BPCL 2017-18 Annual Report Analysis

Sat, 31 Mar

BPCL has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

BPCL Income Statement Analysis

• Operating income during the year rose 21.2% on a year-on-year (YoY) basis.
• The company's operating profit increased by 10.9% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 7.9% in FY18 as against 8.6% in FY17.
• Depreciation charges increased by 36.9% and finance costs increased by 70.3% YoY, respectively.
• Other income declined by 4.8% YoY.
• Net profit for the year declined by 0.7% YoY.
• Net profit margins during the year declined from 5.4% in FY17 to 4.4% in FY18.

BPCL Income Statement 2017-18

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Net Sales	Rs m	1,587,539	1,923,522	21.2%
Other income	Rs m	19,093	18,186	-4.8%
Total Revenues	Rs m	1,606,631	1,941,708	20.9%
Gross profit	Rs m	136,509	151,368	10.9%
Depreciation	Rs m	21,076	28,850	36.9%
Interest	Rs m	6,964	11,857	70.3%
Profit before tax	Rs m	127,562	128,846	1.0%
Tax	Rs m	41,926	43,816	4.5%
Profit after tax	Rs m	85,636	85,030	-0.7%
Gross profit margin	%	8.6	7.9
Effective tax rate	%	32.9	34.0
Net profit margin	%	5.4	4.4

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BPCL Balance Sheet Analysis

• The company's current liabilities during FY18 down at Rs 458 billion as compared to Rs 473 billion in FY17, thereby witnessing an decrease of -3.1%.
• Long-term debt stood at Rs 289 billion as compared to Rs 233 billion during FY17, a growth of 24.3%.
• Current assets rose 7% and stood at Rs 406 billion, while fixed assets rose 12% and stood at Rs 798 billion in FY18.
• Overall, the total assets and liabilities for FY18 stood at Rs 1,204 billion as against Rs 1,091 billion during FY17, thereby witnessing a growth of 10%.

BPCL Balance Sheet as on March 2018

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*	% Change
Networth	Rs m	308,198	366,186	18.8
Current Liabilities	Rs m	473,001	458,102	-3.1
Long-term Debt	Rs m	232,553	289,043	24.3
Total Liabilities	Rs m	1,090,863	1,203,561	10.3
Current assets	Rs m	378,993	406,015	7.1
Fixed Assets	Rs m	711,870	797,546	12.0
Total Assets	Rs m	1,090,863	1,203,561	10.3

BPCL Cash Flow Statement Analysis

• BPCL's cash flow from operating activities (CFO) during FY18 stood at Rs 111 billion, an improvement of 22.4% on a YoY basis.
• Cash flow from investing activities (CFI) during FY18 stood at Rs -71 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY18 stood at Rs -42 billion on a YoY basis.
• Overall, net cash flows for the company during FY18 stood at Rs -2 billion from the Rs -14 billion net cash flows seen during FY17.

BPCL Cash Flow Statement 2017-18

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-17	Mar-18
Cash Flow from Operating Activities	Rs m	90,411	110,684	22.4%
Cash Flow from Investing Activities	Rs m	-152,739	-70,655	-
Cash Flow from Financing Activities	Rs m	48,040	-42,177	-
Net Cash Flow	Rs m	-14,289	-2,149	-

Current Valuations for BPCL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 43.2, an decline from the EPS of Rs 65.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 428.0, stands at 11.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.5 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 10.1 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Sales per share (Unadj.)	Rs	1,210.7	978.0
TTM Earnings per share	Rs	65.3	43.2
Diluted earnings per share	Rs	39.5	39.2
Price to Cash Flow	x	13.2	10.1
TTM P/E ratio	x	17.5	11.7
Price / Book Value ratio	x	2.5	3.1
Market Cap	Rs m	770,034	1,153,182
Dividends per share (Unadj.)	Rs	32.5	21.0

Ratio Analysis for BPCL

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x during FY18, from 0.8x during FY17. The current ratio measures the company's ability to pay short-term and long-term obligations.

Interest Coverage Ratio: The company's interest coverage ratio deteriorated and stood at 11.9x during FY18, from 19.3x during FY17. The interest coverage ratio of a company states how easily a company can pay its interest expense on outstanding debt. A higher ratio is preferable.

• Profitability Ratios

Return on Equity (ROE): The ROE for the company declined and down at 23.2% during FY18, from 27.8% during FY18. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

Return on Capital Employed (ROCE): The ROCE for the company declined and down at 21.5% during FY18, from 24.9% during FY17. The ROCE measures the ability of a firm to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

Return on Assets (ROA): The ROA of the company declined and down at 8.1% during FY18, from 8.5% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-17*	12 Mar-18*
Current ratio	x	0.8	0.9
Debtors’ Days	Days	1	1
Interest coverage	x	19.3	11.9
Debt to equity ratio	x	0.8	0.8
Return on assets	%	8.5	8.1
Return on equity	%	27.8	23.2
Return on capital employed	%	24.9	21.5

To see how BPCL has performed over the last 5 years, please visit here.

BPCL Share Price Performance

Over the last one year, BPCL share price has moved down from Rs 649.0 to Rs 428.0, registering a loss of Rs 221.0 or around 34.1%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 14,614.4 (up 0.1%). Over the last one year it has moved up from 13,563.6 to 14,614.4, a gain of 1,051 points (up 7.7%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

(To know more, check out historical annual results for BPCL and quarterly results for BPCL)

Read: Latest Annual Report Analysis of BPCL