HPCL 2018-19 Annual Report Analysis

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HPCL 2018-19 Annual Report Analysis
Tue, 30 Jul

HPCL has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

HPCL Income Statement Analysis

  • Operating income during the year rose 25.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 8.0% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 4.2% in FY19 as against 4.9% in FY18.
  • Depreciation charges increased by 8.9% and finance costs increased by 27.2% YoY, respectively.
  • Other income declined by 7.5% YoY.
  • Net profit for the year declined by 7.3% YoY.
  • Net profit margins during the year declined from 3.3% in FY18 to 2.4% in FY19.

HPCL Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 2,195,096 2,754,734 25.5%
Other income Rs m 15,279 14,133 -7.5%
Total Revenues Rs m 2,210,375 2,768,867 25.3%
Gross profit Rs m 107,130 115,671 8.0%
Depreciation Rs m 28,344 30,853 8.9%
Interest Rs m 6,179 7,856 27.2%
Profit before tax Rs m 87,886 91,095 3.7%
Tax Rs m 28,919 33,486 15.8%
Profit after tax Rs m 72,183 66,906 -7.3%
Gross profit margin % 4.9 4.2
Effective tax rate % 32.9 36.8
Net profit margin % 3.3 2.4
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HPCL Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 571 billion as compared to Rs 476 billion in FY18, thereby witnessing an increase of 20.1%.
  • Long-term debt stood at Rs 121 billion as compared to Rs 97 billion during FY18, a growth of 25.6%.
  • Current assets rose 19% and stood at Rs 435 billion, while fixed assets rose 20% and stood at Rs 511 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 1,073 billion as against Rs 897 billion during FY18, thereby witnessing a growth of 20%.

HPCL Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 255,324 304,007 19.1
 
Current Liabilities Rs m 475,630 571,218 20.1
Long-term Debt Rs m 96,559 121,278 25.6
Total Liabilities Rs m 896,718 1,072,584 19.6
 
Current assets Rs m 365,331 434,651 19.0
Fixed Assets Rs m 426,890 511,435 19.8
Total Assets Rs m 896,718 1,072,584 19.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



HPCL Cash Flow Statement Analysis

  • HPCL's cash flow from operating activities (CFO) during FY19 stood at Rs 86 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -114 billion, an improvement of 53.8% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs 26 billion, an improvement of 159% on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs -2 billion from the Rs -8 billion net cash flows seen during FY18.

HPCL Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 110,372 85,540 -22.5%
Cash Flow from Investing Activities Rs m -73,980 -113,817 -
Cash Flow from Financing Activities Rs m -44,230 25,982 -
Net Cash Flow Rs m -7,837 -2,295 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for HPCL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 43.9, an decline from the EPS of Rs 47.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 267.5, stands at 6.8 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.3 times, while the price to sales ratio stands at 0.1 times.
  • The company's price to cash flow (P/CF) ratio stood at 4.6 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 1,439.9 1,806.9
TTM Earnings per share Rs 47.3 43.9
Diluted earnings per share Rs 47.4 43.9
Price to Cash Flow x 4.7 4.6
TTM P/E ratio x 6.8 6.8
Price / Book Value ratio x 2.7 1.3
Market Cap Rs m 407,736 407,395
Dividends per share (Unadj.) Rs 17.0 15.9
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for HPCL

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY19, from 0.8x during FY18. 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 12.6x during FY19, from 15.2x during FY18. 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 22.0% during FY19, from 28.3% during FY19. 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 25.5% during FY19, from 30.5% during FY18. 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 7.0% during FY19, from 8.7% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 0.8 0.8
Debtors’ Days Days 9 8
Interest coverage x 15.2 12.6
Debt to equity ratio x 0.4 0.4
Return on assets % 8.7 7.0
Return on equity % 28.3 22.0
Return on capital employed % 30.5 25.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

HPCL Share Price Performance

Over the last one year, HPCL share price has moved down from Rs 287.0 to Rs 267.5, registering a loss of Rs 19.6 or around 6.8%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 13,370.5 (down 0.1%). Over the last one year it has moved down from 14,951.7 to 13,370.5, a loss of 1,581 points (down 10.6%).

Overall, the S&P BSE SENSEX is up 1.0% over the year.

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

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