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HPCL: Bottomline up 13-fold on subsidy relief - Views on News from Equitymaster

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HPCL: Bottomline up 13-fold on subsidy relief

Feb 11, 2012

Hindustan Petroleum Corporation Ltd (HPCL) has announced the third quarter results for financial year 2011-2012 (3QFY12). The company has reported a 41.1% year on year (YoY) growth in sales and a thirteen fold increase in the bottomline on a YoY basis. Here is our analysis of the results.

Performance summary
  • For the quarter, sales were up 41.1% YoY. For the first none months, topline registered a growth of 33.8% YoY.
  • The operating profits for the quarter were up 4.7 times (YoY), with margins at 7.7% (up from 2.3% in 3QFY11). For the first nine months, the company booked losses on account of high losses on the sale of petroleum products.
  • The net profits for the quarter registered a thirteen fold increase (YoY) during the quarter. The net profit margins for the quarter stood at 5.7% (versus 0.6% during 3QFY11). For the first nine months, the company booked losses at the bottomline level.
  • During the quarter, the company acquired 50% stake in Prize Petroleum Company Ltd, converting it from a JV (Joint Venture) company into a 100% subsidiary.
    Standalone financial snapshot
    (Rs m) 3QFY11 3QFY12 Change 9MFY11 9MFY12 Change
    Net sales 340,560 480,475 41.1% 942,277 1,260,686 33.8%
    Expenditure 332,758 443,449 33.3% 924,985 1,273,626 37.7%
    Operating profit (EBDITA) 7,802 37,026 374.6% 17,293 -12,940 -174.8%
    EBDITA margin (%) 2.3% 7.7%   1.8% -1.0%  
    Other income 1,449 1,575 8.7% 5,315 5,203 -2.1%
    Interest 2,417 6,982 188.9% 6,585 17,067 159.2%
    Depreciation 3,647 4,368 19.8% 10,054 12,403 23.4%
    Profit before tax before exceptional items 3,188 27,252 754.9% 5,968 -37,207 -723.4%
    Exceptional items 0 0 na 16 -12  
    Profit before tax bfrom Ordinary activities 3,188 27,252   5,953 -37,195  
    Profit before tax margin (%) 0.9% 5.7%   0.6% -3.0%  
    Tax 1,078 0 -100.0% 1,789 1 -100.0%
    Profit after tax/(loss) 2,110 27,252 1191.4% 4,163 -37,196 nm
    Net profit margin (%) 0.6% 5.7%   0.4% -3.0%  
    No. of shares (m)         339  
    Diluted earnings per share (Rs)*         nm  
    P/E ratio(x)*         nm  
    *On the basis of trailing 12 months earnings

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