The domestic oil & gas exploration & production major, Oil & Natural Gas Corporation Ltd. (ONGC), has recorded an impressive growth in sales. However, in FY00, the company declared revenue growth of 34.3%.
Operating Profit (EBDIT)
Operating Profit Margin (%)
Profit before Tax
Profit after Tax/(Loss)
Net profit margin (%)
No. of Shares (eoy)
Diluted Earnings per share*
Over the last two years sales have grown considerably, as international oil prices have skyrocketed. In FY99 the company reported a drop in sales as oil prices had declined to $10 / barrel.
The rise in sales followed with a control on costs has ensured an impressive growth in OPM. Consequently, operating profits have also grown significantly. The OPM has increased by 530 basis points and 440 basis points during 4QFY01 and FY01 respectively.
During FY01, the company revised the policy for accounting for wells-in-progress. Earlier, wells-in-progress for a period of more than 5 years were charged to the income statement. Under the revised policy the time period has been reduced to more than three years. This has led to a reduction in profits by Rs 4.5 bn.
The post tax profits have received a boost from other income, which shot up over FY01. The rise was contributed by reimbursement from the Government amounting to Rs 4.4 bn. ONGC seems to be among the few companies that pay full tax rate. The effective tax rate has increased by 4.1 percentage points to 42.9% in FY01.
At Rs 163 the company trades on a multiple of 4.4x FY01 earnings. The stock price has moved up considerably since March '01. ONGC has proposed a dividend of Rs 11.
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: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407