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ONGC 2017-18 Annual Report Analysis
Sat, 31 Mar

ONGC 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.

ONGC Income Statement Analysis

  • Operating income during the year rose 18.3% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 15.1% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 13.8% in FY18 as against 14.2% in FY17.
  • Depreciation charges increased by 14.3% and finance costs increased by 56.5% YoY, respectively.
  • Other income grew by 0.3% YoY.
  • Net profit for the year declined by 1.1% YoY.
  • Net profit margins during the year declined from 11.0% in FY17 to 9.2% in FY18.

ONGC Income Statement 2017-18

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Net Sales Rs m 2,393,460 2,831,651 18.3%
Other income Rs m 288,011 288,904 0.3%
Total Revenues Rs m 2,681,471 3,120,555 16.4%
Gross profit Rs m 339,168 390,499 15.1%
Depreciation Rs m 202,192 231,119 14.3%
Interest Rs m 35,911 56,209 56.5%
Profit before tax Rs m 389,076 392,075 0.8%
Tax Rs m 125,484 131,395 4.7%
Profit after tax Rs m 263,591 260,680 -1.1%
Gross profit margin % 14.2 13.8
Effective tax rate % 32.3 33.5
Net profit margin % 11.0 9.2
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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ONGC Balance Sheet Analysis

  • The company's current liabilities during FY18 down at Rs 1,268 billion as compared to Rs 1,327 billion in FY17, thereby witnessing an decrease of -4.5%.
  • Long-term debt stood at Rs 550 billion as compared to Rs 528 billion during FY17, a growth of 4.3%.
  • Current assets fell 6% and stood at Rs 823 billion, while fixed assets rose 5% and stood at Rs 4,226 billion in FY18.
  • Overall, the total assets and liabilities for FY18 stood at Rs 5,049 billion as against Rs 4,896 billion during FY17, thereby witnessing a growth of 3%.

ONGC Balance Sheet as on March 2018

No. of Mths Year Ending 12 Mar-17* 12 Mar-18* % Change
Networth Rs m 1,943,852 2,040,189 5.0
 
Current Liabilities Rs m 1,327,421 1,268,205 -4.5
Long-term Debt Rs m 527,723 550,249 4.3
Total Liabilities Rs m 4,896,024 5,048,812 3.1
 
Current assets Rs m 879,352 822,838 -6.4
Fixed Assets Rs m 4,016,671 4,225,974 5.2
Total Assets Rs m 4,896,024 5,048,812 3.1
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



ONGC Cash Flow Statement Analysis

  • ONGC's cash flow from operating activities (CFO) during FY18 stood at Rs 568 billion, an improvement of 24.1% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY18 stood at Rs -671 billion, an improvement of 49.0% on a YoY basis.
  • Cash flow from financial activities (CFF) during FY18 stood at Rs 99 billion, an improvement of 631% on a YoY basis.
  • Overall, net cash flows for the company during FY18 stood at Rs -967 million from the Rs 989 million net cash flows seen during FY17.

ONGC 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 457,805 567,921 24.1%
Cash Flow from Investing Activities Rs m -450,560 -671,112 -
Cash Flow from Financing Activities Rs m -18,670 99,094 -
Net Cash Flow Rs m 989 -967 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Current Valuations for ONGC

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 20.3, an decline from the EPS of Rs 20.5 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 177.8, stands at 11.2 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 1.1 times, while the price to sales ratio stands at 0.8 times.
  • The company's price to cash flow (P/CF) ratio stood at 4.8 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 186.5 220.6
TTM Earnings per share Rs 20.5 20.3
Diluted earnings per share Rs 21.0 20.7
Price to Cash Flow x 5.0 4.8
TTM P/E ratio x 13.0 11.2
Price / Book Value ratio x 1.1 1.2
Market Cap Rs m 2,220,150 2,362,599
Dividends per share (Unadj.) Rs 9.1 6.6
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



Ratio Analysis for ONGC

  • Solvency Ratios
  • Current Ratio: The company's current ratio deteriorated and stood at 0.6x during FY18, from 0.7x 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 8.0x during FY18, from 11.8x 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 12.8% during FY18, from 13.6% 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 17.3% during FY18, from 17.2% 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 improved and stood at 6.3% during FY18, from 6.1% 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 0.7 0.6
Debtors’ Days Days 19 18
Interest coverage x 11.8 8.0
Debt to equity ratio x 0.3 0.3
Return on assets % 6.1 6.3
Return on equity % 13.6 12.8
Return on capital employed % 17.2 17.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Accord Fintech, Equitymaster



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

ONGC Share Price Performance

Over the last one year, ONGC share price has moved down from Rs 185.1 to Rs 177.8, registering a loss of Rs 7.3 or around 3.9%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 14,614.4 (up 0.1%). Over the last one year it has moved up from 13,563.6 to 14,614.4, a gain of 1,051 points (up 7.7%).

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

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

Annual Report FAQs

What is the current share price of ONGC?

ONGC currently trades at Rs 268.0 per share. You can check out the latest share price performance of ONGC here...

What was the revenue of ONGC in FY18? How does it compare to earlier years?

The revenues of ONGC stood at Rs 3,120,555 m in FY18, which was up 16.4% compared to Rs 2,681,471 m reported in FY17.

ONGC's revenue has grown from Rs 2,058,233 m in FY14 to Rs 3,120,555 m in FY18.

Over the past 5 years, the revenue of ONGC has grown at a CAGR of 11.0%.

What was the net profit of ONGC in FY18? How does it compare to earlier years?

The net profit of ONGC stood at Rs 260,680 m in FY18, which was down -1.1% compared to Rs 263,591 m reported in FY17.

This compares to a net profit of Rs 131,016 m in FY16 and a net profit of Rs 176,730 m in FY15.

Over the past 5 years, ONGC net profit has grown at a CAGR of -0.6%.

What does the cash flow statement of ONGC 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 ONGC reveals:

  • Cash flow from operations increased in FY18 and stood at Rs 567,921 m as compared to Rs 457,805 m in FY17.
  • Cash flow from investments decreased in FY18 and stood at Rs -671,112 m as compared to Rs -450,560 m in FY17.
  • Cash flow from financial activity increased in FY18 and stood at Rs 99,094 m as compared to Rs -18,670 m in FY17.

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

(Rs m)FY14FY15FY16FY17FY18
From Operations532,704339,504462,925457,805567,921
From Investments-636,326-303,197-382,827-450,560-671,112
From Financial Activity152,246-106,408-89,720-18,67099,094
Net Cashflow48,624-67,487-9,354989-967

What does the Key Ratio analysis of ONGC 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 ONGC reveals:

  • Operating profit margins witnessed a fall and stood at 13.8% in FY18 as against 14.2% in FY17.
  • Net profit margins declined from 11.0% in FY17 to 9.2% in FY18.
  • Debt to Equity ratio for FY18 stood at 0.3 as compared to 0.3 in FY17.

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

 FY14FY15FY16FY17FY18
Operating Profit Margin (%)12.613.112.114.213.8
Net Profit Margin (%)15.611.311.611.09.2
Debt to Equity Ratio (x)0.20.30.20.30.3

Read: Latest Annual Report Analysis of ONGC

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