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Tcpl Packaging is a powerful growth stock

03-06-2016 • About Tcpl Packaging ($TCPLPACK) • By InTwits

Tcpl Packaging is a fast-growing stock in Paper & Paper Products industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.

Growth story


Tcpl Packaging showed fast growth in the last financial year. Tcpl Packaging's revenue surged on 16.7% in FY2016. The growth also happened in EBITDA of 22.2% for the same period.

In the last 3 years the company showed fast revenue growth of 15.9% from FY2013 to FY2016 annually. EBITDA surged on 21.9% from FY2013 to FY2016 annually.

Tcpl Packaging ($TCPLPACK) financials for the last 5 years

mln. INR FY2012 FY2013 FY2014 FY2015 FY2016
Revenue2,7923,7333,9494,9785,809
Revenue growth, %33.7%5.8%26.1%16.7%
SG&A, %
EBITDA4495566228241,006
EBITDA growth, %23.9%11.8%32.5%22.2%
EBITDA margin, %16.1%14.9%15.7%16.5%17.3%
Net Income77135125322383
Net Income margin, % 2.76%3.62%3.17%6.47%6.59%
 
CAPEX511321439600858
CAPEX/Revenue, %18.3%8.59%11.1%12.1%14.8%
Debt1,1451,2551,4011,5641,999
Cash1152359
Net Debt/EBITDA2.6x2.3x2.2x1.9x1.9x
 
ROIC, %15.4%17.4%16.9%23.1%23.3%
ROE, %12.1%18.6%15.1%31.9%29.6%

Profitability and return on investment


EBITDA growth was supported by margin expansion. The company showed small growth in EBITDA margin of 0.800 pp from 16.5% to 17.3% in FY2016. If we look for the longer period the company's EBITDA margin surged on 2.40 pp from 14.9% in FY2013 to 17.3% in FY2016.

We call Tcpl Packaging an attractive growth stock as together with the growth it delivers high ROIC at 23.3%. During the last three years it surged - it was 17.4% in FY2013. For the last three years the average ROIC was 21.1%.

The company showed small growth in Net Income margin of 0.100 pp from 6.50% to 6.60% in FY2016. In the longer period Tcpl Packaging showed fast Net Income margin growth of 3 pp from 3.60% in FY2013 to 6.60% in FY2016.

Tcpl Packaging operates at ROE of 29.6%. It's average level of ROE for the last three years was 25.5%.

Capital expenditures (CAPEX)


To fuel this fast growth the company had to invest in CAPEX.The company's CAPEX/Revenue was 14.8% in FY2016. CAPEX/Revenue surged on 6.18 pp from 8.59% in FY2013 to 14.8% in FY2016. It's average CAPEX/Revenue for the last three years was 12.6%.

Leverage (Debt)


Having such a fast growth profile the company keeps medium debt level at 1.9x Net Debt/EBITDA. In the last 3 years Tcpl Packaging's leverage dropped on 0.33x from 2.26x in FY2013 to 1.93x in FY2016.

Valuation vs. comparable companies


The market closed today at 6.3x EV/EBITDA for Tcpl Packaging which is 74.5% lower than 24.5x Paper & Paper Products peer group avearge calculated on the basis of 80 companies. The company trades at 11.4x P/E which is 26.2% lower than 15.4x Paper & Paper Products industry avearge calculated based on 10 companies.

For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. The company trades at 42.5x EV/(EBITDA-CAPEX) which is not surprisingly 569% higher than 6.3x Paper & Paper Products industry avearge calculated based on 4 companies.

Peers in Paper & Paper Products


Below we provide Tcpl Packaging benchmarking against other companies in Paper & Paper 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, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
N.R.Agarwal Industries ($NRAGRINDQ)4.0%5.5%34.1%21.8%
South India Paper Mills ($STHINPA)-1.1%-14.7%29.2%11.5%
Pudumjee Pulp & Paper Mills ($PDUMJEPULP)2.1%8.4%4.9%26.5%
Jk Paper ($JKPAPER)9.4%18.5%24.3%13.5%
Yash Papers ($YASHPPR)-3.6%39.5%17.3%0.6%
 
Median (14 companies)8.2%4.7%8.4%-0.3%11.5%
Tcpl Packaging ($TCPLPACK)33.7%5.8%26.1%16.7%


Top companies by EBITDA margin, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Tamil Nadu Newsprint & Papers ($TNPL)21.0%22.2%22.5%24.0%24.3%
South India Paper Mills ($STHINPA)13.5%16.1%10.2%15.8%17.3%
Yash Papers ($YASHPPR)15.7%16.8%16.0%15.7%
Kuantum Papers ($KUANTUM)11.2%14.2%15.9%12.7%29.6%
Emami Paper Mills ($EMAMIPAP)13.3%15.0%14.5%11.4%10.0%
 
Median (15 companies)11.6%11.8%13.2%9.8%14.7%
Tcpl Packaging ($TCPLPACK)16.1%14.9%15.7%16.5%17.3%


Top companies by CAPEX/Revenue, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top
Tamil Nadu Newsprint & Papers ($TNPL)18.9%10.4%5.5%35.2%37.4%
Emami Paper Mills ($EMAMIPAP)24.4%7.3%19.2%89.3%21.7%
Jk Paper ($JKPAPER)47.6%59.5%15.9%4.2%1.6%
 
Median (3 companies)11.3%10.4%15.9%35.2%21.7%
Tcpl Packaging ($TCPLPACK)18.3%8.6%11.1%12.1%14.8%


Top companies by ROIC, %

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Tamil Nadu Newsprint & Papers ($TNPL)5.3%8.2%11.1%12.7%13.5%
Jk Paper ($JKPAPER)5.2%2.7%1.1%4.3%10.5%
Emami Paper Mills ($EMAMIPAP)5.8%5.9%5.4%3.0%2.0%
Rama Pulp & Papers ($RAMAPULP)10.8%
Ruchira Papers ($RUCHIRA)15.4%20.2%
 
Median (21 companies)7.9%8.2%8.3%4.3%10.5%
Tcpl Packaging ($TCPLPACK)15.4%17.4%16.9%23.1%23.3%


Top companies by Net Debt / EBITDA

 FY2012 FY2013 FY2014 FY2015 FY2016
Top 5
Emami Paper Mills ($EMAMIPAP)7.4x5.3x5.0x11.2x16.7x
Jk Paper ($JKPAPER)6.8x12.7x14.1x8.6x4.0x
Tamil Nadu Newsprint & Papers ($TNPL)5.4x3.6x2.8x4.0x4.4x
Yash Papers ($YASHPPR)5.2x5.5x4.5x0.0x
Sree Sakthi Paper Mills ($SREESAKHTI)2.1x1.7x0.0x
 
Median (13 companies)3.6x3.3x0.0x0.0x0.3x
Tcpl Packaging ($TCPLPACK)2.6x2.3x2.2x1.9x1.9x


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