IOC 2022-23 Annual Report Analysis

Thu, 10 Aug

IOC 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.

IOC Income Statement Analysis

• Operating income during the year rose 65.7% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 34.7% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 4.4% in FY23 as against 11.1% in FY22.
• Depreciation charges increased by 6.8% and finance costs increased by 39.1% YoY, respectively.
• Other income grew by 23.5% YoY.
• Net profit for the year declined by 54.5% YoY.
• Net profit margins during the year declined from 5.8% in FY22 to 1.6% in FY23.

IOC Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	4,419,261	7,321,019	65.7%
Other income	Rs m	30,968	38,234	23.5%
Total Revenues	Rs m	4,450,229	7,359,253	65.4%
Gross profit	Rs m	489,935	319,832	-34.7%
Depreciation	Rs m	123,476	131,811	6.8%
Interest	Rs m	54,541	75,879	39.1%
Profit before tax	Rs m	342,886	150,377	-56.1%
Tax	Rs m	85,620	33,334	-61.1%
Profit after tax	Rs m	257,266	117,043	-54.5%
Gross profit margin	%	11.1	4.4
Effective tax rate	%	25.0	22.2
Net profit margin	%	5.8	1.6

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IOC Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 2,067 billion as compared to Rs 1,990 billion in FY22, thereby witnessing an increase of 3.8%.
• Long-term debt stood at Rs 633 billion as compared to Rs 559 billion during FY22, a growth of 13.2%.
• Current assets rose 4% and stood at Rs 1,579 billion, while fixed assets rose 10% and stood at Rs 2,965 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 4,554 billion as against Rs 4,224 billion during FY22, thereby witnessing a growth of 8%.

IOC Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	1,335,352	1,397,202	4.6
Current Liabilities	Rs m	1,990,051	2,066,584	3.8
Long-term Debt	Rs m	559,445	633,129	13.2
Total Liabilities	Rs m	4,224,150	4,553,579	7.8
Current assets	Rs m	1,522,381	1,578,932	3.7
Fixed Assets	Rs m	2,693,888	2,964,813	10.1
Total Assets	Rs m	4,224,150	4,553,579	7.8

IOC Cash Flow Statement Analysis

• IOC's cash flow from operating activities (CFO) during FY23 stood at Rs 296 billion, an improvement of 15.1% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -280 billion, an improvement of 31.6% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -18 billion, an improvement of 56% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -2 billion from the Rs 4 billion net cash flows seen during FY22.

IOC 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	257,467	296,437	15.1%
Cash Flow from Investing Activities	Rs m	-212,936	-280,296	-
Cash Flow from Financing Activities	Rs m	-40,577	-17,944	-
Net Cash Flow	Rs m	3,954	-1,802	-

Current Valuations for IOC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 8.3, an decline from the EPS of Rs 27.3 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 93.9, stands at 5.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.9 times, while the price to sales ratio stands at 0.2 times.
• The company's price to cash flow (P/CF) ratio stood at 4.4 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	469.4	518.4
TTM Earnings per share	Rs	27.3	8.3
Diluted earnings per share	Rs	18.2	8.3
Price to Cash Flow	x	2.9	4.4
TTM P/E ratio	x	4.6	5.4
Price / Book Value ratio	x	0.5	0.8
Market Cap	Rs m	717,366	1,100,515
Dividends per share (Unadj.)	Rs	12.6	3.0

Ratio Analysis for IOC

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.8x during FY23, from 0.8x 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 3.0x during FY23, from 7.3x 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 8.4% during FY23, from 19.3% 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 11.1% during FY23, from 21.0% 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 4.2% during FY23, from 7.4% 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	0.8	0.8
Debtors’ Days	Days	2	1
Interest coverage	x	7.3	3.0
Debt to equity ratio	x	0.4	0.5
Return on assets	%	7.4	4.2
Return on equity	%	19.3	8.4
Return on capital employed	%	21.0	11.1

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 72.6 to Rs 93.9, registering a gain of Rs 21.3 or around 29.4%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 19,149.7 (up 1.2%). Over the last one year it has moved down from 19,296.5 to 19,149.7, a loss of 147 points (down 0.8%).

Overall, the S&P BSE SENSEX is up 12.1% over the year.

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