Polyplex Corporation Debt dropped on 21.8% while EBITDA surged on 24.5%

30-05-2016 • About Polyplex Corporation ($POLYPLEX) • By InTwits

Polyplex Corporation reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:

EBITDA Margin is quite volatile: 11.2% in FY2016, 8.9% in FY2015, 5.1% in FY2014, 7.5% in FY2013, 17.0% in FY2012
Polyplex Corporation has high CAPEX intensity: 5 year average CAPEX/Revenue was 15.5%. At the same time it's a lot of higher than industry average of 6.1%.
CAPEX is quite volatile: ₹519m in FY2016, ₹1,569m in FY2015, ₹6,071m in FY2014, ₹10,457m in FY2013, ₹2,593m in FY2012
The company has potentially unprofitable business model: ROIC is 3.4%
It operates with high leverage: Net Debt/EBITDA is 2.4x while industry average is 1.8x

Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability

Polyplex Corporation's Revenue decreased slightly on 0.75%. During FY2012-FY2016 Revenue growth topped in FY2014 at 25.2% and was decelerating since that time. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.3 pp from 8.9% to 11.2% in FY2016. During FY2012-FY2016 EBITDA Margin bottomed in FY2014 at 5.1% and was growing since that time.

Net Income margin showed almost no change in FY2016.

Investments (CAPEX, working capital and M&A)

Polyplex Corporation's CAPEX/Revenue was 1.6% in FY2016. Polyplex Corporation's CAPEX/Revenue dropped on 39.7 pp from 41.3% in FY2013 to 1.6% in FY2016. For the last three years the average CAPEX/Revenue was 8.6%. During FY2012-FY2016 CAPEX as a % of Revenue topped in FY2013 at 41.3% and was declining since that time.

Return on investment

The company operates at low ROIC (3.4%) and ROE (1.3%). ROIC increased slightly on 1.9 pp from 1.5% to 3.4% in FY2016. ROE showed almost no change in FY2016. During FY2012-FY2016 ROIC bottomed in FY2014 at -0.68% and was growing since that time.

Leverage (Debt)

Company's Net Debt / EBITDA is 2.4x and Debt / EBITDA is 3.6x. Net Debt / EBITDA dropped on 2.3x from 4.7x to 2.4x in FY2016. Debt dropped on 21.8% while cash surged on 43.5%. During the last 5 years Net Debt/EBITDA topped in FY2014 at 7.1x and was declining since that time.

Polyplex Corporation has short term refinancing risk: cash is only 75.9% of short term debt.

Financial and operational results

Polyplex Corporation ($POLYPLEX) key annual financial indicators

mln. INR	2012	2013	2014	2015	2016	2016/2015
P&L
Revenue	24,158	25,312	31,683	32,042	31,802	-0.7%
SG&A					2,582
EBITDA	4,095	1,888	1,610	2,857	3,558	24.5%
Net Income	940	212	-68	379	290	-23.5%
Balance Sheet
Cash	3,515	3,016	9,315	3,068	4,403	43.5%
Short Term Debt	2,499	4,456	6,381	6,814	5,802	-14.8%
Long Term Debt	4,733	11,342	14,419	9,731	7,141	-26.6%
Cash flow
Capex	2,593	10,457	6,071	1,569	519	-66.9%
Ratios
Revenue growth	-0.7%	4.8%	25.2%	1.1%	-0.7%
EBITDA growth	-54.1%	-53.9%	-14.7%	77.4%	24.5%

EBITDA Margin	17.0%	7.5%	5.1%	8.9%	11.2%	2.3%
SG&A, % of revenue					8.1%
Net Income Margin	3.9%	0.8%	-0.2%	1.2%	0.9%	-0.3%
CAPEX, % of revenue	10.7%	41.3%	19.2%	4.9%	1.6%	-3.3%

ROIC	8.9%	1.0%	-0.7%	1.5%	3.4%	1.9%
ROE	5.4%	1.1%	-0.3%	1.7%	1.3%	-0.4%
Net Debt/EBITDA	0.9x	6.8x	7.1x	4.7x	2.4x	-2.3x

Peers in Commodity Chemicals

Below we provide Polyplex Corporation benchmarking against other companies in Commodity 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
Andhra Petrochemicals ($ANDHRAPET)	-	-5.8%	-53.9%	-45.9%	139.3%
Iol Chemicals & Pharmaceuticals ($IOLCP)	-	2.3%	17.0%	-31.7%	49.1%
Tuticorin Alkali Chemicals & Fertilisers ($TUTIALKA)	-	-27.9%	-83.3%	408.0%	18.3%
Indo Amines ($INDOAMIN)	-	4.4%	10.7%	-2.6%	17.2%
Godrej Industries ($GODREJIND)	-	24.1%	13.7%	16.6%	16.5%
Median (32 companies)	50.0%	11.2%	10.6%	6.3%	-2.0%
Polyplex Corporation ($POLYPLEX)	-	4.8%	25.2%	1.1%	-0.7%

Top companies by EBITDA margin, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Riddhi Siddhi Gluco Biols ($RIDDHI)	-	-	-	104.7%	-
Mysore Petro Chemicals ($MYSORPETRO)	-	-	-	47.1%	-
Aditya Birla Chemicals (India) ($ABCIL)	26.8%	27.1%	23.6%	21.9%	-
Indo Borax & Chemicals ($INDOBORAX)	-	-	-	21.3%	-
Chemfab Alkalis ($CHEMFALKAL)	22.3%	32.9%	24.2%	19.8%	23.2%
Median (50 companies)	9.6%	8.4%	8.6%	6.6%	10.6%
Polyplex Corporation ($POLYPLEX)	17.0%	7.5%	5.1%	8.9%	11.2%

Top companies by CAPEX/Revenue, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Kanoria Chemicals & Industries ($KANORICHEM)	25.1%	6.0%	13.4%	40.3%	28.7%
Aarti Industries ($AARTIIND)	8.0%	11.2%	11.0%	10.4%	16.8%
Alkyl Amines Chemicals ($ALKYLAMINE)	5.1%	6.6%	5.9%	8.6%	7.3%
Jindal Poly Films ($JINDPOLBBPH)	6.9%	2.1%	27.5%	3.1%	7.3%
Andhra Sugars ($ANDHRSUGAR)	5.3%	4.2%	3.2%	4.0%	6.5%
Median (17 companies)	5.2%	6.3%	5.4%	3.2%	4.7%
Polyplex Corporation ($POLYPLEX)	10.7%	41.3%	19.2%	4.9%	1.6%

Top companies by ROIC, %


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Bodal Chemicals ($BODALCHEM)	-1.3%	3.3%	39.0%	38.3%	33.1%
Transpek Industry ($TRANSPEK)	-1.7%	14.2%	11.0%	17.8%	26.9%
Alkyl Amines Chemicals ($ALKYLAMINE)	16.0%	18.7%	25.0%	23.7%	24.7%
Balaji Amines ($BALAMINES)	19.3%	16.1%	15.6%	16.5%	21.2%
Thirumalai Chemicals ($TIRUMALCHM)	13.0%	23.2%	12.5%	5.3%	21.2%
Median (49 companies)	9.2%	9.8%	9.9%	9.6%	14.7%
Polyplex Corporation ($POLYPLEX)	8.9%	1.0%	-0.7%	1.5%	3.4%

Top companies by Net Debt / EBITDA


Top 5	FY2012	FY2013	FY2014	FY2015	FY2016
Kanoria Chemicals & Industries ($KANORICHEM)	5.2x	9.6x	3.5x	9.4x	10.1x
Godrej Industries ($GODREJIND)	9.9x	5.7x	7.9x	10.7x	10.0x
Iol Chemicals & Pharmaceuticals ($IOLCP)	5.8x	4.5x	3.7x	35.4x	8.8x
India Glycols ($INDIAGLYCO)	4.8x	3.7x	8.5x	14.2x	6.7x
Tata Chemicals ($TATACHEM)	2.7x	2.4x	3.6x	2.3x	3.2x
Median (30 companies)	2.6x	3.0x	0.8x	0.9x	1.0x
Polyplex Corporation ($POLYPLEX)	0.9x	6.8x	7.1x	4.7x	2.4x

Polyplex Corporation stock price chart

Polyplex Corporation financials

mln.	FY2010	FY2011	FY2012

Revenue	38,812	24,333	24,158
EBITDA	2,195	8,916	4,095
Net income	939.9	10,556	939.8
CAPEX	5,478	1,457	2,593
Debt	8,540	7,283	7,232
Cash	1,284	2,065	3,515

About Polyplex Corporation

Polyplex Corporation Limited manufactures and sells thin and thick polyester (PET) films primarily for flexible packaging in India and internationally. The company offers sarafil base films, including BOPET films for use in packaging, electrical, and industrial applications; BOPP films, which are transparent bi-oriented polypropylene films for flexible packaging and other applications; CPP films that are transparent cast polypropylene films for flexible packaging and other applications; blown polypropylene films used in pressure sensitive applications; and sustainable films. It also provides saracote range of silicone coated polyester films, such as release liner-labels, release liner-specialty products, shingle roofing tapes, release film liners, and primer coated liners used in labels, tapes, roofing shingles, and peel and stick underlayments. In addition, the company offers saralam range of extrusion coated film products comprising reflective insulation, decorative lamination, polyester thermal lamination film-thin and thick gauge, polypropylene thermal lamination, MegaBond polyester and polypropylene thermal lamination, nylon thermal lamination, and Zafira UV polyester thermal lamination films for use in thermal lamination products, such as book covers, identity cards, etc., as well as in carton lamination, commercial films, etc. Further, it provides saraprint, a non tearable polyester film for various applications comprising photo albums, commercial printing, promotional and customized digital printing, and flexible packaging applications, as well as in durable displays, certificates, aadhar cards, product catalogues, company broachers, signage, posters, graphic industries, visiting cards, menu cards, and self adhesive labels application. Additionally, the company is involved in trading plastic products; and the wholesale trade of packaged beverages and food products. Polyplex Corporation Limited was incorporated in 1984 and is headquartered in Noida, India.