Ratio Analysis Of Indian Oil

Submitted To

By:

Dr. Satish Kumar, Ph.D. (IIT Roorkee) Gaurav Singh Assistant Professor 2012PBM8028 Department of Management Studies

Indian Oil
Indian Oil Corporation Limited, or IndianOil, is an Indian state-owned oil and gas corporation with its headquarters in New Delhi, India. The company is the world's 83rd largest public corporation, according to the Fortune Global 500 list, and the largest public corporation in India when ranked by revenue. IndianOil and its subsidiaries account for a 49% share in the petroleum products market, 31% share in refining capacity and 67% downstream sector pipelines capacity in India. The IndianOil Group of Companies owns and operates 10 of India's 22 refineries with a combined refining capacity of 65.7 million metric tonnes per year. The President of India owns 78.92% (1.9162 billion shares) in the company. In FY 2012 IOCL sold 75.66 million tonnes of petroleum products and reported a PBT of 37.54 billion, and the Government of India earned an excise duty of 232.53 billion and tax of 10.68 billion. It is one of the seven Maharatna status companies of India, apart from Coal India Limited, NTPC Limited, Oil and Natural Gas Corporation, Steel Authority of India Limited, Bharat Heavy Electricals Limited and Gas Authority of India Limited IndianOil operates the largest and the widest network of fuel stations in the country, numbering about 20,575 (16,350 regular ROs & 4,225 Kisan Seva Kendra). It has also started Auto LPG Dispensing Stations (ALDS). It supplies Indane cooking gas to over 66.8 million households through a network of 5,934 Indane distributors. In addition, IndianOil's Research and Development Center (R&D) at Faridabad supports, develops and provides the necessary technology solutions to the operating divisions of the corporation and its customers within the country and abroad.

History
Indian Oil began operations in 1959 as Indian Oil Company Ltd. The Indian Oil Corporation was formed in 1964, with the merger of Indian Refineries Ltd. Indian Oil is the biggest oil producer and marketeer Oil's product range covers petrol, diesel, LPG, auto LPG, aviation turbine fuel, lubricants,naphtha, bitumen, paraffin, kerosene etc. Xtra Premium petrol, Xtra Mile diesel, Servo lubricants, Indane LPG cooking gas, Autogas LPG, IndianOil Aviation are some of its prominent brands. Recently Indian Oil has also introduced a new business line of supplying LNG (liquefied natural gas) by cryogenic transportation. This is called "LNG at Doorstep".

Brands
IndaneGas - Domestic and Industrial Gas AutoGas - Automotive Natural Gas Xtra Premium - Automotive Premium Petrol Xtra Mile - Automotive Premium Diesel Servo - Lubricants and Greases

Refineries
In Assam Digboi Refinery, in Assam, is India's oldest refinery and was commissioned in 1901. Originally a part of Assam Oil Company, it became part of IndianOil in 1981. Its original refining capacity had been 0.5 MMTPA since 1901. Modernisation project of this refinery was completed by 1996 and the refinery now has an enhanced capacity of 0.65 MMTPA. UOP licensed the technology for the Coking process in this refinery. Guwahati Refinery, the first public sector refinery of the country, was built with Romanian collaboration and was inaugurated by Late Pt. Jawaharlal Nehru, the first Prime Minister of India, on 1 January 1962. Its capacity is 1 MMTPA. Bongaigaon Refinery became the eighth refinery of IndianOil after merger of Bongaigaon Refinery & Petrochemicals Limited w.e.f. 25 March 2009. It is located at Dhaligaon in Chirang district of Assam, 200 km west of Guwahati. In Bihar Barauni Refinery, in Bihar, was built in collaboration with Russia and Romania. It was commissioned in 1964 with a capacity of 1 MMTPA. Its capacity today is 6 MMTPA. In Gujarat Gujarat Refinery, at Koyali (near Vadodara) in Gujarat in Western India, is IndianOils second largest refinery. The refinery was commissioned in 1965. It also houses the first hydrocracking unit of the country. Its present capacity is 13.70 MMTPA. In West Bengal

Haldia Refinery is the only coastal refinery of the Corporation, situated 136 km downstream of Kolkata in the Purba Medinipur (East Midnapore) district. It was commissioned in 1975 with a capacity of 2.5 MMTPA, which has since been increased to 7.5 MMTPA

In Uttar Pradesh Mathura Refinery was commissioned in 1982 as the sixth refinery in the fold of IndianOil and with an original capacity of 6.0 MMTPA. Located strategically between the historic cities of Delhi and Agra, the capacity of Mathura refinery was increased to 8.8 MMTPA. In Haryana Panipat Refinery is the seventh and largest refinery of IndianOil. The original refinery with 6 MMTPA capacity was built and commissioned in 1998. Panipat Refinery has since expanded its refining capacity to 15 MMTPA. In Odisha(Orissa) Paradip Refinery- The commissioning of 15 million tonnes per annum refinery in November 2012 has been delayed and is now expected to be operational only in September 2013. [5] Subsidiary refineries Chennai Petroleum (10.5 MMTPA) IndianOil (Mauritius) Ltd. Lanka IOC PLC Group company for retail and storage operations in Sri Lanka. It is listed in the Colombo Stock Exchange. It was locked into a bitter subsidy payment dispute with Sri Lanka's Government which has since been resolved. IOC Middle East FZE Chennai Petroleum Corporation Limited Green Gas Ltd. a joint venture with Gas Authority of India Ltd. for city-wide gas distribution networks. Indo Cat Pvt. Ltd., with Intercat, USA, for manufacturing 15,000 tonnes per annum of FCC (fluidised catalytic cracking) catalysts & additives in India. IndianOil CREDA Biofuels Ltd., a joint venture with Chattisgarh government for production and marketing of Bio-fuels. Numerous exploration and production ventures with Oil India Ltd., Oil and Natural Gas Corporation India Synthetic Rubber Ltd - A joint venture between IOCL, Taiwan Synthetic Rubber Corporation(Taiwan) and Marubeni(Japan)

Indian Oil Corporate Profile

Indian Oil Corporation Ltd. is India's largest company by sales with a turnover of Rs. 4,09,957 crore ($ 85,550 million) and profit of Rs. 3,955 crore ($ 825 million)for the year 2011-12. IndianOil is the highest ranked Indian company in the latest Fortune Global 500 listings, ranked at the 83rd position. IndianOil's vision is driven by a group of dynamic leaders who have made it a name

to reckon with. In this section, read about IndianOils business and its spread across the country & abroad. You can also know about IndianOil's current financial performance, special initiatives and recognitions & awards that have come its way.

Product Portfolio of Indian Oil Coportion limited:

1 2 3 4 5 6 7 8 9

Indane Gas Auto Gas Natural Gas Petrol/Gasoline Diesel/Gas oil ATF/Jet Fuel SERVO lubricants & greases Marine Fuels & Lubricants Kerosene

10 Bulk/Industrial Fuels 11 Bitumen 12 Petrochemicals 13 Crude oil

SWOT Analysis of Indian Oil Corporation Limited

Strengths
1.India's largest commercial enterprise with a strong brand name 2.Has around 50% petroleum products 3.Operates 10 refineries in India 4.Huge distrubtion network through retailing 5.Accounts for a 47% share in the petroleum products market, 34.8% share in refining capacity and 67% downstream sector pipelines capacity in India 6.Has over 35,000 employees 7. Loyalty programs like XTRAPOWER Fleet Card Program is aimed at Large Fleet Operators

Weakness
1.Legal issues 2.Employee management 3.Bureaucracy 4.Volatility in the crude market & subsidy burden

Opportunities:
1.Increasing fuel/oil prices 2.Increasing natural gas market 3.More oil well discoveries 4.Expand export market

Threats

1.Government regulations 2.High Competition

Competitors
Indian Oil Corporation has two major domestic competitors, Bharat Petroleum and Hindustan Petroleum. Both are state-controlled, like Indian Oil Corporation. There are two private competitors,Reliance Industries and Essar Oil

Group companies and joint ventures

IndianOil (Mauritius) Ltd. Lanka IOC PLC Group company for retail and storage operations in Sri Lanka. It is listed in the Colombo Stock Exchange. It was locked into a bitter subsidy payment dispute with Sri Lanka's Government which has since been resolved.

IOC Middle East FZE Chennai Petroleum Corporation Limited Green Gas Ltd. a joint venture with Gas Authority of India Ltd. for city-wide gas distribution networks.

Indo Cat Pvt. Ltd., with Intercat, USA, for manufacturing 15,000 tonnes per annum of FCC (fluidised catalytic cracking) catalysts & additives in India.

IndianOil CREDA Biofuels Ltd., a joint venture with Chattisgarh government for production and marketing of Bio-fuels.

Numerous exploration and production ventures with Oil India Ltd., Oil and Natural Gas Corporation.

India Synthetic Rubber Ltd - A joint venture between IOCL, Taiwan Synthetic Rubber Corporation(Taiwan) and Marubeni(Japan).

Financial Data of Indian Oil Corporation Limited Consolidated balance sheet of Indian Oil Corporation Limited. for last three years:
Mar '12 Sources Of Funds Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Networth Secured Loans Unsecured Loans Total Debt Total Liabilities Application Of Funds Gross Block Less: Accum. Depreciation Net Block Capital Work in Progress Investments Inventories Sundry Debtors Cash and Bank Balance Total Current Assets Loans and Advances Fixed Deposits 99,455.46 39,336.13 60,119.33 13,434.77 18,678.46 56,829.20 15,502.87 307.01 72,639.08 44,988.11 0 92,696.69 34,509.29 58,187.40 12,620.44 19,544.76 49,284.52 8,869.65 643.92 58,798.09 25,454.49 650.5 71,780.60 30,199.53 41,581.07 21,268.63 22,370.25 36,404.08 5,799.28 916.56 43,119.92 17,453.01 398.55 2,427.95 2,427.95 0 0 55,448.75 0 57,876.70 13,045.97 57,277.96 70,323.93 1,28,200.63 2,427.95 2,427.95 0 0 52,904.37 0 55,332.32 20,379.65 32,354.22 52,733.87 1,08,066.19 2,427.95 2,427.95 0 0 48,124.88 0 50,552.83 18,292.45 26,273.80 44,566.25 95,119.08 Mar '11 Mar '10

Total CA, Loans & Advances Deffered Credit Current Liabilities Provisions Total CL & Provisions Net Current Assets Miscellaneous Expenses Total Assets Contingent Liabilities Book Value (Rs)

1,17,627.19 0 66,510.58 15,148.54 81,659.12 35,968.07 0 1,28,200.63 28,085.59 238.38

84,903.08 0 60,441.18 6,763.46 67,204.64 17,698.44 15.15 1,08,066.19 31,505.33 227.9

60,971.48 0 40,818.96 10,271.56 51,090.52 9,880.96 18.17 95,119.08 25,715.07 208.21

Consolidated profit and loss statement of Indian Oil Corporation Limited.

Mar '12 Income Sales Turnover Excise Duty Net Sales Other Income Stock Adjustments Total Income Expenditure Raw Materials Power & Fuel Cost Employee Cost Other Manufacturing Expenses Selling and Admin Expenses Miscellaneous Expenses Preoperative Exp Capitalised Total Expenses Operating Profit PBDIT Interest PBDT Depreciation Other Written Off Profit Before Tax Extra-ordinary items PBT (Post Extra-ord Items) 3,94,385.52 3,801.74 4,980.06 1,465.94 4,321.11 14,283.79 0 4,23,238.16 18,443.65 13,933.85 5,590.54 8,343.31 4,867.79 0 3,475.52 278.76 3,754.28 4,63,285.27 24,455.59 4,38,829.68 -4,509.80 2,852.13 4,37,172.01

Mar '11

Mar '10

3,57,275.89 26,141.04 3,31,134.85 3,554.94 4,972.93 3,39,662.72 2,99,806.97 1,880.24 6,429.58 1,638.36 13,378.79 1,249.03 -945.24 3,23,437.73 12,670.05 16,224.99 2,702.14 13,522.85 4,546.67 132.04 8,844.14 -41.93 8,802.21

2,91,272.84 21,834.76 2,69,438.08 3,189.68 5,044.25 2,77,672.01 2,40,712.77 369.45 5,723.96 1,385.83 11,386.06 733.59 -1,121.28 2,59,190.38 15,291.95 18,481.63 1,572.35 16,909.28 3,227.14 133.98 13,548.16 -36.52 13,511.64

Tax Reported Net Profit Total Value Addition Preference Dividend Equity Dividend Corporate Dividend Tax Per share data (annualised) Shares in issue (lakhs) Earning Per Share (Rs) Equity Dividend (%) Book Value (Rs)

-200.34 3,954.62 28,852.64 0 1,213.98 194.43 24,279.52 16.29 50 238.38

1,297.71 7,445.48 23,630.76 0 2,306.55 358.7 24,279.52 30.67 95 227.9

3,097.87 10,220.55 18,477.61 0 3,156.34 508.83 24,279.52 42.1 130 208.21

Financial Ratio of Indian Oil Corporation Limited.

Mar '12

Mar '11

Mar '10

Investment Valuation Ratios Face Value Dividend Per Share Operating Profit Per Share (Rs) Net Operating Profit Per Share (Rs) Free Reserves Per Share (Rs) Bonus in Equity Capital Profitability Ratios Operating Profit Margin(%) Profit Before Interest And Tax Margin(%) Gross Profit Margin(%) Cash Profit Margin(%) Adjusted Cash Margin(%) Net Profit Margin(%) 4.2 3.8 5.6 10 5 75.96 10 9.5 51.94 10 13 62.19

1,807.41 -93.91

1,363.84 210.91 93.91

1,109.73 191.63 93.91

3.07 3.09 3.67 3.67 0.89

2.41 2.43 3.53 3.53 2.22

4.35 4.4 5.04 5.04 3.74

Adjusted Net Profit Margin(%)

0.89

2.22

3.74

Return On Capital Employed(%) Return On Net Worth(%)

13.08 6.83

10.32 13.45

15.83 20.22

Adjusted Return on Net Worth(%)

19.66

12.93

20.55

Return on Assets Excluding Revaluations

238.38

227.83

208.14

Return on Assets Including Revaluations

238.38

227.83

208.14

Return on Long Term Funds(%) Liquidity And Solvency Ratios Current Ratio Quick Ratio Debt Equity Ratio

22.45

14.56

21.2

0.83 0.74 1.22

0.8 0.51 0.95

0.76 0.45 0.88

Long Term Debt Equity Ratio Debt Coverage Ratios Interest Cover Total Debt to Owners Fund Financial Charges Coverage Ratio

0.29 3 1.22

0.38 4.18 0.95

0.4 9.86 0.88

3.87

5.86

11.71

Financial Charges Coverage Ratio Post Tax Management Efficiency Ratios Inventory Turnover Ratio Debtors Turnover Ratio Investments Turnover Ratio Fixed Assets Turnover Ratio Total Assets Turnover Ratio Asset Turnover Ratio

2.58

5.49

9.64

8.15 36.01 8.15 4.49 3.47 3.71

7.56 45.15 7.56 3.61 3.09 3.26

8.37 45.91 8.37 3.78 2.85 2.93

Average Raw Material Holding

--

56.27

45.53

Average Finished Goods Held

--

23.96

24.77

Number of Days In Working Capital Profit & Loss Account Ratios Material Cost Composition

29.51

19.24

13.2

89.87

90.53

89.33

Imported Composition of Raw Materials Consumed

86.13

83.62

76.69

Selling Distribution Cost Composition Expenses as Composition of Total Sales Cash Flow Indicator Ratios

0.98

3.69

3.89

4.51

5.12

5.1

Dividend Payout Ratio Net Profit Dividend Payout Ratio Cash Profit Earning Retention Ratio Cash Earning Retention Ratio

35.61

35.79

35.86

15.96 87.63 91.34

21.98 62.77 77.49

26.98 64.72 73.35

AdjustedCash Flow Times Earnings Per Share Book Value

4.33 16.29 238.38

4.46 30.67 227.9

3.24 42.1 208.21

Financial Performance

TURNOVER
(INR / bn)
3,500 3,000 2,475 2,500 2,000 1,500 FY07 FY08 FY09 FY10 FY11 2,208 2,854 3,287

EBITDA(1)
(INR / bn)
200 175 150 2,711 125 100 75 50 25 0 FY07

FY08 FY09 FY10 FY11 146 143 113 189 163

NET PROFIT
(INR / bn)
125 102 100 75 75 50 30 25 0 FY07 FY08 FY09 FY10 FY11 70 74

NET WORTH
(INR / bn)
600 506 500 411 400 300 200 FY07 FY08 FY09 FY10

FY11 349 553

GRMs(3)
($/ bl)

PIPELINES EBITDA(2)
(INR./ bn) 10.0 8.0 9.0 40 35 5.9 35 33 29 25 25 20 26 440 6.0 4.2 4.0 2.0 0.0 FY07 FY08 FY09 FY10 3.7 4.5 30 FY11 FY07 FY08 FY09 FY10 FY11
(1)Including interest income

(2)Excluding interest income (3)GRMs for FY07 & FY08 does not include Bongaigaon GRMs

Financial Performance
Total Debt to Equity
1.2 1.0 0.8 0.6 0.4 0.8 0.9

Long Term Debt to Equity

(x)

Debt to Investments Ratio(1)

1.4 0.3 (x) 1.0 0.9 0.4 0.95 0.3 0.2 0.1 0.3 0.3 0.4 0.4 1.3 1.1 1.1 1.2 1.0 1.0 0.8 0.6 0.4 0.2 0.9 0.2 0.0 FY07 FY08 FY09 FY10 FY11 0.0 FY07 FY08 FY09 FY10 FY11 0.0 FY07

FY08 FY09 FY10 FY11

Investments(1)
(INR Bn)

Fixed Assets
(INR Bn)

Contribution to Central Exchequer

(INR Bn) 450 400 350 300 250 200 150 100 FY07 FY08 315 361 424 402 1,100 387 1,000 900 800 700 600 500 400 660 592 805 934 1,058 400 300

200 100 0 284 342 259 265 397 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11 FY07 FY08 FY09 FY10 FY11 Note 1. Investments include Market Value of shares held in ONGC Ltd., GAIL (India) Ltd., OIL India Ltd., shares held in Trust formed for merger of IBP Co. Ltd. and Bongaigaon Refinery & Petrochemicals Ltd and Special Oil Bonds