X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Chennai Petro: It's the industry… - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • May 24, 2002

    Chennai Petro: It's the industry…

    FY02 is one year Chennai Petroleum Corporation Ltd. (CPCL), the south India based refinery, would love to forget. Having said that, the industry has experienced a challenging twenty four months. Domestic petroleum consumption has remained flat over this period. Global economic downturn led to lower petroleum prices in FY02. Oil markets have continued to exhibit volatility in the backdrop of supply adjustments and geo-political tensions.

    (Rs m) 4QFY01 4QFY02 Change FY01 FY02 Change
    Net sales 18,545 15,072 -18.7% 69,565 60,477 -13.1%
    Other Income 324 244 -24.7% 489 395 -19.3%
    Expenditure 18,024 13,907 -22.8% 66,237 57,911 -12.6%
    Operating Profit (EBDIT) 521 1,165 123.8% 3,328 2,566 -22.9%
    Operating Profit Margin (%) 2.8% 7.7%   4.8% 4.2%  
    Interest 319 336 5.3% 1,315 1,281 -2.6%
    Depreciation 256 45 -82.3% 1,028 790 -23.1%
    Profit before Tax 270 1,028 281.2% 1,474 889  
    Tax (111) 233   250 252 0.7%
    Profit after Tax/(Loss) 381 795 108.6% 1,224 637 -48.0%
    Net profit margin (%) 2.1% 5.3%   1.8% 1.1%  
    No. of Shares 149.0 149.0   149.0 149.0  
    Diluted earnings per share* 10.2 21.3   11.0 5.7  
    P/E Ratio         5.5  
    (*annualised)            

    Topline sales of CPCL has declined in all four quarters of FY02. But much of the erosion in financials has occurred in 2HFY02. The September 11 events led to sudden halt in global economic activity, which impacted petroleum product prices. Consequently, realisations were adversely hit. Also, the company faced a water shortage, which affected crude throughput.

    Operating profits in 4QFY02 have been salvaged by better operating margins. Expense heads have declined across the board. Staff costs for the quarter are lower by 67%, which could be due to workforce rationalisation carried out by IOC. Raw material expenses, which constitute approximately 85% of sales, declined by 17%, which has led to reduced operating costs. Oil prices -- key feedstock -- were lower by 21.5% YoY at an estimated $21.3/ barrel during the concerned period. However, for the full year, margins continued to remain under pressure, as final product prices declined at a faster clip compared to crude oil.

    Interest expense, which declined in the past two preceding quarters, has registered a marginal increase. Effective excise duty rate has increased significantly, which could be due to fiscal benefits coming to an end. On the other hand, the effective tax rate has reduced by 11 percentage points to 8%.

    At Rs 31 the scrip is quoting on a multiple of 5.5x FY02 earnings. The scrip usually trades within a band of 3x-6x. Petro product prices have improved with a revival in the global economy. Also, reports suggest that throughput has grown in April '02. Consequently, CPCL is likely to experience a better performance in FY02.

     

     

    Equitymaster requests your view! Post a comment on "Chennai Petro: It's the industry…". Click here!

      
     

    More Views on News

    GAIL: A Good Show (Quarterly Results Update - Detailed)

    Mar 27, 2017

    GAIL (India) Ltd has announced results for the quarter ended December 2016. reported 9.4% year on year (YoY) decline in sales, while bottom-line grew 45.4% YoY.

    ONGC: Higher Realisations on Crude Support Performance (Quarterly Results Update - Detailed)

    Mar 17, 2017

    ONGC has announced results for the quarter ended December 2016. The company has reported 9.2 % year on year (YoY) growth in sales, while bottom-line grew 197% YoY.

    Mahanagar Gas Ltd (IPO)

    Jun 21, 2016

    Should one subscribe to Mahanagar Gas IPO?

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    MARKET STATS