CONFIDENCE PETROLEUM 2021-22 Annual Report Analysis

Fri, 16 Sep

CONFIDENCE PETROLEUM has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

CONFIDENCE PETROLEUM Income Statement Analysis

• Operating income during the year rose 65.4% on a year-on-year (YoY) basis.
• The company's operating profit increased by 49.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.2% in FY22 as against 14.6% in FY21.
• Depreciation charges increased by 27.9% and finance costs decreased by 14.2% YoY, respectively.
• Other income grew by 126.1% YoY.
• Net profit for the year grew by 84.6% YoY.
• Net profit margins during the year grew from 5.5% in FY21 to 6.1% in FY22.

CONFIDENCE PETROLEUM Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	8,631	14,277	65.4%
Other income	Rs m	28	64	126.1%
Total Revenues	Rs m	8,659	14,341	65.6%
Gross profit	Rs m	1,259	1,883	49.6%
Depreciation	Rs m	522	668	27.9%
Interest	Rs m	135	116	-14.2%
Profit before tax	Rs m	630	1,164	84.6%
Tax	Rs m	156	288	84.9%
Profit after tax	Rs m	474	876	84.6%
Gross profit margin	%	14.6	13.2
Effective tax rate	%	24.7	24.8
Net profit margin	%	5.5	6.1

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CONFIDENCE PETROLEUM Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 846 million as compared to Rs 557 million in FY21, thereby witnessing an increase of 51.9%.
• Long-term debt down at Rs 420 million as compared to Rs 480 million during FY21, a fall of 12.5%.
• Current assets rose 34% and stood at Rs 3 billion, while fixed assets rose 33% and stood at Rs 8 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 11 billion as against Rs 8 billion during FY21, thereby witnessing a growth of 33%.

CONFIDENCE PETROLEUM Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	5,332	6,944	30.2
Current Liabilities	Rs m	557	846	51.9
Long-term Debt	Rs m	480	420	-12.5
Total Liabilities	Rs m	7,889	10,504	33.2
Current assets	Rs m	2,184	2,926	34.0
Fixed Assets	Rs m	5,705	7,579	32.8
Total Assets	Rs m	7,889	10,504	33.2

CONFIDENCE PETROLEUM Cash Flow Statement Analysis

• CONFIDENCE PETROLEUM's cash flow from operating activities (CFO) during FY22 stood at Rs 1 billion, an improvement of 5.5% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -2 billion, an improvement of 19.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs 692 million, an improvement of 67% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 30 million from the Rs -30 million net cash flows seen during FY21.

CONFIDENCE PETROLEUM Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	975	1,029	5.5%
Cash Flow from Investing Activities	Rs m	-1,420	-1,692	-
Cash Flow from Financing Activities	Rs m	415	692	66.8%
Net Cash Flow	Rs m	-30	30	-

Current Valuations for CONFIDENCE PETROLEUM

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 3.1, an improvement from the EPS of Rs 1.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 76.0, stands at 25.5 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 3.1 times, while the price to sales ratio stands at 1.5 times.
• The company's price to cash flow (P/CF) ratio stood at 12.3 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	30.4	50.3
TTM Earnings per share	Rs	1.7	3.1
Diluted earnings per share	Rs	1.7	3.1
Price to Cash Flow	x	12.7	12.3
TTM P/E ratio	x	26.7	25.5
Price / Book Value ratio	x	1.7	2.7
Market Cap	Rs m	9,118	18,922
Dividends per share (Unadj.)	Rs	0.1	0.1

Ratio Analysis for CONFIDENCE PETROLEUM

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 3.5x during FY22, from 3.9x during FY21. 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 11.1x during FY22, from 5.7x during FY21. 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 improved and stood at 12.6% during FY22, from 8.9% during FY22. 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 improved and stood at 17.4% during FY22, from 13.2% during FY21. 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 improved and stood at 9.4% during FY22, from 7.7% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	3.9	3.5
Debtors’ Days	Days	280	174
Interest coverage	x	5.7	11.1
Debt to equity ratio	x	0.1	0.1
Return on assets	%	7.7	9.4
Return on equity	%	8.9	12.6
Return on capital employed	%	13.2	17.4

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 down from Rs 77.6 to Rs 76.0, registering a loss of Rs 1.6 or around 2.0%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 19,536.7 (down 1.8%). Over the last one year it has moved up from 17,814.1 to 19,536.7, a gain of 1,723 points (up 9.7%).

Overall, the S&P BSE SENSEX is up 1.1% 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