BPCL 2019-20 Annual Report Analysis

Thu, 22 Oct

BPCL has announced its results for the year ended March 2020. Let us have a look at the detailed performance review of the company during FY19-20.

BPCL Income Statement Analysis

• Operating income during the year fell 4.6% on a year-on-year (YoY) basis.
• The company's operating profit decreased by 44.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 2.9% in FY20 as against 5.1% in FY19.
• Depreciation charges increased by 19.4% and finance costs increased by 49.5% YoY, respectively.
• Other income declined by 5.3% YoY.
• Net profit for the year declined by 57.0% YoY.
• Net profit margins during the year declined from 2.8% in FY19 to 1.3% in FY20.

BPCL Income Statement 2019-20

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Net Sales	Rs m	2,982,256	2,845,719	-4.6%
Other income	Rs m	20,375	19,293	-5.3%
Total Revenues	Rs m	3,002,631	2,865,012	-4.6%
Gross profit	Rs m	151,122	83,490	-44.8%
Depreciation	Rs m	34,178	40,801	19.4%
Interest	Rs m	17,640	26,370	49.5%
Profit before tax	Rs m	119,681	35,613	-70.2%
Tax	Rs m	43,775	-142	-100.3%
Profit after tax	Rs m	85,279	36,658	-57.0%
Gross profit margin	%	5.1	2.9
Effective tax rate	%	36.6	-0.4
Net profit margin	%	2.8	1.3

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BPCL Balance Sheet Analysis

• The company's current liabilities during FY20 stood at Rs 602 billion as compared to Rs 531 billion in FY19, thereby witnessing an increase of 13.4%.
• Long-term debt stood at Rs 439 billion as compared to Rs 343 billion during FY19, a growth of 27.8%.
• Current assets fell 11% and stood at Rs 432 billion, while fixed assets rose 11% and stood at Rs 697 billion in FY20.
• Overall, the total assets and liabilities for FY20 stood at Rs 1,509 billion as against Rs 1,369 billion during FY19, thereby witnessing a growth of 10%.

BPCL Balance Sheet as on March 2020

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*	% Change
Networth	Rs m	387,647	365,323	-5.8
Current Liabilities	Rs m	531,097	602,215	13.4
Long-term Debt	Rs m	343,156	438,531	27.8
Total Liabilities	Rs m	1,369,304	1,508,636	10.2
Current assets	Rs m	487,678	432,307	-11.4
Fixed Assets	Rs m	629,693	697,424	10.8
Total Assets	Rs m	1,369,304	1,508,636	10.2

BPCL Cash Flow Statement Analysis

• BPCL's cash flow from operating activities (CFO) during FY20 stood at Rs 80 billion on a YoY basis.
• Cash flow from investing activities (CFI) during FY20 stood at Rs -112 billion, an improvement of 7.4% on a YoY basis.
• Cash flow from financial activities (CFF) during FY20 stood at Rs 36 billion, an improvement of 1,631% on a YoY basis.
• Overall, net cash flows for the company during FY20 stood at Rs 3 billion from the Rs -870 million net cash flows seen during FY19.

BPCL Cash Flow Statement 2019-20

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-19	Mar-20
Cash Flow from Operating Activities	Rs m	101,572	79,735	-21.5%
Cash Flow from Investing Activities	Rs m	-104,512	-112,276	-
Cash Flow from Financing Activities	Rs m	2,070	35,832	1,630.7%
Net Cash Flow	Rs m	-870	3,291	-

Current Valuations for BPCL

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 18.6, an decline from the EPS of Rs 43.4 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 344.8, stands at 20.3 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 2.2 times, while the price to sales ratio stands at 0.3 times.
• The company's price to cash flow (P/CF) ratio stood at 11.8 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Sales per share (Unadj.)	Rs	1,516.2	1,446.8
TTM Earnings per share	Rs	43.4	18.6
Diluted earnings per share	Rs	39.3	16.9
Price to Cash Flow	x	6.2	11.8
TTM P/E ratio	x	18.4	20.3
Price / Book Value ratio	x	1.8	2.2
Market Cap	Rs m	678,180	747,460
Dividends per share (Unadj.)	Rs	19.0	16.5

Ratio Analysis for BPCL

• Solvency Ratios

Current Ratio: The company's current ratio deteriorated and stood at 0.7x during FY20, from 0.9x during FY19. 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 2.4x during FY20, from 7.8x during FY19. 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 10.0% during FY20, from 22.0% during FY20. 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 7.8% during FY20, from 20.1% during FY19. 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 4.2% during FY20, from 7.5% during FY19. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-19*	12 Mar-20*
Current ratio	x	0.9	0.7
Debtors’ Days	Days	8	7
Interest coverage	x	7.8	2.4
Debt to equity ratio	x	0.9	1.2
Return on assets	%	7.5	4.2
Return on equity	%	22.0	10.0
Return on capital employed	%	20.1	7.8

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

BPCL Share Price Performance

Over the last one year, BPCL share price has moved down from Rs 534.0 to Rs 344.8, registering a loss of Rs 189.2 or around 35.4%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 12,125.5 (up 0.5%). Over the last one year it has moved down from 15,432.3 to 12,125.5, a loss of 3,307 points (down 21.4%).

Overall, the S&P BSE SENSEX is up 4.1% over the year.

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