Shalimar Paints reports 239% EBITDA growth in 2016 and 5.6 pp EBITDA Margin growth from 2.1% to 7.8%
28-05-2016 • About Shalimar Paints (
$SHALPAINTS) • By InTwits
Shalimar Paints reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 7.8% in FY2016, 2.1% in FY2015, 3.0% in FY2014, 7.6% in FY2013, 7.8% in FY2012
- Shalimar Paints has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.9%. At the same time it's a lot of higher than industry average of 5.3%.
- CAPEX is quite volatile: ₹84m in FY2016, ₹283m in FY2015, ₹137m in FY2014, ₹106m in FY2013, ₹36m in FY2012
- The company has highly profitable business model: ROIC is 13.9%
- It operates with high leverage: Net Debt/EBITDA is 3.8x while industry average is 0.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Shalimar Paints's Revenue decreased on 7.0%. Revenue decline was accelerating on average at -6.6 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.6 pp from 2.1% to 7.8% in FY2016. During the last 5 years EBITDA Margin bottomed in FY2015 at 2.1%.
Net Income margin increased on 3.7 pp from -2.4% to 1.3% in FY2016. During the last 5 years Net Income margin bottomed in FY2015 at -2.4%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.1% in FY2016. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average level of CAPEX/Revenue for the last three years was 3.8%. During the last 5 years CAPEX as a % of Revenue topped in FY2015 at 6.5%.
Return on investment
The company operates at good ROIC (13.9%) while ROE is low (8.2%). ROIC surged on 11.5 pp from 2.4% to 13.9% in FY2016. ROE surged on 23.9 pp from -15.7% to 8.2% in FY2016. During the last 5 years ROIC bottomed in FY2015 at 2.4%. During FY2012-FY2016 ROE bottomed in FY2015 at -15.7%.
Leverage (Debt)
Company's Net Debt / EBITDA is 3.8x and Debt / EBITDA is 4.1x. Net Debt / EBITDA dropped on 10.0x from 13.7x to 3.8x in FY2016. Debt decreased slightly on 0.54% while cash surged on 823%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2015 at 13.7x.
Shalimar Paints has short term refinancing risk: cash is only 9.6% of short term debt.
Management team
Shalimar Paints's CEO Surender Kumar Bhatia has spent 5 years with the company. Surender Kumar Bhatia is a Shalimar Paints's CFO. Surender Kumar Bhatia has spent 5 years at the company.
Financial and operational results
Shalimar Paints ($SHALPAINTS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 4,864 | 4,988 | 4,828 | 4,333 | 4,029 | -7.0% |
| EBITDA | 379 | 380 | 146 | 93 | 314 | 238.5% |
| Net Income | 145 | 110 | -28 | -106 | 53 | |
Balance Sheet
|
|---|
| Cash | 131 | 150 | 43 | 10 | 90 | 822.7% |
| Short Term Debt | 688 | 811 | 965 | 1,099 | 940 | -14.4% |
| Long Term Debt | 0 | 71 | 134 | 184 | 336 | 82.2% |
Cash flow
|
|---|
| Capex | 36 | 106 | 137 | 283 | 84 | -70.4% |
Ratios
|
|---|
| Revenue growth | 19.5% | 2.5% | -3.2% | -10.3% | -7.0% | |
| EBITDA growth | 29.3% | 0.2% | -61.7% | -36.4% | 238.5% | |
|
|---|
| EBITDA Margin | 7.8% | 7.6% | 3.0% | 2.1% | 7.8% | 5.6% |
| Net Income Margin | 3.0% | 2.2% | -0.6% | -2.4% | 1.3% | 3.7% |
| CAPEX, % of revenue | 0.7% | 2.1% | 2.8% | 6.5% | 2.1% | -4.5% |
|
|---|
| ROIC | 25.9% | 22.2% | 6.2% | 2.4% | 13.9% | 11.5% |
| ROE | 24.6% | 15.9% | -3.8% | -15.7% | 8.2% | 23.9% |
| Net Debt/EBITDA | 1.5x | 1.9x | 7.3x | 13.7x | 3.8x | -10.0x |
Peers in Furniture-Furnishing-Paints
Below you can find Shalimar Paints benchmarking vs. other companies in Furniture-Furnishing-Paints 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 |
|---|
| Kajaria Ceramics ($KAJARIACER) | - | 22.8% | 13.9% | 19.1% | 10.6% |
| Asian Paints ($ASIANPAINT) | - | 13.3% | 15.7% | 11.3% | 9.5% |
| Nitco ($NITCO) | 31.0% | -8.1% | 0.1% | 7.7% | - |
| Murudeshwar Ceramics ($MURUDCERA) | - | -19.5% | 1.3% | -5.5% | -16.7% |
| Hanung Toys & Textiles ($HANUNG) | 24.6% | 27.6% | -73.8% | -71.2% | - |
| |
|---|
| Median (5 companies) | 27.8% | 13.3% | 1.3% | 7.7% | 9.5% |
|---|
| Shalimar Paints ($SHALPAINTS) | - | 2.5% | -3.2% | -10.3% | -7.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Murudeshwar Ceramics ($MURUDCERA) | 23.6% | 21.8% | 21.6% | 23.5% | 24.9% |
| Kajaria Ceramics ($KAJARIACER) | 15.8% | 15.3% | 15.6% | 16.3% | 19.4% |
| Asian Paints ($ASIANPAINT) | 16.0% | 16.0% | 16.0% | 16.0% | 18.3% |
| Neycer India ($NEYCERI) | - | - | - | 9.3% | - |
| Bil Continental ($BILCONTI) | - | - | - | 2.9% | - |
| |
|---|
| Median (6 companies) | 16.0% | 16.0% | 15.8% | 12.7% | 19.4% |
|---|
| Shalimar Paints ($SHALPAINTS) | 7.8% | 7.6% | 3.0% | 2.1% | 7.8% |
Top companies by CAPEX/Revenue, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kajaria Ceramics ($KAJARIACER) | 5.7% | 9.6% | 8.5% | 12.3% | 11.3% |
| Asian Paints ($ASIANPAINT) | 5.7% | 5.9% | 2.0% | 3.2% | 5.4% |
| |
|---|
| Median (2 companies) | 5.7% | 7.7% | 5.3% | 7.8% | 8.3% |
|---|
| Shalimar Paints ($SHALPAINTS) | 0.7% | 2.1% | 2.8% | 6.5% | 2.1% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Asian Paints ($ASIANPAINT) | 47.1% | 43.0% | 39.8% | 37.1% | 40.7% |
| Kajaria Ceramics ($KAJARIACER) | 27.9% | 28.6% | 28.8% | 29.8% | 31.3% |
| Euro Ceramics ($EUROCERA) | -8.1% | -11.2% | - | - | - |
| Neycer India ($NEYCERI) | - | -6.5% | - | - | - |
| Bil Continental ($BILCONTI) | - | 4.4% | - | - | - |
| |
|---|
| Median (10 companies) | 10.7% | 4.7% | 28.8% | 33.5% | 36.0% |
|---|
| Shalimar Paints ($SHALPAINTS) | 25.9% | 22.2% | 6.2% | 2.4% | 13.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kajaria Ceramics ($KAJARIACER) | 1.3x | 1.3x | 0.8x | 0.7x | 0.6x |
| Asian Paints ($ASIANPAINT) | 0.1x | -0.0x | 0.0x | 0.1x | -0.0x |
| Neycer India ($NEYCERI) | 11.8x | 107.4x | - | 0.0x | - |
| Murudeshwar Ceramics ($MURUDCERA) | 3.2x | 4.1x | 0.0x | 0.0x | 0.0x |
| Bil Continental ($BILCONTI) | 7.9x | 7.0x | 0.0x | 0.0x | - |
| |
|---|
| Median (5 companies) | 6.2x | 4.3x | 0.0x | 0.0x | 0.0x |
|---|
| Shalimar Paints ($SHALPAINTS) | 1.5x | 1.9x | 7.3x | 13.7x | 3.8x |
