Ttk Healthcare reports 44.7% EBITDA growth in 2016 and 7.4% Revenue growth
30-05-2016 • About Ttk Healthcare (
$TTKHEALTH) • By InTwits
Ttk Healthcare reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Ttk Healthcare is a growth stock: FY2016 revenue growth was 7.4%, 5 year revenue CAGR was 10.8% at FY2016 ROIC 21.4%
- Ttk Healthcare has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.1%. At the same time it's a lot of higher than industry average of 2.5%.
- CAPEX is quite volatile: ₹168m in FY2016, ₹492m in FY2015, ₹154m in FY2014, ₹77m in FY2013, ₹44m in FY2012
- The company has highly profitable business model: ROIC is 21.4%
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 increased on 7.4%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 2.2 pp from 6.3% to 8.4% in FY2016. During the last 5 years EBITDA Margin bottomed in FY2014 at 4.8% and was growing since that time.
Net Income margin increased slightly on 1.0 pp from 3.3% to 4.4% in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2014 at 3.0% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In FY2016 the company had CAPEX/Revenue of 3.2%. Ttk Healthcare showed small growth in CAPEX/Revenue of 1.2 pp from 2.0% in FY2013 to 3.2% in FY2016. Average CAPEX/Revenue for the last three years was 5.7%. During the last 5 years CAPEX as a % of Revenue topped in FY2015 at 10.2%.
Return on investment
The company operates at high and attractive ROIC (21.4%) while ROE is a bit lower (17.8%). ROIC increased on 5.5 pp from 15.9% to 21.4% in FY2016. ROE increased on 3.5 pp from 14.3% to 17.8% in FY2016. During the last 5 years ROIC bottomed in FY2014 at 12.8% and was growing since that time. During FY2012-FY2016 ROE bottomed in FY2014 at 12.1% and was growing since that time.
Leverage (Debt)
Debt level is -0.9x Net Debt / EBITDA and 0.9x Debt / EBITDA. Debt decreased on 6.8% while cash surged on 279%.
Ttk Healthcare has no short term refinancing risk: cash is higher than short term debt (205.6%).
Valuation and dividends
Ttk Healthcare's trades at EV/EBITDA 14.7x and P/E 30.2x while industy averages are 17.8x and 21.9x. Ttk Healthcare's EV/(EBITDA-CAPEX) is 24.0x with the industry average at 22.8x.
Financial and operational results
Ttk Healthcare ($TTKHEALTH) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 3,537 | 3,823 | 4,156 | 4,829 | 5,189 | 7.4% |
| EBITDA | 243 | 206 | 201 | 302 | 438 | 44.7% |
| Net Income | 156 | 142 | 124 | 162 | 227 | 40.3% |
Balance Sheet
|
|---|
| Cash | 121 | 124 | 138 | 203 | 770 | 278.7% |
| Short Term Debt | 178 | 218 | 152 | 253 | 374 | 47.9% |
| Long Term Debt | 5 | 6 | 159 | 160 | 11 | -93.4% |
Cash flow
|
|---|
| Capex | 44 | 77 | 154 | 492 | 168 | -65.8% |
Ratios
|
|---|
| Revenue growth | 13.8% | 8.1% | 8.7% | 16.2% | 7.4% | |
| EBITDA growth | 10.5% | -15.2% | -2.5% | 50.4% | 44.7% | |
|
|---|
| EBITDA Margin | 6.9% | 5.4% | 4.8% | 6.3% | 8.4% | 2.2% |
| Net Income Margin | 4.4% | 3.7% | 3.0% | 3.3% | 4.4% | 1.0% |
| CAPEX, % of revenue | 1.2% | 2.0% | 3.7% | 10.2% | 3.2% | -6.9% |
|
|---|
| ROIC | 19.7% | 15.5% | 12.8% | 15.9% | 21.4% | 5.5% |
| ROE | 19.1% | 15.3% | 12.1% | 14.3% | 17.8% | 3.5% |
| Net Debt/EBITDA | 0.3x | 0.5x | 0.9x | 0.7x | -0.9x | -1.6x |
Peers in Pharmaceuticals
Below you can find Ttk Healthcare benchmarking vs. other companies in Pharmaceuticals 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 |
|---|
| Alembic Pharmaceuticals ($APLLTD) | - | 3.7% | 22.6% | 10.4% | 53.1% |
| Lincoln Pharmaceuticals ($LINCOPH) | - | 3.8% | 8.5% | 25.9% | 50.4% |
| Torrent Pharmaceuticals ($TORNTPHARM) | - | 17.7% | 32.2% | 13.6% | 42.4% |
| Natco Pharma ($NATCOPHARM) | - | 26.1% | 11.9% | 11.7% | 38.3% |
| Mangalam Drugs & Organics ($MANGALAM) | - | -18.2% | -2.1% | 79.8% | 33.7% |
| |
|---|
| Median (33 companies) | 27.7% | 14.9% | 13.7% | 8.6% | 11.4% |
|---|
| Ttk Healthcare ($TTKHEALTH) | - | 8.1% | 8.7% | 16.2% | 7.4% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Dr.Reddy'S Laboratories ($DRREDDY) | - | 52.1% | 57.4% | 57.6% | 59.6% |
| Omega Laboratories ($OMEGALAB) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (2 companies) | 46.9% | 26.1% | 28.7% | 28.8% | 29.8% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Divi'S Laboratories ($DIVISLAB) | 37.2% | 38.2% | 40.2% | 37.4% | 37.5% |
| Hester Biosciences ($HESTERBIO) | - | - | - | 32.9% | - |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 40.8% | 44.3% | 44.9% | 29.2% | 30.6% |
| Natco Pharma ($NATCOPHARM) | 21.5% | 23.2% | 24.9% | 26.2% | 24.1% |
| Dr.Reddy'S Laboratories ($DRREDDY) | 25.8% | 22.9% | 25.1% | 23.2% | 25.8% |
| |
|---|
| Median (53 companies) | 12.9% | 13.4% | 15.0% | 12.1% | 16.1% |
|---|
| Ttk Healthcare ($TTKHEALTH) | 6.9% | 5.4% | 4.8% | 6.3% | 8.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| J.B.Chemicals & Pharmaceuticals ($JBCHEPHARM) | 10.0% | 5.8% | 6.0% | 6.2% | 15.9% |
| Claris Lifesciences ($CLARIS) | 58.1% | 42.9% | - | 103.1% | 15.8% |
| Marksans Pharma ($MARKSANS) | 1.5% | 1.5% | 0.8% | 4.6% | 14.8% |
| Natco Pharma ($NATCOPHARM) | 24.4% | 16.3% | 14.4% | 14.1% | 13.8% |
| Sun Pharmaceutical Industries ($SUNPHARMA) | 8.9% | 7.5% | 5.7% | 8.6% | 12.2% |
| |
|---|
| Median (26 companies) | 8.2% | 8.3% | 5.8% | 6.0% | 8.5% |
|---|
| Ttk Healthcare ($TTKHEALTH) | 1.2% | 2.0% | 3.7% | 10.2% | 3.2% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Alembic Pharmaceuticals ($APLLTD) | 27.5% | 29.1% | 41.5% | 35.7% | 62.1% |
| Torrent Pharmaceuticals ($TORNTPHARM) | 26.4% | 30.5% | 33.2% | 19.7% | 44.2% |
| Abbott India ($ABBOTINDIA) | 29.6% | 26.9% | 30.5% | 34.2% | 34.1% |
| Divi'S Laboratories ($DIVISLAB) | 30.6% | 30.4% | 32.3% | 30.5% | 31.9% |
| Jenburkt Pharmaceuticals ($JENBURPH) | 34.1% | 29.0% | 32.4% | 35.3% | 31.4% |
| |
|---|
| Median (56 companies) | 13.7% | 13.0% | 15.6% | 13.0% | 15.9% |
|---|
| Ttk Healthcare ($TTKHEALTH) | 19.7% | 15.5% | 12.8% | 15.9% | 21.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jubilant Life Sciences Limited ($JUBILANT) | 4.0x | 3.5x | 3.5x | 6.4x | 3.2x |
| Claris Lifesciences ($CLARIS) | 1.9x | 1.1x | 1.8x | 3.2x | 2.9x |
| Themis Medicare ($THEMISMED) | - | 7.9x | 0.0x | 0.0x | 2.9x |
| Glenmark Pharmaceuticals ($GLENMARK) | 2.7x | 2.1x | 2.2x | 2.5x | 2.2x |
| Dishman Pharmaceuticals & Chemicals ($DISHMAN) | 3.6x | 2.6x | 2.3x | 2.9x | 2.1x |
| |
|---|
| Median (40 companies) | 1.7x | 1.5x | 0.2x | 0.0x | 0.2x |
|---|
| Ttk Healthcare ($TTKHEALTH) | 0.3x | 0.5x | 0.9x | 0.7x | -0.9x |
