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HPCL 2022-23 Annual Report Analysis
Sun, 6 Aug

HPCL has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the company during FY22-23.

HPCL Income Statement Analysis

  • Operating income during the year rose 27.4% on a year-on-year (YoY) basis.
  • The company's operating profit was by NA YoY during the fiscal. Operating profit margins witnessed a growth and stood at 1.1% in FY23 as against 3.6% in FY22.
  • Depreciation charges increased by 14.0% and finance costs increased by 118.0% YoY, respectively.
  • Other income declined by 39.9% YoY.
  • Net profit for the year declined by NA YoY.
  • Net profit margins during the year declined from 2.2% in FY22 to 1.7% in FY23.

HPCL Income Statement 2022-23

No. of Mths Year Ending 12 Mar-22* 12 Mar-23* % Change
Net Sales Rs m 3,256,994 4,149,199 27.4%
Other income Rs m 24,389 14,659 -39.9%
Total Revenues Rs m 3,281,383 4,163,858 26.9%
Gross profit Rs m 117,024 -47,156 NA
Depreciation Rs m 40,004 45,602 14.0%
Interest Rs m 9,973 21,741 118.0%
Profit before tax Rs m 91,436 -99,839 NA
Tax Rs m 18,494 -30,037 NA
Profit after tax Rs m 72,942 -69,802 NA
Gross profit margin % 3.6 -1.1
Effective tax rate % 20.2 30.1
Net profit margin % 2.2 -1.7
* 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 FY23 stood at Rs 739 billion as compared to Rs 714 billion in FY22, thereby witnessing an increase of 3.4%.
  • Long-term debt stood at Rs 482 billion as compared to Rs 321 billion during FY22, a growth of 50.0%.
  • Current assets fell 11% and stood at Rs 439 billion, while fixed assets rose 12% and stood at Rs 1,174 billion in FY23.
  • Overall, the total assets and liabilities for FY23 stood at Rs 1,613 billion as against Rs 1,546 billion during FY22, thereby witnessing a growth of 4%.

HPCL Balance Sheet as on March 2023

No. of Mths Year Ending 12 Mar-22* 12 Mar-23* % Change
Networth Rs m 414,042 322,633 -22.1
 
Current Liabilities Rs m 714,402 738,659 3.4
Long-term Debt Rs m 321,153 481,715 50.0
Total Liabilities Rs m 1,546,289 1,613,395 4.3
 
Current assets Rs m 496,301 439,255 -11.5
Fixed Assets Rs m 1,049,383 1,173,635 11.8
Total Assets Rs m 1,546,289 1,613,395 4.3
* 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 FY23 stood at Rs -35 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY23 stood at Rs -114 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY23 stood at Rs 160 billion, an improvement of 876% on a YoY basis.
  • Overall, net cash flows for the company during FY23 stood at Rs 12 billion from the Rs -9 million net cash flows seen during FY22.

HPCL Cash Flow Statement 2022-23

Particulars No. of months 12 12 % Change
Year Ending Mar-22 Mar-23
Cash Flow from Operating Activities Rs m 158,102 -34,663 -
Cash Flow from Investing Activities Rs m -137,448 -113,836 -
Cash Flow from Financing Activities Rs m -20,662 160,252 -
Net Cash Flow Rs m -9 11,753 -
* 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 -49.2, an decline from the EPS of Rs 51.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 266.9, stands at 5.5 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.2 times, while the price to sales ratio stands at 0.1 times.
  • The company's price to cash flow (P/CF) ratio stood at -14.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-22* 12 Mar-23*
Sales per share (Unadj.) Rs 2,296.0 2,925.0
TTM Earnings per share Rs 51.4 -49.2
Diluted earnings per share Rs 51.4 -49.2
Price to Cash Flow x 3.4 -14.8
TTM P/E ratio x 6.5 5.5
Price / Book Value ratio x 1.0 1.1
Market Cap Rs m 409,641 359,283
Dividends per share (Unadj.) Rs 14.0 0.0
* 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 deteriorated and stood at 0.6x during FY23, from 0.7x during FY22. 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 -3.6x during FY23, from 10.2x during FY22. 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 -21.6% during FY23, from 17.6% during FY23. 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 -9.7% during FY23, from 13.8% during FY22. 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 -3.0% during FY23, from 5.4% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-22* 12 Mar-23*
Current ratio x 0.7 0.6
Debtors’ Days Days 1 1
Interest coverage x 10.2 -3.6
Debt to equity ratio x 0.8 1.5
Return on assets % 5.4 -3.0
Return on equity % 17.6 -21.6
Return on capital employed % 13.8 -9.7
* 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 250.7 to Rs 266.9, registering a gain of Rs 16.2 or around 6.4%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 18,909.6 (down 0.1%). Over the last one year it has moved down from 19,336.6 to 18,909.6, a loss of 427 points (down 2.2%).

Overall, the S&P BSE SENSEX is up 12.6% over the year.

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

Annual Report FAQs

What is the current share price of HPCL?

HPCL currently trades at Rs 491.2 per share. You can check out the latest share price performance of HPCL here...

What was the revenue of HPCL in FY23? How does it compare to earlier years?

The revenues of HPCL stood at Rs 4,163,858 m in FY23, which was up 26.9% compared to Rs 3,281,383 m reported in FY22.

HPCL's revenue has grown from Rs 2,552,121 m in FY19 to Rs 4,163,858 m in FY23.

Over the past 5 years, the revenue of HPCL has grown at a CAGR of 13.0%.

What was the net profit of HPCL in FY23? How does it compare to earlier years?

The net loss of HPCL stood at Rs -69,802 m in FY23, which was NA compared to Rs 72,942 m reported in FY22.

This compares to a net profit of Rs 106,629 m in FY21 and a net profit of Rs 26,387 m in FY20.

Over the past 5 years, HPCL net profit has grown at a CAGR of NaN%.

What does the cash flow statement of HPCL reveal?

The cash flow statement is the financial statement that presents the cash inflows and outflows of a company during a given period of time.

This statement is one of the most useful tools for judging a company's liquidity position. The ratios and parameters in this statement helps test a company's financial health.

The cash flow statement of HPCL reveals:

  • Cash flow from operations decreased in FY23 and stood at Rs -34,663 m as compared to Rs 158,102 m in FY22.
  • Cash flow from investments increased in FY23 and stood at Rs -113,836 m as compared to Rs -137,448 m in FY22.
  • Cash flow from financial activity increased in FY23 and stood at Rs 160,252 m as compared to Rs -20,662 m in FY22.

Here's the cash flow statement of HPCL for the past 5 years.

(Rs m)FY19FY20FY21FY22FY23
From Operations85,54054,692178,293158,102-34,663
From Investments-113,817-141,679-122,786-137,448-113,836
From Financial Activity25,98284,520-47,092-20,662160,252
Net Cashflow-2,295-2,4678,415-911,753

What does the Key Ratio analysis of HPCL reveal?

Be it the company's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of HPCL reveals:

  • Operating profit margins witnessed a growth and stood at 1.1% in FY23 as against 3.6% in FY22.
  • Net profit margins declined from 2.2% in FY22 to 1.7% in FY23.
  • Debt to Equity ratio for FY23 stood at 1.5 as compared to 0.8 in FY22.

Here's the ratio/financial analysis of HPCL for the past 5 years.

 FY19FY20FY21FY22FY23
Operating Profit Margin (%)4.91.78.23.6-1.1
Net Profit Margin (%)2.61.15.42.2-1.7
Debt to Equity Ratio (x)0.40.70.70.81.5

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