Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 CMP: 25.20 December 30, 2015 Stock Details BSE code 524440 BSE ID CAMEXLTD Face value ( ) 10 No of shares (m) 10.2 52 week H/L 37.20/19.05 Market cap ( m) 257.2 30 day avg vol (No) 8208 Free float ( m) 38.6 Stock performance (%) Absolute Rel. to Sensex 1M 3M 12M -10% -7% -13% -9% -6% -8% Shareholding Pattern* (%) Promoters FIIs DIIs Others 67.5% 0.0% 0.01% 32.5% *As of September 2015 Relative Chart Company Overview Camex Limited is engaged in the business of manufacturing dyes-stuffs, chemicals and pigments. Industry Overview According to Freedonia Group report, the worldwide market of dyes and organic pigments is expected to grow 6 percent per year to reach $19.5 billion in 2019 from $14.5 billion in 2014. Growing middle class, particularly in the Asia Pacific and Africa-Mideast regions will lead to a rise in global consumer spending that will benefit important dye and organic pigment markets such as textiles and plastic products. Rising textile production will complement the demand as the textile market accounted for over half of world dye and organic pigment demand in 2014 and it will be the primary contributor to increased demand going forward, while growing plastic output will expand demand for organic pigments. Financial Performance Camex Limited revenues from operations for FY 15 declined 33.7% to 1467.0 million compared to 2213.8 million in the previous year. 40 35 30 25 20 15 10 Camex (LHS) Sensex 31,000 30,000 29,000 28,000 27,000 26,000 25,000 24,000 The company has reported a net income of 14.2 million in FY 15, representing 25.8% slump from its FY 14 levels of 19.2 million. 5 0 23,000 22,000 Table1: Key Financials (Y/e March) Source: Bloomberg Sales ( m) 2,027.6 2,213.8 1,467.0 YoY Growth (%) NA 9.2% -33.7% EBITDA ( m) 59.5 66.2 56.7 EBITDA Margin 3% 3.0% 3.9% PAT ( m) 16.2 19.2 14.2 EPS ( ) 2.2 2.6 1.4 YoY Growth (%) NA 17.4% -45.9% Source: Company, Karvy Investment Advisory 1
Background and Business Description Camex Limited is owned by Mr. Chandraprakash Chopra in the year in 1986 with an aim to revolutionize the dyes and chemicals industry. Since inception the company has reached new heights of success with rigorous efforts of its promoters. Camex Limited excels in production of reactive dyes, acid dyes stuffs, direct dyes stuff and textile auxiliaries. It also imports various chemicals for different industries like Plastic, Paint, Rubber, Paper and so on. Company s accreditations: ISO 9000:2008 ISO 14001: 2004 Registered with REACH and GOTS NSIC Key Strengths Ability to provide widest possible choice of products for variety of applications to customers Stringent quality control process Risks & Concerns Failure to adapt changing consumer preferences Decline in consumer spending due to slowdown in economic activity Board of Directors Table 2: Composition of Board Name Mr. Chandraprakash Chopra Mr. Mahavirchand Chopra Mr. Jitendra Chopra Dr. Ram Gopal Gupta Mr. Sunil Kothari Mr. Gaurav Chowdhary Mr.Sandeep Mundra Mrs. Indra Singhvi Source: Company Relation with Company Executive Director Executive Director Executive Director Independent & Executive Director 2
Industry Overview The world market for colorants that comprises dyes, pigments and intermediates is presently estimated at approximate value of $27 billion. Over the last decade, the industry has been growing at an average growth of 2-3% per annum. India s share in the world market for colorants is ~14%.Size of the Indian colorants industry is $3.9 billion in FY12 with exports accounting for ~65%. The overall production capacity of dyestuffs is 200,000 tons per annum. With the ever increasing standards of quality and reliability, Indian dyestuffs industry meets more than 95% of the domestic requirement, out of which textile industry consumes nearly 60% and the remaining is shared by paper, leather & other consumer industries. As far as pigments are concerned, the market size is 115,000 tonnes. The main consumer industries for pigments are printing inks, paints, plastics, rubber, etc., accounting for 70% of the end use. Rising consumer spending will lead to increased demand for organic colorants in textiles and plastics, while strong growth in global construction activity is expected to boost demand for paints and coatings. Increases in value demand will reflect the growing importance of expensive, higher value dyes and pigments that meet increasingly stringent performance standards and preferences for more environmentally friendly products. Despite the healthy growth, even faster advances will be limited by a moderation in global vehicle production and slow growth in printing inks due to the challenges facing the print media industry. The fastest growth in dye and organic pigment demand will be in paints and coatings applications, driven primarily by strong advances in construction expenditures in North America and continued growth in the Asia/Pacific region. While the outlook for many organic colorant applications remains healthy, more moderate advances in printing inks, due to the growing publication of information in electronic form will restrain overall dye and pigment demand. Competition analysis Company CMP ( ) Mcap ( m) Rev ( m) OPM (%) EPS ( ) PE (x) Camex Ltd 25.2 257.2 1467 4.0% 1.4 52.5 Gayatri Bio-organics Ltd. 13.8 856.2 2565.6 6.5% 0.3 NA Tanfac Industries Limited 42.0 291.3 1199.2 6.5% -5.3 NM Source: BSE 3
Financial Analysis For the period ending 31 March, 2015, Camex Limited reported revenues of 1467.0 million which represents 33.7% fall when compared to the revenues in FY 14. The company s EBITDA stood at 56.7 million in FY 15 and its EBITDA margin improved by 90bps from 3.0% in FY 14 to 3.9% in FY 15, attributable to reduction in operating expenses. Year end March Income statement ( million) Revenue 2027.6 2213.8 1467.0 % growth NA 9.2% -33.7% EBITDA 59.5 66.2 56.7 % EBITDA margin 2.9% 3.0% 3.9% Depreciation and amortisation 5.4 6.1 6.9 EBIT 54.1 60.1 49.7 Interest 30.5 31.6 30.5 PBT 23.6 28.5 19.2 Tax 7.4 9.4 7.3 Net profit 16.2 19.2 14.2 % growth net profit NA 18.2% -25.8% Balance sheet ( million) Shareholder fund 156.1 202.9 217.2 Long term liabilities 71.7 49.8 29.7 Current liabilities 399.1 405.3 258.8 Fixed assets 41.2 57.5 74.4 Current assets 584.2 597.8 427.9 Cash & cash equivalents 24.5 3.8 6.4 Cash flow statement Cash flow operations -68.6 42.7 236.6 Cash flow from investing -4.1-23.3-20.8 Cash flow from financing 69.9-40.1-213.2 Per share data EPS ( ) 2.19 2.57 1.39 CEPS ( ) - - - DPS ( ) - - - BVPS ( ) 21.1 27.2 21.2 Financial Ratios % ROE 10.4% 10.7% 6.8% ROCE 9.9% 10.8% 12.6% Debt/Equity 251.7% 175.1% 82.2% Interest coverage ratio 1.8 1.9 1.6 Current ratio 1.5 1.5 1.7 Cash ratio 0.06 0.01 0.02 Source: Company, Karvy Investment Advisory 4
Financial Snapshot Revenue growth (%) EBITDA margin (%) 2,500.0 2,000.0 1,500.0 1,000.0 500.0 0.0 0.2 0.1 0-0.1-0.2-0.3-0.4 70.0 65.0 60.0 55.0 50.0 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Revenue ( m) % growth EBITDA ( m) % EBITDA margin BVS & EPS 25.0 20.0 15.0 10.0 5.0 0.0 Net Profit Margin (%) 1.5% 1.0% 0.5% 0.0% 25 24 23 22 21 20 Book value per share ( ) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Net Profit ( m) % net profit margin EPS diluted ( ) 1.7 1.7 1.6 1.6 1.5 1.5 1.4 1.4 Liquidity ratios 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0.00 Profitability ratios 15.0% 13.0% 11.0% 9.0% 7.0% 5.0% Current ratio Cash ratio ROE ROCE Source: Karvy Investment Advisory 5
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