Tamil Nadu Newsprint & Papers Net Income surged on 52.3% and EBITDA Margin showed almost no change
27-05-2016 • About Tamil Nadu Newsprint & Papers (
$TNPL) • By InTwits
Tamil Nadu Newsprint & Papers reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Tamil Nadu Newsprint & Papers is a growth stock: FY2016 revenue growth was 13.2%, 5 year revenue CAGR was 14.9% at FY2016 ROIC 13.5%
- Tamil Nadu Newsprint & Papers has high CAPEX intensity: 5 year average CAPEX/Revenue was 21.5%. At the same time it's in pair with industry average of 18.9%
- CAPEX is quite volatile: ₹9,030m in FY2016, ₹7,518m in FY2015, ₹1,258m in FY2014, ₹1,935m in FY2013, ₹2,884m in FY2012
- The company has highly profitable business model: ROIC is 13.5%
- It operates with high leverage: Net Debt/EBITDA is 4.4x 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 jumped on 13.2%. EBITDA Margin showed almost no change in FY2016. EBITDA Margin grew at 0.83 pp per annum in the last 5 years.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income margin increased on 2.7 pp from 7.8% to 10.5% in FY2016. During the last 5 years Net Income margin bottomed in FY2013 at 4.9% and was growing since that time.
Investments (CAPEX, working capital and M&A)
Tamil Nadu Newsprint & Papers's CAPEX/Revenue was 37.4% in FY2016. Tamil Nadu Newsprint & Papers's CAPEX/Revenue surged on 27.0 pp from 10.4% in FY2013 to 37.4% in FY2016. For the last three years the average CAPEX/Revenue was 26.0%. Tamil Nadu Newsprint & Papers has spent a lot to CAPEX (154% of EBITDA) to fuel its growth. During the last 5 years CAPEX as a % of Revenue bottomed in FY2014 at 5.5% and was growing since that time.
Return on investment
The company operates at good ROIC (13.5%) and ROE (19.2%). ROIC increased slightly on 0.73 pp from 12.7% to 13.5% in FY2016. ROE increased on 5.0 pp from 14.2% to 19.2% in FY2016. ROIC stuck to a growing trend at 2.1 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.4x and Debt / EBITDA is 4.5x. Net Debt / EBITDA surged on 0.4x from 4.0x to 4.4x in FY2016. Debt surged on 26.7% while cash dropped on 20.3%. During FY2012-FY2016 Net Debt/EBITDA bottomed in FY2014 at 2.8x and was growing since that time.
Tamil Nadu Newsprint & Papers has short term refinancing risk: cash is only 2.4% of short term debt.
Management team
Tamil Nadu Newsprint & Papers's CFO Arunachalam Velliangiri has spent 12 years with the company.
Financial and operational results
Tamil Nadu Newsprint & Papers ($TNPL) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 15,229 | 18,613 | 22,852 | 21,357 | 24,175 | 13.2% |
| SG&A | | | | 36 | 72 | 98.0% |
| EBITDA | 3,195 | 4,133 | 5,143 | 5,116 | 5,864 | 14.6% |
| Net Income | 1,089 | 915 | 1,612 | 1,667 | 2,539 | 52.3% |
Balance Sheet
|
|---|
| Cash | 190 | 238 | 115 | 203 | 162 | -20.3% |
| Short Term Debt | 8,600 | 8,429 | 8,381 | 6,965 | 6,782 | -2.6% |
| Long Term Debt | 8,738 | 6,573 | 6,370 | 13,692 | 19,387 | 41.6% |
Cash flow
|
|---|
| Capex | 2,884 | 1,935 | 1,258 | 7,518 | 9,030 | 20.1% |
Ratios
|
|---|
| Revenue growth | 26.0% | 22.2% | 22.8% | -6.5% | 13.2% | |
| EBITDA growth | 1.1% | 29.4% | 24.4% | -0.5% | 14.6% | |
|
|---|
| EBITDA Margin | 21.0% | 22.2% | 22.5% | 24.0% | 24.3% | 0.3% |
| SG&A, % of revenue | | | | 0.2% | 0.3% | 0.1% |
| Net Income Margin | 7.2% | 4.9% | 7.1% | 7.8% | 10.5% | 2.7% |
| CAPEX, % of revenue | 18.9% | 10.4% | 5.5% | 35.2% | 37.4% | 2.2% |
|
|---|
| ROIC | 5.3% | 8.2% | 11.1% | 12.7% | 13.5% | 0.7% |
| ROE | 11.5% | 9.1% | 14.8% | 14.2% | 19.2% | 5.0% |
| Net Debt/EBITDA | 5.4x | 3.6x | 2.8x | 4.0x | 4.4x | 0.4x |
Peers in Paper & Paper Products
Below we provide Tamil Nadu Newsprint & Papers benchmarking against other companies in Paper & Paper Products 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 |
|---|
| N.R.Agarwal Industries ($NRAGRINDQ) | - | 4.0% | 5.5% | 34.1% | 21.8% |
| South India Paper Mills ($STHINPA) | - | -1.1% | -14.7% | 29.2% | 11.5% |
| Pudumjee Pulp & Paper Mills ($PDUMJEPULP) | 2.1% | 8.4% | 4.9% | 26.5% | - |
| Tcpl Packaging ($TCPLPACK) | - | 33.7% | 5.8% | 26.1% | 16.7% |
| Jk Paper ($JKPAPER) | - | 9.4% | 18.5% | 24.3% | 13.5% |
| |
|---|
| Median (14 companies) | 8.2% | 4.7% | 7.5% | 5.0% | 11.5% |
|---|
| Tamil Nadu Newsprint & Papers ($TNPL) | - | 22.2% | 22.8% | -6.5% | 13.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tcpl Packaging ($TCPLPACK) | 16.1% | 14.9% | 15.7% | 16.5% | 17.3% |
| South India Paper Mills ($STHINPA) | 13.5% | 16.1% | 10.2% | 15.8% | 17.3% |
| Yash Papers ($YASHPPR) | 15.7% | 16.8% | 16.0% | 15.7% | - |
| Kuantum Papers ($KUANTUM) | 11.2% | 14.2% | 15.9% | 12.7% | 29.6% |
| Emami Paper Mills ($EMAMIPAP) | 13.3% | 15.0% | 14.5% | 11.4% | 10.0% |
| |
|---|
| Median (15 companies) | 11.6% | 11.8% | 13.2% | 9.8% | 14.7% |
|---|
| Tamil Nadu Newsprint & Papers ($TNPL) | 21.0% | 22.2% | 22.5% | 24.0% | 24.3% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Emami Paper Mills ($EMAMIPAP) | 24.4% | 7.3% | 19.2% | 89.3% | 21.7% |
| Tcpl Packaging ($TCPLPACK) | 18.3% | 8.6% | 11.1% | 12.1% | 14.8% |
| Jk Paper ($JKPAPER) | 47.6% | 59.5% | 15.9% | 4.2% | 1.6% |
| |
|---|
| Median (3 companies) | 11.3% | 8.6% | 15.9% | 12.1% | 14.8% |
|---|
| Tamil Nadu Newsprint & Papers ($TNPL) | 18.9% | 10.4% | 5.5% | 35.2% | 37.4% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tcpl Packaging ($TCPLPACK) | 15.4% | 17.4% | 16.9% | 23.1% | 23.3% |
| Jk Paper ($JKPAPER) | 5.2% | 2.7% | 1.1% | 4.3% | 10.5% |
| Emami Paper Mills ($EMAMIPAP) | 5.8% | 5.9% | 5.4% | 3.0% | 2.0% |
| Rama Pulp & Papers ($RAMAPULP) | - | 10.8% | - | - | - |
| Ruchira Papers ($RUCHIRA) | 15.4% | 20.2% | - | - | - |
| |
|---|
| Median (21 companies) | 8.3% | 9.4% | 8.5% | 4.3% | 10.5% |
|---|
| Tamil Nadu Newsprint & Papers ($TNPL) | 5.3% | 8.2% | 11.1% | 12.7% | 13.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Emami Paper Mills ($EMAMIPAP) | 7.4x | 5.3x | 5.0x | 11.2x | 16.7x |
| Jk Paper ($JKPAPER) | 6.8x | 12.7x | 14.1x | 8.6x | 4.0x |
| Tcpl Packaging ($TCPLPACK) | 2.6x | 2.3x | 2.2x | 1.9x | 1.9x |
| Yash Papers ($YASHPPR) | 5.2x | 5.5x | 4.5x | 0.0x | - |
| Sree Sakthi Paper Mills ($SREESAKHTI) | 2.1x | 1.7x | - | 0.0x | - |
| |
|---|
| Median (13 companies) | 3.2x | 2.7x | 0.0x | 0.0x | 0.3x |
|---|
| Tamil Nadu Newsprint & Papers ($TNPL) | 5.4x | 3.6x | 2.8x | 4.0x | 4.4x |
