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Clariant Chemicals (India)

Mid Cap

Share Data

Price: Rs 725

Reuters code

CLAC.BO

BSE Index: 28,005

Not Rated
18 August 2016

Gradual recovery underway!!!

CLRC IN

Clariant Chemicals (India) Limiteds (CLRC) performance in the last couple of years has not

Market cap. (US$ mn)

251

been encouraging as series of divestments of profitable business impacted the core financial

6M avg. daily turnover (US$ mn)

0.1

performance. However, the green shoots are now visible as the performance in the last

Issued shares (mn)

23

Bloomberg code

Performance (%) 1M

3M 12M

Absolute

(2)

(9)

Relative

3 (10)

(10)

couple of quarters (March 2016 quarter and 1Q17) has improved with operating margins
gradually witnessing an uptick (reported double digit EBITDA margins after 10 quarters).
Further, the company remains optimistic on its near-term performance
and expects short to medium-term boom for the Indian dye and pigment
industry as Indian companies start filling in the shortages caused by the

Valuation Ratios

Chinese plant shutdowns. It also believes that the benefit would largely

Yr to 31 Mar CY13 CY14 FY16*

be reaped by the scaled up players who are compliant with international

EPS (Rs)

28.9

(1.3)

14.7

+/- (%)

(18.1)

PER (x)

21.4

PBV (x)

2.9

49.2
1.7

2.6

environmental and quality standards. The overall commoditised market

thriving on volume play has gained due to supply side dynamics originating
in china and would continue to do so in the immediate future.
The company has changed its accounting year from January-December to April-March.
Consequently, the financial statements for the period under review are for the 15 months

Dividend/Yield (%) 4.9

4.5 23.9

from 01 January 2015 to 31 March 2016. We do not have a rating on the company. However,

EV/Sales (x)

1.3

with the core performance starting to show improvement coupled with favourable industry

1.1

1.4

EV/EBITDA (x) 11.3 52.3 25.1

dynamics we turn positive on the company.

*FY16 figures are for 15 months.

We attended recently held AGM of Clariant Chemicals (India) Ltd. Key

Major shareholders (%)

takeaways from the meet are as follows:

Promoters 64

Speciality Chemicals market pegged at US$ 24 bn in India: The management

FIIs 1

indicated that as per the report of Ministry of Commerce, FICCI and CII, the Indian

MFs 2

Chemical Industry is third largest producer in Asia. It is sixth largest producer globally.

BFSIs 4
Public & Others

29

Relative performance

The estimated market size for chemicals is US$ 140 bn and expected to
reach US$ 214 bn by 2020. India accounts for 16% of the global dye and pigment
manufacturing. The industry has been growing at a CAGR of 12.6%. The Speciality
Chemicals is estimated to have a market size of around US$ 24 bn.
Speciality Chemicals companies to do well in India: Speciality Chemicals are

1,400
1,200
1,000
800
600
400
200
0

typically low volume, high value chemicals with specific applications. With increasing
demand for value-added high performance products, the company expects growth in
demand for speciality chemicals that add functionality to the products. Further, the
shift of manufacturing to the East and Indias export competitiveness is
Apr-10
Oct-10
May-11
Dec-11
Jul-12
Feb-13
Sep-13
Apr-14
Nov-14
Jun-15
Jan-16
Aug-16

expected to strengthen Indias position as a manufacturing hub for speciality

Clariant Chemicals (Actual)

Sensex

chemicals. While globally, the speciality chemicals industry is differentiated

from bulk chemicals by extensive R&D and innovation, such a demarcation
is almost non-existent in the Indian context due to the genericised nature
of the Indian speciality chemicals industry.

B&K R esearch

August 2016
Exports too witnessing healthy growth: The company expects healthy growth
in exports as India is becoming an important manufacturing hub for such chemicals.
Slowdown of China (in certain segments) is a contributing factor to the
growth of exports. The recently launched Make in India campaign is also expected to
add impetus to the emergence of India as a manufacturing hub for the chemicals industry
in the medium-term.
Dynamics titling towards India: The company opined that a re-organisation
is taking place in the dye and pigment industry globally. This is due to the supply
chain disruptions caused to European companies by the effect of REACH
regulation and increased environmental standards in China. Many European
companies depend on supplies from India and China; some are now setting up their own
plants in those countries or establishing JVs with large local players.
Operating margin expansion on cards: The company believes that the softening
of international crude and commodity prices has eased the cost pressure on the industry
to some extent. While operating margins have improved a bit, they have potential
to expand further in the forthcoming quarters should things continue to
remain same.
Acquires Carbon Black business: The company has acquired Carbon Black
business from Lanxess India Pvt. Ltd., effective closing of business hours
on 31 March 2015. The acquisition comprises the Carbon Black Dispersion plant
located at Nagda, India, together with its respective assets, liabilities and employees as a
going concern on a slump sale basis for a lumpsum consideration of Rs 134.6 mn
(including non-compete fees) after working capital adjustment, as at 31 March 2015.
This product line of Lanxess manufactures black pigment preparations used for processing
of viscose fibre, which goes in the manufacture of mainly viscose-based apparels, knitwear,
towels, bed-linen, etc. With this acquisition, CLRC in India gains additional pigment
preparation capacity to cater to a larger, wider customer base. The management believes
that the acquisition of Carbon Black business was strategic for CLRC for survival of its
current business in similar products.
Sells Industrial & Consumer Specialities (ICS): The company sold its Industrial
& Consumer Specialities (ICS) business along with employees, assets, liabilities and
including all licences, permits, consents and approvals thereto on a going concern by way
of a slump sale on a as is where is basis to Clariant India Limited (erstwhile known
as Clariant India Private Limited), for a total consideration of Rs 420 mn, effective from
01 August 2015. The profit on sale of the ICS business amounting to Rs 265.6 mn is shown
under Exceptional Items. The ICS business contributed sales of Rs 386 mn till
31 July 2015. Post the divestment of this business, the company has entered into job work
agreement with Clariant India Ltd. for processing and supply of ICS products.
Buyback of equity shares: The company made an offer of buyback of ~3.6
mn equity shares of face value Rs 10 each to its shareholders (representing
13.42% of the total equity) at the price of Rs 950 per equity share aggregating
to Rs 3.4 bn. The buyback was through Tender Offer by Stock Exchange mechanism.
The buyback offer was open for a period from 22 September 2015 to 07 October 2015. The
response to the buyback offer was 143.45% and the company bought back the entire equity

Clariant Chemicals (India)

B&K R esearch

August 2016
shares offered to the shareholders. After the buyback, the paid up equity capital
of the company is Rs 230.82 mn. The promoters stake increased from ~63%
to 64.24%.
Doles out dividend: The company in order to reward shareholder and distribute benefits
from land sale (received Rs 11.02 bn from Kolshet land sale) doled out an interim dividend
of Rs 140 per share in January 2015 resulting into cash outflow of Rs 4.5 bn. It further
approved final dividend of Rs 10 per share entailing cash outflow of Rs 277.8 mn. The
total dividend for the 15 months thus stood at Rs 150 per share as compared
to Rs 39 per share (CY14).
Continues to be a zero debt company: The company remains a zero debt
company with no long-term borrowings. The credit rating for the company is
reaffirmed CARE AAA for long-term bank facilities and CARE A1+ for short-term
bank facilities.
Increases limit for related party transactions: SEBI LODR Regulations provides
that material related party transaction, i.e. a transaction to be entered into which
individually or together with previous transactions in a given financial year with a related
party exceeds 10% of the annual consolidated turnover as per the last audited financial
statements of the company, requires the approval of the shareholders of the company by
way of an ordinary resolution. The company in order to streamline currency risk involved
in exports, to secure payment on time and also to utilise its capacity by committed demand
has entered into a supply agreement whereby all its exports are routed through a single
customer Clariant (Singapore) Pte. Ltd. The exports to this entity for CY14 and FY16
stood at Rs 2.35 bn and Rs 2.4 bn, respectively, thus exceeding 10% of the consolidated
annual turnover. The company has therefore accordingly sought shareholders
approval to increase the transaction limit with Clariant (Singapore) Pte.
Ltd., from time to time, in the ordinary course of business and at arms
length price, during the financial year 2016-17 and subsequent financial
years for an amount not exceeding Rs 5.0 bn per annum. The members, at the
58th Annual General Meeting held on 24 April 2015, had already given their approval for
the transactions to be entered with Clariant (Singapore) Pte. Ltd. during the financial year
2015 in the ordinary course of business.
1Q17 performance encouraging: The company posted an encouraging performance
in 1Q17 by reporting sales, EBITDA and PAT growth of 10.5%, 160.4% and 213.8% YoY
to Rs 2.70 bn, Rs 282 mn and Rs 140.6 mn, respectively. The performance was driven
by strong performance by Pigments and Colours segment which reported
20.8% YoY growth in sales to Rs 2.52 bn and 266.3% growth in EBIT to Rs
205 mn (margins @ 8.1% witnessed 540 bps YoY expansion). While Dyes and
Speciality Chemicals segments performance was impacted by divestment of ICS. The
segment reported 49.2% decline in revenues to Rs 182 mn, while EBIT declined by 84.2%
YoY to Rs 3.4 mn (margins @ 1.9%, down 410 bps YoY).

Clariant Chemicals (India)

B&K R esearch

August 2016

Business segments performance

The companys products and solutions find applications across several emerging industry
sectors in India, eight of them are notable as they form the building blocks of domestic
economy: Agriculture, Infrastructure, Transportation, Healthcare, Fibre, Packaging,
Consumer Goods and Home & Personal Care.

Products Application details

Agriculture

Agrocer range of pigments provide enhanced appearance to seeds and allow differentiation.
Additives offer strength and durability to PVC irrigation pipes, thus reducing wastage of water.

Infrastructure

Low VOC pigment preparations used in decorative paints help reduce health hazards.
IR-reflective pigment preparations used in water-based exterior paints, ambient temperatures in the interiors are
reduced, thus aiding energy-efficiency. These solutions also contribute to long-lasting exterior finishes.
Easily-Dispersible pigments, specially designed for offering eye-catching attractiveness, also find applications in
paints used for road markings.
Masterbatches find use in solar panels, ensuring their longevity.

Home & Personal Care

Whitening dyes find applications in detergents, thereby offering whiter, brighter, long lasting clothes, with less
usage of water.
Licowax used in applications like shoeshines, offer greater water repellency, thereby increasing shelf life of leather
articles.

Packaging

Pigments used for packaging of sensitive applications like food or cosmetics, are free from lead, chromium,
halogens and toxic solvents.
Pigments reduce warpage or distortion of flexible packaging, thereby cutting down on wastage and rejections.
Speciality masterbatches, processors can increase the use of renewable, degradable and compostable bio-polymers.
Additive masterbatches when used in packaging films enhance the shelf life of packaged products.

Consumer Goods

Low-halogenated, safe pigments find applications in high-end electronics, e.g. smartphones.

Nickel-free sealants are used for anodizing applications in smartphones.
Non-halogenated flame retardants find use in high-end electrical and electronic goods, like smartphones, laptops,
consumer durables, electrical circuits and fittings.
Masterbatches foaming agents help reduce total weight of plastic and resin consumption in consumer durables,
thereby contributing to energy-efficient products.
Pigments find use in mass coloration of Viscose Rayon, with lesser use of water.
Range of waxes enable processing of PP/PET fibres at lower temperatures, thereby saving energy costs.
Additives and masterbatches for various fibre applications like carpets, clothing, automotive interiors, offer flame
retardancy, durability, among other such features.

Transportation

Phthalate-free pigments find use in synthetic leather applications for automotive interiors.
Non-halogenated flame retardants, find application in personal and public transportation vehicles.
Hydrocerol technology for masterbatches helps reduce total weight of plastics in automobiles, thereby contributing
to fuel efficient vehicles.
Masterbatches find use in interiors of automobiles and prevent the plastics from degrading due to temperature
fluctuations, UV or hydrocarbon exposure. Antistatic solutions minimise dust accumulation in the interior
surfaces, thereby maintaining aesthetics and prolonging the life of automobiles.

Healthcare

Mevopur range of functional additives help enhance and protect medical devices and pharmaceutical packaging.
REMAFIN-EP range of white masterbatches are targeted for use in safe and compliant packaging for parenteral,
ocular and nasal drugs.

Clariant Chemicals (India)

B&K R esearch

August 2016

Revenue split in FY16

(Rs mn)

CY14

FY16*

Growth (%)

Pigment and Colours Pigment

4,649

5,993

28.9

Additives

108

170

57.4

2,421

3,897

61.0

Plastichemix

1,110

NA

NA

Core Masterbatch

1,311

NA

NA

847

1,181

955

(19.1 )

30

70

133.3

873

386

(55.8)

10,109

11,471

13.5

CY14

FY16*

Masterbatch (Total)

Dyes and Speciality Divested TPE business

Chemicals

Supply agreements in TPE with

Archroma and Stahl
Oil and Mining
Industrial & Consumer Specialities

Total
*FY16 figures are for 15 months.

Like-to-like performance
CY13
Sales growth, like-to-like basis (%)

25.3

43.6

40.2

Domestic sales growth, like-to-like basis (%)

24.2

56.7

47.3

Export sales growth, like-to-like basis (%)

28.2

15.7

24.2

PBDIT (% to sales)

11.4

3.8

10.9

*FY16 figures are for 15 months.

Pigments and Colours: The segment comprises of Pigments, Additives and Masterbatches.
Pigments are used for colouring paint, ink, plastic, fabric, cosmetics, food and other
materials. CLRC is a leading global provider of organic pigments, pigment preparations
and dyes used in coatings, paints, printing, plastics and other specialty applications.
The company has a very good presence in paints, coating, ink and plastic applications
and continues to be a preferred supplier to major players in the domestic market. The
company acquired the Carbon Black business from Lanxess India comprising of the
Black dispersion plant located at Nagda for Viscofil Black VBL, effective from 01 April
2015. Further, the company introduced new whitening solutions for detergent market
for regional customers in India to support business growth. The company launched new
products Special Pigments for packaging ink segment and L-VOC range of coatings.
Additives are performance chemicals for improving the quality and physical property
to ensure performance, durability and safety of the products. CLRCs additives business
provides solutions in improving the efficiency, safety, protection, durability and appearance
of products such as plastics, coatings and printing inks. CLRC is a leading provider of
non-Halogenated (environmentally safe) flame retardants, waxes and polymer additives
and serves customers across a wide range of applications and sectors including electronic,
construction and automotive, textiles, printing and packaging. The additives business of
the company is evolving by outsourcing the high technology products from CLRC affiliates
to meet the demand of local markets. Additives business has contributed sales of Rs 170 mn
during the period. The company foresees wide scope for this business to grow in future in
the niche applications.
Masterbatch is a concentrated mixture of pigments and/or additives dispersed in
a polymer medium. Masterbatch is produced by encapsulating minimum two or more
Clariant Chemicals (India)

B&K R esearch

August 2016
ingredients in a polymer medium with equipment called as extruder. The strands coming
out of an extruder are then cooled and cut into a granular shape. The company, with its four
manufacturing facilities in India, has established itself as a reliable partner and solution
provider for Masterbatch and fibre segment. The acquisition of Masterbatches business
from Plastichemix Industries has helped it to improve foothold in Masterbatches business
by increasing customer base and product portfolio like black, white, additive, product and
colour master batches and engineering plastics compounds. The business has initiated a
new product line PET BLACK, to cater to customers in the Fibre industry and has also
created multiple technological options for Automotive, Consumer Durable & Packaging
segments, with a focus on green chemistry. The company is further exploring additional
products and services required by the Indian market through close collaboration with its
customers. The Masterbatches business has contributed 39% of sales to the pigments and
colours segment and recorded sales of Rs 3.89 bn.
The growth driver for Pigments and Colours segment continues to be healthy performance
of user industries such as Paints and Plastics.

Indian Paints and Coatings industry

Indian Paints and Coatings industry is estimated about Rs 350 bn and is growing at 1213% CAGR. Per capita consumption of paints is a little over 4 kg which is much lower when
compared to the global average. The unorganised segment has about 35% market share in
the market consisting of around 2,000 small to medium enterprises. Architectural coatings
constitute 70% of the market share and the balance is from Industrial coatings segment.
The market for paints in India is expected to grow at 1.5 times to 2.0 times GDP in the
next five years. Architectural paints segment is expected to witness higher growth going
forward. The fiscal incentives given by the government to the housing sector is expected
to benefit the housing sector. Further, domestic and global auto majors have long term
plans for the Indian market, which augur well for automotive paint manufacturers.
Increased industrial paint demand, especially powder coatings and high performance
coatings is also expected to benefit paint majors in the medium-term.

Indian Plastics industry

Per capita Plastics consumption in India is around 10 kg currently compared to the
global average of 27 kg. The Government plans to increase it to 20 kg by 2022. Capital
outlays worth CHF 31 bn are planned to be invested in Polyester, Polymers and other
Petrochemicals in the next five-six years. The Indian polymer additive market size is
around US$ 400 mn and is expected to grow @ 10% CAGR.

Indian Additives industry

The Indian polymer additives market accounts for only ~1.0% of the global market.
The model of usage and application of polymers in developed countries suggests that
there is a huge market potential in India for similar applications. The growth is expected
to be driven by opportunities in growing end industries such as automobiles, while
goods, packaging, construction, medical supplies, etc. The polymer additives segment is
fairly capital intensive and commands significant investments. R&D and new product
development is largely the domain of global giants. Most of the global polymer additive
companies are already present in India and are largely focused on high margin segments.
Clariant Chemicals (India)

B&K R esearch

August 2016

Revenue mix
(Rs mn)

CY10

CY11

CY12

CY13

CY14

FY16*

Pigments and Colours

3,585

3,789

4,194

5,301

7,178

10,050

36.8

39.6

39.2

43.7

71.2

88.2

6,162

5,772

6,518

6,831

2,904

1,348

63.2

60.4

60.8

56.3

28.8

11.8

9,747

9,561

10,712

12,132

10,082

11,398

2,372

2,458

2,742

3,441

4,955

7,297

66.2

64.9

65.4

64.9

69.0

72.6

1,213

1,331

1,452

1,860

2,223

2,753

33.8

35.1

34.6

35.1

31.0

27.4

3,585

3,789

4,194

5,301

7,178

10,050

5,306

4,841

5,258

5,347

2,501

1,336

86.1

83.9

80.7

78.3

86.1

99.1

% Contribution
Dyes and Speciality Chemicals
% Contribution
Total
Pigments and Colours
Domestic
% Contribution
Exports
% Contribution
Total
Dyes and Speciality Chemicals
Domestic
% Contribution
Exports

856

931

1,260

1,484

403

12

% Contribution

13.9

16.1

19.3

21.7

13.9

0.9

6,162

5,772

6,518

6,831

2,904

1,348

7,678

7,299

8,000

8,788

7,456

8,633

Total
Total Domestic
% Contribution
Total Exports
% Contribution
Total Revenues

78.8

76.3

74.7

72.4

74.0

75.7

2,069

2,262

2,712

3,344

2,626

2,765

21.2

23.7

25.3

27.6

26.0

24.3

9,747

9,561

10,712

12,132

10,082

11,398

CY14

FY16*

*FY16 figures are for 15 months.

Segment performance
(Rs mn)

CY11

CY12

CY13

Pigments and Colours

Net revenues

3,789

4,194

5,301

7,178

10,050

Segment assets

2,485

2,805

3,655

6,673

7,273

Segment liabilities

777

954

1,171

1,837

1,827

Capex

315

168

434

2,161

659

Depreciation

98

119

141

309

550

EBITDA

728

628

648

417

885

EBITDA (%)

19.2

15.0

12.2

5.8

8.8

EBIT

630

509

508

107

335

EBIT (%)

16.6

12.1

9.6

1.5

3.3

RoCE (%)

36.9

27.5

20.4

2.2

6.1

Net revenues

5,772

6,518

6,831

2,904

1,348

Segment assets

2,169

2,445

1,794

620

76

Segment liabilities

1,131

1,358

915

112

167

96

294

150

81

95

92

21

Dyes & Specialty Chemicals

Capex
Depreciation
EBITDA

942

882

754

141

45

EBITDA margin (%)

16.3

13.5

11.0

4.9

3.3

EBIT

861

787

663

120

42

EBIT margin (%)

14.9

12.1

9.7

4.1

3.1

RoCE (%)

83.0

72.4

75.4

23.6

59.4

*FY16 figures are for 15 months.

Clariant Chemicals (India)

B&K R esearch

August 2016

Raw material consumed Details

(Rs mn)

CY11

CY12

CY13

CY14

FY16*

Pigments

872

1,043

993

1,260

1,327

Growth (%)

19.5

(4.8)

26.9

5.4

Ethoxylates and polyglycoles

245

313

408

238

186

Polymers

266

309

392

697

1,181

16.0

27.1

77.5

69.6

Phenol and its derivatives

207

274

344

285

259

Monomers

237

246

211

Biocides

174

240

317

209

60

Others

2,463

2,721

2,922

2,982

3,227

Total

4,464

5,144

5,587

5,677

6,240

CY11

CY12

CY13

CY14

FY16*

19.5

20.3

17.8

22.2

21.3

Growth (%)

*FY16 figures are for 15 months.

Raw material mix

(%)
Pigments
Ethoxylates and polyglycoles

5.5

6.1

7.3

4.2

3.0

Polymers

6.0

6.0

7.0

12.3

18.9

Phenol and its derivatives

4.6

5.3

6.2

5.0

4.1

Monomers

5.3

4.8

3.8

0.1

0.0

Biocides

3.9

4.7

5.7

3.7

1.0

Others

55.2

52.9

52.3

52.5

51.7

100.0

100.0

100.0

100.0

100.0

Total
*FY16 figures are for 15 months.

DPS and Dividend payout

6,000

37.0

5,000

36.5

120

4,000

36.0

3,000

35.5

2,000

35.0

1,000

34.5

20

34.0

Rs mn

0
CY11

CY12

CY13

CY14

Total Raw Material Cost

% of Imported Raw Material

FY16

Rs/share

160
140

37.5

7,000

100
80

100

60

80

Raw materials and Raw material imports

40

60
40

20
0
CY11

CY12

CY13

CY14

FY16

Dividend Per Share

Payout Including Dividend Tax (%)

Source: Company, B&K Research

Clariant Chemicals (India)

B&K R esearch

August 2016

Quarterly performance
(Rs mn)
Net sales

1QCY14 2QCY14 3QCY14 4QCY14 1QCY15 2QCY15 3QCY15 4QCY15 4QFY16

2,742

2,639

2,481

2,220

2,256

2,448

2,233

2,183

Growth YoY (%)

(1.2)

(17.1)

(28.5)

(17.9)

(17.7)

(7.2)

(10.0)

Gross profit

852

785

709

531

720

686

768

Gross profit (%)

31.1

29.8

28.6

23.9

31.9

28.0

Staff cost

232

236

265

246

221

220

Other expenditure

494

486

490

561

468

2,615

2,576

2,527

2,496

5.5

(11.1)

(19.4)

(9.6)

127

63

(47)

Operating profit mgn (%)

4.6

2.4

Other operating income

105

90

EBITDA

232

EBITDA margin (%)

Other income
Depreciation

Expenditure
Growth YoY (%)
Operating profit

EBIT
EBIT margin (%)

1QFY17

2,457

2,706

(1.7)

8.9

10.5

620

875

893

34.4

28.4

35.6

33.0

227

206

198

220

435

492

468

529

488

2,224

2,416

2,184

2,238

2,309

2,522

(15.0)

(6.2)

(13.6)

(10.4)

3.8

4.4

(276)

31

32

49

(55)

148

184

(1.9)

(12.4)

1.4

1.3

2.2

(2.5)

6.0

6.8

80

103

84

77

67

122

76

98

153

33

(173)

116

108

115

67

224

282

8.1

5.6

1.3

(7.4)

4.9

4.3

5.0

2.9

8.9

10.1

39

49

28

21

118

49

54

134

26

56

78

88

111

111

100

114

110

109

99

215

124

(27)

(263)

124

57

55

92

117

210

7.8

4.7

(1.1)

(11.9)

5.5

2.3

2.5

4.2

4.8

7.8

Interest

Exceptional item

991

11

10,834

240

(4 )

213

1,113

(17)

10,565

121

56

293

87

116

208

(39.8)

214.9

(43.0)

(95.0)

(99.2)

(4.8)

270.8

62

259

(4)

2,125

15

11

79

22

17

68

28.9

23.2

22.4

20.1

12.3

20.3

26.9

25.7

14.8

32.5

PBT
Growth YoY (%)
Tax
Tax rate (%)
Reported PAT

151

855

(13)

8,441

107

45

214

64

99

141

Growth YoY (%)

(38.9)

254.3

(29.6)

(94.8)

(99.2)

(7.5)

213.8

PAT margin (%)

5.5

32.4

(0.5)

380.2

4.7

1.8

9.6

3.0

4.0

5.2

Adjusted PAT

151

62

(22)

(226)

107

45

(25)

69

99

141

Reported EPS (Rs)

5.7

32.05

(0.50)

316.61

4.0

1.7

8.0

2.8

4.3

6.1

1QCY14 2QCY14 3QCY14 4QCY14 1QCY15 2QCY15 3QCY15 4QCY15 4QFY16

1QFY17

Base business
Sales

2,202

2,332

2,329

2,160

2,185

2,369

2,230

2,305

2,533

2,804

49.3

40.4

30.8

4.7

(0.8)

1.6

(4.2)

6.7

15.9

18.4

PBT

128

1,072

(33)

10,462

126

54

281

87

116

208

Margin (%)

5.8

46.0

(1.4)

484.4

5.8

2.3

12.6

3.8

4.6

7.4

PAT

95

828

(24)

8,372

110

43

206

64

99

141

(31.3)

543.1

15.2

(94.8)

(99.2)

(10.3)

226.2

Growth (%)

Growth (%)

Indicative performance on financial year basis

(Rs mn)
Sales

FY15

FY16

12,099

9,595

9,320

Growth (%)

(20.7)

(2.9)

Gross profit

3,896

2,745

2,948

Gross profit (%)

32.2

28.6

31.6

1,069

130

515

EBITDA margin (%)

8.8

1.4

5.5

Adjusted PAT

669

(80)

187

EBITDA

Clariant Chemicals (India)

FY14

B&K R esearch

August 2016

Quarterly segmental performance

Revenues

1QCY14 2QCY14 3QCY14 4QCY14 1QCY15 2QCY15 3QCY15 4QCY15

Pigments & Colours

Growth YoY (%)
% of revenue

4QFY16

1QFY17

1,454

1,948

1,975

1,801

1,884

2,090

1,981

1,988

2,272

2,524

26.2

48.5

39.2

27.0

29.6

7.3

0.3

10.4

20.6

20.8

53.0

73.8

79.6

81.1

83.5

85.4

88.7

91.1

92.5

93.3

Dyes & Speciality Chemicals

1,288

691

505

420

371

358

251

195

185

182

Growth YoY (%)

(20.6)

(63.1)

(75.3)

(67.4)

(71.2)

(48.2)

(50.3)

(53.6)

(50.1)

(49.2)

47.0

26.2

20.4

18.9

16.5

14.6

11.3

8.9

7.5

6.7

2,742

2,639

2,481

2,220

2,256

2,448

2,233

2,183

2,457

2,706

(1.2)

(17.1)

(28.5)

(17.9)

(17.7)

(7.2)

(10.0)

(1.7)

8.9

10.5

% of revenue
Total Segment Revenue
Growth YoY (%)
EBIT
Pigments & Colours
Growth YoY (%)
PBIT margin (%)

112

79

16

(100)

15

56

69

10

195

205

(17.6)

(48.4)

(91.9)

(86.3)

(29.2)

334.2

1,173.2

266.3

7.7

4.1

0.8

(5.5)

0.8

2.7

3.5

0.5

8.6

8.1

136

54

(75)

20

22

(2)

(14)

16

Growth YoY (%)

(31.3)

(73.0)

(97.8)

(85.2)

(60.5)

(23.3)

(84.2)

PBIT margin (%)

10.6

7.9

0.9

(17.8)

5.4

6.0

(0.7)

(7.2)

8.4

1.9

Profit/Loss before

248

134

20

(174)

36

78

67

(4)

210

209

(25.7)

(62.4)

(94.9)

(85.7)

(41.9)

232.8

492.4

169.0

9.1

5.1

0.8

(7.9)

1.6

3.2

3.0

(0.2)

8.6

7.7

Dyes & Speciality Chemicals

Interest and Tax

Growth YoY (%)
PBIT margin (%)
Less: Interest
Other unallocable expenditure

34

47

89

(88)

20

12

(96)

93

(1)

Net Profit/Loss before Tax

213

122

(28)

(268)

121

56

54

91

116

208

2,890

4,771

4,866

4,836

5,164

5,657

5,385

5,237

5,446

5,314

before exceptional item

Capital employed
Intermediates & Colours
Dyes & Speciality Chemicals
Unallocated Net Assets/

976

449

705

508

350

356

125

180

70

79

2,028

1,529

(52 )

8,616

4,057

3,660

4,321

1,079

800

1,530

5,895

6,749

5,520

13,960

9,571

9,673

9,831

6,495

6,316

6,923

Liabilities
Total Capital Employed

Indicative segmental performance on financial year basis

(Rs mn)

FY14

FY15

FY16

5,603

7,608

8,331

Pigments & Colours

Revenue
Growth (%)

35.8

9.5

EBIT

484

11

330

EBIT margin (%)

8.6

0.1

4.0

6,496

1,987

989

(69.4)

(50.2)

Dyes & Speciality Chemicals

Revenue
Growth (%)

Clariant Chemicals (India)

EBIT

595

21

EBIT margin (%)

9.2

0.2

2.2

10

B&K R esearch

August 2016

Gross profit versus Gross margin

Net Sales

1,400

40
35
30
25
20
15
10
5
0

1,200
1,000
600

Rs mn

800
400
200

Growth YoY (%)

Gross Profit

1QFY17

4QFY16

4QCY15

3QCY15

2QCY15

1QCY15

4QCY14

3QCY14

2QCY14

1QCY14

4QCY13

3QCY13

1QCY13

2QCY13

1QFY17

4QFY16

4QCY15

3QCY15

2QCY15

1QCY15

4QCY14

3QCY14

2QCY14

1QCY14

4QCY13

3QCY13

40
30
20
10
0
(10)
(20)
(30)
(40)
2QCY13

4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
1QCY13

Rs mn

Net sales versus Growth

Gross Profit (%)

Source: Company, B&K Research

Adjusted PAT versus Adjusted PAT margin

15

300

10

10

200

100

EBITDA

Adj PAT

1QFY17

4QFY16

4QCY15

3QCY15

2QCY15

1QCY15

1QCY13

EBITDA Margin

4QCY14

(15)
3QCY14

(300)
2QCY14

(10)
1QCY14

(200)

1QFY17

4QFY16

4QCY15

3QCY15

2QCY15

1QCY15

4QCY14

3QCY14

2QCY14

1QCY14

4QCY13

3QCY13

2QCY13

(10)

(5)

(100)

4QCY13

(5)

3QCY13

Rs mn

2QCY13

500
400
300
200
100
0
(100)
(200)
(300)
1QCY13

Rs mn

EBITDA versus EBITDA margin

Adj PAT (%)

Source: Company, B&K Research

EBIT mix

Pigments & Colours

Dyes & Speciality Chemicals

Pigments & Colours

1QFY17

4QFY16

4QCY15

3QCY15

2QCY15

1QCY15

4QCY14

3QCY14

2QCY14

1QCY14

4QCY13

3QCY13

2QCY13

500
400
300
200
100
0
(100)
(200)
(300)
1QCY13

1QFY17

4QFY16

4QCY15

3QCY15

2QCY15

1QCY15

4QCY14

3QCY14

2QCY14

1QCY14

4QCY13

3QCY13

2QCY13

Rs mn

4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
1QCY13

Rs mn

Revenue mix

Dyes & Speciality Chemicals

Source: Company, B&K Research

Clariant Chemicals (India)

11

B&K R esearch

August 2016

Income Statement

Cash Flow Statement

Period end (Rs mn)

Dec 12 Dec 13 Dec 14 Mar 16*

Period end (Rs mn)

Net sales

10,712 12,132 10,082 11,398

Profit before tax

Growth (%)

12.0

Operating expenses

13.3

(16.9)

13.1

(9,593) (11,270) (10,215) (11,193)

Operating profit

1,119

862

(133)

205

251

347

378

426

EBITDA

1,370

1,209

245

632

Growth (%)

(9.6)

(11.8)

(79.7)

157.3

Other operating income

Depreciation

(216) (234) (332) (555)

Other income

191

179

137

373

1,345

1,153

50

450

(14)

(18)

(11)

(7)

92

1,122

11,836

235

1,423

2,258

11,874

678

Tax (current + deferred)

(410)

(590)

(2,441)

(150)

Profit/(Loss) for the period

1,013

1,668

9,433

529

Reported Profit/(Loss)

1,013

1,668

9,433

529

Adjusted net profit

939

770

(35)

340

(15.5)

(18.1)

EBIT
Finance cost
Exceptional & extraordinary
Profit before tax

Growth (%)

1,423

2,258

11,874

678

216

234

332

555

Change in working capital

(252)

(308)

1,386

(1,952)

Total tax paid

(402)

(572)

(2,409)

(43)

Others

(160) (141) (75) (272)

Depreciation

Cash f low from oper. (a)

825

Capital expenditure

(213)

(312)

(1,900)

(613)

Change in investments

354

(298)

2,349

(336)

Others

136

126

81

152

Cash f low from inv. (b)

277

(484)

530

(798)

Free cash f low (a+b)

Equity raised/(repaid)
Debt raised/(repaid)
Dividend (incl. tax)
Others

Period end (Rs mn)

Net chg in cash (a+b+c)

Share capital

267

267

267

231

Reserves & surplus

4,749

5,477 13,694

6,085

Shareholders funds

5,015

5,743 13,960

6,316

1,472 11,109 (1,035)

988 11,639 (1,833)

(390)

(2)

95

(95)

(1,239)

(858)

(1,840)

(4,361)

(3)
(142)

(47)

(5) (3,147)

(905) (1,750) (7,993)

83

9,889 (9,826)

Key ratios
Period end (%)
Growth

Dec 12 Dec 13 Dec 14 Mar 16*

1,103

Cash f low from fin. (c) (1,245)

Adjusted EPS (Rs)

Balance Sheet

Dec 12 Dec 13 Dec 14 Mar 16*

CEPS (Rs)
Book NAV/share (Rs)

Dec 12 Dec 13 Dec 14 Mar 16*

35.2

28.9

(1.3)

14.7

(15.5)
(18.1)
43.3

37.7

11.1

38.8

188.1

215.4

523.6

273.6

Dividend/share (Rs)

27.5

30.0

39.0

173.3

Dividend payout ratio

84.1

56.3

12.9

877.5

EBITDA margin

12.5

9.7

2.3

5.3

Non-current liabilities

340

331

349

413

EBIT margin

12.6

9.5

0.5

3.9

Other non-current liabilities

340

331

349

413

Tax rate

29.4

32.2

20.6

23.1

2,858

3,041

4,115

2,189

RoCE

25.7

20.2

0.5

4.3

Net debt/Equity (x)

(0.5)

(0.5)

(0.7)

(0.1)

Current liabilities

ST borrowings, Curr maturity

95

2,858

3,041

4,021

2,189

Total (Equity and Liab.) 8,214

9,115 18,424

8,917

Non-current assets

2,240

2,442

4,296

4,422

Fixed assets (Net block)

1,835

1,915

3,482

3,645

77

67

72

67

Long-term loans and advances 329

460

743

710

6,674 14,128

4,495

Other current liabilities

Non-current Investments

Current assets

5,974

Cash & current investment

2,413

2,833

10,373

912

Other current assets

3,562

3,840

3,755

3,583

Total (Assets)

8,214

9,115 18,424

8,917

Total debt
Capital employed

0
5,356

95

6,075 14,403

6,728

Du Pont Analysis - ROE

Net margin

8.8

6.3

(0.4)

3.0

Asset turnover (x)

Leverage factor (x)

1.3

1.4

0.7

0.8

1.6

1.6

1.4

1.3

Return on equity

19.0

14.3

(0.4)

3.4

Valuations
Period end (x)

Dec 12 Dec 13 Dec 14 Mar 16*

PER

18.2

21.4

49.2

PCE

14.8

16.4

77.9

18.7

Price/Book

3.4

2.9

1.7

2.6

Yield (%)

4.3

4.9

4.5

23.9

10.7

11.3

52.3

25.1

EV/EBITDA

*FY16 figures are for 15 months.

Clariant Chemicals (India)

12

B&K R esearch

August 2016

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140

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125

120
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no. of companies

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