ONGC 2021-22 Annual Report Analysis

Mon, 22 Aug

ONGC has announced its results for the year ended March 2022. Let us have a look at the detailed performance review of the company during FY21-22.

ONGC Income Statement Analysis

• Operating income during the year rose 82.3% on a year-on-year (YoY) basis.
• The company's operating profit increased by 69.8% YoY during the fiscal. Operating profit margins witnessed a fall and stood at 14.4% in FY22 as against 15.5% in FY21.
• Depreciation charges increased by 5.3% and finance costs increased by 13.2% YoY, respectively.
• Other income declined by 4.6% YoY.
• Net profit for the year grew by 135.1% YoY.
• Net profit margins during the year grew from 8.2% in FY21 to 10.6% in FY22.

ONGC Income Statement 2021-22

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Net Sales	Rs m	2,473,209	4,507,778	82.3%
Other income	Rs m	225,389	214,968	-4.6%
Total Revenues	Rs m	2,698,597	4,722,746	75.0%
Gross profit	Rs m	382,827	650,072	69.8%
Depreciation	Rs m	255,385	268,832	5.3%
Interest	Rs m	61,760	69,937	13.2%
Profit before tax	Rs m	291,071	526,272	80.8%
Tax	Rs m	87,662	47,970	-45.3%
Profit after tax	Rs m	203,409	478,301	135.1%
Gross profit margin	%	15.5	14.4
Effective tax rate	%	30.1	9.1
Net profit margin	%	8.2	10.6

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ONGC Balance Sheet Analysis

• The company's current liabilities during FY22 stood at Rs 1,274 billion as compared to Rs 1,233 billion in FY21, thereby witnessing an increase of 3.4%.
• Long-term debt stood at Rs 880 billion as compared to Rs 792 billion during FY21, a growth of 11.2%.
• Current assets rose 14% and stood at Rs 1,061 billion, while fixed assets rose 6% and stood at Rs 4,761 billion in FY22.
• Overall, the total assets and liabilities for FY22 stood at Rs 5,821 billion as against Rs 5,406 billion during FY21, thereby witnessing a growth of 8%.

ONGC Balance Sheet as on March 2022

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*	% Change
Networth	Rs m	2,209,810	2,595,029	17.4
Current Liabilities	Rs m	1,232,665	1,274,243	3.4
Long-term Debt	Rs m	791,621	880,427	11.2
Total Liabilities	Rs m	5,405,851	5,821,214	7.7
Current assets	Rs m	931,212	1,060,593	13.9
Fixed Assets	Rs m	4,474,639	4,760,621	6.4
Total Assets	Rs m	5,405,851	5,821,214	7.7

ONGC Cash Flow Statement Analysis

• ONGC's cash flow from operating activities (CFO) during FY22 stood at Rs 780 billion, an improvement of 65.3% on a YoY basis.
• Cash flow from investing activities (CFI) during FY22 stood at Rs -405 billion, an improvement of 3.5% on a YoY basis.
• Cash flow from financial activities (CFF) during FY22 stood at Rs -360 billion on a YoY basis.
• Overall, net cash flows for the company during FY22 stood at Rs 17 billion from the Rs -2 billion net cash flows seen during FY21.

ONGC Cash Flow Statement 2021-22

Particulars	No. of months	12	12	% Change
	Year Ending	Mar-21	Mar-22
Cash Flow from Operating Activities	Rs m	471,852	780,000	65.3%
Cash Flow from Investing Activities	Rs m	-390,919	-404,773	-
Cash Flow from Financing Activities	Rs m	-82,395	-359,791	-
Net Cash Flow	Rs m	-1,954	16,761	-

Current Valuations for ONGC

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 38.0, an improvement from the EPS of Rs 16.2 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 132.0, stands at 3.4 times its trailing twelve months earnings.
• The price to book value (P/BV) ratio at current price levels stands at 0.6 times, while the price to sales ratio stands at 0.4 times.
• The company's price to cash flow (P/CF) ratio stood at 2.5 times its end-of-year operating cash flow earnings.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Sales per share (Unadj.)	Rs	196.6	358.3
TTM Earnings per share	Rs	16.2	38.0
Diluted earnings per share	Rs	16.2	38.0
Price to Cash Flow	x	2.8	2.5
TTM P/E ratio	x	6.3	3.4
Price / Book Value ratio	x	0.5	0.7
Market Cap	Rs m	1,152,354	1,837,035
Dividends per share (Unadj.)	Rs	3.6	10.5

Ratio Analysis for ONGC

• Solvency Ratios

Current Ratio: The company's current ratio improved and stood at 0.8x during FY22, from 0.8x during FY21. 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 improved and stood at 8.5x during FY22, from 5.7x during FY21. 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 improved and stood at 18.4% during FY22, from 9.2% during FY22. 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 improved and stood at 17.2% during FY22, from 11.8% during FY21. 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 improved and stood at 9.4% during FY22, from 4.9% during FY21. The ROA measures how efficiently the company uses its assets to generate earnings.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-21*	12 Mar-22*
Current ratio	x	0.8	0.8
Debtors’ Days	Days	24	16
Interest coverage	x	5.7	8.5
Debt to equity ratio	x	0.4	0.3
Return on assets	%	4.9	9.4
Return on equity	%	9.2	18.4
Return on capital employed	%	11.8	17.2

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

ONGC Share Price Performance

Over the last one year, ONGC share price has moved up from Rs 110.3 to Rs 132.0, registering a gain of Rs 21.7 or around 19.7%.

Meanwhile, the S&P BSE OIL & GAS Index is trading at Rs 19,520.7 (down 0.8%). Over the last one year it has moved up from 15,750.3 to 19,520.7, a gain of 3,770 points (up 23.9%).

Overall, the S&P BSE SENSEX is up 5.9% over the year.

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

Read: Latest Annual Report Analysis of ONGC