IOC: Nothing extra-ordinary - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

IOC: Nothing extra-ordinary

Jun 15, 2001

The largest of the three oil public sector units (PSUs), Indian Oil Corporation (IOC) has scaled a new peak. Sales of the company have crossed Rs 1000 bn. The growth in sales is impressive considering the large base it operates from. However, sales growth is lower compared to the other two oil majors. Purchase of products and crude for resale grew by 18.8%.

(Rs m)FY00FY01Change
Sales 958,240 1,183,903 23.5%
Other Income 5,466 11,935 118.4%
Expenditure 903,986 1,136,617 25.7%
Operating Profit (EBDIT) 54,254 47,285 -12.8%
Operating Profit Margin (%)5.7%4.0% 
Interest 10,060 16,738 66.4%
Depreciation 19,953 12,239 -38.7%
Profit before Tax29,70630,2431.8%
Extraordinary items - (617) 
Tax 5,272 2,423 -54.0%
Profit after Tax/(Loss) 24,434 27,203 11.3%
Net profit margin (%)2.5%2.3% 
No. of Shares (eoy) 389 779  
Diluted Earnings per share*31.434.9 
P/E Ratio  4.7  
(*annualised)   

Operating expenses have risen at a faster clip compared to sales resulting in pressure on the operating margins, which have fallen by 170 basis points for fiscal '01. Consequently, operating profit growth has shown a dip in FY01. The doubling of oil prices from $16 / barrel to $30 / barrel led to the immense pressure on margins. Raw material expenses were higher by 42.6% in the concerned fiscal.

Staff cost of the company has increased by 52.7% YoY, which could be due to the VRS offered by the company. The extraordinary item pertains to VRS expense written off in FY01 while Rs 1.7 bn has been deferred.

Interest cost of the company has registered significant increase. This could be mainly due to the company's funds being blocked in the oil pool account. Consequently, IOC may have resorted to short term borrowings to meet its working capital requirements. The oil pool account closed FY01 with an estimated deficit of Rs 120 bn. The policy on depreciation of LPG cylinders has been changed from 100% to 16.2%. Consequently, depreciation charge is lower by Rs 6.4 bn and to that extent pre-tax profits are higher.

Pre-tax profits have been saved by other income, which has shown a considerable increase. Removing the effect of other income for both years the pre-tax and post tax would be lower by 24.5% and 19.5%. Effective tax of the company has also reduced significantly, propping up the bottomline. The effective tax rate has declined from 17.7% in FY00 to 8% in FY01.

In the concerned fiscal IOC acquired control over Chennai Petroleum Corp. Ltd. (CPCL) and Bongaigon Refinery & Petrochemicals Ltd. (BRPL) from the Government for Rs 6.6 bn. At Rs 163 the company is trading on a multiple of 4.7x FY01 earnings.

Equitymaster requests your view! Post a comment on "IOC: Nothing extra-ordinary". Click here!

  

More Views on News

IOC 2020-21 Annual Report Analysis (Annual Result Update)

Oct 20, 2021 | Updated on Oct 20, 2021

Here's an analysis of the annual report of IOC for 2020-21. It includes a full income statement, balance sheet and cash flow analysis of IOC. Also includes updates on the valuation of IOC.

IOC Announces Quarterly Results (1QFY22); Net Profit Up 172.1% (Quarterly Result Update)

Aug 3, 2021 | Updated on Aug 3, 2021

For the quarter ended June 2021, IOC has posted a net profit of Rs 58 bn (up 172.1% YoY). Sales on the other hand came in at Rs 1,565 bn (up 73.7% YoY). Read on for a complete analysis of IOC's quarterly results.

IOC Reports Highest Ever Annual Profit (Views On News)

May 20, 2021

Boosted by inventory gains, the state-owned refiner posted a record-breaking bottomline.

5 Green Energy Stocks to Watch as India Readies for a Revolution (Views On News)

Oct 13, 2021

The excitement around green energy stocks has opened up a huge contrarian opportunity in the traditional energy space.

Top Performing PSU Stocks over the Past One Year (Views On News)

Oct 1, 2021

After a decade of underperformance, PSU stocks have woken up. Here are the best performing PSUs of past twelve months.

More Views on News

Most Popular

Infosys vs TCS: Which is Better? (Views On News)

Nov 26, 2021

In the post pandemic era, the top two IT companies in India are fighting to capture the growing demand for IT.

This Multibagger Stock Zooms 20% After Dolly Khanna Buys Stake (Views On News)

Nov 24, 2021

Shares of this edible oil company zoomed over 50% in three days after ace investor bought around 1% stake.

6 Popular Stocks that Turned into Penny Stocks (Views On News)

Nov 27, 2021

A look at popular stocks that crashed big time and never recovered, i.e. which went from 'Multibaggers to Multibeggers'.

India's Top 5 Monopoly Stocks to Watch Out for (Views On News)

Nov 30, 2021

These 5 companies dominate their sectors with a huge piece of the pie.

5 Indian Companies Embracing Blockchain Technology (Views On News)

Nov 23, 2021

Blockchain adoption in India was slow in the past. Now, the technology is being well received.

More

Become A Smarter Investor
In Just 5 Minutes

Multibagger Stock Guide 2022
Get our special report Multibagger Stocks Guide (2022 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

IOC SHARE PRICE


Dec 6, 2021 03:20 PM

TRACK IOC

COMPARE IOC WITH

MARKET STATS