Bharat Rasayan reports 6.7% Net Income growth in 2016 and 3.8% Revenue growth
31-05-2016 • About Bharat Rasayan (
$BHARATRA) • By InTwits
Bharat Rasayan reported FY2016 financial results today. Here are the key drivers of the company's long term financial model:
- Bharat Rasayan has high CAPEX intensity: 5 year average CAPEX/Revenue was 17.6%. At the same time it's a lot of higher than industry average of 5.3%.
- CAPEX is quite volatile: ₹151m in FY2016, ₹134m in FY2015, ₹257m in FY2014, ₹778m in FY2013, ₹467m in FY2012
- The company has highly profitable business model: ROIC is 24.1%
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 3.8%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 4.4 pp from 82.4% to 86.8% in FY2016. During FY2012-FY2016 EBITDA Margin topped in FY2015 at 18.6%.
Net Income margin showed almost no change in FY2016. During FY2012-FY2016 Net Income margin bottomed in FY2013 at 5.1% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.3% in FY2016. Bharat Rasayan's CAPEX/Revenue dropped on 38.2 pp from 41.5% in FY2013 to 3.3% in FY2016. Average CAPEX/Revenue for the last three years was 4.5%.
Return on investment
The company operates at high and attractive ROIC (24.1%) and ROE (26.1%). ROIC decreased slightly on 2.0 pp from 26.1% to 24.1% in FY2016. ROE decreased on 6.4 pp from 32.5% to 26.1% in FY2016.
Leverage (Debt)
Company's Net Debt / EBITDA is 1.3x and Debt / EBITDA is 1.4x. Net Debt / EBITDA dropped on 0.3x from 1.7x to 1.3x in FY2016. Debt dropped on 21.0% while cash dropped on 18.9%. During FY2012-FY2016 Net Debt/EBITDA topped in FY2013 at 5.0x and was declining since that time.
Bharat Rasayan has short term refinancing risk: cash is only 5.6% of short term debt.
Valuation and dividends
The company's trades at EV/EBITDA 6.6x and P/E 12.5x while industy averages are 17.8x and 21.9x. The company's EV/(EBITDA-CAPEX) is 8.1x with the industry average at 22.8x.
Financial and operational results
Bharat Rasayan ($BHARATRA) key annual financial indicators| mln. INR | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 1,419 | 1,876 | 3,614 | 4,388 | 4,555 | 3.8% |
| EBITDA | 181 | 279 | 659 | 815 | 807 | -1.1% |
| Net Income | 98 | 96 | 201 | 317 | 339 | 6.7% |
Balance Sheet
|
|---|
| Cash | 9 | 30 | 8 | 46 | 38 | -18.9% |
| Short Term Debt | 335 | 702 | 512 | 729 | 670 | -8.1% |
| Long Term Debt | 56 | 731 | 920 | 673 | 438 | -34.9% |
Cash flow
|
|---|
| Capex | 467 | 778 | 257 | 134 | 151 | 13.0% |
Ratios
|
|---|
| Revenue growth | 51.3% | 32.1% | 92.7% | 21.4% | 3.8% | |
| EBITDA growth | 158.5% | 54.0% | 136.2% | 23.7% | -1.1% | |
|
|---|
| EBITDA Margin | 12.8% | 14.9% | 18.2% | 18.6% | 17.7% | -0.9% |
| Net Income Margin | 6.9% | 5.1% | 5.6% | 7.2% | 7.4% | 0.2% |
| CAPEX, % of revenue | 32.9% | 41.5% | 7.1% | 3.0% | 3.3% | 0.3% |
|
|---|
| ROIC | 22.1% | 13.7% | 21.9% | 26.1% | 24.1% | -2.0% |
| ROE | 20.3% | 16.6% | 27.8% | 32.5% | 26.1% | -6.4% |
| Net Debt/EBITDA | 2.1x | 5.0x | 2.2x | 1.7x | 1.3x | -0.3x |
Peers in
Below we provide Bharat Rasayan benchmarking against other companies in 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 |
|---|
| Tvs Electronics ($TVSEL) | - | 8.5% | 5.2% | 9.2% | 116.1% |
| Asleyf ($ASLEYF) | - | -3.3% | -8.0% | 33.6% | 34.7% |
| Jocil ($JOCIL) | - | 4.1% | -8.7% | -13.7% | 22.2% |
| Kirloskar Pneumatic Co ($KIRPNDM) | - | -17.7% | -11.8% | -8.9% | 15.4% |
| Jklakbbph ($JKLAKBBPH) | - | 19.6% | 0.0% | 12.2% | 14.0% |
| |
|---|
| Median (17 companies) | 18.0% | 10.8% | 3.5% | 8.4% | 0.9% |
|---|
| Bharat Rasayan ($BHARATRA) | - | 32.1% | 92.7% | 21.4% | 3.8% |
Top companies by Gross margin, %
| Top | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Jenson & Nicholson Financial Services ($JNFSL) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Bombay Drugs & Pharmas ($BOMDRDM) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Southern Herbals ($SOUTHNHE) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| Tafnccpeq ($TAFNCCPEQ) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
| |
|---|
| Median (4 companies) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Oswal Chemicals & Fertilizers ($OSWALCHEM) | - | - | - | 53.4% | - |
| Kaleconbbph ($KALECONBBPH) | 27.7% | 44.3% | 43.5% | 37.9% | - |
| Paushak ($PAUSHAK) | - | - | - | 25.6% | - |
| The United Nilgiri Tea Estates Company ($UNITEDTEA) | - | - | - | 24.7% | - |
| Indbulbbph ($INDBULBBPH) | 36.7% | 34.6% | 29.5% | 23.5% | 28.7% |
| |
|---|
| Median (20 companies) | 15.4% | 12.5% | 13.4% | 10.3% | 9.8% |
|---|
| Bharat Rasayan ($BHARATRA) | 12.8% | 14.9% | 18.2% | 18.6% | 17.7% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Monetbbph ($MONETBBPH) | 131.4% | 5.2% | 139.2% | 89.2% | 8.8% |
| Jklakbbph ($JKLAKBBPH) | 28.5% | 28.8% | 24.6% | 23.6% | 17.5% |
| Rilbbph ($RILBBPH) | 4.6% | 7.7% | 13.8% | 16.9% | 18.0% |
| Gkw ($GKW) | - | - | - | 15.5% | - |
| Paushak ($PAUSHAK) | - | - | - | 12.3% | - |
| |
|---|
| Median (17 companies) | 8.6% | 5.2% | 4.1% | 5.0% | 3.6% |
|---|
| Bharat Rasayan ($BHARATRA) | 32.9% | 41.5% | 7.1% | 3.0% | 3.3% |
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Paushak ($PAUSHAK) | 8.4% | 24.5% | - | - | 23.1% |
| Uplbbph ($UPLBBPH) | 17.1% | 15.9% | 18.2% | 22.1% | 22.2% |
| Rane Brake Lining ($RANEBRAKE) | 14.1% | 7.9% | 11.1% | 12.8% | 21.2% |
| The United Nilgiri Tea Estates Company ($UNITEDTEA) | 11.8% | 15.8% | - | - | 18.1% |
| Asleyf ($ASLEYF) | 12.2% | 5.8% | -0.5% | 7.6% | 16.4% |
| |
|---|
| Median (29 companies) | 8.4% | 7.6% | 5.6% | 3.9% | 2.5% |
|---|
| Bharat Rasayan ($BHARATRA) | 22.1% | 13.7% | 21.9% | 26.1% | 24.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Rane Engine Valve ($RANENGIN) | 2.1x | 11.3x | 4.5x | 4.8x | 25.4x |
| Indian Metals & Ferro Alloys ($INDMETA-B) | 4.0x | 3.8x | 3.5x | 4.3x | 9.1x |
| Jklakbbph ($JKLAKBBPH) | 2.1x | 2.3x | 5.3x | 5.5x | 8.3x |
| Indbulbbph ($INDBULBBPH) | 4.3x | 4.8x | 5.5x | 9.6x | 6.5x |
| Rilbbph ($RILBBPH) | 1.7x | 2.1x | 2.9x | 3.9x | 3.9x |
| |
|---|
| Median (15 companies) | 1.7x | 2.1x | 2.4x | 0.9x | 1.0x |
|---|
| Bharat Rasayan ($BHARATRA) | 2.1x | 5.0x | 2.2x | 1.7x | 1.3x |
