CHENNAI PETROLEUM 2017-18 Annual Report Analysis

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CHENNAI PETROLEUM 2017-18 Annual Report Analysis
Thu, 3 Jan

CHENNAI PETROLEUM has announced its results for the year ended March 2018. Let us have a look at the detailed performance review of the company during FY17-18.

CHENNAI PETROLEUM Income Statement Analysis

  • Operating income during the year rose 17.5% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 7.2% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 6.4% in FY18 as against 7.0% in FY17.
  • Depreciation charges increased by 1.2% and finance costs increased by 17.6% YoY, respectively.
  • Other income declined by 3.8% YoY.
  • Net profit for the year declined by 12.1% YoY.
  • Net profit margins during the year declined from 3.7% in FY17 to 2.8% in FY18.

CHENNAI PETROLEUM Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 276,914 325,280 17.5%
Other income Rs m 341 328 -3.8%
Total Revenues Rs m 277,255 325,608 17.4%
Gross profit Rs m 19,375 20,774 7.2%
Depreciation Rs m 3,404 3,445 1.2%
Interest Rs m 2,728 3,209 17.6%
Profit before tax Rs m 13,585 14,449 6.4%
Tax Rs m 3,353 5,453 62.6%
Profit after tax Rs m 10,232 8,996 -12.1%
Gross profit margin % 7.0 6.4
Effective tax rate % 24.7 37.7
Net profit margin % 3.7 2.8
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



CHENNAI PETROLEUM Balance Sheet Analysis

  • The company's current liabilities during FY18 stood at Rs 90 billion as compared to Rs 57 billion in FY17, thereby witnessing an increase of 59.7%.
  • Long-term debt down at Rs 8 billion as compared to Rs 23 billion during FY17, a fall of 64.5%.
  • Current assets rose 44% and stood at Rs 67 billion, while fixed assets rose 10% and stood at Rs 73 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 143 billion as against Rs 116 billion during FY17, thereby witnessing a growth of 23%.

CHENNAI PETROLEUM Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 34,029 39,970 17.5
 
Current Liabilities Rs m 56,597 90,382 59.7
Long-term Debt Rs m 23,243 8,259 -64.5
Total Liabilities Rs m 116,229 143,060 23.1
 
Current assets Rs m 46,588 66,879 43.6
Fixed Assets Rs m 66,454 73,233 10.2
Total Assets Rs m 116,229 143,060 23.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



CHENNAI PETROLEUM Cash Flow Statement Analysis

  • CHENNAI PETROLEUM's cash flow from operating activities (CFO) during FY18 stood at Rs 28 billion, an improvement of 352.9% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -10 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs -18 billion on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -2 million from the Rs 2 million net cash flows seen during FY17.

CHENNAI PETROLEUM Cash Flow Statement 2017-18

Particulars No. of months 12 12 % Change
Year Ending Mar-17 Mar-18
Cash Flow from Operating Activities Rs m 6,087 27,567 352.9%
Cash Flow from Investing Activities Rs m -11,693 -9,692 -
Cash Flow from Financing Activities Rs m 5,607 -17,877 -
Net Cash Flow Rs m 2 -2 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for CHENNAI PETROLEUM

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 60.4, an decline from the EPS of Rs 68.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 280.2, stands at 5.6 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.5 times, while the price to sales ratio stands at 0.2 times.
  • The company's price to cash flow (P/CF) ratio stood at 3.4 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Sales per share (Unadj.) Rs 1,859.6 2,184.4
TTM Earnings per share Rs 68.7 60.4
Diluted earnings per share Rs 68.7 60.4
Price to Cash Flow x 3.1 3.4
TTM P/E ratio x 5.6 5.6
Price / Book Value ratio x 1.3 1.5
Market Cap Rs m 41,717 41,717
Dividends per share (Unadj.) Rs 21.0 18.5
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for CHENNAI PETROLEUM

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.7x during FY18, from 0.8x during FY17. 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 5.5x during FY18, from 6.0x during FY17. 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 22.5% during FY18, from 30.1% during FY18. 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 36.6% during FY18, from 28.5% during FY17. 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 8.5% during FY18, from 11.2% during FY17. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-17* 12 Mar-18*
Current ratio x 0.8 0.7
Debtors’ Days Days 14 18
Interest coverage x 6.0 5.5
Debt to equity ratio x 0.7 0.2
Return on assets % 11.2 8.5
Return on equity % 30.1 22.5
Return on capital employed % 28.5 36.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



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

CHENNAI PETROLEUM Share Price Performance

Over the last one year, CHENNAI PETROLEUM share price has moved up from Rs 426.8 to Rs 280.2, registering a loss of Rs 146.6 or around 34.4%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 13,457.1 (down 1.3%). Over the last one year it has moved down from 16,095.2 to 13,457.1, a loss of 2,638 points (down 16.4%).

Overall, the S&P BSE SENSEX is up 5.8% over the year.

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

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