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IOC 2020-21 Annual Report Analysis

Wed, 31 Mar

IOC 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.

IOC Income Statement Analysis

• Operating income during the year fell 44.5% on a year-on-year (YoY) basis.
• The company's operating profit increased by 627.1% YoY during the fiscal. Operating profit margins witnessed a fall and down at 18.3% in FY21 as against 1.4% in FY20.
• Depreciation charges increased by 6.5% and finance costs decreased by 33.3% YoY, respectively.
• Other income grew by 55.1% YoY.
• Net profit for the year declined by 734.3% YoY.
• Net profit margins during the year grew from 0.8% in FY20 to 9.3% in FY21.

IOC Income Statement 2020-21

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Net Sales	Rs m	3,991,319	2,213,757	-44.5%
Other income	Rs m	27,736	43,030	55.1%
Total Revenues	Rs m	4,019,055	2,256,787	-43.8%
Gross profit	Rs m	55,864	406,176	627.1%
Depreciation	Rs m	102,734	109,415	6.5%
Interest	Rs m	66,297	44,252	-33.3%
Profit before tax	Rs m	-85,431	295,540	-445.9%
Tax	Rs m	-53,007	89,885	-269.6%
Profit after tax	Rs m	-32,424	205,655	-734.3%
Gross profit margin	%	1.4	18.3
Effective tax rate	%	62.0	30.4
Net profit margin	%	-0.8	9.3

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IOC Balance Sheet Analysis

• The company's current liabilities during FY21 stood at Rs 1,669 billion as compared to Rs 1,615 billion in FY20, thereby witnessing an increase of 3.3%.
• Long-term debt stood at Rs 609 billion as compared to Rs 561 billion during FY20, a growth of 8.7%.
• Current assets rose 9% and stood at Rs 1,209 billion, while fixed assets rose 8% and stood at Rs 2,576 billion in FY21.
• Overall, the total assets and liabilities for FY21 stood at Rs 3,785 billion as against Rs 3,494 billion during FY20, thereby witnessing a growth of 8%.

IOC Balance Sheet as on March 2021

No. of Mths Year Ending		12 Mar-20*	12 Mar-21*	% Change
Networth	Rs m	953,979	1,118,381	17.2
Current Liabilities	Rs m	1,615,285	1,668,782	3.3
Long-term Debt	Rs m	560,706	609,349	8.7
Total Liabilities	Rs m	3,493,753	3,784,802	8.3
Current assets	Rs m	1,107,459	1,209,120	9.2
Fixed Assets	Rs m	2,386,294	2,575,682	7.9
Total Assets	Rs m	3,493,753	3,784,802	8.3

IOC Cash Flow Statement Analysis

• IOC's cash flow from operating activities (CFO) during FY21 stood at Rs 499 billion, an improvement of 597.7% on a YoY basis.
• Cash flow from investing activities (CFI) during FY21 stood at Rs -242 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY21 stood at Rs -263 billion on a YoY basis.
• Overall, net cash flows for the company during FY21 stood at Rs -7 billion from the Rs 5 billion net cash flows seen during FY20.

IOC 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	71,463	498,617	597.7%
Cash Flow from Investing Activities	Rs m	-291,008	-242,449	-
Cash Flow from Financing Activities	Rs m	224,560	-262,702	-
Net Cash Flow	Rs m	5,015	-6,534	-

Current Valuations for IOC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 21.8, an improvement from the EPS of Rs -3.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 91.8, stands at 4.2 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 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 2.6 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	424.0	235.2
TTM Earnings per share	Rs	-3.4	21.8
Diluted earnings per share	Rs	-3.4	21.8
Price to Cash Flow	x	10.9	2.6
TTM P/E ratio	x	-23.7	4.2
Price / Book Value ratio	x	1.2	0.7
Market Cap	Rs m	1,152,999	829,152
Dividends per share (Unadj.)	Rs	4.3	12.0

Ratio Analysis for IOC

• 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 7.7x during FY21, from -0.3x 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 18.4% during FY21, from -3.4% 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 improved and stood at 19.7% during FY21, from -1.3% 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 6.6% during FY21, from 1.0% 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	2
Interest coverage	x	-0.3	7.7
Debt to equity ratio	x	0.6	0.5
Return on assets	%	1.0	6.6
Return on equity	%	-3.4	18.4
Return on capital employed	%	-1.3	19.7

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

IOC Share Price Performance

Over the last one year, IOC share price has moved up from Rs 81.7 to Rs 91.8, registering a gain of Rs 10.2 or around 12.4%.

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 IOC and quarterly results for IOC)

Read: Latest Annual Report Analysis of IOC