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ONGC 2020-21 Annual Report Analysis
Wed, 31 Mar

ONGC has announced its results for the year ended March 2021. Let us have a look at the detailed performance review of the company during FY20-21.

ONGC Income Statement Analysis

  • Operating income during the year fell 32.9% on a year-on-year (YoY) basis.
  • The company's operating profit increased by 33.4% YoY during the fiscal. Operating profit margins witnessed a fall and down at 15.5% in FY21 as against 7.8% in FY20.
  • Depreciation charges decreased by 4.1% and finance costs decreased by 32.2% YoY, respectively.
  • Other income declined by 9.2% YoY.
  • Net profit for the year grew by 93.1% YoY.
  • Net profit margins during the year grew from 2.9% in FY20 to 8.2% in FY21.

ONGC Income Statement 2020-21

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Net Sales Rs m 3,685,641 2,474,297 -32.9%
Other income Rs m 240,345 218,193 -9.2%
Total Revenues Rs m 3,925,986 2,692,490 -31.4%
Gross profit Rs m 286,876 382,753 33.4%
Depreciation Rs m 266,349 255,385 -4.1%
Interest Rs m 80,579 54,659 -32.2%
Profit before tax Rs m 180,293 290,903 61.4%
Tax Rs m 75,062 87,662 16.8%
Profit after tax Rs m 105,231 203,241 93.1%
Gross profit margin % 7.8 15.5
Effective tax rate % 41.6 30.1
Net profit margin % 2.9 8.2
* 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 FY21 down at Rs 1,233 billion as compared to Rs 1,251 billion in FY20, thereby witnessing an decrease of -1.4%.
  • Long-term debt stood at Rs 792 billion as compared to Rs 729 billion during FY20, a growth of 8.5%.
  • Current assets rose 15% and stood at Rs 932 billion, while fixed assets rose 5% and stood at Rs 4,474 billion in FY21.
  • Overall, the total assets and liabilities for FY21 stood at Rs 5,406 billion as against Rs 5,074 billion during FY20, thereby witnessing a growth of 7%.

ONGC Balance Sheet as on March 2021

No. of Mths Year Ending 12 Mar-20* 12 Mar-21* % Change
Networth Rs m 2,051,046 2,209,810 7.7
 
Current Liabilities Rs m 1,250,726 1,232,647 -1.4
Long-term Debt Rs m 729,316 791,621 8.5
Total Liabilities Rs m 5,073,501 5,405,710 6.5
 
Current assets Rs m 807,095 931,842 15.5
Fixed Assets Rs m 4,266,407 4,473,868 4.9
Total Assets Rs m 5,073,501 5,405,710 6.5
* 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 FY21 stood at Rs 472 billion on a YoY basis.
  • Cash flow from investing activities (CFI) during FY21 stood at Rs -391 billion on a YoY basis.
  • Cash flow from financial activities (CFF) during FY21 stood at Rs -83 billion, an improvement of 51% on a YoY basis.
  • Overall, net cash flows for the company during FY21 stood at Rs -2 billion from the Rs 7 billion net cash flows seen during FY20.

ONGC Cash Flow Statement 2020-21

Particulars No. of months 12 12 % Change
Year Ending Mar-20 Mar-21
Cash Flow from Operating Activities Rs m 705,930 472,014 -33.1%
Cash Flow from Investing Activities Rs m -534,983 -390,898 -
Cash Flow from Financing Activities Rs m -167,264 -82,578 -
Net Cash Flow Rs m 7,076 -1,954 -
* 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 16.2, an improvement from the EPS of Rs 8.4 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 102.2, stands at 6.3 times its trailing twelve months earnings.
  • The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.5 times.
  • The company's price to cash flow (P/CF) ratio stood at 2.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Sales per share (Unadj.) Rs 293.0 196.7
TTM Earnings per share Rs 8.4 16.2
Diluted earnings per share Rs 8.4 16.2
Price to Cash Flow x 2.3 2.5
TTM P/E ratio x 8.4 6.3
Price / Book Value ratio x 0.7 0.5
Market Cap Rs m 1,451,764 1,152,354
Dividends per share (Unadj.) Rs 5.0 3.6
* 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 improved and stood at 0.8x during FY21, from 0.6x during FY20. 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 6.3x during FY21, from 3.2x during FY20. 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 9.2% during FY21, from 5.1% during FY21. 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 11.5% during FY21, from 9.4% during FY20. 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 4.8% during FY21, from 3.7% during FY20. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending 12 Mar-20* 12 Mar-21*
Current ratio x 0.6 0.8
Debtors’ Days Days 9 24
Interest coverage x 3.2 6.3
Debt to equity ratio x 0.4 0.4
Return on assets % 3.7 4.8
Return on equity % 5.1 9.2
Return on capital employed % 9.4 11.5
* 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 up from Rs 68.3 to Rs 102.2, registering a gain of Rs 33.9 or around 49.6%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 14,820.5 (down 0.1%). Over the last one year it has moved up from 10,020.9 to 14,820.5, a gain of 4,800 points (up 47.9%).

Overall, the S&P BSE SENSEX is up 74.1% 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 FY21? How does it compare to earlier years?

The revenues of ONGC stood at Rs 2,692,490 m in FY21, which was down -31.4% compared to Rs 3,925,986 m reported in FY20.

ONGC's revenue has grown from Rs 2,681,471 m in FY17 to Rs 2,692,490 m in FY21.

Over the past 5 years, the revenue of ONGC has grown at a CAGR of 0.1%.

What was the net profit of ONGC in FY21? How does it compare to earlier years?

The net profit of ONGC stood at Rs 203,241 m in FY21, which was up 93.1% compared to Rs 105,231 m reported in FY20.

This compares to a net profit of Rs 305,098 m in FY19 and a net profit of Rs 260,680 m in FY18.

Over the past 5 years, ONGC net profit has grown at a CAGR of -6.3%.

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 decreased in FY21 and stood at Rs 472,014 m as compared to Rs 705,930 m in FY20.
  • Cash flow from investments increased in FY21 and stood at Rs -390,898 m as compared to Rs -534,983 m in FY20.
  • Cash flow from financial activity increased in FY21 and stood at Rs -82,578 m as compared to Rs -167,264 m in FY20.

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

(Rs m)FY17FY18FY19FY20FY21
From Operations457,805567,921614,576705,930472,014
From Investments-450,560-671,112-373,317-534,983-390,898
From Financial Activity-18,67099,094-233,245-167,264-82,578
Net Cashflow989-96710,0157,076-1,954

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 down at 15.5% in FY21 as against 7.8% in FY20.
  • Net profit margins grew from 2.9% in FY20 to 8.2% in FY21.
  • Debt to Equity ratio for FY21 stood at 0.4 as compared to 0.4 in FY20.

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

 FY17FY18FY19FY20FY21
Operating Profit Margin (%)14.213.814.17.815.5
Net Profit Margin (%)11.09.27.82.98.2
Debt to Equity Ratio (x)0.30.30.20.40.4

Read: Latest Annual Report Analysis of ONGC

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