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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
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 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
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 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
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
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 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
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
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
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
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
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
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)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
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