Responsive Industries EBITDA dropped on 16.5% and EBITDA Margin decreased on 2.9 pp from 12.2% to 9.3%
30-05-2016 • About Responsive Industries (
$RESPONIND) • By InTwits
Responsive Industries reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Responsive Industries is a growth stock: FY2016 revenue growth was 9.3%, 5 year revenue CAGR was 13.5% at FY2016 ROIC 2.1%
- Responsive Industries has medium CAPEX intensity: 5 year average CAPEX/Revenue was 7.3%. At the same time it's a lot of higher than industry average of 4.9%.
- CAPEX is quite volatile: ₹155m in FY2016, ₹781m in FY2015, ₹1,733m in FY2014, ₹2,247m in FY2013, ₹2,466m in FY2012
- The company has potentially unprofitable business model: ROIC is 2.1%
- It operates with high leverage: Net Debt/EBITDA is 1.7x 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
Responsive Industries's Revenue increased on 9.3%. During FY2012-FY2016 Revenue growth bottomed in FY2015 at -19.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.88 pp from 10.2% to 11.1% in FY2016.
SG&A as a % of Revenue showed almost no change in FY2016.
Net Income margin decreased slightly on 1.6 pp from 2.4% to 0.83% in FY2016. Net Income margin declined at -1.2 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2016 Responsive Industries had CAPEX/Revenue of 0.70%. Responsive Industries's CAPEX/Revenue decreased on 9.6 pp from 10.3% in FY2013 to 0.70% in FY2016. Average CAPEX/Revenue for the last three years was 3.8%. CAPEX as a % of Revenue declined at -3.4 pp per annum in the last 5 years.
Return on investment
The company operates at low ROIC (2.1%) and ROE (2.1%). ROIC decreased on 2.6 pp from 4.8% to 2.1% in FY2016. ROE decreased on 4.0 pp from 6.1% to 2.1% in FY2016. ROIC followed a declining trend at -2.6 pp per annum in FY2012-FY2016. ROE declined at -4.5 pp per annum in FY2012-FY2016.
Leverage (Debt)
Debt level is 1.7x Net Debt / EBITDA and 2.0x Debt / EBITDA. Net Debt / EBITDA dropped on 0.3x from 1.9x to 1.7x in FY2016. Debt dropped on 23.7% while cash increased on 9.7%. Net Debt/EBITDA followed a declining trend at -0.4x per annum in the last 5 years.
Responsive Industries has short term refinancing risk: cash is only 33.7% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 12.0x and P/E 116.3x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 13.0x with the industry average at 22.8x.
Financial and operational results
Responsive Industries ($RESPONIND) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 16,822 | 21,771 | 25,154 | 20,336 | 22,217 | 9.3% |
| SG&A | | | | 275 | 292 | 6.0% |
| EBITDA | 2,259 | 2,509 | 2,585 | 2,474 | 2,064 | -16.5% |
| Net Income | 1,040 | 810 | 726 | 493 | 184 | -62.7% |
Balance Sheet
|
|---|
| Cash | 139 | 188 | 1,746 | 692 | 759 | 9.7% |
| Short Term Debt | 2,948 | 2,977 | 4,559 | 2,657 | 2,252 | -15.2% |
| Long Term Debt | 4,689 | 4,554 | 3,434 | 2,845 | 1,947 | -31.5% |
Cash flow
|
|---|
| Capex | 2,466 | 2,247 | 1,733 | 781 | 155 | -80.2% |
Ratios
|
|---|
| Revenue growth | 42.7% | 29.4% | 15.5% | -19.2% | 9.3% | |
| EBITDA growth | 24.4% | 11.1% | 3.0% | -4.3% | -16.5% | |
|
|---|
| EBITDA Margin | 13.4% | 11.5% | 10.3% | 12.2% | 9.3% | -2.9% |
| SG&A, % of revenue | | | | 1.4% | 1.3% | -0.0% |
| Net Income Margin | 6.2% | 3.7% | 2.9% | 2.4% | 0.8% | -1.6% |
| CAPEX, % of revenue | 14.7% | 10.3% | 6.9% | 3.8% | 0.7% | -3.1% |
|
|---|
| ROIC | 13.0% | 9.0% | 6.9% | 4.8% | 2.1% | -2.6% |
| ROE | 20.8% | 13.7% | 10.4% | 6.1% | 2.1% | -4.0% |
| Net Debt/EBITDA | 3.3x | 2.9x | 2.4x | 1.9x | 1.7x | -0.3x |
Peers in Plastic Products
Below we provide Responsive Industries benchmarking against other companies in Plastic 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 |
|---|
| Acrysil ($ACRYSIL) | - | 29.6% | 33.8% | 19.4% | 31.6% |
| Shaily Engineering Plastics ($SHAILY) | - | -16.0% | 23.3% | 19.2% | 25.5% |
| Astral Poly Technik ($ASTRAL) | - | 41.6% | 30.8% | 32.4% | 20.2% |
| Flexituff International ($FLEXITUFF) | - | 29.9% | 12.5% | 8.4% | 11.5% |
| Prima Plastics ($PRIMAPLA) | - | 25.2% | - | - | 8.8% |
| |
|---|
| Median (12 companies) | - | 23.4% | 12.6% | 8.5% | 2.8% |
|---|
| Responsive Industries ($RESPONIND) | - | 29.4% | 15.5% | -19.2% | 9.3% |
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Acrysil ($ACRYSIL) | 12.4% | 16.8% | 17.5% | 19.5% | 17.1% |
| Wim Plast ($WIMPLAST) | 18.1% | 17.9% | 18.1% | 17.0% | 20.9% |
| Shaily Engineering Plastics ($SHAILY) | 14.3% | 13.9% | 16.0% | 14.8% | 17.3% |
| Jain Irrigation Systems ($JISLJALEQS) | 16.6% | 12.6% | 12.6% | 12.4% | 12.8% |
| Bloom Dekor ($BLOOM) | - | - | - | 11.8% | - |
| |
|---|
| Median (15 companies) | 11.7% | 11.8% | 12.6% | 9.7% | 11.9% |
|---|
| Responsive Industries ($RESPONIND) | 13.4% | 11.5% | 10.3% | 12.2% | 9.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Shaily Engineering Plastics ($SHAILY) | 3.7% | - | 10.7% | 17.2% | 13.0% |
| Astral Poly Technik ($ASTRAL) | 11.9% | 8.4% | 8.6% | 6.0% | 8.0% |
| Flexituff International ($FLEXITUFF) | 10.8% | 10.3% | 15.7% | 10.0% | 5.0% |
| Acrysil ($ACRYSIL) | 7.8% | 11.0% | 9.6% | 9.3% | 5.0% |
| Jain Irrigation Systems ($JISLJALEQS) | 10.9% | 6.0% | 5.7% | 3.6% | 3.8% |
| |
|---|
| Median (7 companies) | 7.8% | 8.1% | 8.6% | 7.9% | 5.0% |
|---|
| Responsive Industries ($RESPONIND) | 14.7% | 10.3% | 6.9% | 3.8% | 0.7% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wim Plast ($WIMPLAST) | 31.8% | 31.2% | 31.0% | 31.2% | 31.6% |
| Shaily Engineering Plastics ($SHAILY) | 19.5% | 15.0% | 19.3% | 15.2% | 18.2% |
| Astral Poly Technik ($ASTRAL) | 29.3% | 31.1% | 33.3% | 19.7% | 17.3% |
| Acrysil ($ACRYSIL) | 7.7% | 16.2% | 20.2% | 21.0% | 16.9% |
| Max India ($MAX) | 8.9% | 24.3% | 7.0% | 12.7% | 12.8% |
| |
|---|
| Median (21 companies) | 10.0% | 11.8% | 19.3% | 15.2% | 16.9% |
|---|
| Responsive Industries ($RESPONIND) | 13.0% | 9.0% | 6.9% | 4.8% | 2.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jain Irrigation Systems ($JISLJALEQS) | 3.8x | 5.1x | 4.8x | 4.8x | 4.6x |
| Flexituff International ($FLEXITUFF) | 2.2x | 3.1x | 4.3x | 5.3x | 4.5x |
| Shaily Engineering Plastics ($SHAILY) | 1.9x | 1.8x | 1.9x | 2.6x | 1.5x |
| Acrysil ($ACRYSIL) | 2.9x | 2.2x | 2.0x | 2.7x | 1.4x |
| Astral Poly Technik ($ASTRAL) | 1.0x | 0.7x | 0.9x | 1.1x | 0.7x |
| |
|---|
| Median (18 companies) | 2.1x | 2.1x | 0.0x | 0.0x | 0.0x |
|---|
| Responsive Industries ($RESPONIND) | 3.3x | 2.9x | 2.4x | 1.9x | 1.7x |
