Financial Analysis of Indian Oil Corporation Limited (IOCL)
Course Instructor: Prof. V.K.Gupta
Submitted By: ADITYA KUMAR SINGH
Section C PGP2011515
Table of Contents
Serial Number Contents 1 IOCL – An Overview 2 Business Description 3 Key Financial Indicators 3.1 Debt-Equity Ratio 3.2 Long Term Debt-Equity Ratio 3.3 Current Ratio 3.4 Quick Ratio 3.5 Fixed Assets Turnover Ratio 3.6 Inventory Turnover Ratio 3.7 Debtors Turnover Ratio 3.8 Interest Coverage Ratio 3.9 Operating Profit Margin 3.10 Profit Before Interest And Tax Margin or EBIT 3.11 Gross Profit Margin 3.12 Net Profit Margin 3.13 Return On Capital Employed 3.14 Return On Net Worth 3.15 Earnings Per Share 3.16 Book Value 3.17 Price Earning (P/E) 3.18 Price to Book Value 4 Comparison of IOCL financial ratios with Refinery Industry 5 Analysis of Director’s Report and MDA 5.1 Analysis of Director’s Report and MDA for 2006-07 5.2 Analysis of Director’s Report and MDA for 2007-08 5.3 Analysis of Director’s Report and MDA for 2008-09 5.4 Analysis of Director’s Report and MDA for 2009-10 5.5 Analysis of Director’s Report and MDA for 2010-11 6 Analysis of Auditor’s Report (2010-11) 7 Du-Pont Analysis 8 Growth Drivers and Risk Factors 9 Bibliography Page Number 3 3 5 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 25 25 27 28 30 31 33 34 36 38
1. IOCL – An Overview
IndianOil is India's flagship national oil company with business interests straddling the entire hydrocarbon value chain – from refining, pipeline transportation and marketing of petroleum products to natural gas and petrochemicals. It is the leading Indian corporate in the Fortune 'Global 500' listing, ranked at 98 by sales turnover for the year 2011. IndianOil and its subsidiaries have a dominant share of the petroleum products market, national refining capacity and downstream sector pipelines capacity in India. With over a 34,000-strong workforce, IndianOil has been helping meet India’s energy demands for over five decades now. At IndianOil, operations are strategically structured along business verticals - Refineries, Pipelines, Marketing, R&D and Business Development - E&P, Petrochemicals and Natural Gas. IndianOil controls 10 of India’s 20 refineries with a group refining capacity of 65.7 MMTPA. Its cross-country network of crude oil, product and gas pipelines, spanning 10,899 km with a capacity of 75.2 MMTPA, is the largest in the country. With a throughput of 68.5 million tonnes, it meets the vital energy needs of the consumers in an efficient and environmentfriendly manner. The company recorded revenues of INR 2,710,736.2 million (approximately $56,925.5 million) in the financial year ended March 2010 (FY2010), a decrease of 5% compared to FY2009. The operating profit of the company was INR 157,161.4 million (approximately $3,300.4 million) in FY2010, an increase of 99% over FY2009.The net profit was INR102,205.5 million (approximately $2,146.3 million) in FY2010, compared to INR29,495.5 million (approximately $619.4 million) in FY2009.
2. Business Description
Indian Oil Corporation Limited (IOCL) is one of India's largest oil companies. IOCL along with its subsidiaries account for over 48% petroleum products market share, 34.8% national refining capacity, and 71% downstream sector pipelines capacity in India. IOCL operates through two business divisions: petroleum products and other businesses. The petroleum products division engages in refining of crude oil and sale of refined and processed oil products. IOCL engages in limited upstream activities. It procures most of its requirements of crude oil from the international energy market. The company operates refineries and a retail network for sale of processed oil. The company owns and operates 10 of India's 20 refineries with a combined refining capacity of 65.7 million metric tonnes per annum (MMTPA), which is equivalent to 1.3 million barrels per day. IOCL operates a cross-...