ONGC 2018-19 Annual Report Analysis

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ONGC 2018-19 Annual Report Analysis
Wed, 7 Aug

ONGC has announced its results for the year ended March 2019. Let us have a look at the detailed performance review of the company during FY18-19.

ONGC Income Statement Analysis

  • Operating income during the year rose 25.2% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 31.2% YoY during the fiscal. Operating profit margins witnessed a fall and down at 16.5% in FY19 as against 15.7% in FY18.
  • Depreciation charges increased by 4.0% and finance costs increased by 16.8% YoY, respectively.
  • Other income grew by 9.1% YoY.
  • Net profit for the year grew by 30.0% YoY.
  • Net profit margins during the year grew from 7.1% in FY18 to 7.3% in FY19.

ONGC Income Statement 2018-19

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Net Sales Rs m 3,622,462 4,534,606 25.2%
Other income Rs m 74,682 81,488 9.1%
Total Revenues Rs m 3,697,143 4,616,093 24.9%
Gross profit Rs m 568,890 746,441 31.2%
Depreciation Rs m 231,119 240,262 4.0%
Interest Rs m 49,990 58,367 16.8%
Profit before tax Rs m 362,463 529,299 46.0%
Tax Rs m 131,395 208,802 58.9%
Profit after tax Rs m 260,680 338,869 30.0%
Gross profit margin % 15.7 16.5
Effective tax rate % 36.3 39.4
Net profit margin % 7.1 7.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



ONGC Balance Sheet Analysis

  • The company's current liabilities during FY19 stood at Rs 1,290 billion as compared to Rs 1,170 billion in FY18, thereby witnessing an increase of 10.3%.
  • Long-term debt down at Rs 531 billion as compared to Rs 550 billion during FY18, a fall of 3.4%.
  • Current assets rose 24% and stood at Rs 901 billion, while fixed assets rose 4% and stood at Rs 2,357 billion in FY19.
  • Overall, the total assets and liabilities for FY19 stood at Rs 4,957 billion as against Rs 4,602 billion during FY18, thereby witnessing a growth of 8%.

ONGC Balance Sheet as on March 2019

No. of Mths Year Ending 12 Mar-18* 12 Mar-19* % Change
Networth Rs m 2,040,189 2,181,408 6.9
 
Current Liabilities Rs m 1,169,657 1,290,316 10.3
Long-term Debt Rs m 550,249 531,441 -3.4
Total Liabilities Rs m 4,602,349 4,957,021 7.7
 
Current assets Rs m 724,290 900,758 24.4
Fixed Assets Rs m 2,257,629 2,357,156 4.4
Total Assets Rs m 4,602,349 4,957,021 7.7
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



ONGC Cash Flow Statement Analysis

  • ONGC's cash flow from operating activities (CFO) during FY19 stood at Rs 612 billion, an improvement of 7.8% on a YoY basis.
  • Cash flow from investing activities (CFI) during FY19 stood at Rs -342 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY19 stood at Rs -260 billion on a YoY basis.
  • Overall, net cash flows for the company during FY19 stood at Rs 13 billion from the Rs -967 million net cash flows seen during FY18.

ONGC Cash Flow Statement 2018-19

Particulars No. of months 12 12 % Change
Year Ending Mar-18 Mar-19
Cash Flow from Operating Activities Rs m 567,921 612,485 7.8%
Cash Flow from Investing Activities Rs m -671,112 -341,674 -
Cash Flow from Financing Activities Rs m 99,094 -259,959 -
Net Cash Flow Rs m -967 12,852 -
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Current Valuations for ONGC

  • The trailing twelve-month earnings per share (EPS) of the company stands at Rs 26.9, an improvement from the EPS of Rs 20.3 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 129.2, stands at 6.2 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 0.4 times.
  • The company's price to cash flow (P/CF) ratio stood at 3.0 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Sales per share (Unadj.) Rs 282.3 360.5
TTM Earnings per share Rs 20.3 26.9
Diluted earnings per share Rs 20.3 26.4
Price to Cash Flow x 3.6 3.0
TTM P/E ratio x 6.2 6.2
Price / Book Value ratio x 1.2 0.9
Market Cap Rs m 1,657,413 1,657,413
Dividends per share (Unadj.) Rs 6.6 7.0
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, Equitymaster



Ratio Analysis for ONGC

  • Solvency Ratios
  • Current Ratio: The company's current ratio improved and stood at 0.7x during FY19, from 0.6x during FY18. 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 10.1x during FY19, from 8.3x during FY18. 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 15.5% during FY19, from 12.8% during FY19. 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 22.3% during FY19, from 17.1% during FY18. 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 8.0% during FY19, from 6.8% during FY18. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-18* 12 Mar-19*
Current ratio x 0.6 0.7
Debtors’ Days Days 14 12
Interest coverage x 8.3 10.1
Debt to equity ratio x 0.3 0.2
Return on assets % 6.8 8.0
Return on equity % 12.8 15.5
Return on capital employed % 17.1 22.3
* Results Consolidated
Interim results exclude extraordinary / exceptional items
Source: Company Reports, Regulatory Filings, 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 167.1 to Rs 129.2, registering a loss of Rs 38.0 or around 22.7%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 12,704.6 (down 0.8%). Over the last one year it has moved down from 15,058.2 to 12,704.6, a loss of 2,354 points (down 15.6%).

Overall, the S&P BSE SENSEX is down 1.9% over the year.

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

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