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Ratio Analysis Of Indian Oil Submitted To By: Dr. Satish Kumar, Ph.D. (IIT Roorkee) Gaurav Singh Assistant Professor 2012PBM8028 Department of Management Studies
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Page 1: Indian Oil

Ratio Analysis Of Indian Oil

Submitted To By:

Dr. Satish Kumar, Ph.D. (IIT Roorkee) Gaurav Singh

Assistant Professor 2012PBM8028 Department of Management Studies

Page 2: Indian Oil

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".

Page 3: Indian Oil

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 IndianOil’s 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

Page 4: Indian Oil

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)

Page 5: Indian Oil

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 IndianOil’s 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 Indane Gas

2 Auto Gas

3 Natural Gas

4  Petrol/Gasoline

5 Diesel/Gas oil

6 ATF/Jet Fuel

7 SERVO lubricants & greases

8 Marine Fuels & Lubricants

9 Kerosene

10 Bulk/Industrial Fuels

11 Bitumen

12 Petrochemicals

13 Crude oil

Page 6: Indian Oil

SWOT Analysis of Indian Oil Corporation Limited

Strengths

1.India's largest commercial enterprise with a strong brand name2.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 India6.Has over 35,000 employees7. Loyalty programs like XTRAPOWER Fleet Card Program is aimed at Large Fleet Operators

Weakness 

1.Legal issues 2.Employee management 3.Bureaucracy4.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

Page 7: Indian Oil

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).

Page 8: Indian Oil

Financial Data of Indian Oil Corporation Limited

Consolidated balance sheet of Indian Oil Corporation Limited. for last three years:

  Mar '12 Mar '11 Mar '10

Sources Of Funds    

Total Share Capital 2,427.95 2,427.95 2,427.95

Equity Share Capital 2,427.95 2,427.95 2,427.95

Share Application Money 0 0 0

Preference Share Capital 0 0 0

Reserves 55,448.75 52,904.37 48,124.88

Revaluation Reserves 0 0 0

Networth 57,876.70 55,332.32 50,552.83

Secured Loans 13,045.97 20,379.65 18,292.45

Unsecured Loans 57,277.96 32,354.22 26,273.80

Total Debt 70,323.93 52,733.87 44,566.25

Total Liabilities 1,28,200.63 1,08,066.19 95,119.08

 

Application Of Funds    

Gross Block 99,455.46 92,696.69 71,780.60

Less: Accum. Depreciation 39,336.13 34,509.29 30,199.53

Net Block 60,119.33 58,187.40 41,581.07

Capital Work in Progress 13,434.77 12,620.44 21,268.63

Investments 18,678.46 19,544.76 22,370.25

Inventories 56,829.20 49,284.52 36,404.08

Sundry Debtors 15,502.87 8,869.65 5,799.28

Cash and Bank Balance 307.01 643.92 916.56

Total Current Assets 72,639.08 58,798.09 43,119.92

Page 9: Indian Oil

Loans and Advances 44,988.11 25,454.49 17,453.01

Fixed Deposits 0 650.5 398.55

Total CA, Loans & Advances 1,17,627.19 84,903.08 60,971.48

Deffered Credit 0 0 0

Current Liabilities 66,510.58 60,441.18 40,818.96

Provisions 15,148.54 6,763.46 10,271.56

Total CL & Provisions 81,659.12 67,204.64 51,090.52

Net Current Assets 35,968.07 17,698.44 9,880.96

Miscellaneous Expenses 0 15.15 18.17

Total Assets 1,28,200.63 1,08,066.19 95,119.08

Contingent Liabilities 28,085.59 31,505.33 25,715.07

Book Value (Rs) 238.38 227.9 208.21

Consolidated profit and loss statement of Indian Oil Corporation Limited.

      Mar '12 Mar '11 Mar '10

Income    

Sales Turnover 4,63,285.27 3,57,275.892,91,272.8

4

Excise Duty 24,455.59 26,141.04 21,834.76

Net Sales 4,38,829.68 3,31,134.852,69,438.0

8

Other Income -4,509.80 3,554.94 3,189.68

Stock Adjustments 2,852.13 4,972.93 5,044.25

Total Income 4,37,172.01 3,39,662.722,77,672.0

1

Expenditure    

Raw Materials 3,94,385.52 2,99,806.972,40,712.7

7

Power & Fuel Cost 3,801.74 1,880.24 369.45

Employee Cost 4,980.06 6,429.58 5,723.96

Other Manufacturing Expenses 1,465.94 1,638.36 1,385.83

Selling and Admin Expenses 4,321.11 13,378.79 11,386.06

Miscellaneous Expenses 14,283.79 1,249.03 733.59

Preoperative Exp Capitalised 0 -945.24 -1,121.28

Total Expenses 4,23,238.16 3,23,437.732,59,190.3

8

 

Operating Profit 18,443.65 12,670.05 15,291.95

PBDIT 13,933.85 16,224.99 18,481.63

Interest 5,590.54 2,702.14 1,572.35

PBDT 8,343.31 13,522.85 16,909.28

Depreciation 4,867.79 4,546.67 3,227.14

Other Written Off 0 132.04 133.98

Page 10: Indian Oil

Profit Before Tax 3,475.52 8,844.14 13,548.16

Extra-ordinary items 278.76 -41.93 -36.52

PBT (Post Extra-ord Items) 3,754.28 8,802.21 13,511.64

Tax -200.34 1,297.71 3,097.87

Reported Net Profit 3,954.62 7,445.48 10,220.55

Total Value Addition 28,852.64 23,630.76 18,477.61

Preference Dividend 0 0 0

Equity Dividend 1,213.98 2,306.55 3,156.34

Corporate Dividend Tax 194.43 358.7 508.83

Per share data (annualised)    

Shares in issue (lakhs) 24,279.52 24,279.52 24,279.52

Earning Per Share (Rs) 16.29 30.67 42.1

Equity Dividend (%) 50 95 130

Book Value (Rs) 238.38 227.9 208.21

Financial Ratio of Indian Oil Corporation Limited.

Mar '12 Mar '11 Mar '10

Investment Valuation Ratios    

Face Value 10 10 10

Dividend Per Share 5 9.5 13

Operating Profit Per Share (Rs) 75.96 51.94 62.19

Net Operating Profit Per Share (Rs) 1,807.41 1,363.84 1,109.73

Free Reserves Per Share (Rs) -- 210.91 191.63

Bonus in Equity Capital 93.91 93.91 93.91

Profitability Ratios    

Operating Profit Margin(%) 4.2 3.8 5.6

Profit Before Interest And Tax Margin(%) 3.07 2.41 4.35

Gross Profit Margin(%) 3.09 2.43 4.4

Cash Profit Margin(%) 3.67 3.53 5.04

Adjusted Cash Margin(%) 3.67 3.53 5.04

Page 11: Indian Oil

Net Profit Margin(%) 0.89 2.22 3.74

Adjusted Net Profit Margin(%) 0.89 2.22 3.74

Return On Capital Employed(%) 13.08 10.32 15.83

Return On Net Worth(%) 6.83 13.45 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(%) 22.45 14.56 21.2

Liquidity And Solvency Ratios    

Current Ratio 0.83 0.8 0.76

Quick Ratio 0.74 0.51 0.45

Debt Equity Ratio 1.22 0.95 0.88

Long Term Debt Equity Ratio 0.29 0.38 0.4

Debt Coverage Ratios    

Interest Cover 3 4.18 9.86

Total Debt to Owners Fund 1.22 0.95 0.88

Financial Charges Coverage Ratio 3.87 5.86 11.71

Financial Charges Coverage Ratio Post Tax 2.58 5.49 9.64

Management Efficiency Ratios    

Inventory Turnover Ratio 8.15 7.56 8.37

Debtors Turnover Ratio 36.01 45.15 45.91

Investments Turnover Ratio 8.15 7.56 8.37

Fixed Assets Turnover Ratio 4.49 3.61 3.78

Page 12: Indian Oil

Total Assets Turnover Ratio 3.47 3.09 2.85

Asset Turnover Ratio 3.71 3.26 2.93

       

Average Raw Material Holding -- 56.27 45.53

Average Finished Goods Held -- 23.96 24.77

Number of Days In Working Capital 29.51 19.24 13.2

Profit & Loss Account Ratios    

Material Cost Composition 89.87 90.53 89.33

Imported Composition of Raw Materials Consumed 86.13 83.62 76.69

Selling Distribution Cost Composition 0.98 3.69 3.89

Expenses as Composition of Total Sales 4.51 5.12 5.1

Cash Flow Indicator Ratios    

Dividend Payout Ratio Net Profit 35.61 35.79 35.86

Dividend Payout Ratio Cash Profit 15.96 21.98 26.98

Earning Retention Ratio 87.63 62.77 64.72

Cash Earning Retention Ratio 91.34 77.49 73.35

AdjustedCash Flow Times 4.33 4.46 3.24

Earnings Per Share 16.29 30.67 42.1

Book Value 238.38 227.9 208.21

Page 13: Indian Oil

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

Financial Performance

Page 14: Indian Oil

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

Page 15: Indian Oil

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

Page 16: Indian Oil

FY10

FY11

(1)Including interest income

(2)Excluding interest income

(3)GRM’s for FY’07 & FY’08 does not include Bongaigaon GRMs

Financial PerformanceTotal Debt to Equity

1.2

1.0

0.8

0.6

0.4

0.8

Page 17: Indian Oil

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

Page 18: Indian Oil

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

Page 19: Indian Oil

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


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