HPCL 2020-21 Annual Report Analysis

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HPCL 2020-21 Annual Report Analysis
Wed, 27 Oct

HPCL 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.

HPCL Income Statement Analysis

  • Operating income during the year fell 21.8% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 243.5% YoY during the fiscal. Operating profit margins witnessed a fall and down at 8.2% in FY21 as against 1.9% in FY20.
  • Depreciation charges increased by 7.6% and finance costs decreased by 15.4% YoY, respectively.
  • Other income grew by 57.2% YoY.
  • Net profit for the year grew by 239.8% YoY.
  • Net profit margins during the year grew from 1.2% in FY20 to 5.3% in FY21.

HPCL Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 2,504,410 1,959,189 -21.8%
Other income Rs m 16,816 26,437 57.2%
Total Revenues Rs m 2,521,226 1,985,627 -21.2%
Gross profit Rs m 46,596 160,034 243.5%
Depreciation Rs m 33,699 36,255 7.6%
Interest Rs m 11,389 9,633 -15.4%
Profit before tax Rs m 18,325 140,583 667.2%
Tax Rs m -12,644 35,341 -379.5%
Profit after tax Rs m 30,969 105,242 239.8%
Gross profit margin % 1.9 8.2
Effective tax rate % -69.0 25.1
Net profit margin % 1.2 5.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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HPCL Balance Sheet Analysis

  • The company's current liabilities during FY21 stood at Rs 624 billion as compared to Rs 570 billion in FY20, thereby witnessing an increase of 9.3%.
  • Long-term debt stood at Rs 278 billion as compared to Rs 231 billion during FY20, a growth of 20.1%.
  • Current assets rose 17% and stood at Rs 442 billion, while fixed assets rose 13% and stood at Rs 900 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 1,342 billion as against Rs 1,169 billion during FY20, thereby witnessing a growth of 15%.

HPCL Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 309,806 380,809 22.9
 
Current Liabilities Rs m 570,481 623,803 9.3
Long-term Debt Rs m 231,096 277,644 20.1
Total Liabilities Rs m 1,169,099 1,341,597 14.8
 
Current assets Rs m 376,198 441,671 17.4
Fixed Assets Rs m 792,901 899,926 13.5
Total Assets Rs m 1,169,099 1,341,597 14.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



HPCL Cash Flow Statement Analysis

  • HPCL's cash flow from operating activities (CFO) during FY21 stood at Rs 178 billion, an improvement of 226.0% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -123 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -47 billion on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs 8 billion from the Rs -2 billion net cash flows seen during FY20.

HPCL 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 54,692 178,293 226.0%
Cash Flow from Investing Activities Rs m -141,679 -122,786 -
Cash Flow from Financing Activities Rs m 84,520 -47,092 -
Net Cash Flow Rs m -2,467 8,415 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for HPCL

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 72.5, an improvement from the EPS of Rs 20.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 333.7, stands at 5.0 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 3.3 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 1,643.5 1,349.3
TTM Earnings per share Rs 20.3 72.5
Diluted earnings per share Rs 21.8 74.2
Price to Cash Flow x 7.9 3.3
TTM P/E ratio x 5.4 5.0
Price / Book Value ratio x 1.2 0.8
Market Cap Rs m 508,423 473,299
Dividends per share (Unadj.) Rs 9.8 22.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for HPCL

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.7x during FY21, from 0.7x 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 15.6x during FY21, from 2.6x 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 improved and stood at 27.6% during FY21, from 10.0% 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 improved and stood at 22.8% during FY21, from 5.5% 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 improved and stood at 8.6% during FY21, from 3.6% 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 0.7 0.7
Debtors’ Days Days 1 1
Interest coverage x 2.6 15.6
Debt to equity ratio x 0.7 0.7
Return on assets % 3.6 8.6
Return on equity % 10.0 27.6
Return on capital employed % 5.5 22.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, 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 up from Rs 173.6 to Rs 333.7, registering a gain of Rs 160.1 or around 92.3%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 18,720.8 (down 0.7%). Over the last one year it has moved up from 12,043.0 to 18,720.8, a gain of 6,678 points (up 55.4%).

Overall, the S&P BSE SENSEX is up 52.3% over the year.

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

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