ONGC 2022-23 Annual Report Analysis

Thu, 17 Aug

ONGC 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.

ONGC Income Statement Analysis

• Operating income during the year rose 28.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 24.6% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 8.4% in FY23 as against 14.4% in FY22.
• Depreciation charges decreased by 8.7% and finance costs increased by 37.8% YoY, respectively.
• Other income grew by 22.7% YoY.
• Net profit for the year declined by 33.5% YoY.
• Net profit margins during the year declined from 10.9% in FY22 to 5.7% in FY23.

ONGC Income Statement 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Net Sales	Rs m	4,508,085	5,798,227	28.6%
Other income	Rs m	230,252	282,589	22.7%
Total Revenues	Rs m	4,738,337	6,080,816	28.3%
Gross profit	Rs m	649,428	489,845	-24.6%
Depreciation	Rs m	268,832	245,571	-8.7%
Interest	Rs m	69,937	96,355	37.8%
Profit before tax	Rs m	540,911	430,508	-20.4%
Tax	Rs m	47,970	102,731	114.2%
Profit after tax	Rs m	492,941	327,776	-33.5%
Gross profit margin	%	14.4	8.4
Effective tax rate	%	8.9	23.9
Net profit margin	%	10.9	5.7

Download Now: 7 Unstoppable Growth Engines of India's $10 Trillion Bull Run...

ONGC Balance Sheet Analysis

• The company's current liabilities during FY23 stood at Rs 1,323 billion as compared to Rs 1,274 billion in FY22, thereby witnessing an increase of 3.9%.
• Long-term debt stood at Rs 984 billion as compared to Rs 880 billion during FY22, a growth of 11.7%.
• Current assets rose 8% and stood at Rs 1,142 billion, while fixed assets rose 5% and stood at Rs 4,980 billion in FY23.
• Overall, the total assets and liabilities for FY23 stood at Rs 6,121 billion as against Rs 5,821 billion during FY22, thereby witnessing a growth of 5%.

ONGC Balance Sheet as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	2,595,029	2,806,473	8.1
Current Liabilities	Rs m	1,273,652	1,322,702	3.9
Long-term Debt	Rs m	880,427	983,595	11.7
Total Liabilities	Rs m	5,820,624	6,121,141	5.2
Current assets	Rs m	1,059,897	1,141,505	7.7
Fixed Assets	Rs m	4,760,727	4,979,636	4.6
Total Assets	Rs m	5,820,624	6,121,141	5.2

ONGC Cash Flow Statement Analysis

• ONGC's cash flow from operating activities (CFO) during FY23 stood at Rs 842 billion, an improvement of 7.6% on a YoY basis.
• Cash flow from investing activities (CFI) during FY23 stood at Rs -732 billion, an improvement of 77.1% on a YoY basis.
• Cash flow from financial activities (CFF) during FY23 stood at Rs -129 billion, an improvement of 64% on a YoY basis.
• Overall, net cash flows for the company during FY23 stood at Rs -15 billion from the Rs 13 billion net cash flows seen during FY22.

ONGC 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	782,482	842,113	7.6%
Cash Flow from Investing Activities	Rs m	-413,296	-732,090	-
Cash Flow from Financing Activities	Rs m	-357,900	-129,163	-
Net Cash Flow	Rs m	12,611	-15,040	-

Current Valuations for ONGC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 26.1, an decline from the EPS of Rs 39.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 177.6, stands at 5.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.8 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 3.3 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	358.3	460.9
TTM Earnings per share	Rs	39.2	26.1
Diluted earnings per share	Rs	39.2	26.1
Price to Cash Flow	x	2.7	3.3
TTM P/E ratio	x	4.3	5.3
Price / Book Value ratio	x	0.7	0.7
Market Cap	Rs m	1,837,035	1,884,526
Dividends per share (Unadj.)	Rs	10.5	11.3

Ratio Analysis for ONGC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.9x 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 5.5x during FY23, from 8.7x 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 11.7% during FY23, from 19.0% 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 13.9% during FY23, from 17.6% 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 6.9% during FY23, from 9.7% 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	0.9
Debtors’ Days	Days	16	12
Interest coverage	x	8.7	5.5
Debt to equity ratio	x	0.3	0.4
Return on assets	%	9.7	6.9
Return on equity	%	19.0	11.7
Return on capital employed	%	17.6	13.9

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 139.7 to Rs 177.6, registering a gain of Rs 38.0 or around 27.2%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 18,902.9 (down 0.8%). Over the last one year it has moved down from 20,168.0 to 18,902.9, a loss of 1,265 points (down 6.3%).

Overall, the S&P BSE SENSEX is up 8.9% over the year.

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