Oricon Enterprises reports 224% CAPEX growth in 2016 and 11.6% Revenue growth
29-05-2016 • About Oricon Enterprises (
$ORICON) • By InTwits
Oricon Enterprises reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Oricon Enterprises has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.4%. At the same time it's a lot of higher than industry average of 8.3%.
- CAPEX is quite volatile: ₹2,673m in FY2016, ₹825m in FY2015, ₹414m in FY2014, ₹610m in FY2013, ₹993m in FY2012
- The company has potentially unprofitable business model: ROIC is 4.3%
- It operates with high leverage: Net Debt/EBITDA is 3.2x while industry average is 1.0x
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 11.6%. EBITDA Margin showed almost no change in FY2016. During the last 5 years EBITDA Margin topped in FY2013 at 13.2% and was declining since that time.
Net Income margin decreased on 2.5 pp from 4.1% to 1.6% in FY2016.
Investments (CAPEX, working capital and M&A)
Oricon Enterprises's CAPEX/Revenue was 22.9% in FY2016. The company showed fast CAPEX/Revenue growth of 16.7 pp from 6.2% in FY2013 to 22.9% in FY2016. It's average CAPEX/Revenue for the last three years was 11.8%. To secure its fast growth Oricon Enterprises made large investments to CAPEX (242% of EBITDA). During the last 5 years CAPEX as a % of Revenue bottomed in FY2014 at 4.7% and was growing since that time.
Return on investment
The company operates at low ROIC (4.3%) and ROE (2.9%). ROIC decreased slightly on 1.4 pp from 5.7% to 4.3% in FY2016. ROE decreased on 4.2 pp from 7.1% to 2.9% in FY2016. ROIC followed a declining trend at -1.5 pp per annum in FY2012-FY2016.
Leverage (Debt)
Debt level is 3.2x Net Debt / EBITDA and 3.4x Debt / EBITDA. Net Debt / EBITDA increased on 0.021x from 3.2x to 3.2x in FY2016. Debt increased on 6.0% while cash dropped on 23.5%. Net Debt/EBITDA followed a growing trend at 0.6x per annum in FY2012-FY2016.
Oricon Enterprises has short term refinancing risk: cash is only 10.0% of short term debt.
Management team
Pramod Sarda is a the company's CFO. Pramod Sarda has spent 5 years at the company.
Financial and operational results
Oricon Enterprises ($ORICON) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 9,732 | 9,920 | 8,871 | 10,478 | 11,689 | 11.6% |
| EBITDA | 1,048 | 1,312 | 1,014 | 1,027 | 1,105 | 7.6% |
| Net Income | 386 | 348 | 217 | 433 | 187 | -56.8% |
Balance Sheet
|
|---|
| Cash | 330 | 508 | 281 | 252 | 193 | -23.5% |
| Short Term Debt | 721 | 1,055 | 1,200 | 1,772 | 1,926 | 8.7% |
| Long Term Debt | 828 | 796 | 781 | 1,768 | 1,826 | 3.3% |
Cash flow
|
|---|
| Capex | 993 | 610 | 414 | 825 | 2,673 | 224.2% |
Ratios
|
|---|
| Revenue growth | 18.5% | 1.9% | -10.6% | 18.1% | 11.6% | |
| EBITDA growth | 37.4% | 25.2% | -22.7% | 1.3% | 7.6% | |
|
|---|
| EBITDA Margin | 10.8% | 13.2% | 11.4% | 9.8% | 9.5% | -0.4% |
| Net Income Margin | 4.0% | 3.5% | 2.4% | 4.1% | 1.6% | -2.5% |
| CAPEX, % of revenue | 10.2% | 6.2% | 4.7% | 7.9% | 22.9% | 15.0% |
|
|---|
| ROIC | 9.5% | 10.1% | 6.1% | 5.7% | 4.3% | -1.4% |
| ROE | 7.5% | 6.1% | 3.6% | 7.1% | 2.9% | -4.2% |
| Net Debt/EBITDA | 1.2x | 1.0x | 1.7x | 3.2x | 3.2x | 0.0x |
Peers in Specialty Chemicals
Below you can find Oricon Enterprises 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 |
|---|
| Vikas Globalone ($VIKASGLOB) | - | 53.0% | -0.9% | -10.0% | 36.6% |
| Cochin Minerals & Rutile ($COCHINM) | - | -15.9% | -33.8% | -11.0% | 35.6% |
| Ultramarine & Pigments ($ULTRAMAR) | - | 3.0% | 7.2% | 14.2% | 27.7% |
| Anil ($ANILLTD) | - | 9.5% | 16.8% | 17.5% | 26.6% |
| Sudarshan Chemical Industries ($SUDARSCHEM) | - | 9.1% | 28.2% | 8.3% | 15.3% |
| |
|---|
| Median (24 companies) | 12.7% | 14.1% | 13.7% | 10.9% | 0.1% |
|---|
| Oricon Enterprises ($ORICON) | - | 1.9% | -10.6% | 18.1% | 11.6% |
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 ($ULTRAMAR) | 18.0% | 15.5% | 17.4% | 17.2% | 17.2% |
| |
|---|
| Median (34 companies) | 9.4% | 10.5% | 10.6% | 10.8% | 13.6% |
|---|
| Oricon Enterprises ($ORICON) | 10.8% | 13.2% | 11.4% | 9.8% | 9.5% |
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 ($SOLARINDS) | 13.0% | 9.9% | 12.3% | 10.3% | 9.6% |
| |
|---|
| Median (17 companies) | 4.9% | 4.5% | 4.3% | 4.9% | 7.7% |
|---|
| Oricon Enterprises ($ORICON) | 10.2% | 6.2% | 4.7% | 7.9% | 22.9% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Pidilite Industries ($PIDILITIND) | 27.4% | 29.3% | 29.8% | 29.0% | 38.3% |
| Vinati Organics ($VINATIORGA) | 29.6% | 26.2% | 30.6% | 34.8% | 32.2% |
| Ultramarine & Pigments ($ULTRAMAR) | 20.0% | 16.3% | 20.8% | 25.7% | 30.2% |
| Vidhi Dyestuffs Manufacturing ($VIDHIDYE) | 14.7% | 15.0% | - | - | 26.4% |
| Camlin Fine Sciences ($CAMLINFIN) | 11.1% | 17.8% | 24.2% | 29.5% | 23.3% |
| |
|---|
| Median (31 companies) | 15.3% | 14.9% | 11.4% | 17.8% | 20.6% |
|---|
| Oricon Enterprises ($ORICON) | 9.5% | 10.1% | 6.1% | 5.7% | 4.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Anil ($ANILLTD) | 2.2x | 3.4x | 3.8x | 4.0x | 4.2x |
| Jayant Agro-Organics ($JAYAGROGN) | 2.8x | 3.1x | 4.6x | 6.5x | 3.4x |
| Sudarshan Chemical Industries ($SUDARSCHEM) | 2.4x | 5.1x | 3.2x | 3.2x | 2.4x |
| Meghmani Organics ($MEGH) | 4.2x | 3.7x | 4.3x | 3.1x | 1.9x |
| Vikas Globalone ($VIKASGLOB) | 2.5x | 4.4x | 4.9x | 0.0x | 1.8x |
| |
|---|
| Median (28 companies) | 1.5x | 1.8x | 1.7x | 0.0x | 0.0x |
|---|
| Oricon Enterprises ($ORICON) | 1.2x | 1.0x | 1.7x | 3.2x | 3.2x |
