IOC 2021-22 Annual Report Analysis

Thu, 4 Aug

IOC 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.

IOC Income Statement Analysis

• Operating income during the year rose 99.6% on a year-on-year (YoY) basis.
• The company's operating profit increased by 16.5% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 10.7% in FY22 as against 18.3% in FY21.
• Depreciation charges increased by 12.9% and finance costs increased by 23.3% YoY, respectively.
• Other income declined by 18.0% YoY.
• Net profit for the year grew by 19.1% YoY.
• Net profit margins during the year declined from 9.3% in FY21 to 5.5% in FY22.

IOC Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	2,213,757	4,419,406	99.6%
Other income	Rs m	43,030	35,272	-18.0%
Total Revenues	Rs m	2,256,787	4,454,678	97.4%
Gross profit	Rs m	406,176	473,275	16.5%
Depreciation	Rs m	109,415	123,476	12.9%
Interest	Rs m	44,252	54,541	23.3%
Profit before tax	Rs m	295,540	330,531	11.8%
Tax	Rs m	89,885	85,620	-4.7%
Profit after tax	Rs m	205,655	244,910	19.1%
Gross profit margin	%	18.3	10.7
Effective tax rate	%	30.4	25.9
Net profit margin	%	9.3	5.5

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IOC Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 1,983 billion as compared to Rs 1,669 billion in FY21, thereby witnessing an increase of 18.8%.
• Long-term debt stood at Rs 559 billion as compared to Rs 547 billion during FY21, a growth of 2.3%.
• Current assets rose 27% and stood at Rs 1,530 billion, while fixed assets rose 5% and stood at Rs 2,694 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 4,224 billion as against Rs 3,785 billion during FY21, thereby witnessing a growth of 12%.

IOC Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	1,118,381	1,335,352	19.4
Current Liabilities	Rs m	1,668,782	1,983,202	18.8
Long-term Debt	Rs m	546,850	559,445	2.3
Total Liabilities	Rs m	3,784,802	4,224,150	11.6
Current assets	Rs m	1,209,110	1,530,262	26.6
Fixed Assets	Rs m	2,575,692	2,693,888	4.6
Total Assets	Rs m	3,784,802	4,224,150	11.6

IOC Cash Flow Statement Analysis

• IOC's cash flow from operating activities (CFO) during FY22 stood at Rs 246 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -212 billion on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -30 billion, an improvement of 89% on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 4 billion from the Rs -7 billion net cash flows seen during FY21.

IOC 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	496,502	245,703	-50.5%
Cash Flow from Investing Activities	Rs m	-229,347	-211,776	-
Cash Flow from Financing Activities	Rs m	-273,690	-29,973	-
Net Cash Flow	Rs m	-6,534	3,954	-

Current Valuations for IOC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 26.0, an improvement from the EPS of Rs 21.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 71.3, stands at 5.2 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 0.2 times.
• The company's price to cash flow (P/CF) ratio stood at 1.9 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	235.2	469.4
TTM Earnings per share	Rs	21.8	26.0
Diluted earnings per share	Rs	14.6	17.3
Price to Cash Flow	x	2.7	1.9
TTM P/E ratio	x	4.2	5.2
Price / Book Value ratio	x	0.7	0.5
Market Cap	Rs m	829,152	717,366
Dividends per share (Unadj.)	Rs	12.0	12.6

Ratio Analysis for IOC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during FY22, from 0.7x 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 deteriorated and stood at 7.1x during FY22, from 7.7x 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 declined and down at 18.3% during FY22, from 18.4% 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 declined and down at 20.3% during FY22, from 20.4% 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 7.1% during FY22, from 6.6% 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	0.7	0.8
Debtors’ Days	Days	2	2
Interest coverage	x	7.7	7.1
Debt to equity ratio	x	0.5	0.4
Return on assets	%	6.6	7.1
Return on equity	%	18.4	18.3
Return on capital employed	%	20.4	20.3

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 70.3 to Rs 71.3, registering a gain of Rs 1.1 or around 1.5%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 19,429.1 (up 0.5%). Over the last one year it has moved up from 15,777.0 to 19,429.1, a gain of 3,652 points (up 23.1%).

Overall, the S&P BSE SENSEX is up 10.1% 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