Kiri Industries Debt dropped on 64.0% while EBITDA surged on 16.5%
30-05-2016 • About Kiri Industries (
$KIRIINDUS) • By InTwits
Kiri Industries reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 11.5% in FY2016, 10.9% in FY2015, 10.6% in FY2014, 4.2% in FY2013, 4.1% in FY2012
- Kiri Industries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.1%. At the same time it's a lot of higher than industry average of 3.2%.
- CAPEX is quite volatile: ₹457m in FY2016, ₹496m in FY2015, ₹384m in FY2014, ₹249m in FY2013, ₹2,236m in FY2012
- The company has business model with low profitability: ROIC is 8.3%
- It operates with high leverage: Net Debt/EBITDA is 2.2x while industry average is 0.8x
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 10.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.67 pp from 3.1% to 3.8% in FY2016. EBITDA Margin stuck to a growing trend at 2.2 pp per annum in the last 5 years.
Net Income margin showed almost no change in FY2016.
Investments (CAPEX, working capital and M&A)
In FY2016 Kiri Industries had CAPEX/Revenue of 4.4%. CAPEX/Revenue showed almost no change from FY2013 to FY2016. It's average CAPEX/Revenue for the last three years was 5.1%.
Return on investment
The company operates at good ROE (36.1%) while ROIC is low (8.3%). ROIC increased slightly on 1.7 pp from 6.5% to 8.3% in FY2016. ROE dropped on 22.2 pp from 58.3% to 36.1% in FY2016. ROIC grew at 1.9 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 2.4x. Net Debt / EBITDA dropped on 5.5x from 7.7x to 2.2x in FY2016. Debt dropped on 64.0% while cash surged on 356%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2013 at 31.3x and was declining since that time.
Kiri Industries has no short term refinancing risk: cash is higher than short term debt (137.5%).
Valuation and dividends
Kiri Industries's trades at EV/EBITDA 6.7x and P/E 2.7x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 10.9x with the industry average at 22.8x.
Management team
Kiri Industries's CFO Jayesh Vyas has spent 6 years with the company.
Financial and operational results
Kiri Industries ($KIRIINDUS) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 41,088 | 5,540 | 6,912 | 9,308 | 10,286 | 10.5% |
| EBITDA | 1,683 | 233 | 730 | 1,018 | 1,186 | 16.5% |
| Net Income | -687 | -1,995 | 99 | 1,815 | 1,957 | 7.8% |
Balance Sheet
|
|---|
| Cash | 2,436 | 66 | 101 | 44 | 201 | 355.7% |
| Short Term Debt | 13,077 | 2,386 | 2,864 | 524 | 146 | -72.1% |
| Long Term Debt | 3,114 | 4,964 | 4,956 | 7,346 | 2,689 | -63.4% |
Cash flow
|
|---|
| Capex | 2,236 | 249 | 384 | 496 | 457 | -8.0% |
Ratios
|
|---|
| Revenue growth | 7.9% | -86.5% | 24.8% | 34.7% | 10.5% | |
| EBITDA growth | -44.7% | -86.2% | 213.7% | 39.4% | 16.5% | |
|
|---|
| EBITDA Margin | 4.1% | 4.2% | 10.6% | 10.9% | 11.5% | 0.6% |
| Net Income Margin | -1.7% | -36.0% | 1.4% | 19.5% | 19.0% | -0.5% |
| CAPEX, % of revenue | 5.4% | 4.5% | 5.6% | 5.3% | 4.4% | -0.9% |
|
|---|
| ROIC | 2.2% | -0.7% | 3.8% | 6.5% | 8.3% | 1.7% |
| ROE | -7.3% | -36.1% | 5.4% | 58.3% | 36.1% | -22.2% |
| Net Debt/EBITDA | 8.2x | 31.3x | 10.6x | 7.7x | 2.2x | -5.5x |
Peers in Specialty Chemicals
Below we provide Kiri Industries benchmarking against other companies in Specialty Chemicals 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 |
|---|
| 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 ($SUDARSCHEM) | - | 9.1% | 28.2% | 8.3% | 15.3% |
| |
|---|
| Median (26 companies) | 56.1% | 14.1% | 11.3% | 10.9% | 0.6% |
|---|
| Kiri Industries ($KIRIINDUS) | - | -86.5% | 24.8% | 34.7% | 10.5% |
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 ($ULTRAMAR) | 18.0% | 15.5% | 17.4% | 17.2% | 17.2% |
| |
|---|
| Median (34 companies) | 10.6% | 11.2% | 10.6% | 10.5% | 12.0% |
|---|
| Kiri Industries ($KIRIINDUS) | 4.1% | 4.2% | 10.6% | 10.9% | 11.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oricon Enterprises ($ORICON) | 10.2% | 6.2% | 4.7% | 7.9% | 22.9% |
| Plastiblends India ($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 ($DAICHI) | 3.2% | - | - | 1.6% | 10.3% |
| |
|---|
| Median (18 companies) | 4.9% | 4.7% | 4.3% | 4.9% | 8.1% |
|---|
| Kiri Industries ($KIRIINDUS) | 5.4% | 4.5% | 5.6% | 5.3% | 4.4% |
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 ($CAMLINFIN) | 11.1% | 17.8% | 24.2% | 29.5% | 23.3% |
| |
|---|
| Median (34 companies) | 15.3% | 14.9% | 11.4% | 17.8% | 20.6% |
|---|
| Kiri Industries ($KIRIINDUS) | 2.2% | -0.7% | 3.8% | 6.5% | 8.3% |
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 |
| Oricon Enterprises ($ORICON) | 1.2x | 1.0x | 1.7x | 3.2x | 3.2x |
| Sudarshan Chemical Industries ($SUDARSCHEM) | 2.4x | 5.1x | 3.2x | 3.2x | 2.4x |
| Meghmani Organics ($MEGH) | 4.2x | 3.7x | 4.3x | 3.1x | 1.9x |
| |
|---|
| Median (30 companies) | 1.5x | 1.7x | 1.7x | 0.0x | 0.0x |
|---|
| Kiri Industries ($KIRIINDUS) | 8.2x | 31.3x | 10.6x | 7.7x | 2.2x |
