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.
IOC: Birds of a feather flock together - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Nov 27, 2001

    IOC: Birds of a feather flock together

    Performance of India's only Fortune 500 company, Indian Oil Corporation (IOC), tripped in the quarter ended September '01. Sales for the half-year of FY02 have been salvaged by a 6.4% growth in 1QFY02. That said, the performance is better compared to the other oil refining & marketing (R&M) majors, which reported an 8% drop in topline for 2QFY02.

    (Rs m) 2QFY01 2QFY02 Change 1HFY01 1HFY02 Change
    Net Sales 300,796 287,668 -4.4% 578,931 583,711 0.8%
    Other Income 1,530 4,219 175.7% 3,378 6,305 86.7%
    Expenditure 281,887 278,727 -1.1% 547,697 563,325 2.9%
    Operating Profit (EBDIT) 18,910 8,942 -52.7% 31,234 20,387 -34.7%
    Operating Profit Margin (%) 6.3% 3.1%   5.4% 3.5%  
    Interest 4,113 4,185 1.7% 7,346 8,319 13.3%
    Depreciation 5,520 3,614 -34.5% 11,103 7,150 -35.6%
    Profit before Tax 10,807 5,362 -50.4% 16,163 11,223 -30.6%
    Tax 1,027 712 -30.7% 1,287 1,028 -20.1%
    Profit after Tax/(Loss) 9,780 4,650 -52.5% 14,875 10,194 -31.5%
    Net profit margin (%) 3.3% 1.6%   2.6% 1.7%  
    No. of Shares 778.7 778.7   778.7 778.7  
    Diluted Earnings per share* 50.2 23.9   38.2 26.2  
    P/E Ratio   5.8     5.3  
    (*annualised)            

    The industry sales were hit on two counts. With the slowdown intensifying in the September '01 quarter, growth in refinery throughput was significantly lower compared to the previous year. In fact, diesel and kerosene, which account for the biggest share in petroleum product consumption, reported negative growth over the concerned period. Further, the global economic downturn put pressure on petroleum product prices, as demand dwindled. This led to reduced realisations and lower gross refining margins (GRMs).

    Reflecting the same -- reduced GRMs -- is the OPM, which was lower by 320 and 190 basis points respectively for 2QFY02 and 1HFY02. During the quarter, refining margins continued to remain under pressure, as oil prices ruled in the region of $26 / barrel similar to levels in the corresponding period of the previous year. Raw material expenses, which constitute 27% of operating costs, fell by only 1.1% YoY for 1HFY02. Staff costs for the quarter decreased by 14.3% YoY. The company had carried out a voluntary retirement scheme (VRS) last fiscal and Rs 1.7 bn in expenses are yet to be written off.

    Interest costs, which had spiraled in the previous fiscal are showing signs of stabilising. Last year, working capital requirement of the company is likely to have increased due to higher crude & final product prices and blockage of funds in the oil pool account (OPA). Consequently, leading to higher interest costs. In the current fiscal, the YoY effect is nullified.

    Although pre-tax profits are down sharply, the same have been lifted by a significant jump other income. Adjusting for other income -- indicator of earnings from core activity -- pre-tax profits are almost wiped away declining by 88% YoY. Tax provision in the current year includes deferred tax liability. Aggregate liability upto March '01 will be provided at the end of the current fiscal from reserves.

    At Rs 138 the scrip is trading on a multiple of 5.3x 1HFY02 annualised earnings. The reduced earnings have led to the higher valuation. At the end of FY01 the scrip traded on a multiple of 4.7x FY01 earnings.

     

     

    Equitymaster requests your view! Post a comment on "IOC: Birds of a feather flock together". 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.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    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

    IOC SHARE PRICE


    Aug 18, 2017 (Close)

    TRACK IOC

    IOC - INDRAPRASTHA GAS COMPARISON

    Compare Company With Charts

    COMPARE IOC WITH

    MARKET STATS