Sudarshan Chemical Industries reports 49.9% CAPEX growth in 2016 and 15.3% Revenue growth
27-05-2016 • About Sudarshan Chemical Industries (
$SUDARSCHEM) • By InTwits
Sudarshan Chemical Industries reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Sudarshan Chemical Industries is a growth stock: FY2016 revenue growth was 15.3%, 5 year revenue CAGR was 14.1% at FY2016 ROIC 15.8%
- Sudarshan Chemical Industries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.7%. At the same time it's in pair with industry average of 7.1%
- CAPEX is quite volatile: ₹851m in FY2016, ₹567m in FY2015, ₹309m in FY2014, ₹1,207m in FY2013, ₹875m in FY2012
- The company has highly profitable business model: ROIC is 15.8%
- It operates with high leverage: Net Debt/EBITDA is 2.4x while industry average is 1.1x
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 surged on 15.3%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.3 pp from 10.7% to 12.0% in FY2016.
Net Income margin increased slightly on 0.52 pp from 4.5% to 5.0% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2013 at 2.5% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 6.1%. Sudarshan Chemical Industries's CAPEX/Revenue decreased on 7.7 pp from 13.8% in FY2013 to 6.1% in FY2016. For the last three years the average CAPEX/Revenue was 4.5%. Sudarshan Chemical Industries invested a big chunk of EBITDA (50.7%) to CAPEX to fuel its growth.
Return on investment
The company operates at high and attractive ROE (24.3%) while ROIC is a bit lower (15.8%). ROIC increased on 3.9 pp from 11.9% to 15.8% in FY2016. ROE increased on 3.9 pp from 20.4% to 24.3% in FY2016. During FY2012-FY2016 ROE bottomed in FY2013 at 8.8% and was growing since that time.
Leverage (Debt)
Debt level is 2.4x Net Debt / EBITDA and 2.6x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 3.2x to 2.4x in FY2016. Debt decreased slightly on 0.68% while cash decreased on 2.7%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2013 at 5.1x and was declining since that time.
Sudarshan Chemical Industries has short term refinancing risk: cash is only 9.8% of short term debt.
Valuation and dividends
Sudarshan Chemical Industries's trades at EV/EBITDA 7.3x and P/E 11.6x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 14.8x with the industry average at 22.8x.
Financial and operational results
Sudarshan Chemical Industries ($SUDARSCHEM) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 8,003 | 8,729 | 11,186 | 12,117 | 13,973 | 15.3% |
| EBITDA | 846 | 780 | 1,333 | 1,298 | 1,677 | 29.3% |
| Net Income | 336 | 220 | 350 | 544 | 699 | 28.6% |
Balance Sheet
|
|---|
| Cash | 337 | 418 | 147 | 212 | 206 | -2.7% |
| Short Term Debt | 1,149 | 2,212 | 2,574 | 2,712 | 2,112 | -22.1% |
| Long Term Debt | 1,234 | 2,155 | 1,831 | 1,613 | 2,184 | 35.4% |
Cash flow
|
|---|
| Capex | 875 | 1,207 | 309 | 567 | 851 | 49.9% |
Ratios
|
|---|
| Revenue growth | 10.5% | 9.1% | 28.2% | 8.3% | 15.3% | |
| EBITDA growth | -2.6% | -7.8% | 70.9% | -2.6% | 29.3% | |
|
|---|
| EBITDA Margin | 10.6% | 8.9% | 11.9% | 10.7% | 12.0% | 1.3% |
| Net Income Margin | 4.2% | 2.5% | 3.1% | 4.5% | 5.0% | 0.5% |
| CAPEX, % of revenue | 10.9% | 13.8% | 2.8% | 4.7% | 6.1% | 1.4% |
|
|---|
| ROIC | 14.1% | 8.5% | 13.2% | 11.9% | 15.8% | 3.9% |
| ROE | 14.4% | 8.8% | 13.3% | 20.4% | 24.3% | 3.9% |
| Net Debt/EBITDA | 2.4x | 5.1x | 3.2x | 3.2x | 2.4x | -0.7x |
Peers in Specialty Chemicals
Below you can find Sudarshan Chemical Industries benchmarking vs. other companies in Specialty 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 |
|---|
| Black Rose Industries ($BLACKROSE) | - | 30.6% | -5.6% | 70.0% | -10.0% |
| Kiri Industries ($KIRIINDUS) | 7.9% | -86.5% | 24.8% | 34.7% | - |
| Vidhi Dyestuffs Manufacturing ($VIDHIDYE) | - | 4.7% | 19.5% | 30.0% | -1.4% |
| Keltech Energies ($KELENRG) | - | -13.4% | -0.4% | 24.4% | -6.3% |
| Dai-Ichi Karkaria ($DAICHI) | - | 31.4% | 45.4% | 22.8% | -36.4% |
| |
|---|
| Median (29 companies) | 17.4% | 14.1% | 11.3% | 11.7% | -1.4% |
|---|
| Sudarshan Chemical Industries ($SUDARSCHEM) | - | 9.1% | 28.2% | 8.3% | 15.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vinati Organics ($VINATIORGA) | 21.7% | 21.8% | 22.7% | 24.9% | 32.8% |
| Indian Toners & Developers ($INDTONER) | - | - | - | 22.6% | - |
| Solar Industries India ($SOLARINDS) | 18.5% | 17.5% | 17.9% | 19.3% | 19.3% |
| Anil ($ANILLTD) | 18.1% | 16.9% | 17.1% | 17.4% | 16.2% |
| Ultramarine & Pigments ($ULTRAMAR) | 18.0% | 15.5% | 17.4% | 17.2% | 17.2% |
| |
|---|
| Median (34 companies) | 9.4% | 11.2% | 10.6% | 10.6% | 15.9% |
|---|
| Sudarshan Chemical Industries ($SUDARSCHEM) | 10.6% | 8.9% | 11.9% | 10.7% | 12.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Plastiblends India ($PLASTIBLEN) | 2.1% | 1.9% | 0.9% | 4.0% | 15.6% |
| Camlin Fine Sciences ($CAMLINFIN) | 4.3% | 5.7% | 7.1% | 5.1% | 13.7% |
| Vinati Organics ($VINATIORGA) | 13.6% | 28.2% | 4.2% | 7.4% | 12.1% |
| Dai-Ichi Karkaria ($DAICHI) | 3.2% | - | - | 1.6% | 10.3% |
| Solar Industries India ($SOLARINDS) | 13.0% | 9.9% | 12.3% | 10.3% | 9.6% |
| |
|---|
| Median (14 companies) | 4.9% | 4.5% | 4.5% | 5.2% | 8.7% |
|---|
| Sudarshan Chemical Industries ($SUDARSCHEM) | 10.9% | 13.8% | 2.8% | 4.7% | 6.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Vinati Organics ($VINATIORGA) | 29.6% | 26.2% | 30.6% | 34.8% | 32.2% |
| Camlin Fine Sciences ($CAMLINFIN) | 11.1% | 17.8% | 24.2% | 29.5% | 23.3% |
| Pidilite Industries ($PIDILITIND) | 27.4% | 29.3% | 29.8% | 29.0% | 38.3% |
| Adi Finechem ($ADIFINCHM) | 30.6% | 29.8% | 46.4% | 26.3% | 20.6% |
| Ultramarine & Pigments ($ULTRAMAR) | 20.0% | 16.3% | 20.8% | 25.7% | 30.2% |
| |
|---|
| Median (37 companies) | 15.3% | 14.9% | 11.1% | 17.8% | 22.3% |
|---|
| Sudarshan Chemical Industries ($SUDARSCHEM) | 14.1% | 8.5% | 13.2% | 11.9% | 15.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kiri Industries ($KIRIINDUS) | 8.2x | 31.3x | 10.6x | 7.7x | - |
| Jayant Agro-Organics ($JAYAGROGN) | 2.8x | 3.1x | 4.6x | 6.5x | 3.4x |
| Anil ($ANILLTD) | 2.2x | 3.4x | 3.8x | 4.0x | 4.2x |
| Oricon Enterprises ($ORICON) | 1.2x | 1.0x | 1.7x | 3.2x | - |
| Meghmani Organics ($MEGH) | 4.2x | 3.7x | 4.3x | 3.1x | - |
| |
|---|
| Median (32 companies) | 1.5x | 1.7x | 1.7x | 0.0x | 0.0x |
|---|
| Sudarshan Chemical Industries ($SUDARSCHEM) | 2.4x | 5.1x | 3.2x | 3.2x | 2.4x |
