Jindal Poly Films ($JINDPOLBBPH) | -17.2% | -6.3% | 131.7% | 46.9% | - |
| |
|---|
| Median (37 companies) | 33.8% | 9.7% | 10.6% | 6.3% | -1.2% |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | - | 27.2% | 47.9% | -1.9% | 6.4% |
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 ($CHEMFALKAL) | 22.3% | 32.9% | 24.2% | 19.8% | 23.2% |
| |
|---|
| Median (50 companies) | 11.3% | 8.4% | 8.6% | 6.6% | 10.6% |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 8.2% | 4.6% | 8.2% | 6.0% | 5.9% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| 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% |
| Godrej Industries ($GODREJIND) | 1.5% | 9.9% | 5.4% | 5.4% | 3.7% |
| |
|---|
| Median (21 companies) | 5.2% | 7.2% | 5.4% | 3.2% | 4.6% |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 25.1% | 6.0% | 13.4% | 40.3% | 28.7% |
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 ($TRANSPEK) | -1.7% | 14.2% | 11.0% | 17.8% | 26.9% |
| |
|---|
| Median (60 companies) | 9.2% | 9.8% | 9.9% | 9.6% | 16.3% |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 1.2% | -0.3% | 3.0% | -0.2% | 0.2% |
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 ($GODREJIND) | 9.9x | 5.7x | 7.9x | 10.7x | 10.0x |
| Garware Polyester ($GARWARPOLY) | 2.2x | 3.8x | 4.0x | 5.2x | 3.1x |
| Polyplex Corporation ($POLYPLEX) | 0.9x | 6.8x | 7.1x | 4.7x | - |
| |
|---|
| Median (37 companies) | 2.6x | 3.0x | 0.8x | 0.9x | 1.0x |
|---|
| Kanoria Chemicals & Industries ($KANORICHEM) | 5.2x | 9.6x | 3.5x | 9.4x | 10.1x |
