Panacea Biotec reports 64.8% EBITDA growth in 2016 and 7.7 pp EBITDA Margin growth from 10.4% to 18.1%
27-05-2016 • About Panacea Biotec (
$PANACEABIO) • By InTwits
Panacea Biotec reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Panacea Biotec is a company in decline: FY2016 revenue growth was -5.0%, 5 years revenue CAGR was -10.6%
- Panacea Biotec has medium CAPEX intensity: 5 year average CAPEX/Revenue was 9.6%. At the same time it's in pair with industry average of 12.5%
- CAPEX is quite volatile: ₹113m in FY2016, ₹78m in FY2015, ₹560m in FY2014, ₹798m in FY2013, ₹1,345m in FY2012
- The company has potentially unprofitable business model: ROIC is 2.9%
- It operates with high leverage: Net Debt/EBITDA is 8.8x while industry average is 3.1x
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 5.0%. During the last 5 years Revenue growth topped in FY2015 at 34.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.7 pp from 10.4% to 18.1% in FY2016. During the last 5 years EBITDA Margin bottomed in FY2014 at -13.6% and was growing since that time.
Net Income margin jumped on 12.7 pp from -15.5% to -2.8% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2013 at -43.1% and was growing since that time.
Investments (CAPEX, working capital and M&A)
Panacea Biotec's CAPEX/Revenue was 1.7% in FY2016. The company's CAPEX/Revenue dropped on 13.0 pp from 14.7% in FY2013 to 1.7% in FY2016. It's average level of CAPEX/Revenue for the last three years was 4.6%. CAPEX as a % of Revenue followed a declining trend at -4.9 pp per annum in FY2012-FY2016.
Return on investment
The company operates at low but positive ROIC (2.9%) and negative ROE (-4.1%). ROIC increased on 2.6 pp from 0.28% to 2.9% in FY2016. ROE jumped on 17.9 pp from -22.0% to -4.1% in FY2016. During the last 5 years ROIC bottomed in FY2014 at -8.7% and was growing since that time.
Leverage (Debt)
Debt level is 8.8x Net Debt / EBITDA and 9.0x Debt / EBITDA. Net Debt / EBITDA dropped on 6.2x from 15.0x to 8.8x in FY2016. Debt decreased on 3.3% while cash surged on 14.8%.
Panacea Biotec has short term refinancing risk: cash is only 11.9% of short term debt.
Financial and operational results
Panacea Biotec ($PANACEABIO) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 6,978 | 5,431 | 5,100 | 6,872 | 6,531 | -5.0% |
| EBITDA | -495 | -492 | -695 | 718 | 1,183 | 64.8% |
| Net Income | -2,057 | -2,343 | -1,121 | -1,065 | -183 | |
Balance Sheet
|
|---|
| Cash | 150 | 349 | 208 | 200 | 229 | 14.8% |
| Short Term Debt | 3,641 | 2,893 | 4,766 | 3,719 | 1,918 | -48.4% |
| Long Term Debt | 5,125 | 6,899 | 5,832 | 7,230 | 8,671 | 19.9% |
Cash flow
|
|---|
| Capex | 1,345 | 798 | 560 | 78 | 113 | 44.6% |
Ratios
|
|---|
| Revenue growth | -39.0% | -22.2% | -6.1% | 34.7% | -5.0% | |
| EBITDA growth | -118.2% | -0.4% | 41.2% | -203.2% | 64.8% | |
|
|---|
| EBITDA Margin | -7.1% | -9.1% | -13.6% | 10.4% | 18.1% | 7.7% |
| Net Income Margin | -29.5% | -43.1% | -22.0% | -15.5% | -2.8% | 12.7% |
| CAPEX, % of revenue | 19.3% | 14.7% | 11.0% | 1.1% | 1.7% | 0.6% |
|
|---|
| ROIC | -7.5% | -8.0% | -8.7% | 0.3% | 2.9% | 2.6% |
| ROE | -27.0% | -31.2% | -19.7% | -22.0% | -4.1% | 17.9% |
| Net Debt/EBITDA | | | | 15.0x | 8.8x | -6.2x |
Peers in Biotechnology
Below we provide Panacea Biotec benchmarking against other companies in Biotechnology 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Biocon ($BIOCON) | - | 21.3% | 15.8% | 7.4% | 12.8% |
| |
|---|
| Median (1 company) | - | 21.3% | 15.8% | 7.4% | 12.8% |
|---|
| Panacea Biotec ($PANACEABIO) | - | -22.2% | -6.1% | 34.7% | -5.0% |
Top companies by EBITDA margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Biocon ($BIOCON) | 25.3% | 22.9% | 25.7% | 23.6% | 24.6% |
| Alpa Laboratories ($ALPA) | - | - | - | 6.0% | - |
| |
|---|
| Median (2 companies) | 25.3% | 22.9% | 25.7% | 14.8% | 24.6% |
|---|
| Panacea Biotec ($PANACEABIO) | -7.1% | -9.1% | -13.6% | 10.4% | 18.1% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Biocon ($BIOCON) | 13.4% | 14.4% | 27.4% | 27.1% | 23.3% |
| |
|---|
| Median (1 company) | 13.4% | 14.4% | 27.4% | 27.1% | 23.3% |
|---|
| Panacea Biotec ($PANACEABIO) | 19.3% | 14.7% | 11.0% | 1.1% | 1.7% |
Top companies by ROIC, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Biocon ($BIOCON) | 13.5% | 13.9% | 15.4% | 12.2% | 10.9% |
| Vivo Bio Tech ($VIVOBIOT) | 11.4% | 4.0% | - | - | - |
| Alpa Laboratories ($ALPA) | 1.9% | -1.6% | - | - | - |
| Saamya Biotech (India) ($SAAMYABIO) | 1.6% | -1.1% | - | - | - |
| |
|---|
| Median (4 companies) | 6.6% | 1.4% | 15.4% | 12.2% | 10.9% |
|---|
| Panacea Biotec ($PANACEABIO) | -7.5% | -8.0% | -8.7% | 0.3% | 2.9% |
Top companies by Net Debt / EBITDA
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Biocon ($BIOCON) | -0.1x | -0.4x | 0.4x | 0.1x | 0.7x |
| Alpa Laboratories ($ALPA) | 3.4x | 4.6x | 0.0x | 0.0x | - |
| |
|---|
| Median (2 companies) | 1.8x | -0.4x | 0.0x | 0.1x | 0.7x |
|---|
| Panacea Biotec ($PANACEABIO) | - | - | - | 15.0x | 8.8x |
