CONFIDENCE PETROLEUM 2020-21 Annual Report Analysis

Wed, 31 Mar

CONFIDENCE PETROLEUM has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

CONFIDENCE PETROLEUM Income Statement Analysis

• Operating income during the year fell 19.9% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 4.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 14.6% in FY21 as against 12.2% in FY20.
• Depreciation charges increased by 1.9% and finance costs decreased by 19.2% YoY, respectively.
• Other income declined by 34.3% YoY.
• Net profit for the year declined by 7.2% YoY.
• Net profit margins during the year grew from 4.7% in FY20 to 5.5% in FY21.

CONFIDENCE PETROLEUM Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	10,778	8,631	-19.9%
Other income	Rs m	43	28	-34.3%
Total Revenues	Rs m	10,821	8,659	-20.0%
Gross profit	Rs m	1,317	1,259	-4.4%
Depreciation	Rs m	512	522	1.9%
Interest	Rs m	167	135	-19.2%
Profit before tax	Rs m	681	630	-7.4%
Tax	Rs m	170	156	-8.1%
Profit after tax	Rs m	511	474	-7.2%
Gross profit margin	%	12.2	14.6
Effective tax rate	%	24.9	24.7
Net profit margin	%	4.7	5.5

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CONFIDENCE PETROLEUM Balance Sheet Analysis

• The company's current liabilities during FY21 down at Rs 557 million as compared to Rs 721 million in FY20, thereby witnessing an decrease of -22.7%.
• Long-term debt stood at Rs 479 million as compared to Rs 345 million during FY20, a growth of 39.1%.
• Current assets fell 4% and stood at Rs 2 billion, while fixed assets rose 19% and stood at Rs 6 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 8 billion as against Rs 7 billion during FY20, thereby witnessing a growth of 12%.

CONFIDENCE PETROLEUM Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	4,466	5,332	19.4
Current Liabilities	Rs m	721	557	-22.7
Long-term Debt	Rs m	345	479	39.1
Total Liabilities	Rs m	7,050	7,889	11.9
Current assets	Rs m	2,269	2,184	-3.8
Fixed Assets	Rs m	4,781	5,705	19.3
Total Assets	Rs m	7,050	7,889	11.9

CONFIDENCE PETROLEUM Cash Flow Statement Analysis

• CONFIDENCE PETROLEUM's cash flow from operating activities (CFO) during FY21 stood at Rs 975 million, an improvement of 47.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -1 billion, an improvement of 53.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs 415 million, an improvement of 65% on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -30 million from the Rs -13 million net cash flows seen during FY20.

CONFIDENCE PETROLEUM Cash Flow Statement 2020-21

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-20	Mar-21
Cash Flow from Operating Activities	Rs m	662	975	47.3%
Cash Flow from Investing Activities	Rs m	-926	-1,420	-
Cash Flow from Financing Activities	Rs m	251	415	65.3%
Net Cash Flow	Rs m	-13	-30	-

Current Valuations for CONFIDENCE PETROLEUM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 1.7, an decline from the EPS of Rs 1.9 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 44.7, stands at 26.7 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.4 times, while the price to sales ratio stands at 1.5 times.
• The company's price to cash flow (P/CF) ratio stood at 9.2 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Sales per share (Unadj.)	Rs	39.4	30.4
TTM Earnings per share	Rs	1.9	1.7
Diluted earnings per share	Rs	1.8	1.7
Price to Cash Flow	x	4.1	9.2
TTM P/E ratio	x	8.2	26.7
Price / Book Value ratio	x	1.9	1.7
Market Cap	Rs m	8,290	9,118
Dividends per share (Unadj.)	Rs	0.0	0.1

Ratio Analysis for CONFIDENCE PETROLEUM

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 3.9x during FY21, from 3.1x during FY20. 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 improved and stood at 5.7x during FY21, from 5.1x during FY20. 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 8.9% during FY21, from 11.4% during FY21. 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 13.2% during FY21, from 17.6% during FY20. 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 7.7% during FY21, from 9.6% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*
Current ratio	x	3.1	3.9
Debtors’ Days	Days	258	280
Interest coverage	x	5.1	5.7
Debt to equity ratio	x	0.1	0.1
Return on assets	%	9.6	7.7
Return on equity	%	11.4	8.9
Return on capital employed	%	17.6	13.2

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

CONFIDENCE PETROLEUM Share Price Performance

Over the last one year, CONFIDENCE PETROLEUM share price has moved up from Rs 14.7 to Rs 44.7, registering a gain of Rs 30.0 or around 203.7%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 14,820.5 (down 0.1%). Over the last one year it has moved up from 10,020.9 to 14,820.5, a gain of 4,800 points (up 47.9%).

Overall, the S&P BSE SENSEX is up 74.1% over the year.

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

Read: Latest Annual Report Analysis of CONFIDENCE PETROLEUM